ENRC deal with diamond trader Gertler criticised

A move by the controversial mining giant ENRC to sever its joint-venture ties with Dan Gertler, the Israeli diamond billionaire, has run into immediate criticism from governance watchdogs.

In what is being seen as an attempt to assuage widespread criticism of the way ENRC has bought assets from Mr Gertler, the company yesterday confirmed that it had struck a deal to buy the remaining 49.5 per cent stake in their copper and cobalt joint venture in the Democratic Republic of Congo for $550m (£342m).

This follows the International Monetary Fund's decision last week to freeze loans to Congo over concerns about the way a company associated with Mr Gertler acquired mining rights from the government of President Joseph Kabila.

While the deal will arguably clean up ENRC's reputation in the country, it still apparently sees Mr Gertler, pictured, profit handsomely from the Kolwezi mine's copper and cobalt.

Global Witness, the NGO which has been heavily critical of Mr Gertler's involvement in Congo's mining asset sales, arguing that he has been given them on the cheap by the government of his friend Mr Kabila, said it deplored the deal.

A spokesman said: "We oppose this strongly. It carries with it a very significant risk of corruption. This is exactly the kind of deal we have been complaining about."

ENRC bought its original 50.5 per cent stake in the assets from Mr Gertler in 2010, paying just $50m with the promise of a further $125m to come.

Analysts working at Deutsche Bank said the latest price paid to Mr Gertler looked "high", and that there was still not enough information from the company to establish whether or not it was a good deal.

ENRC's Mehmet Dalman, who has been trying to clean up the image of the company's Congo operations, said: "This transaction is an integral part of the corporate governance and company structure optimisation that I set as a key priority when I assumed chairmanship."

Mr Gertler last week told Bloomberg Markets Magazine that he deserved a Nobel Prize for his work attracting investors to Congo.