ENRC has resolved not to buy mineral rights via controversial middlemen who campaign groups say pose an appearance or risk of corruption, the Mail understands.
Chairman Mehmet Dalman has taken an increasingly active role in addressing the firm’s reputation for boardroom rows and opaque deals to buy mineral rights in the developing world.
The FTSE 100 group has suffered damage to its image over mineral concessions in the Democratic Republic of Congo (DRC) bought via companies controlled by Israeli diamond tycoon Dan Gertler.
His companies are located in secretive tax havens, raising fears that a lack of transparency obscured whether the right price was paid or who the ultimate beneficiary of the deals was, although Gertler representatives have previously denied corruption and stated that the Gertler family are the only beneficiaries.
ENRC was also forced to pay out £800m to fellow miner First Quantum earlier this year to settle claims that the Congolese government had seized mines before selling them on to ENRC via Gertler.
But the Mail understands that Dalman has decided all future deals should be struck directly with governments, to avoid the appearance and the risk of corruption. A £63m purchase of the Frontier licence in the DRC earlier this year cut Gertler out of the transaction and any future mineral rights purchases are expected to follow the same format.
Dalman is understood to have flown to the Democratic Republic of Congo earlier this year for clear-the-air talks with Gertler.
While they will remain in partnership on existing contracts, ENRC is understood to have told the Israeli businessman that it cannot risk buying any more mining rights through him.
The decision will be seen as a milestone victory for campaign groups such as Global Witness, which has warned that the Congolese people are at risk of being cheated out of mineral revenues by complex deals that benefit Western companies and their go-betweens.
ENRC is still struggling to shake off its habit of boardroom conflicts, after director Sir Paul Judge accused colleagues earlier this month of acting like a ‘lynch mob’.
He was reacting to what he perceived as a power grab by Dalman, who is expected to take on a more executive role alongside chief executive Felix Vulis.
Last year, non-executive director Ken Olisa dubbed the firm – more than a third of which is owned by a trio of Kazakh billionaires –‘more Soviet than City’ after he and Sir Richard Sykes were ousted from the board.
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