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Congolese government breaks own rules in sale of mine shares to Glencore

The Democratic Republic of Congo went against its own regulations, and an agreement with the World Bank, by not publicising the sale of its shares in a copper mine, the International Monetary Fund told Reuters30 Jun 2015

The government sold its shares in the Kawama mine to Mutanda Mining, a join venture between Swiss commodity trading and mining company Glencore and the Fleurette Group, in February, Glencore told Invezz.com.

The details of the sale ought to have been posted by the Mines Ministry or the government gazette within 60 days, under a 2011 decree designed to increase transparency, the IMF said, according to the Reuters report. It also broke an agreement with the World Bank on "posting contracts and competitive bidding for divestment of government assets", the IMF said.

"This sale of asset by the state-owned enterprise, Gecamines, as confirmed by the company acquiring the asset, was not posted within 60 days of its signing on the website of the Ministry of Mines nor gazette," the IMF's Congo representative, Oscar Melhado, said in an email to Reuters.

"It does not also comply with some criteria of the governance matrix agreed between the government with the World Bank related to posting contracts and competitive bidding for divestment of government assets," he said.

Congolese state miner Gecamines owned a 30% stake in the Kawama mine, with the rest owned by local mining company Dino Steel International, Mining Weekly said.

The IMF cancelled a loan program with Congo in 2012 following the discovery of a similar secret sale by Gecamines, Bloomberg said. However, the IMF does not currently have a lending programme in place with Congo, so would not be able to impose a similar sanction in this case, Reuters said.

A source close to the deal said Dino Steel received $20 million and Gecamines $10 million for the concession, Reuters said.