Press Release / Oct. 18, 2013

Secretive plans to sell a lucrative Congolese mining asset raise further Congo corruption concerns

New reports indicate that the Democratic Republic of Congo’s state-owned mining company, Gécamines, is in an advanced stage of negotiations to sell its stake in a lucrative copper mine without informing the Congolese Ministry of Mines. If true, this would follow a pattern of opaque deals in Congo mining sector giving rise to concerns about poor value for money and possible corruption, said Global Witness today.

Bloomberg has reported on the potential deal today involving the transfer of ownership of 20% of Kamoto Copper Co (KCC), which is set to become the country’s top producing copper mine next year.  Bloomberg cited evidence that the Ministry of Mines had not been informed of the sale.

Following press reports, Gécamines issued a statement today saying that a competitive bidding process has been organised for the sale and that “the potential sale of assets, is constantly discussed with and reported to” the State. Gécamines says it will provide further information “when the process is complete”.

“If it is true that Gécamines did not inform the government of the potential sale of KCC, this is extremely alarming,” said Daniel Balint-Kurti of Global Witness. “Gécamines is 100% owned by the Congolese state and has a duty to manage state assets solely in the interests of the Congolese people. However, currently it does not publish public audited accounts.”

The nature of this new deal is especially concerning given that Congo is estimated to have lost out on at least $1.36 billion between 2010 and 2012, according to Kofi Annan’s Africa Progress Panel, in a string of under-priced and opaque sales of mining assets many of which were sold by Gécamines.  This is almost twice the country’s annual spending on health and education combined.

“Without proper oversight and transparency, Gécamines may be a financial black hole at the heart of the Congolese mining sector, wasting money that one of the world’s poorest countries cannot afford to lose,” said Balint-Kurti.

Prominent political figures in Congo have pledged that assets will be sold by open tenders in a transparent manner.  Any apparent failure to do this with KCC would be a major setback for efforts to clean up the sector. Congo’s mining law, which is currently under revision, also needs to be modified to require proper bidding and oversight to ensure that this does not happen again.

Global Witness has contacted a representative of Dan Gertler’s Fluerette Group, who is reported to be the potential buyer, for comment and is awaiting a response. Fleurette told Bloomberg, “We don’t comment on market speculation”. Mr Gertler has previously denied any wrongdoing and insisted that transactions were properly conducted.

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Nathaniel Dyer, Global Witness in London on +44 (0)77 11 006 799, [email protected]