US Official Insists Gertler’s Congo Royalties Must Go to Government

A senior US official stated that any deal to ease sanctions on billionaire mining magnate Dan Gertler must include transferring his royalties in the Democratic Republic of Congo (DRC) to the country’s government.

Amos Hochstein, a senior White House adviser on energy and investment, emphasized in an interview that lifting the sanctions is crucial to attracting new investments that align with US interests and benefit the DRC, with the option to reimpose sanctions if necessary.

“The royalties that he has should be in the hands of the government of the DRC,” Hochstein said. “It’s an entirely absurd situation that the state is not benefiting more from their own natural resources.”

While Hochstein did not provide specifics on the transfer process, it would likely involve buying out Gertler, a move that has faced criticism from civil-society groups but could prevent legal disputes.

Gertler was sanctioned by the US in 2017 for allegedly using his connections to then-President Joseph Kabila to siphon off over $1 billion from the DRC, a crucial source of minerals for green energy.

In 2022, Gertler made a deal with the DRC to return some assets in exchange for lobbying help to lift US sanctions. However, he retained royalties from some of the world’s largest cobalt sources not owned by Chinese companies.

This situation complicates US efforts to secure critical minerals independent of China, as Gertler’s presence deters western firms from investing in his assets.

“It’s very difficult to get a western company with high values to invest if they think there’s a risk of litigation, sanctions, and so on,” Hochstein noted.

Chinese companies own many of the best mines in the DRC, the world’s second-largest source of copper and producer of about three-quarters of the world’s cobalt, essential for electric vehicle batteries.

Gertler denies any wrongdoing and has never been charged with a crime. His representatives declined to comment.

At the heart of the controversy are royalties from projects owned by Eurasian Resources Group and Glencore Plc, potentially worth $100 million annually. Anti-corruption groups argue that Gertler obtained these assets through corruption and should relinquish them without compensation.

Bloomberg News previously reported that the US might ease sanctions if Gertler sells his royalties, exits the DRC, and submits to audits of his businesses.

“If an arrangement can be reached that continues to punish him, doesn’t trust him, and opens the door for the kinds of investment we would like to see in DRC,” the US is open to a deal with monitoring of Gertler’s businesses and potential re-imposition of sanctions if necessary, Hochstein said.

“We have to make sure that the sanctions on Gertler are not becoming a punishment for DRC and against the overall interests of enhancing good actors from investing,” he added.

Gertler, from a prominent Israeli diamond family, has connections at the highest levels of the country’s government. His sanctions were briefly lifted under President Donald Trump in January 2020, when both men were represented by Alan Dershowitz, but President Joe Biden reinstated them shortly after taking office.

The DRC remains one of the poorest countries globally, posing a further challenge to any deal requiring the government to purchase Gertler’s royalty streams.

“This is a complicated conversation that’s been going on for more than 18 months,” Hochstein said. “I cannot tell you if it’s going to happen or not. Our demands are pretty steep, and there are ongoing discussions.”