Call to lift veil on terms of shady DRC deal

By Bloomberg Time of article published Jun 29, 2015

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Franz Wild and Michael J Kavanagh

THE Democratic Republic of Congo should live up to its pledge to improve transparency in the mining industry by publishing the terms of the recent sale of a copper permit to a Glencore venture, the Carter Center said.

Congolese state-owned mining company Gecamines and a business partner sold the Kawama copper and cobalt concession to Glencore’s Mutanda Mining in February without announcing the deal. It was first confirmed by Glencore and Israeli billionaire Dan Gertler’s Fleurette Group, which owns a 31 percent stake in Mutanda, this month.

“The government should publish the terms of the Kawama deal and all other outstanding natural resource contracts,” the Carter Center’s field office director in Congo, Phyllis Cox, said on Friday. It should “reassure the public that this and similar transactions are carried out in a transparent manner that safeguards the public interest”.

The International Monetary Fund (IMF) in 2012 cancelled a $551 million (R6.71 billion) loan programme halfway through because Congo did not publish a similar Gecamines deal, breaching the programme’s transparency conditions.

Congo holds vast resources of copper, gold, diamonds and tin, yet is ranked by the UN as the world’s second-least developed country.

Under a May 2011 government decree, any contract transferring rights to Congo’s natural resources must be published within 60 days of execution.

Respect promise

Congo should respect its promise for the “full transparency of revenues accruing to state-owned companies”, according to former US President Jimmy Carter’s Atlanta-based centre, which has a mining transparency programme in Congo.

Glencore and Fleurette Group declined to disclose the deal’s value.

“Despite the small size of Kawama’s concession area, the permit is potentially very valuable,” the Carter Center said.

Gecamines in 2011 sold its stake in the two concessions Mutanda already owns to Gertler – a friend of Congolese President Joseph Kabila – at below market value without announcing the deals.

When the IMF discovered that Gecamines also did not publish the contract for the sale to Gertler of its 25 percent stake in a copper project next to Mutanda, it cancelled the loan programme.

The loan-cancellation came on top of criticism from former UN Secretary-General Kofi Annan’s Africa Progress Panel and London-based transparency campaigners Global Witness, who called for the veil to be lifted on these deals. – Bloomberg

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