Bloomberg News

Congo and IMF to Discuss Disputed Mine Deal, Premier Says

February 14, 2013

Officials from Democratic Republic of Congo and the International Monetary Fund will meet to discuss a mining deal that led the IMF to cancel loans to the country last year, Congo’s prime minister said.

The Washington-based lender terminated its $532 million loan agreement on Nov. 30 after Congo failed to publish sufficient detail of a 2011 asset sale by state-owned copper miner Gecamines to a company associated with Israeli billionaire Dan Gertler. Congo wants to settle the dispute and begin a new program with the fund, Prime Minister Matata Ponyo told reporters today in the capital, Kinshasa.

“We agree that the question of the contract that brought down our relationship needs to be resolved,” he said. “There will be bilateral discussions between experts of the International Monetary Fund and the DRC so we can end this and propose a basis for a new beginning.”

Congo had the lowest per capita gross domestic product in the world last year, according to IMF data adjusted for purchasing power. The premature end to the three-year loan program, which was meant to promote growth and reduce poverty, cost Congo about $225 million, according to the IMF.

The Central African country produces about half the world’s cobalt and about 3 percent of its copper and has large deposits of gold, coltan, tin and diamonds.

Under the terms of its accord with the IMF, the government agreed to publish all contracts related to oil, mining and forestry to improve transparency in its revenue collection from those industries.

Copper Project

The IMF canceled the program when the government did not provide enough detail of Gecamines’ June 2011 sale of its 25 percent in the Comide Sprl copper project to Gertler’s Straker International Corp. The deal was one of five sales in 2011 by Congo’s state-owned mining companies to Gertler that the IMF questioned amid concerns about how the country was managing its mining industry.

In December, Gertler sold Straker’s stakes in Comide to London-listed Eurasian Natural Resources Corp. along with his shareholdings in several other properties for $550 million.

There will be a meeting in Kinshasa about the Comide contract “when the authorities are ready,” Oscar Melhado, the IMF’s resident representative in Congo, said in an e-mailed response to questions.

Ponyo said he met with IMF managing director Christine Lagarde twice in Washington last week to discuss mining governance and the possibility of a new loan agreement.

To contact the reporter on this story: Michael Kavanagh in Kinshasa at mkavanagh9@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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