Canadian mining group Ivanhoe accused of ‘gaming’ DRC's corrupt body politic — report

The report could spell big trouble for Ivanhoe and its US-born boss and founder Robert Friedland as investors increasingly want untainted returns from their capital while Ottawa takes a dim view of foreign corrupt practices, placing the company in the cross-hairs of the Canadian police. The saga also comes in the wake of revelations that mining and commodity trader Glencore engaged in corruption on a grand scale in Africa, highlighting the wicked spell the “resource curse” still casts over the region's body politic. 

To wit, The Sentry report maintains Ivanhoe — which it says has denied the allegations — gained control of prized assets in the African Copperbelt by cutting in a politically-connected individual, one of the oldest, but most effective, tricks in the book. Meanwhile, the report alleges that the Congolese government broke its own laws to ensure Ivanhoe retained lucrative exploration licenses.

“Evidence examined by The Sentry reveals that the multi-billion-dollar company ... arranged to share a potentially lucrative cut of local subsidiaries with a politically connected individual, just as the Congolese government took apparently illegal actions allowing Ivanhoe to maintain exploration licenses. According to The Sentry’s analysis, those licenses by law should have been surrendered by Ivanhoe years ago,” The Sentry said. 

The prize at stake here is Africa's largest copper discovery to date, “a project poised to become the world’s third-largest copper producer by 2024 and the second-largest thereafter, with the highest grades of ore in the world.” The licences refer to an area covering covering roughly 2,400-square-kilometers (about 925-square-miles) that the company refers to as its “Western Foreland Exploration Project". The area is adjacent to the company's existing Kamoa and Kakula copper mines in the DRC copperbelt.

Copper has been rebranded as a “green metal” as it is seen as crucial to the global energy transition from fossil fuels. This means the sky is limit for future copper demand.  

The Sentry report also flags a previously unreported detail in Ivanhoe's 2012 annual report disclosing the discomfiting fact that Canadian police conducted a search warrant at the company's headquarters on the basis of “probable cause” that Canada's foreign bribery statute had been violated.

“Hidden camera videos published this September apparently show Vidiye Tshimanga, then a close advisor to DRC President Félix Tshisekedi, claiming to hold 20% of an unidentified Ivanhoe Mines subsidiary and telling unidentified people he believed to be prospective investors that they could pay him off using concealed business arrangements, including channelling payments to political parties by tendering contracts to well-connected service providers, all with the approval of the president,” The Sentry said. 

“Tshimanga, who has denied wrongdoing, subsequently resigned and is facing prosecution, claiming he was entrapped by malicious actors operating on false pretences, and the presidency has said that any advisor found to be in violation of legal or ethical duties would be held to account. Neither Tshimanga nor an attorney representing him responded to questions from The Sentry.”