Dan Gertler

After gaining experience with purchasing and marketing artisanally mined diamonds from the DRC, Gertler started negotiations to establish a partnership with the Societé Minière de Bakwanga (MIBA), a DRC state-controlled diamond mine operator.[15] Through his friendship with the young Joseph Kabila, Gertler was introduced to his father Laurent Kabila, then-president of the Democratic Republic of the Congo (DRC), in 2000.[3]

From September 2000 through April 2001, Gertler had the sole right to buy "all diamonds produced in territory under the control of the Congolese Government", for which he had paid Kabila $20 million.[12] He ran a quasi "comptoir" in the DRC with International Diamond Industries-Congo (IDI-Congo), the affiliate of his Israeli firm, IDI-Diamonds Industry. IDI-Congo received 70 percent of the profits and the Congolese Government received 30 percent, which included the state diamond producer, MIBA, and all diamonds sold by private businesses. The deal was to "regulate and certify the origins of its diamonds under new UN requirements intended to weed out blood diamonds" and diamond smuggling.[16] Even with the IDI-Congo monopoly offering below-market prices for diamonds, the Congo received a greater percentage of diamond revenues than before the monopoly was in place.[17]

A report by the mines auditing service at the mines ministry was harshly critical of IDI-Congo's diamond export monopoly.[16] The IDI deal was haunted by allegations that Israelis had arrangements to train Congolese security forces in brutal techniques, as they had under Mobutu Sese Seko, and that IDI was buying diamonds from UNITA. Also, by paying below the market price, IDI encouraged smuggling into the Republic of the Congo (Brazzaville).[17]^: 10

After Laurent Kabila's assassination in January 2001, Gertler briefly lost influence in the Congo.[12] In April 2001, Laurent's son and successor, Joseph Kabila, revoked IDI's monopoly. DRC diamond producers shut out of the IDI monopoly had been unhappy with the monopoly, and the International Monetary Fund had encouraged the country to liberalize the diamond industry.[17]^: 10 Gertler soon managed to reestablish a relationship with Joseph Kabila,[12] becoming increasingly close socially, to the point that, in 2006, Kabila invited him to his wedding.[18] By 2009, DGI group was one of the largest wholesale distributors of rough and polished diamonds in the world. The group spans mining, manufacturing and sales operations.[12]

In 2001, Gertler established Emaxon Finance International Inc, in Canada, as a subsidiary of Dan Gertler International (DGI)[19] (reported by the International Development Research Centre according to the 2001 International Peace Information Service (IPIS) publication, and according to the Quebec trade register.[20]^: 5[21]) In April 2002, Emaxon secretly signed a contract through which Gertler gained a four-year right to market 88% of the rough-diamond production of the Societé minière de Bakwanga (MIBA), about a quarter of the DRC's legitimate diamond exports, at around 600,000 carats a month. Emaxon enjoyed a five-percent discount on its purchase of MIBA diamonds, which it then usually sold in the free market to the highest bidder. Emaxon lent MIBA $15 million to modernize its mining equipment.[22] In July 2017, Exmaxon's corporate registration was cancelled after failing to file annual declarations with the Quebec government for two years. The company was also sanctioned by the United States Office of Foreign Assets Control.[23][24]

Fleurette Properties is a Gibraltar-based company which has at least "60 holding companies in offshore havens such as the Virgin Islands", through which Dan Gertler has controlled concessions in the Democratic Republic of the Congo.[3] Fleurette Group refers to the group of companies with respect to which Fleurette Properties is either the direct or indirect shareholder.[25] The Fleurette Group has owned the Kansuki concession, a Congolese copper and cobalt development project, since 2006.[25] As of April 2016 it employed 30 000 people and was the largest source of private receipts for the Congolese government.[11]

In March 2004, DGI founded Global Enterprises Corporate (GEC) in partnership with Beny Steinmetz Global. In May 2004 GEC signed an agreement with the state-owned Gécamines, finalized in September 2004, to rehabilitate and operate the Kananga and Tilwezembe copper mines. The deal was ratified 13 October 2005 by presidential decree.[27] This deal was later found by the World Bank, reviewing the DRC's three biggest mining contracts, to have been approved with "a complete lack of transparency" (Mahtani 3 January 2007).[28][29] [30]

Global Enterprises Corporate's mining assets ended up being held by Nikanor plc, registered in the Isle of Man. For example, Gertler and Steinmetz placed Global Enterprises Corporate (GEC)'s 75% share in KOV into Nikanor. Nikanor was owned 75% by GEC and 25% by Gécamines at the time Nikanor was first floated on the Alternative Investment Market in July 2006.[31] This IPO raised $400 million, and Nikanor's market capitalization reached $1.5 billion.[28]

In February 2007, 22% of the Nikanor Mining company was owned by the Gertner Family Trust and 14% by Dan Gertler.[32]

In January 2008 Katanga Mining acquired Nikanor plc for $452m, rendering the company defunct.[30]

In April 2006 Gertler's DGI took a major stake in DEM Mining, a cobalt-copper mining and services company based in Katanga.[28]

In June 2006 Gertler bought Tremalt, which had a half share in the Mukondo Mine, for about $60 million from the Zimbabwean businessman John Bredenkamp.[28] [33]

In 2007 Tremalt was owned by Prairie International Ltd, of which Dan Gertler's family trust was a major shareholder. Tremalt owned 80% of Savannah Mining, which held concessions C17 and C18 in Katanga Province and 50% of the Mukondo project. The other 50% of Mukondo was held by Boss Mining, which in turn was 80% owned by Central African Mining & Exploration Company (CAMEC).[26] Boss Mining had rented and operated Bredenkamp's half of Mukondo. Gertler terminated this arrangement.[28]

When CAMEC bought Boss Mining in February 2006, its then- owner, Billy Rautenbach, a Zimbabwe businessman, gained about 17% of CAMEC shares.[33] Gertler and CAMEC made plans to combine the Mukondo assets and a Katanga Province copper and cobalt project, into a new holding company. Rautenbach would be excluded from ownership in the new company, due to the hostile relations that had developed between him and the DRC government.[26]

In November 2007, Prairie International and CAMEC signed a memorandum of understanding to complete the deal.[34] In November 2007 the digital mining industry Miningmx reported that Dan Gertler's Prairie International Ltd. and CAMEC had created a joint venture vehicle in the Mukondo with concessions held by the state-owned Gécamines. "Tremalt will be transferred into the joint venture vehicle."[26] In February 2008 the two companies announced that the Mukondo Mountain operations had restarted.[35]

Gertler has been a partner with Glencore International Plc., the largest company in Switzerland and the world's largest commodities trading company.[36][37][38] One of their mines is Mutanda.[3]

In the course of the Congo events, Glencore and Gertler partnered in Nikanor from 2007 until the final merger with Katanga Mining in late 2007 in a transaction valued at US$3.3 billion.[39] A 2011 article by Reuters journalists described Glencore as "the biggest company you never heard of":[40]

In June 2007, Glencore and partner Dan Gertler, an Israeli mining magnate, paid £300 million for a quarter of mining company Nikanor, which planned to revive derelict copper mines next to Katanga Mining's properties. The contract gave Glencore exclusive sales rights to all Nikanor's output, an "offtake" agreement. Katanga lost 97% of its market value over the final six months of 2008. Running out of cash in the financial crisis, Katanga accepted [Glencore] control, issuing more than a billion new shares for about US$500 million in a convertible loan and rights issue. A share that grew to 74% went to Glencore. In 2011 copper prices regularly set records above US$10,000 a ton, and the value of Katanga's stock market value was nearly US$3.2 billion. Katanga lost US$108 million in 2009, but posted an annual profit of US$265 million in 2010.[40]

Glencore had initially stopped all payments to Gertler to respect the 2013 US sanctions, but following a lawsuit filed by Gertler in a Congolese court, Glencore paid about 2.5% of the sales from its mines in the Congo in royalties to Gertler in euros, not dollars.[8]

In July 2008 Catela Global, a company owned by Gertler's family trust, offered about C$296 million to buy Anvil Mining shares, around 25% of Anvil, in a private placement.[41] An RBC Capital Markets analyst, Cailey Barker, speculated that Anvil would use the cash infusion for acquisitions, but the company said it would remain focused on completing its Kinsevere Stage II project.[42] In August 2008, Anvil lowered the amount to be paid to about C$237 million, due to "the significant deterioration in market conditions for resource companies".[43]

"In 2007 Africa Management Limited was created as a joint venture between South African housing minister Tokyo Sexwale's investment vehicle Mvelaphanda Holdings, its associate company Palladino Holdings, and Och-Ziff Capital Management, a $30 (~$38.3 billion in 2021)-billion New York hedge fund (Wood et al. 2012)."[44]

In June 2010 the Financial Post of Canada reported that Highwind Properties, a company registered in the British Virgin Islands, now owned the Kolwezi project. The newspaper, citing unnamed sources, linked the company to Dan Gertler.[45] In August 2010 Eurasian Natural Resources Corporation, a company listed in London with most of its operations in Kazakhstan, said it was buying indirect control of the Kolwezi licence from Dan Gertler.[46] ENRC was buying 50.5% of Camrose from Gertler. Camrose's key asset was a 70% interest in the Kolwezi project.[47] The Kolwezi property was sold to Gertler for $20 million. He in turn sold 50.5% of Camrose to ENRC for $175 million. In April 2011 a British MP called for an investigation of the transaction under the Bribery Act.[48]

Camrose's other assets included a "64% stake in Canada listed Africo Resources which held a 75% interest in Kalukundi exploitation licence as well as a 56% indirect interest in Comide Sprl, which held the exploitation licence for Mashitu, Pangalume and Kii tenements."[49]

According to a 2012 article in the Mail and Guardian,[44] Camrose acquired a controlling stake in Africo through a simultaneous, complex and clever set of transactions from 2007 to 2008. Located in the south-eastern DRC's copper belt, the lucrative Kalukundi concession owned by Congolese company Swanmines, which was part-owned by Canadian miner Africo Resources, had potential for high copper and cobalt yields. In April 2007 Africo was preparing to purchase enough shares to become the majority shareholder of Kalukundi when a third party entered into litigation, claiming prior ownership. Dan Getler offered to help, through his connections with President Joseph Kabila. Gertler purchased the third-party company and resold it to Africo. In July 2008, the Getler company, Camrose Resources, purchased Africo shares worth about $100 million (~$125 million in 2021). Camrose then held a 63% controlling stake in Africo. Camrose paid for Africo through a loan from an offshore British Virgin Islands-registered company called Vipar, "an affiliate of Africa Management Limited."[44]

In 2008, Camrose Resources Ltd, a Gertler family trust company, purchased s 62.5% share of Africo Resources. In February 2009, Africo confirmed that it had the go-ahead from the DRC government for the 75%-owned Kalukundi project.[50]

In 2009 Vancouver, Canada-based (through Dan Gertler's newly formed British Virgin Island-based company, Highwinds) sold ENRC 50.5% of Kolwezi Mine Tailings (KWT) a "multi-billion dollar copper and cobalt tailings reprocessing facility."[49] The facility had been expropriated in 2009 by the DRC from then-Vancouver, Canada-based Highwinds.[51] In September 2009 the DRC government revoked the license of Canadian mining firm First Quantum Minerals to operate the Kolwezi copper tailings project. First Quantum appealed the decision. The CEO, Philip Pascal, said "the activities on the legal side come from a small and very influential group of individuals in the Congo and don't necessarily mirror the sentiments of a number of other authorities".[45] Later, the government also expropriated the Frontier and Lonshi mines from First Quantum.

In August 2010, Camrose acquired British Virgin Island-based Highwind Group.[52] In March 2011 the state-owned Sodimico sold its 30% stake in these two mines for $30 million to two companies registered in the British Virgin Islands. The total estimated value of the mines was over $1.6 billion.[53]

Emerald Star Enterprises Limited, a company controlled by Gertler's family trust, was incorporated 29 October 2009 in the British Virgin Islands. On 21 December 2009 Emerald Star sold an option to buy the remaining 50% stake of Société Minière de Kabolela et de Kipese SPRL, (a company formed by Melkior Resources Inc and Gécamines that holds the rights to develop the Kabolela cobalt-copper deposit) to Katash-founded mining company Eurasian Natural Resources Corporation (ENRC) who already owned 50%. The other 50% belonged to state-owned Gécamines. In February 2010 Emerald Star Enterprises Limited purchased Gécamines' 50% for $15 million and sold these shares to ENRC for $50 million. Emerald Star Enterprises Limited paid $15 million, and sold for $75 million, making a 500 percent return.[3]

Rowny Assets Limited is one of the offshore firms owned by Gertler's family and is described in the initial Glencore public offering (IPO) prospectus.[54] Gécamines sold its 20% share of the Mutanda project to Rowny Assets. This company, registered in the British Virgin Islands, was said to be "associated" with Gertler. The share was worth an estimated $600 million, but was sold for $137 million.[53]

Rowny Assets Limited was also in Glencore's 4 May 2011 listing prospectus, and acquired a 20% interest in Mutanda from Gécamines.[55]

Biko Invest Corporation (BVI), linked to Dan Gertler and incorporated 23 February 2011 in the British Virgin Islands, bought a quarter of Kansuki Sprl from Gécamines in 2011.[55]

In April 2013, Gertler sold one of his Congo-based oil companies, Nessergy Ltd, for $150 million.[58] Advocacy group Global Witness criticized the deal for lack of transparency on the part of Gertler and the Congolese government.[59]