Kalukundi mine

Copper mines in the Democratic Republic of the CongoUnderground mines in the Democratic Republic of the CongoMining in Katanga Province
4 min read

In September 2008, a Canadian mining company called Africo Resources told its shareholders that the deposit it was developing near Kolwezi was worth $1.47 billion. It was a big number, and it rested on a simple geological fact: the Central African Copperbelt is one of the richest metal-bearing belts on the planet, and Kalukundi sits right inside it. What happened next was not geological. It was legal, political and, according to US federal prosecutors, criminal. And a decade and a half later, the deposit is still mostly in the ground.

A Simple Ownership Structure

Kalukundi's legal skeleton is tidy on paper. The mining lease is held by a company called Swanmines, owned 75 percent by Africo Resources and 25 percent by the state mining company Gécamines. A 2006 feasibility study projected 800,000 tonnes of ore a year, yielding roughly 16,400 tonnes of copper and 3,800 tonnes of cobalt annually. The site is 32 kilometres west of the enormous Tenke Fungurume mine, 65 kilometres by road from Kolwezi, near a major power line and a working railway. Everything was positioned for a straightforward development. What went wrong had nothing to do with the rocks.

The Dispute

In 2007 a Congolese company called Akam Mining claimed it had acquired control of Swanmines. A superior court in Lubumbashi upheld that claim. In September 2007 the Congolese justice minister at the time, Georges Minsay Booka, directed Gécamines to disregard the court and treat Akam as having no stake. Into this confusion walked the Israeli mining magnate Dan Gertler. In 2008 Gertler offered to buy a controlling stake in Africo through a vehicle called Camrose Resources. According to US prosecutors who later pursued the case, Gertler paid about $900,000 in bribes to Congolese court officials to delay a ruling until Africo shareholders could vote on his buyout. The shareholders accepted. Gertler's Camrose Resources ended up with 63 percent of Africo - and with it the mine. In February 2009, after a government review of Katanga mining contracts, Africo renegotiated terms with the DRC government and Gécamines.

Och-Ziff

The bribes did not stay secret. Federal prosecutors in the United States traced a web of payments from Gertler through the hedge fund Och-Ziff Capital Management, which had been financing Gertler's African deals. In 2016 Och-Ziff agreed to pay a $412 million settlement as restitution for passing bribes to Congolese officials in connection with the Kalukundi affair and related transactions. Africo's own investors - diluted, defrauded, locked out of the rise in value the mine should have produced for them - filed a separate complaint against Och-Ziff that became public in 2019. In 2020 the restitution payment to Africo investors was finally distributed, thirteen years after the scheme began. Meanwhile the mine itself had passed through other hands. In 2010 the Eurasian Natural Resources Corporation, a London-listed company with operations in Kazakhstan, bought 50.5 percent of Camrose Resources, and by 2012 had acquired the rest. ENRC restructured as the privately-held Eurasian Resources Group in 2013. ERG swept up the remaining fragments of Africo in 2016.

Rock That Outlasts Paperwork

Through all of it - the Akam ruling, the Gertler offer, the bribes, the settlement, the ownership handoffs - the deposit at Kalukundi sat where it had always sat, 65 kilometres from Kolwezi, under the red plateau. The workers who would have mined it, the families in the villages around Mutshatsha and Kolwezi who would have stood to benefit from tax revenue and employment, waited through a decade that mostly happened in courtrooms in Lubumbashi, London and New York. The Congolese communities living closest to the ore bore the cost of the delay: jobs that did not arrive, infrastructure promised and not built, revenue that vanished into offshore accounts before a single shift was worked. A mine is more than a business asset. It is a contract, whether explicit or not, between a company and a place. At Kalukundi the rocks kept their side of the bargain. The corporate structures above them did not.

From the Air

Located at 10.62 degrees south, 25.90 degrees east, in the former Katanga Province (now Lualaba). Best viewed from 10,000-14,000 feet AGL; the site sits 32 km west of the Tenke Fungurume operation (a much larger red-brown scar visible on a clear day) and 65 km east of Kolwezi town. Nearest airport is Kolwezi (FZQM); Lubumbashi International (FZQA) is the major regional hub about 280 km southeast. Dry-season (June-September) flying offers the clearest views; afternoon thunderstorms are common November through April.