It’s Ours, So You Can Have Yours? Dan Gertler Seeks to Charm Congolese Citizens with Mining Initiative
Commentary surrounding Israeli businessman Dan Gertler’s mining activities is frequently negative. However, his newly launched scheme to facilitate local participation in the Democratic Republic of the Congo mining sector – Yabiso (It’s Ours in Lingala) – is more mixed. On the one hand, the model innovates in an area touching on widely held developmental objectives. And on the other, there is concern about its operability and place amid the failing Tshisekedi-Kabila coalition. A timeline for implementation of the project doesn’t yet exist, raising questions about the motive behind its announcement.
Significance – political context
According to recent reports, Yabiso is a special purpose vehicle (SPV) in which any Congolese citizen (no groups or businesses) will be allowed to purchase shares of a value between EUR 50 and EUR 10,000. It will be fed with 30% of Gertler’s revenues from the Metalkol operation[1], said to be worth roughly USD25 million (in total) yearly. Citizens will be eligible for an interest free loan to purchase shares with a five-year grace period and repayable from future royalties’ incomes.
The plan has been met with mixed reactions from civil society with some calling it a victory for justice for local communities and others saying it is a cheap ploy for Gertler to curry favour with both the authorities and the populace.
Gertler has been a feature of the Congolese extractive sector for well over two decades. Since 2017, he has been the subject of US sanctions for illicit mining deals worth at least USD1.36 billion that he was allegedly able to secure due to his close friendship with former president, Joseph Kabila. Gertler was accused in July 2020 by Global Witness of using an elaborate, international network of banks and companies to evade the sanctions placed on him, the complexity of which would necessitate some form of state involvement.
It is noteworthy that this scheme has been launched as Kabila is beginning to lose his stronghold on the national assembly and the coalition with current president Felix Tshisekedi collapses. The uneasy alliance between Tshisekedi and Kabila included a pact of non-interference in the mining sector. Indeed, the only pronouncement that the current president had made on Gertler was to say that he saw no reason to prevent him doing business in the country. However, with the coalition now in tatters, it would appear that the sector is now open to scrutiny – it was Sama Lukonde, the GM of Gecamines who forced the revelation of Gertler’s purchase of the shares in Metalkol through an offshore company in November. Lukonde is a staunch Tshisekedi ally.
Outlook - Transparency required
Despite being officially launched, the details on how and when Yabiso will become operational are yet to be released. There is a call from civil society organisations including Le Congo N’est Pas A Vendre (CPNAV) for Congolese authorities to freeze all of Gertler’s assets pending a full investigation of all his allegedly corrupt activities.
However, the interest generated from individual citizens and civil society alike mean that this could be a model of interest for other firms to explore. This should not be seen as a replacement for CSR schemes and obligations for social protections as made under the 2018 mining code, more as a
In a country where the GDP per capita is only USD580 and over 60% of the population live on less than a dollar a day, a commitment of at least EUR 50 is significant and the opportunity for small, community conglomerates to take part would likely increase the uptake. Transparency in both the operations of the funding mine and the management of the SPV will be vital to increasing the feeling of benefit from citizens.
[1] Gertler bought the rights to 2.5% of Metalkol’s annual royalties from state mining firm, Gecamines in 2017 for USD83 million.
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