Global Witness calls for Glencore’s business partner to explain mining discount in Democratic Republic of Congo

New analysis by the non-profit Resource Matters, published yesterday, shows in watertight detail how a company part-owned by commodities giant Glencore, mining magnate Dan Gertler and other investors received a $440 million discount on a payment to Democratic Republic of Congo’s state-owned mining company. This came following negotiations by Gertler, a controversial friend of Congo’s President Kabila. Gertler has been linked to numerous mining bribery scandals.

The massive discount on the payment, known as a ‘signature bonus’, was first revealed by the Paradise Papers leaks in early November. The revelations focused on Glencore’s 2009 acquisition of Katanga Mining, which owned a huge copper and cobalt operation in Congo. Glencorehad teamed up with Gertler as they took over Katanga together, and the Paradise Papers showed how Gertler personally negotiated mining licences in Katanga’s favour. The backdrop to these negotiations was that Glencore was in the process of taking over Katanga from other investors and now controls the company.

Glencore has said that the signature bonus it paid was “essentially correct”. However Resource Matters questions this, showing that one of Katanga’s subsidiaries got a discount of 98 per cent on the signature bonus it was initially requested to pay.

“Dan Gertler’s negotiations with Congolese officials seem to have paid off for him and his business partner, Glencore,” said Global Witness’s Pete Jones. “While other mining companies paid signature bonuses in full, Gertler appears to have secured a discount worth hundreds of millions of dollars. It looks like ‘mates rates’ for the friend of the president. Gertler must clarify exactly why and how he was able to secure such a significant discount.”

Gertler has been central to all Glencore’s operations in Congo. The latest revelations will add weight to calls for Glencore to face a bribery and corruption investigation into its business relationship with Gertler in Congo.

Glencore has consistently defended its partnership with Gertler, telling Global Witness that its deals with him have been “conducted on arm’s length terms” and are “entirely proper”. Gertler’s lawyers said that allegations of bribery are “false and without any basis whatsoever” and rejected any suggestion of wrongdoing.