afrol News, 24 October - Having been accused in a UN report of misconduct in its Congolese mining activities, the US/Finnish OM Group yesterday tentatively refutes all allegations. The OM Group is among those specific 29 companies mentioned in the report, and even though they were not singled out for financial sanctions, they are under consideration in this respect.
OM Group chairman and chief executive officer, James Mooney, yesterday commented on the 22 October UN report. The report concluded that punitive measures are needed to curb the illegal exploitation of Congo Kinshasa's natural resources by criminal organisations and persons, and recommends accordingly that financial restrictions be placed on a number of companies and persons.
The OM Group (OMG) is a mining company headquartered in Cleveland, Ohio, which has played a significant role in the mining activities in the Congo (DRC) and consequently the Congolese economy.
A central issue in the UN report is the company's relationship with the state-owned mining company, Gécamines, which apparently has been tricky for some time. The relationship particularly became conflicted in connection with called the Scories du Terril de Lubumbashi (STL), also known as the Big Hill Project, one of the most profitable mining operations from the Congo.
In his announcement, Mr Mooney points out that the project referred to represents "a very small part" of their "longstanding relationship with Gécamines." He also stresses the omission of OMG's recent investment of more than US$ 100 million to "build a new production facility, which created some 300 new jobs", and that "the company's track record for business relationships in the DRC based on fairness, integrity and mutual respect."
OMG operations in the Congo have to an increasing degree been questioned as episodes of misconduct are reported. In connection with the Big Hill project, the state company Gécamines has been virtually put off with scraps, according to UN report. Even though shareholdings for this project are divided between OMG (55 percent), Groupe George Forrest (25 percent) and Gécamines (20 percent), "the state company has been expressly excluded from the revenues derived from the germanium processing," the UN experts say.
A dispute over the Congolese germanium resources exploited by the partners accentuated the ever more asymmetric relationship between OMG and Gécamines. OMG had only offered the Congolese state company 5 percent of the germanium revenues, which now are processed in Finland.
With regard to a plan formerly agreed upon - which provided for two electric-powered refineries and a converter to be built adjacent to the copper and cobalt stockpile and consequently would have meant that all the germanium would have been processed within the Congo - Gécamines would have been entitled to a revenue share.
The fact that the Big Hill project is run in partnership with former chairman of Gécamines, George Forrest and his company, Groupe George Forrest (GGF) - who is to be found on the proposed UN list of sanctions - further contributes to put the heat on OMG. Mr Forrest has allegedly used his position in the elite network in an attempt to control the mining sector in the Congo.
By Knut Henrik Gjone
Sources: Based on OMG, UN
sources and afrol archives