| KINSHASA, March 3
KINSHASA, March 3 Tens of millions of dollars in
royalties and signing bonuses that Glencore told an
independent transparency board it had paid to Congo's state
mining company actually went to a business controlled by Israeli
billionaire Dan Gertler, advocacy group Global Witness said in a
report on Friday.
Glencore-controlled Kamoto Copper Co (KCC) told the
Extractive Industries Transparency Initiative (EITI) in 2013 and
2014, in publicly-available disclosures, the payments were made
to Gecamines, the state company.
EITI audits payments by mining companies to governments
annually, an initiative the companies sign up to voluntarily.
Glencore acknowledged in a statement to Reuters that KCC
paid the royalties and signing bonuses in 2013 and 2014 to
Africa Horizons Investment Ltd (AHIL), a wholly owned subsidiary
of Gertler's Fleurette Group, rather than Gecamines. But
Glencore said this was what Gecamines instructed it to do.
Glencore said the payments to AHIL "discharged KCC's obligation
to make these payments to Gecamines."
Glencore said KCC made the payments to AHIL "in accordance
with the payment instruction from Gecamines and the subsequent
tri-partite royalties agreement between KCC, Gecamines and
Reuters was not able to review the documents providing these
instructions. The chairman of the Gecamines board and its
interim director-general could not be reached for comment about
the payment of royalties and signing bonuses. Fleurette
confirmed that it received the payments.
Glencore has said in the past that it adheres to strict
Some Campaign groups including Global Witness have accused
Gertler of exploiting his friendship with Congo President Joseph
Kabila to ink sweetheart deals with the state that have cost the
Congolese treasury millions.
Gertler and Kabila have both denied that. Gertler has long
denied any improper conduct and says his investments have
contributed to Congo's economic development.
AHIL has been receiving Gecamines' 2.5 percent royalty
stream since at least 2013, though this was only made public
last November in a separate report by Global Witness.
Fleurette has said AHIL bought the royalty right
from Gecamines, although it has not disclosed for how much.
Reuters could not determine how AHIL acquired the rights to
the signing bonuses. Fleurette did not respond to a Reuters
question about the signing bonuses but said in a statement that
Gecamines stood to benefit from having sold the royalty stream,
which Fleurette has said proved less lucrative for AHIL than
According to EITI reports and KCC's 2014 financial
statement, reviewed by Reuters, KCC paid more than $70 million
in signing bonuses and royalties to AHIL in 2013 and 2014.
Last month, Glencore bought Fleurette Group's 31 percent
stake in the Mutanda copper mine in southeastern Congo and its
smaller stake in KCC for a total of $960 million.
A Fleurette spokesman told Reuters after the sale that the
company had retained its royalty streams in Mutanda and KCC.
(Editing by Tim Cocks and Dale Hudson)