The U.S. Department of Treasury has issued sanctions against Israeli billionaire Dan Gertler on allegations of human rights abuse and corruption. Gertler is a senior adviser to the Fleurette Group, which held substantial stakes in two mines in the Democratic Republic of Congo—a country notorious for child labor and other human rights abuse practices in the mining industry.
Fleurette Group sold its Mutanda stake to Glencore earlier this year, but before that, according to the Treasury, the Israeli entrepreneur "used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state."
This resulted in the DRC losing more than US$1.36 billion in revenues between 2010 and 2012 because Gertler arranged for mining assets to be sold at much lower prices than they were worth as the buyers were offshore entities linked to him.
What’s more, in 2013, Gertler sold back to the DRC government drilling rights to an offshore oil block in Lake Albert for US$150 million, after acquiring the rights for only half a million dollars, the Treasury also said.
The Fleurette Group held, until February this year, a 31-percent interest in the Mutanda copper mine as well as a stake in the adjacent Kansuki cobalt mine. Fleurette sold both its stakes to its partner in the project, Glencore.
The Treasury imposed sanctions on 12 other people as well, with Treasury Secretary Steve Mnuchin saying that "Treasury is freezing their assets and publicly denouncing the egregious acts they've committed, sending a message that there is a steep price to pay for their misdeeds."
The Democratic Republic of Congo holds proven oil reserves of 180 million barrels, although estimates peg the potential resources at more than 5 billion barrels. Gas reserves, including methane and natural gas, are estimated at around 30 billion cu meters.
The DRC is also the third-largest producer of cobalt globally, and also has substantial copper and untapped gold reserves, along with rare earths, which are essential for not just consumer electronics but for renewable energy installations and many other indispensable applications.
By Irina Slav for Oilprice.com
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- What’s Next For U.S. Shale Giants?
- What Will Drive The Next Oil Price Crash?
- Wall Street Returns To U.S. Shale With A Bang