“Tshisekedi must prevent the sale of a significant part of SOKIMO’s assets to AJN” Press release by “Congo Not For Sale”
The “Congo is Not For Sale” campaign is requesting the President of DRC and his Council of Ministers to prevent the definitive transfer of a significant part of SOKIMO’s heritage to AJN Resources. The objective of the initial transaction was to revive SOKIMO, but it will instead have the effect of destroying it permanently. We therefore call on the President and the Prime Minister not to approve this transaction and to learn from past privatizations. It is more than necessary for the Congolese state to adopt a real policy of reviving companies within the state enterprise portfolio.
Indeed, AJN is a junior company that does not have the financial resources or expertise to revive SOKIMO. Its operating expenses were less than US$36,000 in 2019, which corresponds to the expenses of a small bakery, far from supporting a company such as SOKIMO. In addition, according to an internal audit, the company is in financial difficulty. The audit even casts doubt on the financial viability of AJN in the years to come. The rise in its share price and its future financial viability depend in large part on SOKIMO’s rich heritage. So it is AJN that needs SOKIMO and not the other way around.
AJN Resources is controlled by Klaus Eckhof, who is not in his first attempt in the Democratic Republic of Congo. Since 2003, deals with its other financial vehicles such as Moto Goldmines, AVZ Minerals, Okapi Resources and Amani Resources have not revived either SOKIMO in Ituri or COMINIERE in Tanganyika contrary to the stated objectives.
Thus, this proposed transaction is part of a long history of full-scale privatization of Congolese mining assets. We recall the tactics of other foreign junior companies that speculated on the basis of the assets of Gécamines and MIBA during the war that previously raged in the DRC, they ended up increasing their own profits and stripping the most important state-owned enterprises of any potential for recovery.
The idea that SOKIMO would itself become a successful stock market player is illusory. Already, his ‘partner’ has relegated him to second place, leaving him only 2 out of 5 seats in the decision-making bodies of AJN and no place on the executive body. Moreover, through financial transactions announced in April, the risk is very real if not certain that SOKIMO will lose its 60% shares to the new partners and remain only a minority shareholder without real power.
We would like to point out that this opposition to the transaction is almost unanimous. Ituri MPs, Sokimo’s trade unions, the National Assembly’s Environment and Natural Resources Committee and several broad civil society coalitions have clearly spoken out against this same deal. These are all alarm bells that the President and the Council of Ministers should not ignore.
The “Congo is Not For Sale” campaign supports the relaunch and revival of companies within the state enterprise portfolio, including SOKIMO. To do this, a professional and independent assessment of its assets as well as the development of a solid business plan are required. In the event that this business plan involves investors, it will then be necessary to conduct an open tender in accordance with the law, to ensure that SOKIMO can attract investors with the required financial and technical capabilities, and negotiate terms that will really benefit it.
We call on the President of the Republic and the Prime Minister to reject the Memorandum of Understanding submitted to their agreement and to preserve Congolese mining heritage. Together they are called upon to define a strong policy of reviving companies within the state enterprise portfolio in general and that of SOKIMO, in particular.
