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Glencore faces new Congo legal challenge
Congolese-American businessman and convicted fraudster Charles Brown has resurrected a lawsuit against mining giant Glencore, claiming he was owed $1bn in compensation for a 19% stake he previously held in Mutanda Mining, the world's biggest cobalt miner.
Brown's suit, the third court challenge against FTSE 100-listed Glencore for control of its Congolese mines this year, marks another pain for the firm as it also battles the African nation's government over a new mining code.
The Mutanda founder claims his shares had been fraudulently sold to Glencore in two transactions, in 2007 and 2012, and has demanded Glencore pay him in excess of $1bn for compensation and damages, although Brown told Bloomberg that his end goal was to take back control of his shares.
Glencore, which owns 100% of Mutanda, produced 24,000 metric tons of cobalt at the site, more than any other mine in the world, and 192,000 tons of copper.
In January 2018, the DRC's Commercial Court authorised Brown to seize $843m of Mutanda assets, and later rejected a bid by the firm to reverse the decision.
Two months later, Glencore chief executive Ivan Glasenberg and head of copper trading Aristotelis Mistakidis were ordered by the court to appear at a public hearing on 2 July, claiming they had used "violence and threats" to get Brown to sign an agreement giving up his claim back in May 2012.
Glencore said Brown's claims were "vexatious and baseless".
"Mr Brown's allegations have been rejected on numerous occasions by various courts in the DRC," the company said.
"Glencore will vigorously defend itself in the current legal proceedings."
Analysts at Shore Capital, said, "Apparently, the difference this time around is that Brown's legal team now includes politically connected lawyers... these include a former Kabila adviser and a serving lawmaker from the ruling coalition."