London Mining NetworkDRC | London Mining Network

Secret mining in the Congo: Integrity of the UK aid programme & the IMF at stake

Richard — Wed, 23 May 2012 17:05:56 +0000

Press statement from the office of Pauline Latham OBE MP, Member of the International Development Select Committee, Chair of the All Party Parliamentary Group for the Extractive Industries

23/05/2012

Secret mining in the Congo: Integrity of the UK aid programme & the IMF at stake

Ahead of today’s conference of Secret Mining in the Congo, by Professor Willy Vangu, please find below a supporting statement from Pauline Latham MP.

“Until the IMF start enforcing the transparency caveats attached to their massive loan to the DRC Government, British Ministers should force the IMF to stop their support of this regime.

“The integrity of the UK’s aid programme and the work of the IMF are at stake here. It cannot be right that, in the face of such overwhelming evidence of wrongdoing, the UK Government does nothing. The UK aid programme is vital to protecting the lives of so many of the world’s poorest but for the long term betterment of aid recipients, the UK Government must be prepared to take tough decision on aid and loan payments through the IMF. This includes suspension and cancellation of projects.

“UK taxpayer-funded aid programmes, delivered by DfID or via the IMF or World Bank are only value for money if Andrew Mitchell and other Ministers work together to root out corruption. There is little point in pumping money into a DRC Government that is stealing its own natural resources through a network of shell companies housed in the British Virgin Islands.

“What is all the more concerning for UK taxpayers, seeking reassurances that their money is being spent wisely, is the involvement of London-listed FTSE 100 firms. It raises the need for a full investigation to get to the bottom of who is benefiting from these deals – are London listed firms using Dan Gertler and shell companies to navigate around anti-bribery legislation?

“The acid test will be the sale of the Lonshi and Frontier mines, both formerly owned by First Quantum Minerals. According to the IMF rules, these two mines should be sold through a public tender to get the best deal for the Congolese people.

“This is a complex situation, made purposely so by its architects. But for all of us who care about the Congolese and transparency in business, we must get to the bottom of it. We must get to the bottom of it because what Professor Vangu has outlined today is evidence of the channels used by a ruling elite to keep a country with huge natural wealth tragically poor.”

For further information: http://www.freefairdrc.com/en/job

or contact: ANITA VUKOMANOVIC 0207 219 7110 anita.vukomanovic@parliament.uk

West Africa emerging as the new Pilbara

Richard — Wed, 23 May 2012 16:48:06 +0000

West Africa is emerging as the next significant iron-ore province after Australia’s rich Pilbara and is attracting the attention of global majors and the Chinese, says the London-Aim-listed West African Minerals. Major diversified miners are attracted to the area by the potentially large, high-grade deposits generally with low impurities and low processing costs.

See http://www.miningweekly.com/article/west-africa-emerging-as-the-new-pilbara-west-african-minerals-2012-05-21.

Glencore ‘should explain potentially corrupt deals in Congo’ – Global Witness

Richard — Wed, 09 May 2012 13:02:52 +0000

Global Witness is today calling on Glencore to explain potentially corrupt deals in the Democratic Republic of Congo, and is calling on the company to provide more details about its relationship with an Israeli businessman who is key to its substantial mining investments in the country. The concerns, detailed in a briefing for Glencore’s shareholders, are being published on the day of the company’s first AGM as a publicly listed company.

Since 2010 a number of offshore companies associated with Dan Gertler – an Israeli businessman and friend of Congolese President Joseph Kabila – have secretly bought stakes in several mines from the state, paying only a small fraction of their commercially estimated values. The mines were sold without public tenders and limited details were only released long after the assets were sold off.

After buying the assets, at least two of the offshore companies made huge profits by selling on shares in them soon afterwards. Others are positioned to profit by collecting the mining revenues.

Some of the proceeds of mining sales in 2011 were used by the Congolese government to cover costs related to the 2011 election, which returned incumbent president Joseph Kabila to power. The polls were condemned as flawed by international diplomats and election observers and were marred by killings committed by government security forces.

Mr Gertler and Glencore have challenged Global Witness’s facts as laid out in the briefing, and their views are reflected in the note. A spokesman for Mr Gertler has questioned the commercial valuations for some of the mines concerned, while both Glencore and Mr Gertler’s representatives categorically deny any involvement in corruption in Congo.

“Glencore’s business in Congo is intimately tied up with a controversial friend of the president,” said Daniel Balint Kurti, Campaign Leader for the Democratic Republic of Congo at Global Witness. “In a country endowed with vast mineral wealth and yet ranked by the UN as the least developed nation in the world, the company owes its shareholders and, more importantly, the people of Congo, an explanation of exactly who now owns their natural resources.”

Mr Gertler is a key intermediary through whom Glencore has acquired stakes in Congolese mining assets. He is also a partner in all three mining ventures in Congo in which Glencore has acquired stakes that have been collectively valued at an estimated $4.6 billion. Two of those ventures, the Kansuki and Mutanda mines, together are expected to add at least 40% to the world’s cobalt output and increase Congo’s copper production by about 40% (compared to 2011 production figures) once they are fully developed.

Global Witness is asking Glencore and Mr Gertler to release the full list of shareholders of all the offshore companies involved – information which is currently secret. Global Witness believes there is a risk that the shareholders could include corrupt Congolese government officials or their proxies.

“Congo’s natural resource wealth should benefit the country as a whole,” said Balint-Kurti. “Yet hugely profitable deals are being struck in Congo by secretive offshore companies and multinationals; the Congolese state is getting peanuts and we are extremely concerned that the Congolese people are being deprived of billions of dollars.”

As the world’s largest commodity-trading firm, Glencore’s behaviour helps set the standard for how commodities companies operate across the world. It boasts that it “will not assist any third party in violating the law in any country, nor pay or receive bribes, nor participate in any other criminal, fraudulent or corrupt practice”.

“It is now incumbent upon Glencore to show that it is living up to its rhetoric and that it is ready to make public the details of its previously secret business deals,” concluded Balint-Kurti.

/Ends

Notes for editors:

Contact:

Daniel Balint-Kurti, +44 (0) 207 492 5872 and +44 (0) 7912 517 146

Notes to editors:

1. The full report on Glencore’s investments in Congo and the company’s links to Dan Gertler is available at http://www.globalwitness.org/sites/default/files/Global%20Witness%20memo%20on%20Glencore%27s%20secretive%20dealings%20in%20the%20Democratic%20Republic%20of%20Congo.pdf.

2. A Q&A on the “secret sales” scandal can be found at http://www.globalwitness.org/sites/default/files/Global%20Witness%20Q%26A%20on%20Glencore%20in%20the%20Congo_0.pdf.

3. Written responses by Glencore and Mr Gertler’s representatives to questions from Global Witness can be found at http://www.globalwitness.org/library/glencore-has-questions-answer-global-witness-investigation-potentially-corrupt-deals-congo.

Global Witness investigates and campaigns to prevent natural resource-related conflict and corruption and associated environmental and human rights abuses.

If you go to the weblink http://www.globalwitness.org/campaigns/corruption/oil-gas-and-mining/glencore, you will find all the associated documents, including Global Witness’s note for the attention of Glencore shareholders and replies from Glencore and Dan Gertler.

Mining giant Glencore accused in child labour and acid dumping row

Richard — Wed, 25 Apr 2012 13:53:44 +0000

Glencore, the commodity and mining firm worth £27bn, stands accused in the Democratic Republic of the Congo of dumping raw acid and profiting from children working 150ft underground. The revelations come as the notoriously secretive Swiss-based company, which floated on the London Stock Exchange last year, seeks to merge with mining firm Xstrata in a £50bn-plus deal.

See http://www.minesandcommunities.org/article.php?a=11640.

Report calls for stricter regulation of UK mining companies

Richard — Wed, 07 Mar 2012 09:40:48 +0000

Bumi plc's Kaltim Prima Coal mine in Indonesia. Photo: JATAM

London Mining Network has today published a report calling on the government to include a review of regulatory regimes as part of the current discussion on the Financial Services Bill. The Bill is replacing the existing FSA with a new body, the Financial Conduct Authority, which will inherit the FSA’s role as UK Listing Authority.

Looking at eight case studies, the report, UK-Listed Mining Companies & the Case for Stricter Oversight, argues that:

Many mining companies listed in London have very poor records of complicity in human rights abuse, environmental pollution or destruction of people’s cultures and livelihoods around the world.
Once listed in London, some mining companies have continued to flout the law in the countries where they operate, or engage in damaging tax avoidance, or break accepted international mining industry standards, with no move by the UK Listing Authority to discipline them.

The report follows on from dramatic developments at the end of February in which a proposed opencast coal mine in Bangladesh being developed by GCM, one of the eight case studies used in the report, was condemned as “threatening human rights” by an independent panel of UN experts.

John McDonnell MP, who will be chairing the Parliamentary launch of the report today, said:

“We cannot stand by and witness these global mining companies brutally impoverishing and destroying the lives and environments of whole communities. We need not only to expose this exploitation but also to demand that a firm system of international regulation, control and accountability is put in place that halts the destructive activities of these corporate pirates.”

Peter Frankental, the Economic Relations Programme Director of Amnesty International UK, said:

“This report by London Mining Network presents a challenge to the Government to ensure that the proposed regulatory body has the powers to require mining companies to meet acceptable human rights and environmental standards as a condition for listing on the London Stock Exchange”.

Richard Solly, Co-ordinator of London Mining Network, said:

“This report provides a reminder to the Government of the need for measures to ensure that the London Stock Exchange does not continue to act as a repository for dodgy companies that harm the environment and abuse human rights. The ease with which such companies can list in the UK is an indictment of the existing regulatory framework”.

The report can be downloaded from http://londonminingnetwork.org/docs/lmn-the-case-for-stricter-oversight.pdf.

The eight London-listed mining companies looked at tin the report are African Barrick, Brinkley Mining, African Minerals, London Mining, Vedanta Resources, Glencore, GCM Resources and Bumi.

The Government has introduced its Financial Services Bill, which is being considered in Committee between 21 February and 20 March.

* Open-pit coal mine project in Bangladesh threatens human rights – UN experts http://www.un.org/apps/news/story.asp?NewsID=41398&Cr=Bangladesh&Cr1

See also Stop the City of London laundering blood money from mining at http://www.newint.org/blog/2012/03/12/city-of-london-laundering-mining-money/.

Presentation on the Monterrico case given at the report launch

In 2005 Minera Majaz, a wholly owned subsidiary of the British company Monterrico Metals, was working hard in the northern highlands of Piura in Peru to get its social licence and start the operation of its first copper project, known as the Majaz mine. What happened there is important because it illustrates the impact of the mining conflict on HR, the role played by criminalisation as a strategy that clears the way for mining projects and finally the impunity with which these activities are carried out. The project is currently owned by the Chinese Zijin consortium.

On the first of August 2005, thousands of people started a march protesting against the Majaz mine. Their intention was to arrive at the mining camp to let management know that the mine was not welcome. Before they reached the camp, they were ambushed by police, soldiers and security forces with tear gas and live ammunition, whilst being tracked by aircraft. Twenty nine people were caught and held within the mining camp where, they were tortured. One man was killed, and several were seriously injured .

As part of the follow-up strategy, shortly after the ambush Félix Toledo, the public prosecutor began a legal persecution, and accused 107 people of a range of crimes including terrorism. Furthermore, leaders from several nearby communities also reported their houses being searched by the police without a warrant, being detained and threatened they would be killed unless they named the ring-leaders of the protest.

Given that local authorities simply ignored what was happening, the organisation FEDEPAZ (Federación Ecuménica para el Desarrollo y la Paz, a church organisation) requested that the Public Ombudsman investigate the police and corporate persecution against campesino leaders. The National Coordination for HR went a step further and introduced a lawsuit against the public prosecutor for failing in his duty to investigate corporate abuse. Nothing happened until five years later, when in 2010 the judicial system rejected charges against the prosecutor’s behaviour, alleging lack of evidence. All cases against the protesters were dropped.

I would also like to mention that among the 29 people detained there were two women. During their illegal detention the women were not only tortured but also sexually abused. What happened to these women is important because they were treated as “spoils from the raids”. The sexual abuse of women in the context of the mining conflict sends a powerful message to women: a message that seeks to put “women in their place”; a message that says “Women’s place is not with men, and sexual abuse is the price to pay when women choose to deviate from accepted customs”.

Thanks to Leigh Day, the 29 victims of this terrifying attack were financially compensated, and the brutality with which they were treated by a British company made the front page of The Guardian. But we mustn’t forget that victims of corporate and state abuse in the context of this mining project run into hundreds of people and that they haven’t received any kind of compensation at all. Neither the government nor the corporation admit to any wrong doing. This victimisation of ordinary people is often forgotten. But we must not forget that people detained and tortured by the Monterrico were left with permanent scars such as “suicide thoughts”. Also, whilst most of the men tortured during the protest returned to loving families, women didn’t have that safe haven as they experienced rejection by their own families.

Glevys Rondon, Co-ordinator, Latin American Mining Monitoring Programme.

The World Bank and extractives: a rich seam of controversy

michaela — Wed, 15 Feb 2012 20:29:31 +0000

As World Bank projects fail to reduce corruption in the mining sector in the Democratic Republic of Congo (DRC), International Finance Corporation (IFC) investments in extractive industries are provoking complaints and protests around the world.…
Read more

Glencore faces questions over controversial DRC mine sales

Richard — Fri, 10 Feb 2012 12:14:59 +0000

Moves by unknown shell companies to control lucrative natural resources may have cost Democratic Republic of Congo $1 billion in lost revenue, as UK-listed mining company Glencore comes under pressure to explain deals. See http://www.theecologist.org/News/news_analysis/1235793/glencore_faces_questions_over_controversial_drc_mine_sales.html…
Read more

DRC dispute disentangled: ENRC and FQM agree settlement

Richard — Fri, 13 Jan 2012 16:13:18 +0000

London listed miner, Eurasian Natural Resources Corporation Plc (ENRC) and Canada’s First Quantum Minerals Ltd (FQM) have resolved a rumble in the jungle with a US$1.25bn settlement for disputed mining assets in the Democratic Republic of the Congo (DRC).

See http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=142586&sn=Detail&pid=92730.

Energy colonialism in the Congo

Richard — Sat, 03 Dec 2011 09:14:07 +0000

The Congo River embodies an immense amount of energy – enough to supply a significant portion of Africa’s electricity requirements. The river is being touted as a perpetual source of clean, green power that could “light up Africa” and solve many of the continent’s problems.

But if its power is harnessed, who will benefit – the DRC’s millions of poor or a wealthy regional and international elite?

Civil society organisations are worried that ordinary Congolese, only 6% of whom have access to electricity, will remain in the dark, while their river’s power is transmitted to mines and industrial facilities in South Africa, elsewhere in Africa or even Europe, or to power-hungry installations such as a massive aluminium smelter proposed for the coast by BHP Billiton.

See http://www.news24.com/Columnists/AndreasSpath/Energy-colonialism-in-the-Congo-20111130

World’s Biggest Hydropower Scheme Will Leave Africans in the Dark

Richard — Sat, 26 Nov 2011 18:17:43 +0000

South Africa and the Democratic Republic of Congo have signed an agreement to build a major hydroelectric power project, which is said to bring electricity to more than half of the continent’s 900 million people. But economic analysts warn that foreign investors will prevent the grid from benefiting the general public.

(One of the companies hoping to benefit from cheap power from the Inga Dam project is BHP Billiton.)

See http://ipsnews.net/news.asp?idnews=105843.

Glencore puts up $635 million to build world’s largest cobalt mine

Richard — Tue, 15 Nov 2011 17:10:56 +0000

Katanga Mining announced on Friday it has secured $635.5 million in new loan facilities from parent Glencore International to fund the expansion of its Democratic Republic of Congo copper-cobalt mine. Katanga says with the expansion the DRC complex it could become Africa’s largest producer of copper and the world’s number one cobalt mine.

See http://www.mining.com/2011/11/11/katanga-gets-635-million-to-build-worlds-largest-cobalt-mine/.

Africa’s Energy Future Heading Down a Dark Tunnel

Richard — Sat, 08 Oct 2011 10:07:33 +0000

BHP Billiton’s proposed Inga 3 hyropower scheme in DR Congo, and its existing Mphanda Nkugwa dam in Mozambique – both designed to provide electricity for the company’s aluminium plants – come under fire from the former Africa programme director of the International Rivers Network, based in San Francisco.

See http://www.internationalrivers.org/blog/lori-pottinger/2011-9-26/africas-energy-future-heading-down-dark-tunnel.

Colombia to the Congo: Lust for Gold Threatens Environment & Human Rights

Richard — Sat, 08 Oct 2011 09:44:26 +0000

Nestled alongside the central range of the Andes lies the town of Cajamarca, Colombia, also known as la dispensa agricola de Colombia: literally Colombia’s agricultural larder. The fertile environs surrounding this settlement of twenty thousand souls play host to bumper crop of coffee, peas, kidney beans and fruits. Nourished by fresh mountain springs that in turn trickle downwards toward the rice growing lowlands of Tolima, Cajamarca, sits amidst a contrasting landscape of agricultural endeavor and natural beauty.

But this is threatened by AngloGold Ashanti‘s mining plans.

See http://www.towardfreedom.com/americas/2549-colombia-to-the-congo-lust-for-gold-threatens-environment-a-human-rights

AngloGold May Lift Output 68% by 2020 Excluding Acquisitions

AngloGold Ashanti Ltd (ANG), the third- largest producer of the metal, may increase output 68 percent by 2020 excluding any acquisitions as it seeks to reverse declines.

See http://www.bloomberg.com/news/2011-09-26/anglogold-ashanti-says-production-could-rise-to-7-6-million-ounces-in-2020.html.

ENRC ends long-awaited governance review; CEO and chairman stay on

Richard — Sat, 08 Oct 2011 09:37:45 +0000

London-listed miner ENRC has ended its long-awaited governance review, confirming both the chairman and CEO in their roles as part of a trimmer board that it hopes will revive its underperforming shares.

See http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=136466&sn=Detail&pid=92730.…
Read more

Long but hopeful path towards legislation on conflict minerals

Richard — Tue, 05 Jul 2011 13:23:35 +0000

On 26 May, SOMO organised a Roundtable in the European Parliament, together with Judith Sargentini (Member of European Parliament, GroenLinks). This well attended meeting focused on conflict minerals from the Democratic Republic of Congo (DRC).

This Roundtable focused on two objectives: urging the European commission to develop legislation in the matter, and offering a platform for Congolese NGOs. The meeting was a success, but the road to actual legislation is still a long one. But doing nothing is not an option, according to Judith Sargentini.

See: http://somo.nl/news-en/long-but-hopeful-path-towards-legislation-on-conflict-minerals/