Glencore: Settlement of dispute with Ventora and Africa horizons

Africa Link Reports

Further to its announcement of 27 April 2018 in respect of freezing orders filed against Mutanda Mining Sarl (“Mutanda”) and Kamoto Copper Company SA (“KCC”), subsidiaries of Glencore plc, by Ventora Development Sasu (“Ventora”), a company affiliated with Mr. Dan Gertler,  Glencore has carefully considered its legal and commercial options in connection with its dispute with Ventora and Africa Horizons Investments Limited (“AHIL”), also a company affiliated with Mr Dan Gertler, and its obligations to its various stakeholders, including its shareholders, customers and the communities in which it operates in the Democratic Republic of the Congo (“DRC”).  

Glencore and Katanga Mining have determined that in the circumstances the only viable option to avoid the material risk of seizure of its assets under DRC court orders is for Mutanda and KCC to pay the relevant royalties as and when they become due to Ventora in non-US dollars, without involving US persons, in order to discharge their obligations under the terms of the pre-existing contracts. Mutanda, KCC, Ventora and AHIL have on this basis agreed to withdraw all pending and threatened litigation between them pursuant to a settlement agreement signed by the parties.

Glencore believes that payment in non-US dollars of royalties and access premiums to Ventora without the involvement of US persons would appropriately address all applicable sanctions obligations.  

Glencore is a substantial investor and partner in the DRC and is committed to sustainable mining, creating employment and supporting local businesses, thereby providing substantial revenues to local and national Government and making voluntary contributions to improve living standards in the communities in which it operates.  KCC and Mutanda employ in excess of 12,000 people.  KCC and Mutanda represent an investment by Glencore of close to $7 billion at the end of 2017.  

In the last three years, our operations in the DRC have paid over $1.6 billion in taxes and royalties to the government with $407m paid in 2017.  KCC and Mutanda are significant producers of cobalt, a metal which is of critical importance for batteries for electric vehicles and portable electronics as well as essential technology, defense and industrial applications.  Glencore’s operations are the single largest source of industrial cobalt which guarantees the provenance of the material and the exclusion of child labour from the supply chain.