Michael J. Kavanagh and Franz Wild
GECAMINES, the Democratic Republic of Congo’s state-owned mining company, with a local partner sold a mining concession to Glencore’s Mutanda copper and cobalt venture without announcing the deal.
When Congo failed to publish a similar deal in June 2011 the International Monetary Fund canceled a $551 million (R6.6 billion) loan programme, of which about half had been released, to the country because it broke transparency conditions.
A May 2011 government decree requires the state to publish contracts for any cession, sale or rental of the state’s natural resources within 60 days of their execution. The deal for the land, which is surrounded by Mutanda’s property, was concluded in February this year, according to a person familiar with the transaction.
Glencore spokesman Charles Watenphul confirmed Mutanda had bought the licence from Chabara, a joint venture between Gecamines and local company Dino Steel International. He declined to disclose the amount paid.
Dino Steel is part of closely held Congolese company Bazano Group, which did not answer calls.
Israeli billionaire Dan Gertler’s Fleurette Group, which owns a 31 percent stake in Mutanda, also confirmed the transaction, only saying that it would not affect the company’s shareholding in Mutanda.
Permit 658 has become part of the $1.8bn Mutanda project, which was the second-biggest copper producer in Congo last year.
Former UN secretary-general Kofi Annan’s Africa Progress Panel and London-based transparency campaigners Global Witness have criticised Gecamines for the secrecy around its sale of stakes in Mutanda and other copper projects to companies registered in tax havens for below market prices.
Those companies were owned by Gertler, who says he is a friend of Congo’s President Joseph Kabila.
Gertler has said his investments in Congo have benefited the country.
While the sale is shown in Congo’s mining registry with no date given for the transfer, Gecamines still identifies Chabara as an asset undergoing a feasibility study on its website.
The Chabara permit is an enclave within Mutanda. It includes Kawama, a hill riddled with holes from thousands of local independent diggers who have mined copper and cobalt there for years and stands out in satellite images from the sprawling green savannah that surrounds the concession.
Mutanda’s copper production climbed 31 percent to 197 100 tons in 2014 from a year earlier, while Glencore’s total cobalt output rose 8 percent to 17 200 tons, mainly because of expansion at the project, the firm said in its annual report.
Interim chief executive Jacques Kamenga Tshimuanga did not respond to requests for comment. Chairman Albert Yuma declined to comment.
Congolese Mines Minister Martin Kabwelulu and the ministry also did not respond to requests for comment.
While Congo is the second-least developed country according to UN data, the IMF forecasts economic growth of 9.2 percent this year, with mining of copper, gold and other metals the main exports.
The government said the economy expanded 9.3 percent in 2014. – Bloomberg