Mutanda Mining hit nameplate copper production capacity of 200,000 tpy in the second quarter, after a $1.8 billion investment in the mine and an associated power project, minority stakeholder Fleurette Group said on Wednesday August 13.

Parent company Fleurette Properties, the manager of a family trust set up by Israeli billionaire Dan Gertler, indirectly controls a 31% stake in Mutanda Mining. Glencore holds the remaining 69% interest in the Democratic Republic of Congo-based company.

“Fleurette has invested a total of $420 million in acquiring and developing the asset in partnership with Glencore,” Fleurette said on Wednesday, adding that both parties have so far spent $1.8 billion on the project and associated power facilities.

“The success of MUMI [Mutanda Mining] shows the importance of foreign investment into the DRC’s mining sector […] This is the kind of investment the DRC needs to continue to lift itself out of poverty as it recovers from years of conflict,” Gertler said in a statement on Wednesday.

Fleurette Properties, the parent company of the Fleurette Group, is run as the exclusive trustee of the Ashdale settlement, a trust set up for the benefit of the Gertler family in 2006.

The Fleurette Group paid DRC state miner Gécamines $220 million to acquire its minority stakes in Mutanda and Kansuki, which were merged by Glencore last year.

The Mutanda and Kansuki deals later attracted criticism from pressure group Global Witness, which claimed Gertler exploited his close ties to DRC president Joseph Kabila to acquire the stakes for less than their market value

The claims were repeated in a 2013 report from the Africa Progress Panel, which is chaired by former UN secretary-general Kofi Annan. The advocacy group said Gertler paid $137 million for the assets, compared with independent assessments valuing the stakes at nearly $780 million.

Gertler contested the claims made by APP and Global Witness, noting that Fleurette paid an additional $52 million for both stakes and also took on $31.4 million in debt from Gécamines in connection with the deals, for an aggregate price of $220 million, not $120 million.

“The question of valuation, while based on industry-accepted calculation methods, is largely subjective. While Fleurette would be delighted if Mutanda proves to be as valuable as suggested here, it is inappropriate to use the Glencore IPO valuation as a definitive benchmark,” he also said, responding to Global Witness.

Glencore has provided production details for Mutanda since 2010, when it launched its IPO prospectus, but Fleurette started releasing separate updates on the asset in the first quarter of this year.

Mutanda produced 51,500 tonnes of copper in the second quarter, up 9.3% from the first quarter, while cobalt production totalled 7,089 tonnes, up 11%.

The Mutanda assets have been a major contributor to Glencore’s strong copper production growth of late. In the first half, Glencore’s own-sourced copper production was up 13% in the first half of the year, as Mutanda’s output rose 61% year-on-year.

Mark Burton
Twitter: @mburtonmb