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Biden open to easing sanctions on billionaire Gertler in return for Congo exit

17th May 2024

By: Bloomberg

  

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The US government is open to easing sanctions on billionaire mining magnate Dan Gertler if he gives up his business operations and assets in the Democratic Republic of Congo, where Washington’s interest in critical minerals has run up against his problematic royalties ownership.

The Treasury Department is willing to grant limited sanctions relief to Gertler, an Israeli citizen, as a way to incentivize his complete exit from Congo, including relinquishing his royalty streams on three strategic projects, according to two US officials, who asked not to be identified as the talks are ongoing.

The mines are rich in copper and cobalt, a key ingredient in most electrical vehicle batteries and which is almost exclusively mined in Congo. While Chinese miners have thrived in the Central African country, Western investors have been reluctant, in part because of a legacy of corruption.

Gertler was sanctioned in 2017 by the US Treasury for “hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals” in Congo under the previous administration of President Joseph Kabila. In the waning days of his presidency, Donald Trump granted him a one-year reprieve that was cancelled early by the Biden administration.

The willingness to loosen sanctions to purge Gertler from the projects, first reported by the New York Times, come as the US seeks to boost investments in critical minerals needed for EVs from sources not tied to Chinese firms that dominate the industry.

Gertler has never been charged with a crime and denies any wrongdoing. Gertler and his US-based lawyers didn’t respond to emailed requests for comment.

He cut a deal with Congo in 2022 to give back some of his assets in exchange for help lobbying the US government to lift his sanctions. But as part of the agreement he retained his royalties in the world’s biggest non-Chinese sources of cobalt.

Those royalty streams have enriched Gertler by hundreds of millions of dollars from metal projects owned by Eurasian Resources Group and Glencore Plc, according to calculations made by Congo Is Not For Sale, a consortium of Congolese and international anti-corruption groups.

Glencore declined to comment, while ERG didn’t respond to emails requesting comment. Congo’s government didn’t immediately provide comment when contacted Thursday by text message, and the office of President Felix Tshisekedi didn’t respond to text messages requesting comment.

Gertler first came to Congo in 1997 and struck up a friendship with Kabila that led to billions of dollars worth of investments in minerals and oil.

Edited by Bloomberg

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