Source: Getty Images

Congo Urged to Publish Details of Mining Deals

  • Advocacy group sees risk of revenue being illegally diverted
  • Gecamines has failed to publish details of 2015 mine sale

Gecamines, the state-owned Democratic Republic of Congo mining company, violated transparency rules by failing to publish agreements signed last year with China Nonferrous Metal Mining Co. and Glencore Plc, Global Witness said, urging the government to disclose details of the deals.

There’s a risk that revenue may be illegally diverted unless the details of contracts relating to the cession, sale or rental of Congo’s natural resources are published, the London-based advocacy group said in report published today.

“To help prevent this happening, Congo must publish the full details of all natural resource sales, including information on the real beneficiaries of the companies involved,” Nat Dyer, Congo team leader at Global Witness, said in an e-mailed statement.

Congo is Africa’s biggest copper producer and the world’s largest source of cobalt. Mining output increased rapidly in the past decade, but a lack of transparency relating to a number of major transactions involving Gecamines has drawn international criticism.

In 2012, the International Monetary Fund canceled a $551-million loan program with Congo after the government failed to publish details of a copper-mining deal involving Gecamines and Israeli billionaire Dan Gertler. A 2011 government decree requires that contracts for any deal involving the country’s natural resources be published within 60 days of execution.

IMF Criticism

Gecamines Chairman Albert Yuma didn’t answer a call to his mobile phone seeking comment. His senior executive adviser, Arthur Katalayi, declined to comment, speaking on Yuma’s behalf.

Gecamines in June 2015 confirmed it sold a copper mine to Glencore’s Mutanda unit in February after the IMF criticized the government’s failure to announce the deal or disclose the terms of the sale. Gecamines owned 30 percent of the Kawama copper and cobalt concession through a joint-venture with Dino Steel International. Congo still hasn’t published the contract for the sale. Nor has it published the amendment to its joint-venture accord with Dino Steel, as it has with previous such agreements.

In July, Gecamines and CNMC said they would explore "five large projects" around the southeastern cities of Lubumbashi, Likasi and Kolwezi. It didn’t identify the projects or give financial terms. Gecamines Chief Executive Officer Jacques Kamenga in July said the accord was an agreement to cooperate rather than a contract and declined to provide further details.

Gecamines said in January it signed a memorandum of understanding with CNMC to build processing plants on its Kambove and Deziwa mining concessions. It didn’t say whether this is one of the “five large projects.” To date, Gecamines has published no further information relating to the CNMC agreements.

(Corrects spelling of Yuma adviser in paragraph below IMF Criticism subhead.)
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