Dear Supporter,

Ivanhoe Mines, a Canadian mining company, appears to have struck it rich in the Democratic Republic of Congo (DRC). Pull back the curtain on its success story, however, and you find a company that appears to be above the law.

After 25 years of exploration, Ivanhoe claims to have found Africa’s largest-ever copper deposit. The company now also says a copper exploration project just next door could have similarly rich deposits. The problem? They realized this good fortune right before key exploration licenses were set to expire, meaning their hold on these discoveries was about to vanish. The solution? The Congolese government unlawfully allowed Ivanhoe to hold on to these licenses for years after they should have been surrendered. "Gaming the System” reveals evidence that points to a likely explanation for why this happened: a top Ivanhoe executive arranged to share a potentially lucrative cut of local subsidiaries with a politically connected individual at just the right moment.

All of this serves to weaken the rule of law in one of the world’s poorest countries and now raises serious concerns of corruption. On the part of the DRC, it shows that the state apparently allowed a major outside player and a politically connected local business partner to sidestep laws protecting the DRC’s control over its mineral wealth. As for Ivanhoe Mines, The Sentry has yet to discover a compelling explanation for how the company could have legally claimed many of the mineral rights it now holds. And these aren’t the only worrying signs: Canadian police raided Ivanhoe’s offices last year as part of a criminal investigation into possible bribery in the DRC.

Illegal arrangements and suspicious behavior have long plagued the DRC’s natural resource sector. Money and access have bought special treatment and the laws and regulations in place haven’t been applied to all individuals and entities. To stop this, key recommendations regarding further investigations and policy actions can be found within our report. As always, The Sentry will continue to shine a light on allegations of corruption wherever we find them.

Sincerely,

John Prendergast
Co-Founder of The Sentry