MAC: Mines and Communities

DRC wikileak reveals a uranium scandal

Published by MAC on 2011-01-10
Source: Nostromo Research, Inter Press Service (2011-01-26)

UK company put in the spotlight

One of the most explosive wikileaks published late last year escaped the attention of many in the international media - though it was quite widely covered elsewhere, as in the article we publish below from Julio Godoy of Inter Press Service (IPS).

In this particular instance, leaked US diplomatic cables alleged a raft of recent serious safety violations at uranium mines and nuclear facilities in a number of African countries. 

One of these cables, dated September 2007, is from Roger A Meece, the US Ambassador to DR Congo. It identifies Finnish, British, Congolese and South African companies as likely to have been complicit in the illicit trading of uranium (if not copper and cobalt as well).

In its summary of this wikileak, Godoy indicts an outfit called Malta Forest for illegally "mining and exporting" DRC's uranium from the Luiswishi deposit in Katanga province.

However, Meece's cable is considerably more circumspect about this company's role than Godoy' article suggests.

Ambassador Reece raised the serious possibility that it was actually a UK company, Brinkley Mining, that  tried to secure this lucrative uranium contract.

And that Brinkley might have done so by corruptly dealing with a top Congolese official, while using the services of a shady company directly linked to a convicted fraudster.

From Malta to Mayfair

Judging by its title, readers might think that  Malta Forest is a Maltese outfit involved in forestry.

In fact it is almost certainly (and literally) the parent company of George Forrest International, one of the most notable (if not notorious) exploiters of DR Congo's mineral resources (Malta was the first name of George's biological father). See http://moneytometal.org/index.php/Forrest_Group_International

According to Meece's 2007 cable, Malta Forest was in direct competition with Brinkley for access to Luiswishi's uranium.

Brinkley Mining is based at the edge of London's highly fashionable Mayfair district. It was established largely by the efforts of Gerald Holden, a City whizzkid who also launched Asia Energy (the company behind the infamous Phulbari coal venture in Bangladesh). See: London Calling On A Recent City Shuffle

These, and other parlous mining promotions, were doubtless considerably boosted by Holden's stint as the former head of mining and metals investment at Barclays Bank.

During his time at the bank Holden also promoted the Tiomin mineral sands project in Kenya, and  the listing of Lonrho plc - his colleague David Lenigas' Africa-based agribusiness, infrastructure, luxury services and mining conglomerate.

Here are extracts from the full wikileaks cable sent back home by Roger A Meece on September 11 2007:

"It is unclear whether or not Malta Forest and other companies in Katanga Province mine and traffic uranium. A body of circumstantial evidence exists, but specific hard evidence does not. Certainly, there are extensive, probably profitable quantities of uranium in Malta Forest's [sic] mines, especially since the price of uranium (U308) has increased from approximately $15 a pound in 2004 to $135 a pound in 2007.

"It would be difficult to avoid mining this uranium while mining copper, and it would be easy to export it within raw, semi-processed rock as copper, especially if an illegal export system in an unregulated environment already existed to do so.

"The fact that the Embassy has received several reports in the past two months from approximately six different sources that Malta Forest is trafficking uranium, lends support to the circumstantial case against them (Post can not confirm if any of this reporting is circular).

"The fact that Finland may claim DRC uranium imports, but the DRC does not record any uranium exports, is also suspicious.

"...On the other hand, Malta Forest is an easy target; it is a large company that has been working in the Congo since 1915, and it has been involved in business deals with various Congolese Government officials. Statistics are also intentionally muddied and manipulated by DRC officials to push various economic and political agendas.

"Around 20 June, for example, Governor Katumbi called Econoff [a DRC official] to discuss the REF Ministry of Mine,s[sic] report. He argued that Malta Forest was trafficking uranium, and tried to get the United States to intervene.

"Governor Katumbi was reportedly a shareholder in several mining companies that compete with Malta Forest, including the Mining Company of Katanga (MCK) and Anvil Mining, although he told Econoff he divested himself of ownership in these companies".

Brinkley's misfortunes

Meece then examines the role of Fortunat Lumu, then head of DRC's Atomic Energy Agency (CGEA), in negotaitions with Brinkley:

"Professor Lumu,s side-story is also a case in point. What at first glance seems like a clear-cut case of uranium mining at Luiswishi quickly loses credibility by the revelation that Lumu planned to use the investigation to push Malta Forest aside and form a personally profitable partnership with Brinkley.

"Certain DRC officials may have a powerful economic incentive to say that private companies like Malta Forest are exporting uranium, whether this is true or not, because this often benefits their own business interests, and it is standard practice for officials to receive bribes from companies to make the problems the officials created in the first place go away.

"The only solution to conclusively determine whether or not companies are clandestinely trafficking uranium may be to conduct an independent study by a neutral party, such as the IAEA.  MEECE".

Just before ambassador Meece assembled these comments, Fortunat Lumu Badimbayi-Matu, Director of CREN-K and the DRC Atomic Energy Commission (to give him his full designation) was suspended from office by his government.

Then, just a week after the cable was sent, Brinkley itself was in hot water.  On September 20 2007, the London Sunday Times  alleged that Holden's company had used the services of a convicted fraudster, Niko Scheffer, to broker a deal with Lumu. (see story below).

In October 2007, according to public relations firm Bell Pottinger, the DRC government  determined that the agreement between Brinkley and the CGEA did not meet “the highest standards of integrity” [Mining Weekly, 8 October 2007].

In May the following year, Holden resigned as the chair of Brinkley; just over three months later, the company announced that it was terminating its operations in DR Congo.

Whether it's poetic justice or not, Brinkley went on to suffer from rising debt over the next two years and, in early December 2010, it was bought out by Eurogold.

[Comment by Nostromo Research, 9 January 2011].

Africa Offers Easy Uranium

By Julio Godoy

Inter Press Service (IPS)

26 December 2010

Wikileaks cables have revealed a disturbing development in the African uranium mining industry: abysmal safety and security standards in the mines, nuclear research centres, and border customs are enabling international companies to exploit the mines and smuggle dangerous radioactive material across continents.

The Wikileaks cables reveal that U.S. diplomats posted in a number of African countries - the Democratic Republic of Congo (DRC), Tanzania, Niger, and Burundi, among others - have had direct knowledge of the poor safety and security standards in these countries' uranium and nuclear facilities.

The cables also highlight the involvement of European, Chinese, Indian, and South Korean companies in the illegal extraction and smuggling of uranium from Africa. Most European nuclear reactors use uranium imported from African countries.

In one classified document, dated Sep. 8, 2006, the U.S. embassy in the DRC capital Kinshasa reported that several U.S. diplomats and security service personnel toured the Kinshasa Nuclear Research Centre (CREN-K) on Jul. 27 that year in order to assess the facility's security needs.

CREN-K houses the DRC's two nuclear reactors. Neither reactor is currently functioning, but staff conduct nuclear-related research and teaching at the facility.

Although inactive, CREN-K stores significant amounts of uranium and nuclear waste. This radioactive material includes 138 nuclear fuel rods, at least 15 kg of enriched and non-enriched uranium, and some 23 kg of nuclear waste.

At CREN-K, "external and internal security is poor, leaving the facility vulnerable to theft," Roger A. Meece, U.S. ambassador to DRC, reported in the 2006 document.

Meece's detailed description of the security measures at CREN-K suggests that security is not just "poor," but non-existent. According to the report, the fence surrounding CREN-K "is not lit at night, has no razor-wire across the top, and is not monitored by video surveillance.

"There are numerous holes in the fence, and large gaps where the fence was missing altogether," Meece wrote.

"University of Kinshasa students frequently walk through the fence to cut across CREN-K, and subsistence farmers grow manioc on the facility next to the nuclear waste storage building," he added.

In March 2006, an International Atomic Energy Agency (IAEA) contractor using a Geiger counter detected elevated levels of radiation in this manioc plot.

According to the cable, none of CREN-K buildings have sophisticated locks, intrusion alarms, motion detectors, or video surveillance systems.

"Once inside the facility, no one controls the entrance to the nuclear reactor, although a key is required to enter the room," Meece wrote.

"The fuel rod storage room, where the nine unused fuel rods are stored, was not locked, and the fuel rods are not kept in a separate locked container."

But security gaps in nuclear and radioactive facilities in the DRC go beyond CREN-K. In a separate cable, dated Jul. 11, 2007, Meece reported that several sources "recently stated that the Malta Forest Company is (illegally) mining and exporting uranium from the DRC."

According to the report, the company is "mining the uranified rock while mining copper and cobalt, then exporting the uranified ore and circumventing radiation testing by using an established system of corrupt government officials."

Meece explained that foreign companies purchase the uranified ore and refine it abroad to separate the uranium, copper, and cobalt.

"In this way, foreign companies purchase uranium from Malta Forest, while Malta Forest appears to be exporting copper and cobalt," he wrote.

In 2006, for example, two Finish companies, Opolo Chemicals and Konkola Chemicals, reportedly told the IAEA that they imported one ton of uranium from the DRC. The DRC, however, claimed that it did not export any uranium in 2006.

In addition, the cable warns that high levels of radioactivity have been measured in numerous regions of the DRC.

"All of Katanga Province could be said to be somewhat radioactive," Meece reported.

Katanga is the country's southernmost province. With an area of 518,000 square kilometres, Katanga is 16 times larger than Belgium, and holds a population of more than four million people.

In the cable, Meece refers to research carried out in May 2007 in the Luiswishi mine, located approximately 20 km northwest of Lubumbashi, the region's capital city. After analysing 100 kg of rock samples from the mine, a scientific commission from Kinshasa found "dangerously high levels of radiation existed at Luiswishi mine, and that the mine operator ...was suppressing this fact to continue mining operations."

The mine operator is the Mining Company of South Katanga (CMSK), predominantly owned by the Malta Forest Company.

The cable also refers to several other findings of high radioactivity and corruption in other Congolese uranium mines, operated by Chinese and South Korean companies. These mines are staffed by "artisanal diggers" - a euphemism for local workers extracting uranium and other radioactive material without enjoying any health protection.

Other U.S. classified cables revealed by Wikileaks report cases of smuggling uranium and other radioactive material in Tanzania, Burundi, Niger, Portugal, and Georgia.

Meece continues to serve in the DRC, as head of the U.N. mission.


Congo purge puts Brinkley deal in doubt

By Ben Laurance

Sunday Times

20 September 2007

A CONVICTED fraudster played a pivotal role in securing uranium mining rights in the Congo for the British minerals group Brinkley Mining, The Sunday Times has established.

Niko Shefer, of Johannesburg, was sentenced to 14 years in jail in the late 1980s for his part in one of South Africa’s biggest bank frauds. And a 2002 United Nations report into the plunder of the Congo’s natural resources named him as one of 54 people who should be subjected to travel restrictions and penalties.

It has now emerged that a Shefer company was instrumental in securing a deal for Brinkley to mine uranium in the Congo.

But since the deal was struck, Shefer was declared persona non grata by the government of the Democratic Republic of Congo (DRC) last month; The minister who approved the deal has been sacked and a civil servant involved in the agreement has been suspended.

The latest moves, seen as part of a drive by the DRC to purge its mining sector of corruption, have thrown into doubt Brinkley plans for uranium production in the country – but the company has yet to tell shareholders of the new developments.

Shefer’s role in Brinkley’s DRC uranium project has never been disclosed to investors. But papers seen by The Sunday Times show that Brinkley acknowledges that a key role in securing the deal was played by Sentinelle Investments. Shefer’s wife’s family trust has been a major shareholder in Sentinelle. Shefer’s accountant is the company’s sole director.

Shefer received a 14-year jail sentence in 1989 for his part in stealing 47m rand – then worth about $10m – from the South African Trust Bank. He was found guilty on three counts of fraud and one of theft.

Released in 1995, he became a close associate of Liberia’s then president Charles Taylor. The two later fell out. Shefer was charged in 2003 with a number of breaches of South Africa’s companies act. He was also charged with obstructing police and had to pay fines of hundreds of thousands of rand.

Brinkley announced last year that a majority-owned offshoot, Brinkley Africa Limited (BAL), was forming a partnership with the Congolese atomic energy authority, the CGEA, to mine uranium ore in five areas. The identity of the minority holder in BAL was not made public.

The deal was struck on the Congolese side by the DRC’s scientific research minister, Sylvanus Bonane.

The other key Congolese player was Fortunat Lumu, head of the country’s atomic energy commission. He was suspended from his job this year after being accused of agreeing uranium deals with Brinkley without the authorisation of DRC president Joseph Kabila.

Science minister Bonane was sacked from the government in July – only days after Brinkley announced in London that a deal with the DRC had been signed.

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