DRC faces $3.7b loss in crooked mining deals

DRC lost $1.95 billion in revenues between 2003 and 2021. A further $1.76 billion in future royalty payments to Gertler’s companies will have been paid by 2039, according to some financial investigations.

Democratic Republic of Congo leader Félix Tshisekedi is seeking a review of some mining contracts with foreign companies as a lobby warns that the country will potentially lose at least $3.7 billion in skewed mining and oil deals with controversial Israeli billionaire Dan Gertler.

Kinshasa has already lost out on nearly $2 billion in revenue by selling mining and oil assets to Mr Gertler, according to a coalition of Congolese and international organisations, which has urged the government to review the deals.

Companies owned by Mr Gertler, who is under US sanctions for alleged corruption in Congo, stand to gain $1.76 billion in the next 20 years from copper and cobalt projects in the country, said the lobby, Congo Is Not For Sale.

Mr Gertler, a close friend of former Congolese president Joseph Kabila, denies any wrongdoing. He has never been charged with a crime.

“The coalition calls on Congolese authorities to end their silence on this matter and take urgent measures to ensure that Congo’s mineral wealth benefits the DRC Treasury and its people,” the group said in a report.

The lobby wants President Tshisekedi to “take the bold step of ordering a thorough and credible investigation into all mining deals involving Mr Gertler”.

“The Congolese government cannot ignore the haemorrhage of billions of dollars from its coffers when it desperately needs the funds to rebuild its economy and pull its citizens out of poverty,” said the group’s spokesperson Jean Claude Mputu.

Congo is the world’s largest source of cobalt and Africa’s biggest copper producer. Mr Gertler’s companies own royalty streams from three of the world’s biggest cobalt projects run by Glencore Plc and Eurasian Resources Group Sarl, which could soon produce more than 70,000 tonnes of cobalt a year – about half of total global output in 2019. They are also significant copper producers.

Mr Gertler’s companies took over the royalties from state-owned miner Gecamines in a series of transactions over a decade, some of which are being scrutinised by activists and foreign regulators from the US, UK and Switzerland.

The lobby’s report builds on calculations published in 2013 by former UN Secretary-General the late Kofi Annan-led Africa Progress Panel, which alleged that Congo lost out on $1.36 billion through the under-pricing of mining assets bought by companies linked to Mr Gertler.

Mr Gertler’s spokesman denied the deals for the royalties were mis-priced and, in reference to his most recent royalty transaction in 2017 involving a tailings project, said the valuation was done “in line with industry standards.”

“At that time, there was no certainty at all any royalty would even be paid,” the spokesman said.

Mr Gertler announced last year he would allow Congolese citizens to invest in the royalty stream from the copper and cobalt project, known as Metalkol. The Congo Is Not For Sale coalition has also criticised that proposal.

Mr Gertler’s companies also control oil and gold permits in northeastern Congo that were not part of the coalition’s calculations. The sanctions against Gertler have complicated the development of those projects.

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