Dan Gertler

Dan Gertler (born December 1973) is an Israeli businessman, the founder and President of the DGI (Dan Gertler International) Group of Companies. He has large interests in diamonds and copper mining in the Democratic Republic of the Congo (DRC).

Background

Dan Gertler was born in December 1973. He is a grandson of Moshe Schnitzer, first President of the Israeli Diamond Exchange, who won the Israel Prize in 2004. His family was traditionally involved in cutting and merchandising diamonds. While growing up, Gertler spent as much time as he could learning about the diamond trade from his father and grandfather. As soon as he had completed his 3-year mandatory service in the Israeli Defense Forces he opened his own diamond business.^[1]

Gertler founded the Dan Gertler International (DGI) group of companies in 1996.^[2] The Yedioth Aharonoth weekend supplement on 19 September 1999 asserted that in 1997 Gertler had been involved in financing a program to buy diamonds in Liberia and Sierra Leone in exchange for military training and arms deliveries. The plan fell apart due to the chaotic political changes and military events in Sierra Leone at that time.^[3] The Israeli arms dealer Yair Klein, who had been convicted for earlier involvement in Colombia, was charged with arming and training rebels, and was thrown in jail.^[4] Gertler was also involved in trading in Russia and Guinea.^[3]

Congo diamond trade

After gaining experience with purchasing and marketing artisanally mined diamonds from the DRC, Gertler started negotiations to establish a partnership with the Societé Minière de Bakwanga (MIBA), a state-controlled diamond mine operator.^[1] Letters allegedly written early in 1998 by Gertler to the DRC Minister of Mines, Kibassa Maliba, described the capability of Dan Gertler Diamonds (DGD). They said that DGD "owns and operates its own mining, transportation and security equipment, and trains its own personnel". The correspondence discussed a contract to buy rough diamonds worth $2 billion over a period of 24 months. Gertler's International Diamond Industries (IDI) was eventually awarded an 18-month monopoly on DRC diamond exports in July 2000.^[3]

Some reports say Gertler paid $20 million to the dominant Kabila clan in the DRC for a monopoly on exporting Congo diamonds. The deal reportedly included a reciprocal agreement to arrange arms shipments from Israel to the DRC.^[2] Others say that any involvement in an arms deal was highly unlikely after the fiasco in Sierra Leone, and that his family would not have allowed it. It is clear that the DRC President, Laurent-Désiré Kabila, needed the money to fund his government's struggle against rebels in the Second Congo War, which lasted from 1998 to 2003, with millions of people dying. Any assistance that Gertler could provide in arranging for arms and training by Israel would have been welcome.^[3]

The press picked up on the story, saying Gertler'sdeal included an arrangement for the Israelis to train Congolese security forces in brutal techniques, as they had under Mobutu Sese Seko, that IDI was buying diamonds from UNITA and that by paying below the market price IDI was encouraging smuggling into the Republic of Congo (Brazzaville).^[5] In 2004 Yossi Kamisa, who had formerly been an officer in the Israel Police Border Guard Anti-Terrorism Unit, filed a lawsuit against Gertler alleging that in July 2000 he had been hired to train the DRC army as part of Gertner's diamond franchise deal and that he witnessed Gertler bribing Congolese government officials and Angola Army generals hired to protect Kinshasha. Gertner soon after cancelled their verbal contract. Kamisa said he attempted to arrange for the training on his own account, but ran into roadblocks from senior officials. However, he alleged that Gertner subsequently hired other Israeli's who were able to get around the roadblocks.^[6]

After Laurent-Désiré Kabila died in January 2001, Gertler briefly lost influence in the Congo, but soon managed to reestablish a relationship with his son and successor Joseph Kabila.^[2] In April 2002 Emaxon Finance, a Canadian company owned by DGI group, gained a four-year right to market 88% of MIBA's rough-diamond production, about a quarter of the DRC's legitimate diamond exports at around 600,000 carats a month. Emaxon also gained a 5% discount on the diamonds it bought in exchange for lending MIBA $15 million to be used in modernizing its mining equipment.^[7] Gertler became increasingly close to President Joseph Kabila, and was invited to Kabila's wedding in 2006.^[8] By 2009 DGI group was one of the largest wholesale distributors of rough and polished diamonds in the world. The group spans mining, manufacturing and sales.^[2]

Early copper mining activity

In March 2004, Dan Gertler International in partnership with Beny Steinmetz Global founded a firm named Global Enterprises Corporate (GEC). In May 2004 GEC signed a preliminary agreement with the state-owned Gécamines, finalized in September that year, to rehabilitate and operate the Kananga and Tilwezembe copper mines. The deal was ratified by presidential decree. Gertler and Steinmetz placed GEC'S 75% share in KOV into Nikanor Plc., registered in the Isle of Man. Nikanor's stock was listed on on the LSE's Alternative Investment Market in London in July 2006. The IPO raised $400 million, and Nikanor's market capitalization reached $1.5 billion.^[9] In February 2007, 22% of the Nikanor Mining company was owned by the Gertner Family Trust and 14% by Dan Gertler.^[10] In January 2008 Katanga Mining acquired Nikanor PLC for $452m.^[11]

In April 2006 Gertler's DGI took a major stake in DEM Mining. a cobalt-copper mining and services company based in Katanga.^[9] In June 2006 Gertler bought Tremalt, which had a half share in the Mukondo Mine for about $60m from the Zimbabwean businessman John Bredenkamp.^[12] In 2007 Tremalt was owned by Prairie International Ltd, of which Dan Gertler’s family trust was a major shareholder. Tremalt owned 80% of Savannah Mining, which held concessions C17 and C18 in Katanga Province and 50% of the Mukondo project. The other 50% of Mukonda was held by Boss Mining, which in turn was 80% owned by Central African Mining & Exploration Company (CAMEC).^[13] Boss Mining had rented and operated Bredenkamp's half of Mukondo. Gertler terminated this arrangement.^[9]

Billy Rautenbach, another Zimbabwe businessman, had formerly owned Boss Mining. In a February 2006 deal, Rautenbach had gained about 17% of the CAMEC shares when CAMEC bought Boss.^[12] Gertler and CAMEC made plans to combine the Mukondo assets into a new holding company. Billy Rautenbach would be excluded from ownership in the new company due to the hostile relations that had developed between him and the DRC government.^[13] CAMEC and Prairie International signed the MOU to complete the deal in November 2007.^[14] In February 2008 the two companies announced that the Mukondo Mountain operations had restarted.^[15]

In July 2008 Anvil Mining announced that it was selling about C$296 million worth of shares worth to Catala Global in a private placement. Catela Global, a company owned by Dan Gertler's family trust, would own around 25% of Anvil on completion of the deal.^[16] Despite speculation that Anvil would use the cash infusion for acquisitions, the company insisted it would remain focused on completing its Kinsevere Stage II project.^[17] In August 2008 the amount to be paid was lowered to about C$237 million due to "the significant deterioration in market conditions for resource companies".^[18] Camrose Resources Ltd, a Gertler family trust company, purchased s 62.5% share of Africo Resources in 2008. The next February, Africo confirmed that it had the go ahead from the DRC government for 75%-owned Kalukundi project.^[19]

Later mining activity and controversy

In September 2009 the DRC government revoked the license of Canadian miner First Quantum Minerals to operate the Kolwezi copper tailings project. First Quantum appealed the decision. The CEO Philip Pascal said "the activities on the legal side come from a small and very influential group of individuals in the Congo and don't necessarily mirror the sentiments of a number of other authorities".^[20] Later the government also expropriated the Frontier and Lonshi mines from First Quantum. In March 2011 the state-owned Sodimico sold its 30% stake in these two mines for $30 million to two companies registered in the British Virgin Islands. The total estimated value of the mines was over $1.6 billion.^[21]

In June 2010 the Financial Post of Canada reported that Highwind Properties, a company registered in the British Virgin Islands, now owned the Kolwezi project. The newspaper, citing unnamed sources, linked the company to Dan Gertler.^[20] In August 2010 ENRC, a company listed in London with most of its operations in Kazakhstan, said it was buying indirect control of the Kolwezi licence from Dan Gertler.^[22] ENRC was buying 50.5% of Camrose from Gertler. Camrose's key asset was a 70% interest in the Kolwezi project.^[23] The Kolwezi property was sold to Gertler for $20 million. He in turn sold 50.5% of Camrose to ENRC for $175 million. In April 2011 a British MP called for an investigation of the transaction under the Bribery Act.^[24]

In July 2011 Fleurette Properties, owned by Dan Gertler, settled a claim over having missed paying in full an installment on an $8 million debt after flooding at the Kipushi copper and zinc mine in the DRC. The mine has been out of operation since 1993, but there are plans to bring it back into production. An electricity problem caused the pumps to fail and the mine to flood in November 2010, and emergency measures had to be taken to drain the mine.^[25]

In September 2011 the International Monetary Fund asked for explanations from Sodimico and Gecamines, both state owned mining companies, of sales of assets below market value and without publicity. At the time, the IMF was providing loans to the DRC worth $561 million to improve the economy. Gecamines sold its 20% share of the Mutanda project, worth an estimated $600 million, for $137 million. The buyer was Rowny Assets, a company registered in the British Virgin Islands and "associated" with Gertler. Gecamines sold its 25% percent share in the neighboring Kansuki copper and cobalt project to another British Virgin Islands entity associated with Gertler for an undisclosed price. Kansuki was said to potentially be a larger producer than Mutanda.^[21] Analysts criticized lack of transparency in the disposal of key assets by Gecamines, which the government was preparing for sale to private investors.^[26]

References

1. ^ ^{a b} "Dan Gertler's Biography". Spoke. http://www.spoke.com/info/pA9NMXh/DanGertler. Retrieved 2011-11-16. 
2. ^ ^{a b c d} "Gertler, Dan (DGI Group)". Rough and Polished. 03.12.2009. http://www.rough-polished.com/en/database/10375.html. Retrieved 2011-11-15. 
3. ^ ^{a b c d} "Have African-based Diamond Monopolies Been Effective?". Central Africa Minerals and Arms Research Bulletin (International Peace Information Service (IPIS)) (2). 18 June 2001. http://www.ipisresearch.be/download.php?id=72. Retrieved 2011-11-17. 
4. ^ Nicole Gaouette (February 21, 2002). "Inside Israel's diamond trade: a family affair". Christian Science Monitor. http://www.csmonitor.com/2002/0221/p01s03-wome.html/(page)/4. Retrieved 2011-11-19. 
5. ^ INGRID J. TAMM (2002). "DIAMONDS IN PEACE AND WAR: SEVERING THE CONFLICT-DIAMOND CONNECTION". WORLD PEACE FOUNDATION. http://belfercenter.ksg.harvard.edu/files/wpf30diamonds.pdf. Retrieved 2011-11-15. 
6. ^ "Lawsuit claims corruption in Congo diamonds for arms deal". Globes. 18 February 04. http://www.globes.co.il/serveen/globes/docview.asp?did=772481. Retrieved 2011-11-15. 
7. ^ "Sifting Through A Dark Business". Newsweek. Dec 7, 2003. http://www.thedailybeast.com/newsweek/2003/12/07/sifting-through-a-dark-business.html. Retrieved 2011-11-15. 
8. ^ "Fight over mineral wealth shifts from battlefields to boardrooms". Business Report (SA). 22-Jul-2007. http://www.zwnews.com/issuefull.cfm?ArticleID=17045. Retrieved 2011-11-17. 
9. ^ ^{a b c} Barry Sergeant (03 Apr 2007). "Nikanor’s DRC mining contract quandary". http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=19037&sn=Detail. Retrieved 2011-11-16. 
10. ^ Martin Creamer (26 February 2007). "DRC's Katanga governor woos bona fide resources investors, heaps praise on Nikanor". Mining weekly. http://www.miningweekly.com/article/drcs-katanga-governor-woos-bona-fide-resources-investors-heaps-praise-on-nikanor-2007-02-26. Retrieved 2011-11-15. 
11. ^ "History". Katanga Mining. http://www.katangamining.com/kat/about_us/history/. Retrieved 2011-11-16. 
12. ^ ^{a b} Barry Sergeant (6 May 2007). "Copper/cobalt bull elephants square up in the DRC". Mining Newsletter (United Nations). http://www.un.int/drcongo/mining.htm. Retrieved 2011-11-14. 
13. ^ ^{a b} Allan Seccombe (Wed, 07 Nov 2007). "CAMEC enters new JV to house DRC assets". MiningMX. http://www.miningmx.com/news/archive/670097.htm. Retrieved 2011-11-14. 
14. ^ "CAMEC creates new DRC joint venture company to develop Mukondo Mountain". MineWeb. 07 Nov 2007. http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=39422&sn=Detail. Retrieved 2011-11-14. 
15. ^ Christy van der Merwe (7 February 2008). "Camec, Prairie restart operations at DRC mine". Mining weekly. http://www.miningweekly.com/article/camec-prairie-restart-operations-at-drc-mine-2008-02-07. Retrieved 2011-11-15. 
16. ^ Liezel Hill (10 July 2008). "Anvil to raise C$296m in private placement". Mining weekly. http://www.miningweekly.com/article/anvil-to-raise-c296m-in-private-placement-2008-07-10. Retrieved 2011-11-16. 
17. ^ Liezel Hill (18 August 2008). "Cash-flush Anvil may consider acquisitions". Mining weekly. http://www.miningweekly.com/article/cashflush-anvil-may-consider-acquisitions-2008-08-18. Retrieved 2011-11-16. 
18. ^ Liezel Hill (25 August 2008). "Anvil lowers private placement pricing on weak market". Mining weekly. http://www.miningweekly.com/article/anvil-lowers-private-placement-pricing-on-weak-market-2008-08-25. Retrieved 2011-11-16. 
19. ^ Heinrich Boll Stiftung (5 November 2010). "Dan Gertler". Money to Metal. http://moneytometal.org/index.php/Dan_Gertler. Retrieved 2011-11-16. 
20. ^ ^{a b} Matthew Hill (30 June 2010). "Pressure mounts on DRC over mine-rights controversy". Mining weekly. http://www.miningweekly.com/article/pressure-mounts-on-drc-over-mine-rights-controversy-2010-06-30. Retrieved 2011-11-16. 
21. ^ ^{a b} Michael J. Kavanagh and Franz Wild (Sep 28, 2011). "IMF Asks Congo for Explanation on State Mining Assets Sale". Bloomberg Business Week. http://www.bloomberg.com/news/2011-09-28/imf-asks-congo-for-explanation-on-state-mining-assets-sale.html. Retrieved 2011-11-16. 
22. ^ Matthew Hill (25 August 2010). "Compliance with ICC order 'in DRC's best interest' – FQM CEO". Mining weekly. http://www.miningweekly.com/article/compliance-with-icc-order-in-drcs-best-interest-fqm-ceo-2010-08-25. Retrieved 2011-11-16. 
23. ^ Nick Fletcher (23 August 2010). "Miners and merger moves lift FTSE 100 but ENRC misses out". The Guardian. http://www.guardian.co.uk/business/marketforceslive/2010/aug/23/enrc-bhpbilliton. Retrieved 2011-11-16. 
24. ^ Russell Lynch and Jim Armitage (8 Apr 2011). "MP calls for Fraud Office probe of ENRC under Bribery Act". London Evening Standard. http://www.thisislondon.co.uk/standard-business/article-23939771-mp-calls-for-fraud-office-probe-of-enrc-under-bribery-act.do. Retrieved 2011-11-16. 
25. ^ Franz Wild and Michael J. Kavanagh (Jul 29, 2011). "Gertler Company Settles Over Missed Payments After Congolese Mine Flooded". Bloomberg. http://www.bloomberg.com/news/2011-07-29/gertler-company-settles-over-missed-payments-after-congolese-mine-flooded.html. Retrieved 2011-11-16. 
26. ^ "Sale of top DRC mine may stymie share offer". Bloomberg. July 17, 2011. http://www.iol.co.za/business/international/sale-of-top-drc-mine-may-stymie-share-offer-1.1100362. Retrieved 2011-11-16. 

Persondata
Name	Gertler, Dan
Alternative names
Short description	Businessperson
Date of birth	1973
Place of birth
Date of death
Place of death