Gecamines Discloses Congo Mine-Permit Sale to Glencore UnitMichael J. Kavanagh and Franz Wild
The Democratic Republic of Congo’s Gecamines disclosed the sale of a copper mine to Glencore Plc’s Mutanda unit after the International Monetary Fund and the Carter Center criticized its lack of transparency.
A joint-venture between the state-owned copper and cobalt miner and Dino Steel International sold the Chabara mine permit to Mutanda on Feb. 18 because it was “overrun in a permanent way” by independent diggers and therefore difficult to develop, Gecamines said in a statement on its website. Gecamines received $10 million for its 30 percent stake in the venture.
In 2012, the IMF canceled the final installments of a half-billion dollar loan program with Congo after Gecamines failed to publish full details of a deal for a copper mine stake the previous year, breaching transparency conditions.
The IMF last week said the Chabara deal also violated a 2011 government decree that obliges the state to publish the contract for the sale of any natural resources within 60 days. The Carter Center, the group formed by former U.S. President Jimmy Carter that runs a mining-transparency program with Congo, also called on the government to publish the terms of the deal.
Gecamines and Dino Steel will change the name of their partnership from Chabara to Shamitumba SAS, because it will now focus on developing two permits in the Shamitumba area of Katanga province and four new permits, according to the statement. Dino Steel is part of the Bazano Group of Congo.
Gecamines still hasn’t published the contract for the Chabara sale. Nor has it published the amendment to its joint-venture accord with Dino Steel, as it has with previous such agreements.
Mutanda, a joint venture between Glencore and billionaire Dan Gertler’s Fleurette Group, now controls Kawama, a site within the Chabara concession pock-marked with holes burrowed by thousands of the independent diggers extracting ore there.
The site was already surrounded on all sides by land held by Mutanda, which produced 197,100 metric tons of copper last year and was Congo’s second-largest producer of the metal.
Glencore said while the new permit allowed Mutanda to consolidate the concession, the company is “fully aware” of the independent diggers and has “no current plans” to mine that area. Glencore will prioritize investing in Mutanda and exploring the wider concession, it said in an e-mailed response to questions on Tuesday.
“We will ensure that before any work commences, we work with the necessary authorities and stakeholders to come to a long-term, sustainable solution for all parties,” it said.
Congo is the world’s biggest cobalt miner, Africa’s largest copper producer and holds resources of gold, diamonds and tin, yet it’s ranked by the United Nations as the world’s second-least developed country.
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