Congo Ousts Mining Leader in a Cloud of Corruption Claims

By Brian Kingston

Congo Ousts Mining Leader in a Cloud of Corruption Claims

République démocratique du Congo (RDC) has ordered the suspension of Mines Minister Martin Kabwelulu in the wake of allegations of corruption and profligacy. The decision is the latest in a series of attempts to rein in Congo’s sweeping executive rule.

RDC President Joseph Kabila – who has faced persistent allegations of nepotism and corruption, including from human rights advocates – had hinted at impending action to halt the public spending spree that Kabwelulu has overseen as mines minister.

“The problems that we’re going through now is not the result of inconsequential poor decisions or extenuating circumstances, but are instead the result of the conscious choices of those who committed these acts,” Kabila said in November.

The announcement of Kabwelulu’s suspension in November came on the heels of a spectacular rise in the prices of tin, cobalt, copper and other metals mined in Congo.

The country’s top court had already barred Kabkwelulu from travelling abroad – an extraordinary step in a country where foreign-exchange control is by far the most powerful tool in the legislative arsenal.

Suspending Kabkwelulu will further diminish the public perception of Kabila’s ability to stem spending that has been largely driven by his ties to mining companies. Kabwelulu wields widespread influence and is a key member of Kabila’s elite.

The withdrawal of Kabkwelulu’s assets was reported Wednesday morning by state television station and Congolese newspaper Conatel.

Corruption scandals have dogged Kabila’s nearly two-decade presidency. An investigation into a $1bn payment from mining giant Glencore to the government cleared Kabwelulu in 2012, but dropped several other key figures including senior officials at the Central Bank and the private banking division of commercial bank PNB, Societe Generale and Bank of the Congo. Last year, the ombudsman ruled that Kabwelulu did not properly handle a money transfer from German investment group E-Capital.

The state has been accused of abusing its monopoly over mining in Congo’s mineral-rich Katanga province to enrich itself. Congo’s oil reserves have grown only slowly, however, and don’t generate revenues large enough to satisfy the huge public needs.

Congo’s government issued $45.4bn in debt to Chinese state-owned banks in 2014. This year it faced funding shortfalls and staved off a third-term declaration by failing to deliver on previous promises to reduce borrowing. With some $53bn left to repay by 2025, Kabila is accused of limiting revenue growth to meet that target.

Meanwhile, Congo’s equity of the international mining industry has increased by about one third since 2001 to account for just under a quarter of global mining investment. According to the Mining Information Centre, the sector employs 12% of the population and accounts for 62% of exports.

Glencore said Tuesday that it had not been informed of any decision to suspend Kabkwelulu. But its lawyers were made aware that the suspension was imminent, it added.

However, shortly after RDC’s announcement Tuesday, Glencore’s share price dropped by 5.8% in the Hong Kong market as investors feared it would trigger a less favourable mining agreement with Congo.

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