Painting by Cheri Samba

Lokuta eyaka na ascenseur, kasi vérité eyei na escalier mpe ekomi. Lies come up in the elevator; the truth takes the stairs but gets here eventually. - Koffi Olomide

Ésthetique eboma vélo. Aesthetics will kill a bicycle. - Felix Wazekwa

Monday, June 21, 2010

Dan Gertler: At it Again?

Israeli diamond tycoon Dan Gertler appears to be working his magic again. Various sources have reported his involvement in Caprikat, a British Virgin Island registered company that was reported to have taken oil blocks 1 and 2 in Lake Albert. At the same time, he is reportedly behind Highwinds, another British Virgin Islands based company, that is reportedly taking over the lucrative Kolwezi Tailings copper & cobalt concession that is being expropriated from Canadian company First Quantum.

Neither company has any reported expertise in mining or oil drilling. They both appear to be newly-founded companies.

In both cases, Gertler's alleged companies have stepped in to take over concessions whose worth is well-known and that are being claimed by other parties. In the case of Kolwezi, First Quantum says it has already sunk $700 million in the project, whose rich mineral deposits are well-known. In Lake Albert, the blocks are being claimed by two other parties already - Tullow Oil first had the rights for both blocks, one of which was sold on to Divine Inspiration, much to the alarm of Tullow. On the one hand, this makes the investments safe bets for Gertler, as at least he knows the value of the concessions. On the other hand, he will have to weather the international legal disputes that are currently unfolding. (First Quantum has gone to arbitration, while at the same time being sued by the Congolese state for $12 billion).

Gertler also recently bought the BIC bank from Congolese businessman Pascal Kinduelo (whose curious involvement in the Divine Inspiration deal was also documented here). And he has been rumored to be involved in several offshore oil concessions, as well, in the Atlantic off the Congolese coast.

Gertler was just 27 when he first became involved in the Congo in 2000, obtaining a monopoly of diamond exports (worth around $600 million) in return for $20 million. He had previously been involved in diamonds in Angola and he is the grandson of Moshe Schnitzer, the founder of the Israel Diamond Bourse. He is now one of the richest Israelis.

In 2007, one of the companies that Gertler helped found, Nikanor, went public on the London AIM stock exchange, raising a record $434 million. Again, it was a company with no previous record or expertise in mining that had been granted some of the Congo's richest copper and cobalt assets.

Gertler's success has been closely linked to his warm relations with the presidency. He was one of the only westerners to be invited to Kabila's wedding in 2006, and has very close links with Katumba Mwanke, the president's closest financial adviser.

For those interested in Middle East politics, Gertler, a devout Orthodox Jew, is also behind the Green Park and Green Mount companies that are helping to finance the building of new Israeli settlements in the occupied West Bank.

Why these new concessions, whom do they benefit? Not clear. The fact that they are registered in the British Virgin Islands will make it difficult to find out who is a shareholder. The investments are certainly risky, and the shenanigans with the existing contracts has certainly not helped boost investor confidence in the Congo - the World Bank's IFC, a partner in the First Quantum project, has suspended activity in the Congo for the time being. Risk insurance premiums have risen by 40% over the past 18 months due to contractual insecurity, a serious headache for investors.

Industry insiders, however, suggest that the last big round of mining concession acquisitions happened just before the last elections and helped the president raise funds for his expensive campaign. The next elections are in 2011.


james said...

Hi Jason,

I heard through the Congolese grapevine that a son of the South African president Zuma and the unavoidable Katumba Mwanke are involved in Caprikat. In 2008 I was told Gertler had received some concessions in Manono and Ankoro. This guy just seems to be everywhere.

Benoit said...
This comment has been removed by the author.
Benoit said...

Any news about situation around Edward Lake concerning ADF/NALU?

Unknown said...

Divine Inspiration is linked to the Moseneke family vey powerful during Thabo Mbeki presidency and now the cake is given to Zuma's family. Is this the diplomacy for development?

D. Patrick from Gonzoville said...

Let's get this straight: Gertler via his company Highwinds, purchased Kolwezi from the government for an undisclosed sum, who had seized it from First Quantum who had spent $750m developing it over the previous decade. Gertler then sold it to Eurasian Natural Resource Corp, of Kazazstan for $175m. This raises the question of who on the inside, is benefiting from these deals?

The sale to Eurasian is well below real value, probably reflecting the risk over purchasing an asset whose ownership is disputed (First Quantum is in international arbitration over the Kolwezi expropriation, together with the Word Bank's IFC, whose presence in the project as an equity investor a decade ago was supposed to lower risk and increase the attractiveness of the DRC as an investment destination).

The govt evidently decided that it was worth it to shred its credibility as a place to do business, becauase in the short term regime insiders could make enough off the looting of First Quantum's mines). Who, exactly, is benefiting, Kasonga, Kabila et al?

What an awful mess. Just interested to find out the motivations and interests involved, from anyone in the know.

Unknown said...

Kinduelo involvement in Lake Albert oil documented here:

Unknown said...

Anonymous said...

I'm a congolese and i'm shocked.

Anonymous said...

get real you are all ja louse ein od milvadoi

Anonymous said...

MR dan gertler,souvenez-toi d'adolphe hitler avec tes ancetres,le congo ns appartient et non ta proprieter privee.ns sommes ds le 21siecle rien ne plus a cacher,votre argent sale tue mon peuple,il est grand temps que tu puisse laisser la terre de nos ancetres.ns ne somme pas des palestiniens qui vs combattent et vs demande leur freedom,les congolais n'est s'interesse pas de votre terre ni votre histoire.tes ancestres nous ont pillee et toi tu continue a ns piller et a violler nos mamans,nos soeur et a detruire notre pays.sachez-ceci,u are not safe in the congo and around the world,one option leave congo for congolese.

Anonymous said...

dan certler is killer of 10bn congolese peoples. dan certler wanted, we want him life or dead

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