The Kamoto copper mine has been closed since September last year due to ageing equipment ©Katanga Mining Limited
The Kamoto copper mine has been closed since September last year due to ageing equipment ©Katanga Mining Limited

African mine income worth millions siphoned off

16 November 2016

Millions of dollars worth of income from a mine in the Democratic Republic of Congo (DRC) that should have been used to develop the country has been siphoned off, claims an anti-corruption campaign group.

In a report Global Witness said royalties from the Kamoto Copper Company (KCC) mine in the south east of the DRC ended up in an offshore company with a complex ownership structure.

The report claimed a state-owned enterprise, Gécamines, had transferred the rights to royalties from the mine to a Cayman Island-based company and there was no evidence it received any remumeration in exchange.

The DRC is one of the lowest ranking countries in the UN Human Development Index, scoring 176 out of 188 countries.

“It’s troubling that the state miner Gécamines has signed away rights to potentially huge flows of cash that should go towards building Congo’s future,” said Pete Jones, campaigner at Global Witness.

Global Witness estimated royalties from the mine, owned and operated by a subsidiary of Glencore, could be worth up to $880m over the life of the mine. They have been directed to Africa Horizons Investment Limited, part of the Fleurette Group.

In a statement Glencore confirmed to SM the sale of royalties by Gécamines to Africa Horizons, but said it was not involved in discussions between the two groups. It said it subsequently followed instructions from Gécamines after taking “reasonable measures" to verify the sale.

Fleurette Group have not yet responded to a request for comment from SM.

However, Global Witness said it received a statement from Fleurette Group’s public relations agency Powerscourt Group that said the estimated value of royalty payments of $880m was “entirely wrong” and the group had made a considerable loss on the deal.

Operations at the KCC mine have been suspended since September last year while equipment is upgraded.

☛ Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
Hounslow, Heathrow /Richmond upon Thames
Competitive salary depending on experience plus generous share award
Tails.com
London
GBP40000 - GBP50000 per annum + Excellent Benefits Package
Bramwith Consulting
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE