This article corrects an earlier, erroneous story published by "Globes" on November 17, 2016.
Global Witness, an NGO that fights corruption, exploitation, and violence in the global natural resources industry, has reported that the state mining company in Democratic Republic of Congo last year signed over royalty rights in its most lucrative mining project, owned and operated by giant London-listed commodities trader Glencore, to an offshore company belonging to Dan Gertler.
The organization, whose offices are located in Washington and London, conducts investigations aimed at discovering which concerns are engaged in illegal and immoral practices. A decade ago, it was a candidate for the Nobel Peace Prize.
Gertler is an Israeli businessman rated as one of the world's wealthiest diamond traders, with an estimated wealth of $1.6 billion. He made his money by investing in Congolese diamond and copper mines. Gertler is founder and president of the Dan Gertler International Group (DGI), and heads Gibraltar-registered Fleurette, a family-owned company. Gertler's uncle, Shmuel Schnitzer, is honorary president of the Israel Diamond Exchange.
As reported by Global Witness, under the terms of the agreement signing over royalty rights, dated January 2015, the royalties due to state mining company Gecamines from Glencore’s KCC copper project in southeast Congo were assigned to an anonymous Cayman Islands company called Africa Horizons Investment Limited. Africa Horizons is part of Fleurette Group.
Global Witness states that the contract does not explain what, if anything, Congo’s state mining company received in compensation for handing over these rights, and that neither Gecamines nor the offshore company involved has provided a full explanation.
Global Witness estimates that the royalties could generate as much as $880 million more than Congo’s annual health spending.
“It’s troubling that the state miner Gecamines has signed away rights to potentially huge flows of cash that should go towards building Congo’s future. The state mining company should be trying to make money for the Congolese people, but here it is signing away its rights to potentially huge royalties,"said Pete Jones, campaigner at Global Witness.
“The contract we have seen provides no reason for Gecamines giving away these royalties. Neither Gecamines nor Gertler’s representatives have told us whether Gecamines received any payment in return. It is imperative that Gecamines and Gertler explain what is behind this agreement. If they can’t show that this is a good deal for Congo, there should be an investigation into what’s really behind the agreement,” said Jones.
Fleurette said in a statement that it utterly rejects the claims of Global Witness, whose report was compiled amateurishly with the intention of smearing and harming Fleurette's business, and that the manipulations of the facts were intended to mislead the public and to harm Fleurette. The company further said that the deal in question was appropriate and fair and met all generally accepted business criteria and was lawfully approved by the all the authorized agencies.
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2016 © Copyright of Globes Publisher Itonut (1983) Ltd. 2016