The elements of power, p.17
The Elements of Power, page 17
At one point, the miners at Mutanda revolted—against the mining conditions and their earnings, as traders were paying them a pittance for their minerals. Le Petit stepped into the breach, hashing out terms with the miners in their native Kiswahili.
In May 2001, Gécamines finalized an accord with a firm called Southern African Metal Refiners Congo, or Samref, to exploit Mutanda’s minerals. Gécamines technically possessed the mineral rights to Mutanda but was not mining there. At the beginning, the state company retained 40 percent of the new company’s shares, and Samref owned the rest. The new venture was christened Mutanda Mining, or MUMI.
Little was public about Samref and the investors behind it. One of them was Charles Brown, an American adventurer who had seen an opportunity to profit in Congo as the Kabila regime took the reins from Mobutu. Samref was a junior mining firm. Success for such junior companies is based on not only the richness of the reserves they have developed but also how much money they can eventually convince large operators to pay them.
After a few years, Brown was worried that his bet on MUMI had not paid off. When Hamze offered to buy some of Brown’s shares in the company for $300,000 in 2006, Brown agreed to sell.
As the mine became profitable, Brown began legal action, alleging that Hamze and his future partner, Glencore, a commodities-trading firm based out of Switzerland, used coercion to wrest away his rights to the mine. (Hamze has denied any coercion; Glencore maintains that it never met with Brown, who died shortly after filing suit.)
By 2005, Hamze was operating MUMI using a hybrid between artisanal and industrial methods. Bazano was able to exploit the rich seams of cobalt and copper at Mutanda. At the time, it was difficult to refine the rock into sheets of copper cathode and cobalt hydroxide, a blue powder that is further refined into battery precursor material. Since the Benguela Railway through Angola was closed, Bazano began using trucks to export large quantities of copper and cobalt across the Zambian border. Much of the material from Mutanda began arriving for smelter refinement at a mine in Zambia called Mopani.
The rock beneath the russet hills of northern Zambia contains ores that are less concentrated than those on the Congolese side of the border. The Mopani mine, whose giant Nkana concentrator had been operational since the 1930s, during the days of British colonialism, had been acquired in 1998 by a consortium majority-owned by Glencore. By 2003, people at the company had noted “the potential sources of ‘imported’ concentrates and copper bearing material produced from new mining developments in northern Zambia and the Democratic Republic of Congo,” as one report put it. Glencore committed itself to building a new smelter and sulfuric acid plant (acid is used to leach cobalt out of the ore), which went operational in 2006, but it still wanted more.
Glencore began to expand into Katanga, and as its officials crossed the Congolese frontier, they heard tell of a young Lebanese trader whose business was booming. “Alex is a very smart guy,” a former Glencore cobalt trader told me. “He probably knew the market for cobalt and copper in the DRC better than anyone at the time.”
Exporting most unprocessed cobalt and copper ore from Congo had technically been illegal since 2003. Like the cobaltists, the cobalt thieves during Mobutu’s era, traders like Hamze were now known for heterogenite, the name of the copper- and cobalt-rich ore they smuggled. They were dubbed “heterogenists.”
For the Congolese state, this posed a problem: Millions of dollars a month in revenue were being lost as minerals were smuggled across the Zambia-Congo border at Kasumbalesa. “A comparison of official Congolese export and Chinese import statistics for cobalt and copper trade in April and May 2004, for example, showed a greater than ten-fold difference,” a 2006 report from the International Crisis Group explained.
As the 2000s wore on, some politicians, such as Katumbi, vowed to stop the minerals flowing over the border. But the 2002 Mining Code was increasingly showing its deficiencies. It gave leeway to traders. It allowed for minerals to be exported with special permits from the minister of mines (and, according to some interpretations, by companies that could prove they were building processing plants in Congo). The discretion of the Ministry of Mining was an easy target for under-the-table dealings, but Hamze was also constructing refineries in Likasi and Kolwezi, so he could legitimately say that he was building processing plants.
The Katangese mineral-smuggling situation may have been problematic for Congo, but for Congolese politicians, who ensured loyalty through payments to their supporters, it was a gift. Like Mobutu’s “big vegetables,” many of them had developed a taste for luxury goods and expensive homes abroad. Accusations were rife that the powerful, right up to the president’s office, were profiting from the trafficking of minerals in Katanga.
* * *
By 2007, Bazano began to signal that it did not want to buy from artisanal miners. It was clear that the artisanal trade was for small-timers, and Hamze was moving up the ladder. Hamze invested in Mutanda, carried out a feasibility study, and reassessed the size of the mine’s deposits. When the contract had been signed between Gécamines and Samref in 2001, there was no solid estimation of the size of the deposits. After Hamze’s companies finally did a size assessment, they found that the mine held around 958,000 tons of copper and 85,375 tons of cobalt, numbers that continued to grow with time. He had hit the mother lode. Soon, Hamze brought his operational genius to bear on the site: Mutanda basically became an industrial mine. “It was run like a Swiss operation,” one of Hamze’s associates recalled.
But Bazano also continued to buy artisanally mined cobalt from other mines, despite its protestations to the contrary. In 2012, researchers found that Bazano was buying hand-mined cobalt from Tilwezembe, a site that was technically owned by Glencore but had been abandoned to a massive artisanal operation. Tilwezembe was known for its rampant use of child labor. It was one of the sites that had been bought by Gertler and flipped to Glencore, but the company had decided it wanted nothing to do with the site after its employees were threatened by people with artisanal mining interests there. Artisanal mining at Tilwezembe, it argued, was “to our disbenefit. However of even more concern is that their operations may well be unsafe and creating environmental problems.”
Approximately sixteen hundred artisanal miners, including Kajumba, were working on the site by 2012. They were surveilled by at least fifty-five armed guards. A Lebanese man named Ismaël, a former associate of Hamze’s, bought the site’s cobalt. Ismaël was described by one NGO as “an extremely tough man in business, who has no respect for the miners.” Ismaël’s firm processed the ore at his smelter and at the Mopani concentrator in Zambia. Bazano insisted that it wasn’t involved in mining at Tilwezembe, but the firm had signed a contract with a firm named Misa Mining to purchase ore from the site.
On a visit to Kolwezi ten years later, in 2022, I visited makeshift shafts dug into the red earth of people’s back gardens outside Tilwezembe. Bazano was long gone, but the creuseurs and child laborers were still there.
Chapter 23
Into the Pits
Sometime in the early 2000s, Odilon Kajumba Kilanga’s father, Joseph, the tire salesman, was bitten by a malaria-carrying mosquito. The parasite began to wear him down. “He was suffering,” Kajumba said. “His health began to get worse.” Malaria, it can be said, is the most lethal side effect of the country’s crippling poverty. In Congo, the disease is the principal cause of early death; every time I visited the country, people whom I’d come to know would tell me how they or someone they loved had just recovered from a nasty bout of the disease.
Joseph couldn’t work as hard as he used to, and he didn’t have money to send his children to school. Education was supposed to be free, but in a country where the state had all but crumbled, it was up to parents to pay teachers’ salaries. Kajumba had to drop out. His father “couldn’t support his family any longer,” Kajumba told me.
Joseph became weaker still when he contracted typhoid fever. He tried to continue working to support his family. “When he started to get treatment, it was too late,” Kajumba said. “Typhoid had already started to eat away his insides. He didn’t realize how far it had gotten.” As Kajumba remembered his father’s last days, he shook his head. “He was a good guy,” he said. “The best father in the world.”
Kajumba was now alone with his mother and four siblings, unable to pay for school and watching everything his father had built fall apart. His dream was to open a little restaurant, a bar or a nightclub maybe, but he didn’t know where to start, and he didn’t have the funds. His oldest brother went to Kinshasa to see if he could find a job. As his father had become sicker and sicker, Kajumba had begun to venture to the mine site to moonlight as a creuseur. “Even if it was against my father’s will, I said to myself, ‘You’re a man—you have to work,’ ” he told me.
Kajumba soon began to get sucked in by the work, lugging rocks across the burned and pitted craterscape of the Kakama mine. They were sold to intermediaries. He didn’t think about where they went. He learned how to lower himself into narrow, deep, hot holes in the earth; how to chip away at the rock face with the crudest of tools, usually an iron bar whose ends had been ground to points; and how to bring scraps of precious ore back to the surface before he fainted from lack of oxygen. “I had to work out how to take care of myself and my family,” he said. He was sixteen, maybe seventeen.
One day in 2006, when Kajumba was eighteen, he got a call from a friend who had moved to Kolwezi. This friend urged him to join a creuseur cooperative that was roaming from mine to mine, sharing profits. He told Kajumba that Kolwezi’s mineral seams were rich in not just copper but cobalt too, and that Kajumba would be able to turn his family’s fortunes around. “There were good sites that you could just turn up to and work,” Kajumba remembered.
In those days, it took eight hours to get from Lubumbashi to Kolwezi by bus. The country was still settling down after years of civil war, and the thickets on either side of the rutted two-lane road crawled with outlaws who would occasionally hijack vehicles using weapons they’d leased from impoverished soldiers. Once, bandits stopped a bus and ordered its passengers to strip; the hijackers took everything, even people’s underwear. Kajumba knew that the journey to Kolwezi had its risks, but of the creuseurs, he said: “If they tell you to come, you come.”
* * *
Growing up in Katanga, Kajumba had enjoyed watching soccer with his father. He grew to love Joseph’s favorite team, Tout Puissant Mazembe (All-Powerful Mazembe), Congo’s most successful club. TP Mazembe, which was founded by Benedictine monks during the colonial era, had as its logo a crocodile clenching a ball in its long jaws. The team’s owner, Moïse Katumbi Chapwe, the suave Congolese businessman who would soon become governor of Katanga, was a protégé of Augustin Katumba Mwanke. “This man was a brother to me,” Katumbi said of Katumba when we first met in 2019, at a lodge in Zambia. “I can’t deny it.”
Katumbi’s father was a prominent Greek trader who had fled anti-Jewish purges during the Axis occupation of the island of Rhodes during World War II, and his mother was a princess who traced her heritage to the eastern Lunda kingdom of Kazembe. Katumbi’s father had made a fortune from a set of family businesses, including the importation of fish from Lake Mweru. His brother Raphaël Katebe Katoto had political ambitions: He reportedly supplied UNITA rebels in Angola, planned a coup against Kabila, and even backed anti-Kabila rebels in the East of Congo.
Katumbi, by contrast, jumped on the Kabila bandwagon and supported the M’zee. He also profited from the mining industry; a business run by his family was the monopolistic food supplier to Gécamines workers, and he owned mining and trucking companies. One of them, Mining Company Katanga, or MCK (the initialism recalled Katumbi’s own initials), would reportedly make him tens of millions of dollars, much of which he spent on his political career. In 2006, Katumbi became a parliamentary deputy.
In 2007, soon after Katumbi’s foray into politics, he was elected governor of Katanga. He ran the province like a business and became popular because he handed out large sums of cash in poor areas, built roads, and outfitted schools. Katumbi supported education for girls and tried to stop children from working in dangerous mines. The province was soon faring well. “Fighting corruption took us from third place in contributions to the national budget to number one after six months,” Katumbi told me proudly. When he became governor, 3 percent of Katangese people had access to running water. By 2013, that number had climbed to 67 percent.
Katumbi was concerned about the effect of rapid industrialization on his province, even as he profited from it (MCK was signed over to his wife). He saw how the number of artisanal miners had swelled to hundreds of thousands; how, every day, tons of ore was crossing the border into Zambia; and how the people of Congo were receiving little, if any, benefit.
Shortly after taking office, Katumbi, who said that mining companies were “keeping the money and sending it overseas,” banned the export of raw minerals across the frontier to Zambia. “Show me even one toilet that has been built with that money,” he thundered, insisting that an export ban would begin to bring benefits back to Congo. All of a sudden, the traders who had profited from the minerals couldn’t sell their wares.
* * *
Katumbi wanted big Western companies to invest in Katanga. Glencore, the Swiss trading firm, had been on an asset-buying spree since around 2003. It was headed by Ivan Glasenberg, a former champion racewalker for South Africa and Israel. Glasenberg’s intensity and intellect made him unusually suited to the world of commodities trading, which required a combination of hardheadedness and an ability to sink oneself into the minutiae of deals that spanned continents and were often renegotiated at the last moment. Glencore employees of the Glasenberg vintage often tried to replicate IG, as he was known among his workforce, getting up before sunrise to indulge in physical activity, especially cycling through the rolling hills around the company’s headquarters in the Swiss town of Baar, one of their boss’s favorite pastimes.
But Glencore was not all fresh air and freewheeling. It had been born out of the ashes of Marc Rich and Co., a commodities firm whose eponymous founder had been served “the biggest tax-fraud indictment in history” in 1983. (Rich was later controversially pardoned by President Bill Clinton.) In late 1994, Rich’s traders booted him out and formed two rival firms: Glencore (for “global energy commodities and resources”) and Trafigura, which was based in Geneva. Both firms would soon find themselves on the front lines of the global rush for battery minerals, in Congo and across the world.
Glasenberg had struck it large by betting on coal and other commodities, and the firm was looking for investment prospects. Copper, which was booming in China, seemed like a good bet in a rapidly electrifying world. Cobalt was an afterthought, a last wring of the profit rag; cobalt is a byproduct, several current and former Glencore traders were at pains to explain to me while I researched this book. They meant that the market for cobalt was a volatile one, dissimilar from the big-time futures markets for metals like copper or even nickel, and that cobalt was stockpiled, especially because trading volumes for the metal were comparatively low.
In the mid-2000s, Glasenberg was looking for a source of copper, and he was willing to take on risk. More risk, in fact, than large established firms like BHP Billiton, which had examined several sites in Katanga, including those owned by Dan Gertler, but then withdrawn because it feared running afoul of financial authorities. Glencore officials began scouring the world for deals. In Congo, Glasenberg did not want to purchase shares from Gécamines because Glencore wasn’t seeking a relationship with the Congolese government. In July 2006, Nikanor, a mining company founded by Gertler, was floated on the London Stock Exchange, and the firm soon came to Glasenberg’s attention.
There was substantial back-and-forth as Glencore tried to acquire Nikanor. An early offer of some $1.6 billion was not accepted in May 2007. It was at this point that Gertler and other investors in Nikanor appeared and began meeting with Glencore officials: Samie Monderer, then a young Glencore employee, helped introduce the company to Mendi and Moises Gertner, who by that time held about 22 percent of Nikanor. When one of the businessmen negotiating the sale came to the office, he “would come, spend half the day there—it was important,” a Glencore employee recalled.
In June 2007, Glencore obtained its first shares through a share placing, whereby Nikanor offered new shares directly to the company, and the company ended up taking a 12.5 percent stake in Nikanor. According to several Glencore employees, Gertler wasn’t a major figure in the early stages, but he began requesting meetings more and more persistently. In the next half decade, the Gertners’ relationship with Gertler would go south and their arguments developed into the arbitration proceedings. In documents submitted at the arbitration, Gertler revealed that he had paid some $360 million in bribes to Katumba “to ensure ‘goodwill and influence’ on his part concerning continued activity in Congo.” The Gertners’ lawyers would later insist to Bloomberg that they had no role in running their mine investments in Congo and that they were “run exclusively by Gertler, causing the Gertner brothers significant financial damage.”
In his quest for copper, Glasenberg wanted a stake in Katanga’s other big mine, the giant Kamoto Copper Company (KCC) mine outside Kolwezi, which was owned by Katanga Mining Ltd., a Toronto-listed company in which George Forrest held a stake. The world was in financial crisis, and everyone was looking for financing, which also meant it was a good time to make strategic acquisitions. In 2008, Glencore obtained its first shares of Katanga through a merger with Nikanor; then, in June 2009, it obtained more shares in the mine when it executed on a convertible loan it had given to Katanga; and the next month it bought even more shares in Katanga. Through his involvement in Nikanor, Gertler had also become involved in the mine. In a separate transaction, in 2013, he arranged to purchase the royalties from the mine’s production from Gécamines through a firm named African Horizons, meaning he would have a steady stream of income from the mine’s production of copper and cobalt. Glencore would buy out more than $37 million of a Gertler company’s shares in Katanga in 2017, but he continued to receive royalties from the mine well into the next decade.
In May 2001, Gécamines finalized an accord with a firm called Southern African Metal Refiners Congo, or Samref, to exploit Mutanda’s minerals. Gécamines technically possessed the mineral rights to Mutanda but was not mining there. At the beginning, the state company retained 40 percent of the new company’s shares, and Samref owned the rest. The new venture was christened Mutanda Mining, or MUMI.
Little was public about Samref and the investors behind it. One of them was Charles Brown, an American adventurer who had seen an opportunity to profit in Congo as the Kabila regime took the reins from Mobutu. Samref was a junior mining firm. Success for such junior companies is based on not only the richness of the reserves they have developed but also how much money they can eventually convince large operators to pay them.
After a few years, Brown was worried that his bet on MUMI had not paid off. When Hamze offered to buy some of Brown’s shares in the company for $300,000 in 2006, Brown agreed to sell.
As the mine became profitable, Brown began legal action, alleging that Hamze and his future partner, Glencore, a commodities-trading firm based out of Switzerland, used coercion to wrest away his rights to the mine. (Hamze has denied any coercion; Glencore maintains that it never met with Brown, who died shortly after filing suit.)
By 2005, Hamze was operating MUMI using a hybrid between artisanal and industrial methods. Bazano was able to exploit the rich seams of cobalt and copper at Mutanda. At the time, it was difficult to refine the rock into sheets of copper cathode and cobalt hydroxide, a blue powder that is further refined into battery precursor material. Since the Benguela Railway through Angola was closed, Bazano began using trucks to export large quantities of copper and cobalt across the Zambian border. Much of the material from Mutanda began arriving for smelter refinement at a mine in Zambia called Mopani.
The rock beneath the russet hills of northern Zambia contains ores that are less concentrated than those on the Congolese side of the border. The Mopani mine, whose giant Nkana concentrator had been operational since the 1930s, during the days of British colonialism, had been acquired in 1998 by a consortium majority-owned by Glencore. By 2003, people at the company had noted “the potential sources of ‘imported’ concentrates and copper bearing material produced from new mining developments in northern Zambia and the Democratic Republic of Congo,” as one report put it. Glencore committed itself to building a new smelter and sulfuric acid plant (acid is used to leach cobalt out of the ore), which went operational in 2006, but it still wanted more.
Glencore began to expand into Katanga, and as its officials crossed the Congolese frontier, they heard tell of a young Lebanese trader whose business was booming. “Alex is a very smart guy,” a former Glencore cobalt trader told me. “He probably knew the market for cobalt and copper in the DRC better than anyone at the time.”
Exporting most unprocessed cobalt and copper ore from Congo had technically been illegal since 2003. Like the cobaltists, the cobalt thieves during Mobutu’s era, traders like Hamze were now known for heterogenite, the name of the copper- and cobalt-rich ore they smuggled. They were dubbed “heterogenists.”
For the Congolese state, this posed a problem: Millions of dollars a month in revenue were being lost as minerals were smuggled across the Zambia-Congo border at Kasumbalesa. “A comparison of official Congolese export and Chinese import statistics for cobalt and copper trade in April and May 2004, for example, showed a greater than ten-fold difference,” a 2006 report from the International Crisis Group explained.
As the 2000s wore on, some politicians, such as Katumbi, vowed to stop the minerals flowing over the border. But the 2002 Mining Code was increasingly showing its deficiencies. It gave leeway to traders. It allowed for minerals to be exported with special permits from the minister of mines (and, according to some interpretations, by companies that could prove they were building processing plants in Congo). The discretion of the Ministry of Mining was an easy target for under-the-table dealings, but Hamze was also constructing refineries in Likasi and Kolwezi, so he could legitimately say that he was building processing plants.
The Katangese mineral-smuggling situation may have been problematic for Congo, but for Congolese politicians, who ensured loyalty through payments to their supporters, it was a gift. Like Mobutu’s “big vegetables,” many of them had developed a taste for luxury goods and expensive homes abroad. Accusations were rife that the powerful, right up to the president’s office, were profiting from the trafficking of minerals in Katanga.
* * *
By 2007, Bazano began to signal that it did not want to buy from artisanal miners. It was clear that the artisanal trade was for small-timers, and Hamze was moving up the ladder. Hamze invested in Mutanda, carried out a feasibility study, and reassessed the size of the mine’s deposits. When the contract had been signed between Gécamines and Samref in 2001, there was no solid estimation of the size of the deposits. After Hamze’s companies finally did a size assessment, they found that the mine held around 958,000 tons of copper and 85,375 tons of cobalt, numbers that continued to grow with time. He had hit the mother lode. Soon, Hamze brought his operational genius to bear on the site: Mutanda basically became an industrial mine. “It was run like a Swiss operation,” one of Hamze’s associates recalled.
But Bazano also continued to buy artisanally mined cobalt from other mines, despite its protestations to the contrary. In 2012, researchers found that Bazano was buying hand-mined cobalt from Tilwezembe, a site that was technically owned by Glencore but had been abandoned to a massive artisanal operation. Tilwezembe was known for its rampant use of child labor. It was one of the sites that had been bought by Gertler and flipped to Glencore, but the company had decided it wanted nothing to do with the site after its employees were threatened by people with artisanal mining interests there. Artisanal mining at Tilwezembe, it argued, was “to our disbenefit. However of even more concern is that their operations may well be unsafe and creating environmental problems.”
Approximately sixteen hundred artisanal miners, including Kajumba, were working on the site by 2012. They were surveilled by at least fifty-five armed guards. A Lebanese man named Ismaël, a former associate of Hamze’s, bought the site’s cobalt. Ismaël was described by one NGO as “an extremely tough man in business, who has no respect for the miners.” Ismaël’s firm processed the ore at his smelter and at the Mopani concentrator in Zambia. Bazano insisted that it wasn’t involved in mining at Tilwezembe, but the firm had signed a contract with a firm named Misa Mining to purchase ore from the site.
On a visit to Kolwezi ten years later, in 2022, I visited makeshift shafts dug into the red earth of people’s back gardens outside Tilwezembe. Bazano was long gone, but the creuseurs and child laborers were still there.
Chapter 23
Into the Pits
Sometime in the early 2000s, Odilon Kajumba Kilanga’s father, Joseph, the tire salesman, was bitten by a malaria-carrying mosquito. The parasite began to wear him down. “He was suffering,” Kajumba said. “His health began to get worse.” Malaria, it can be said, is the most lethal side effect of the country’s crippling poverty. In Congo, the disease is the principal cause of early death; every time I visited the country, people whom I’d come to know would tell me how they or someone they loved had just recovered from a nasty bout of the disease.
Joseph couldn’t work as hard as he used to, and he didn’t have money to send his children to school. Education was supposed to be free, but in a country where the state had all but crumbled, it was up to parents to pay teachers’ salaries. Kajumba had to drop out. His father “couldn’t support his family any longer,” Kajumba told me.
Joseph became weaker still when he contracted typhoid fever. He tried to continue working to support his family. “When he started to get treatment, it was too late,” Kajumba said. “Typhoid had already started to eat away his insides. He didn’t realize how far it had gotten.” As Kajumba remembered his father’s last days, he shook his head. “He was a good guy,” he said. “The best father in the world.”
Kajumba was now alone with his mother and four siblings, unable to pay for school and watching everything his father had built fall apart. His dream was to open a little restaurant, a bar or a nightclub maybe, but he didn’t know where to start, and he didn’t have the funds. His oldest brother went to Kinshasa to see if he could find a job. As his father had become sicker and sicker, Kajumba had begun to venture to the mine site to moonlight as a creuseur. “Even if it was against my father’s will, I said to myself, ‘You’re a man—you have to work,’ ” he told me.
Kajumba soon began to get sucked in by the work, lugging rocks across the burned and pitted craterscape of the Kakama mine. They were sold to intermediaries. He didn’t think about where they went. He learned how to lower himself into narrow, deep, hot holes in the earth; how to chip away at the rock face with the crudest of tools, usually an iron bar whose ends had been ground to points; and how to bring scraps of precious ore back to the surface before he fainted from lack of oxygen. “I had to work out how to take care of myself and my family,” he said. He was sixteen, maybe seventeen.
One day in 2006, when Kajumba was eighteen, he got a call from a friend who had moved to Kolwezi. This friend urged him to join a creuseur cooperative that was roaming from mine to mine, sharing profits. He told Kajumba that Kolwezi’s mineral seams were rich in not just copper but cobalt too, and that Kajumba would be able to turn his family’s fortunes around. “There were good sites that you could just turn up to and work,” Kajumba remembered.
In those days, it took eight hours to get from Lubumbashi to Kolwezi by bus. The country was still settling down after years of civil war, and the thickets on either side of the rutted two-lane road crawled with outlaws who would occasionally hijack vehicles using weapons they’d leased from impoverished soldiers. Once, bandits stopped a bus and ordered its passengers to strip; the hijackers took everything, even people’s underwear. Kajumba knew that the journey to Kolwezi had its risks, but of the creuseurs, he said: “If they tell you to come, you come.”
* * *
Growing up in Katanga, Kajumba had enjoyed watching soccer with his father. He grew to love Joseph’s favorite team, Tout Puissant Mazembe (All-Powerful Mazembe), Congo’s most successful club. TP Mazembe, which was founded by Benedictine monks during the colonial era, had as its logo a crocodile clenching a ball in its long jaws. The team’s owner, Moïse Katumbi Chapwe, the suave Congolese businessman who would soon become governor of Katanga, was a protégé of Augustin Katumba Mwanke. “This man was a brother to me,” Katumbi said of Katumba when we first met in 2019, at a lodge in Zambia. “I can’t deny it.”
Katumbi’s father was a prominent Greek trader who had fled anti-Jewish purges during the Axis occupation of the island of Rhodes during World War II, and his mother was a princess who traced her heritage to the eastern Lunda kingdom of Kazembe. Katumbi’s father had made a fortune from a set of family businesses, including the importation of fish from Lake Mweru. His brother Raphaël Katebe Katoto had political ambitions: He reportedly supplied UNITA rebels in Angola, planned a coup against Kabila, and even backed anti-Kabila rebels in the East of Congo.
Katumbi, by contrast, jumped on the Kabila bandwagon and supported the M’zee. He also profited from the mining industry; a business run by his family was the monopolistic food supplier to Gécamines workers, and he owned mining and trucking companies. One of them, Mining Company Katanga, or MCK (the initialism recalled Katumbi’s own initials), would reportedly make him tens of millions of dollars, much of which he spent on his political career. In 2006, Katumbi became a parliamentary deputy.
In 2007, soon after Katumbi’s foray into politics, he was elected governor of Katanga. He ran the province like a business and became popular because he handed out large sums of cash in poor areas, built roads, and outfitted schools. Katumbi supported education for girls and tried to stop children from working in dangerous mines. The province was soon faring well. “Fighting corruption took us from third place in contributions to the national budget to number one after six months,” Katumbi told me proudly. When he became governor, 3 percent of Katangese people had access to running water. By 2013, that number had climbed to 67 percent.
Katumbi was concerned about the effect of rapid industrialization on his province, even as he profited from it (MCK was signed over to his wife). He saw how the number of artisanal miners had swelled to hundreds of thousands; how, every day, tons of ore was crossing the border into Zambia; and how the people of Congo were receiving little, if any, benefit.
Shortly after taking office, Katumbi, who said that mining companies were “keeping the money and sending it overseas,” banned the export of raw minerals across the frontier to Zambia. “Show me even one toilet that has been built with that money,” he thundered, insisting that an export ban would begin to bring benefits back to Congo. All of a sudden, the traders who had profited from the minerals couldn’t sell their wares.
* * *
Katumbi wanted big Western companies to invest in Katanga. Glencore, the Swiss trading firm, had been on an asset-buying spree since around 2003. It was headed by Ivan Glasenberg, a former champion racewalker for South Africa and Israel. Glasenberg’s intensity and intellect made him unusually suited to the world of commodities trading, which required a combination of hardheadedness and an ability to sink oneself into the minutiae of deals that spanned continents and were often renegotiated at the last moment. Glencore employees of the Glasenberg vintage often tried to replicate IG, as he was known among his workforce, getting up before sunrise to indulge in physical activity, especially cycling through the rolling hills around the company’s headquarters in the Swiss town of Baar, one of their boss’s favorite pastimes.
But Glencore was not all fresh air and freewheeling. It had been born out of the ashes of Marc Rich and Co., a commodities firm whose eponymous founder had been served “the biggest tax-fraud indictment in history” in 1983. (Rich was later controversially pardoned by President Bill Clinton.) In late 1994, Rich’s traders booted him out and formed two rival firms: Glencore (for “global energy commodities and resources”) and Trafigura, which was based in Geneva. Both firms would soon find themselves on the front lines of the global rush for battery minerals, in Congo and across the world.
Glasenberg had struck it large by betting on coal and other commodities, and the firm was looking for investment prospects. Copper, which was booming in China, seemed like a good bet in a rapidly electrifying world. Cobalt was an afterthought, a last wring of the profit rag; cobalt is a byproduct, several current and former Glencore traders were at pains to explain to me while I researched this book. They meant that the market for cobalt was a volatile one, dissimilar from the big-time futures markets for metals like copper or even nickel, and that cobalt was stockpiled, especially because trading volumes for the metal were comparatively low.
In the mid-2000s, Glasenberg was looking for a source of copper, and he was willing to take on risk. More risk, in fact, than large established firms like BHP Billiton, which had examined several sites in Katanga, including those owned by Dan Gertler, but then withdrawn because it feared running afoul of financial authorities. Glencore officials began scouring the world for deals. In Congo, Glasenberg did not want to purchase shares from Gécamines because Glencore wasn’t seeking a relationship with the Congolese government. In July 2006, Nikanor, a mining company founded by Gertler, was floated on the London Stock Exchange, and the firm soon came to Glasenberg’s attention.
There was substantial back-and-forth as Glencore tried to acquire Nikanor. An early offer of some $1.6 billion was not accepted in May 2007. It was at this point that Gertler and other investors in Nikanor appeared and began meeting with Glencore officials: Samie Monderer, then a young Glencore employee, helped introduce the company to Mendi and Moises Gertner, who by that time held about 22 percent of Nikanor. When one of the businessmen negotiating the sale came to the office, he “would come, spend half the day there—it was important,” a Glencore employee recalled.
In June 2007, Glencore obtained its first shares through a share placing, whereby Nikanor offered new shares directly to the company, and the company ended up taking a 12.5 percent stake in Nikanor. According to several Glencore employees, Gertler wasn’t a major figure in the early stages, but he began requesting meetings more and more persistently. In the next half decade, the Gertners’ relationship with Gertler would go south and their arguments developed into the arbitration proceedings. In documents submitted at the arbitration, Gertler revealed that he had paid some $360 million in bribes to Katumba “to ensure ‘goodwill and influence’ on his part concerning continued activity in Congo.” The Gertners’ lawyers would later insist to Bloomberg that they had no role in running their mine investments in Congo and that they were “run exclusively by Gertler, causing the Gertner brothers significant financial damage.”
In his quest for copper, Glasenberg wanted a stake in Katanga’s other big mine, the giant Kamoto Copper Company (KCC) mine outside Kolwezi, which was owned by Katanga Mining Ltd., a Toronto-listed company in which George Forrest held a stake. The world was in financial crisis, and everyone was looking for financing, which also meant it was a good time to make strategic acquisitions. In 2008, Glencore obtained its first shares of Katanga through a merger with Nikanor; then, in June 2009, it obtained more shares in the mine when it executed on a convertible loan it had given to Katanga; and the next month it bought even more shares in Katanga. Through his involvement in Nikanor, Gertler had also become involved in the mine. In a separate transaction, in 2013, he arranged to purchase the royalties from the mine’s production from Gécamines through a firm named African Horizons, meaning he would have a steady stream of income from the mine’s production of copper and cobalt. Glencore would buy out more than $37 million of a Gertler company’s shares in Katanga in 2017, but he continued to receive royalties from the mine well into the next decade.
