Gecamines has sued Kamoto Copper Company SA (KCC) and its majority shareholder group controlled by Glencore, in the Kolwezi Commercial Court, for the purpose of seeking the dissolution of KCC for the non-replenishment of its own funds within the legal period. KCC is a 25/25 joint venture owned by the Gécamines Group and 75% by the Glencore Group.
On April 22, 2018, Katanga Mining, a subsidiary of Glencore, took the initiative to make public and comment on the procedure thus initiated by Gécamines.
Gécamines wishes, as far as it is concerned, to make the following clarifications:
Gécamines was obliged to initiate this procedure, since the situation justifying a judicial dissolution has been characterized for more than 10 years now, without any regularization having occurred, despite numerous reminders to the ‘order.
On the contrary, it appears that during this period, through a series of intra-group financial and commercial agreements, the majority shareholder group implemented a policy that resulted in the cash and wealth being extracted for its sole profit. of the joint venture.
Indeed, based solely on the last four fiscal years, the financial debt has increased from $ 3,233,736,880 to $ 4,572,497,908 and the commercial debt from $ 1,967,255,847 to $ 4,473,525,056. at the end of 2017, it is indebted to the Glencore Group for USD 9 billion, all bearing annual interest rates of up to 14%, far from the conditions at which the parent company borrows, before lending to the joint venture. As a result, hundreds of millions of dollars of interest are owed annually by KCC to the majority shareholder group.
The policy of service and subcontracting contracts in favor of the Glencore Group’s affiliates was another form of practice to the detriment of Gécamines, which helped to affect the results of this joint venture, which has never paid the least dividend.
Thus, whereas for 10 years, in accordance with the law, the company could have been dissolved and the mining titles recovered by Gécamines without financial counterpart, it has perpetuated a form of management which seriously damaged the interests of Gécamines and more generally from the DRC, and to which it is now essential to end.
