Jeff Bezos, Bill Gates, and other masters of the universe are betting big on Greenland as mining in the Congo gets too dirty for even Elon Musk.
APRIL 21, 2022 8:00 AM
As the bankers from J.P. Morgan’s London offices stepped off the two-hour private flight from Johannesburg onto the hot runway, soldiers sporting sunglasses and semiautomatics watched them closely. The Democratic Republic of the Congo’s brutal civil war had ended several years earlier, but peace remained tenuous, and the Lubumbashi airstrip was still heavily militarized.
It was the summer of 2006, the height of a period that became known as the commodities “Super Cycle,” in which a hardy vanguard of investors sought to sate industrializing China’s seemingly endless appetite for raw materials, particularly metals. Relying on low-cost financing, dealmakers at Credit Suisse, First Boston, HSBC, Goldman Sachs, and Morgan Stanley scoured the world for once state-owned mining assets in need of fresh funds or those primed for privatization. But the capital markets group at J.P. Morgan had proved more adept than its peers at this international treasure hunt, earning tens of millions in fees thanks to a series of mining-company flotations that grew ever more exotic, remote, and risky. And the sortie into the DRC—one of the world’s wealthiest nations in terms of natural resources but among the poorest by gross domestic product—sat at the riskiest end of that spectrum.
Once their customs paperwork was handled, the bankers reboarded the Challenger for a 45-minute flight northwest, to a dust-choked mining settlement called Kolwezi. Before they landed, the pilot circled the prize: Kamoto Oliveira Virgule, known simply by its initials KOV, a rain-flooded mining pit named for its biggest three ore bodies, as geologists call deposits, each one the size of an underground Manhattan skyscraper. The bankers’ invitation had come from a handful of foreign businessmen who’d secured the rights to resume digging at KOV more than a decade after the DRC’s state mining company essentially abandoned it. The specific draw had been what the owners were claiming was the planet’s largest high-grade copper mine, metallic ore so concentrated as to be visible to the naked eye. From the air in the bright June sunshine, though, as one mining executive put it, KOV looked like little more than “a fucking big hole in the ground…you might as well go scuba diving or waterskiing.”
Beneath 5 million or so gallons of floodwater, in addition to all that copper, surveys suggested a spectacular trove of another metal, cobalt. To the bankers peering down from the jet, the cobalt was incidental, an ingredient in aircraft turbines and, so it happened, part of the mine. “Nobody ever thought it was at all strategic or important,” remembers one of those bankers, Michael Rawlinson, who now holds top positions at several mining firms. But Daniel Gertler, 32 at the time and the youngest of the businessmen involved, saw raw opportunity. This deal would help him move beyond his family’s trade in diamonds to become a player in the commodities world, cementing him as a dominant force in the DRC’s economic engine and the country as the source of some 70 percent of the world’s cobalt supply.
The cobalt that today remains unmined at KOV—one of Gertler’s largest remaining interests in the DRC—is worth more than $39 billion. The metal has become a critical component in the global transition to a greener future, a reality reflected in its soaring price: $29,000 per metric ton in July 2020; by the time this story went to print in late March, $82,000 per ton. Most lithium-ion batteries depend on cobalt, and everything from iPhones to Teslas depends on those batteries. One analytics firm estimates the worldwide market for electric vehicles and consumer electronics will drive cobalt demand at least three times higher by the end of this decade.
But the green gold has become a dirty business—bad enough that Elon Musk has vowed to engineer cobalt out of his vehicles—with a small coterie of individuals and companies growing immensely wealthy from the DRC’s resources at scant benefit to ordinary Congolese people. In 2019, a U.S. human rights organization filed suit against Tesla, Apple, Dell, and other tech giants on behalf of the families of 14 children killed or injured mining in the DRC; the lawsuit was dismissed in November. Meanwhile, Gertler and dozens of companies linked to him are under U.S. sanctions for allegedly corrupt deals, while Glencore, the Swiss-based commodities giant and current majority owner and operator of KOV, faces ongoing investigations from the U.S. Department of Justice and the Commodities and Futures Trading Commission, as well as Britain’s Serious Fraud Office, Switzerland’s Office of the Attorney General, and the Netherlands Public Prosecution Service. The U.S. Treasury used an NGO’s calculations that indicated Gertler was responsible for stiffing the DRC on more than $1.3 billion in lost revenue between 2010 and 2012 alone. Although Gertler found brief reprieve in the final days of the Trump administration, courtesy of Steven Mnuchin, Biden administration officials swiftly reimposed sanctions. As a result, Gertler, who is Israeli, is prohibited from using U.S. financial institutions and is largely barred from the international banking system. One of his lobbyists, Trump impeachment lawyer Alan Dershowitz, has insisted that Gertler has complied with U.S. and international law. But Vanity Fair interviews with banking officials and experts in enforcing U.S. sanctions, alongside reviews of multiple financial and corporate documents, indicate Gertler has continued to try to circumvent restrictions, even as he receives royalties from the company that operates KOV.
Mines are finite, though. And as cobalt’s value skyrockets, so does the significance of its role in the economic contest between Beijing and Washington. In an effort to simultaneously save the planet and turn a profit, an enterprise funded by—among others—a swashbuckling half-trillionaire group that includes Bill Gates, Jeff Bezos, and Michael Bloomberg has set its sights as far afield as Greenland, whose citizens may eventually embrace such lucrative pursuits too.
The search occupies the minds of a growing army of geologists, software engineers, and data scientists at KoBold Metals, a U.S. technology firm focused on accelerating and expanding the exploration process for cobalt and other so-called battery metals, including nickel. The lack of alternatives to Congolese cobalt is “a major motivator” for KoBold’s workforce, according to cofounder and CEO Kurt House, a Harvard PhD who wrote his thesis on carbon dioxide capture. “We can’t solve all governance problems of the world, we can’t solve corruption and labor, at least on our own—but what we can certainly do is diversify supply,” he told me on a video call from Northern California. One location where his firm hopes to find cobalt and nickel is Disko, an island slightly larger than Delaware and Rhode Island combined. It lies off the remote west coast of Greenland, the ice-riven North Atlantic landmass with 57,000 residents that President Trump considered trying to buy from Denmark, its former colonial power.
“If we diversify supply, if we find a major cobalt discovery in Greenland, we can guarantee that cobalt is going to be produced under extremely high labor standards, and extremely high environmental standards, and then you have a choice,” House posits. “Apple can then buy its cobalt from us, where it’ll have a really reliable chain of custody, and no corruption issues, and no child labor issues, and minimal environmental impact.”
In 2019 KoBold received backing from one of Silicon Valley’s top venture capital funds, Andreessen Horowitz, and further firepower from Breakthrough Energy Ventures, a multibillion-dollar funding vehicle created by Microsoft cofounder Gates and seeded by a boldface group that includes Bezos, Bloomberg, Ray Dalio, David Rubenstein, Jack Ma, Reid Hoffman, and Sir Richard Branson. The fundraising ran into the tens of millions of dollars and gave KoBold a four-year financial runway for preliminary exploration efforts at more than a dozen sites, including in Greenland. A more recent round brought in a further $192.5 million. And the high demand forecasts should help attract future loans and bigger projects, even in one of the world’s most inhospitable locations.PHOTOGRAPHS BY RICHARD MOSSE.
A view from the Bluejay offices overlooking the growing town of Ilulissat, Greenland.
By the time our Air Greenland charter helicopter tilts northwestward at dawn, there’s only a dusting of the previous day’s seasonal snowstorm, which grounded all flights. Disko Island’s desolate jumble of ridges, valleys, and glacial ice forms a ragged baseball glove facing west to Baffin Bay and the Canadian Arctic beyond. Beside me, Hans Jensen points out where a new, longer runway will be blasted from a headland’s small hillock, at the edge of Greenland’s third largest town, Ilulissat. “Useful for bringing miners and equipment in,” he explains through his headset. Jensen is the chief operations officer for Bluejay Mining, KoBold’s exploration partner in the far North Atlantic, and has been waiting to revisit an abandoned town on Disko called Qullissat that will serve as a geological exploration camp this summer. A Dane with a shaved head and blond-gray goatee, he has spent his adult life working in Greenland, first landing on Disko in 1987.
Below us as we cross the channel from the mainland, deep anthracite-colored inlets and fjords are occasionally marked by lighter currents. Steep cliffs of black stratified rock hug the shoreline near Qullissat, their staggered elevation accentuated by thin lines of packed snow. The abandoned settlement was once a prosperous town, pretty enough to feature on a Greenlandic postage stamp. Now from above it resembles a series of ragged matchboxes, variously red, yellow, blue, and pewter; Jensen identifies a large rust-colored building on a knoll as the possible home of a future site manager. The air is bitingly cold, painful punishment for any exposed skin. A solitary iceberg loiters offshore, a stone’s throw from where the old main street peters out at the beach.
In its quest for quality and quantity, the global commodities market has rarely cared for its climactic surroundings or distinctive color palettes. But the cobalt that KoBold and Bluejay hope to discover beneath Disko’s stark, frigid, and remote surface will differ greatly in its geology from that found in the lush, heavily populated mining belt of southeastern DRC and northern Zambia. And the cobalt will likely coexist with much larger quantities of not just copper but nickel as well. These kinds of ore bodies, known as magmatic sulfide deposits, can be relatively deep underground and difficult to locate, but once identified and extracted, their metal can be easier to process.
Millions of years ago heat from the earth’s core rose up to the mantle, forming magma. If that magma reacted with enough sulfur from the surrounding rock layer, the products—nickel or cobalt sulfides—might separate out as a more stable form and sink into the keel—the underside—of a larger tube of magma. Ideally, that keel is what House calls “chock-full of the really good stuff.” The absence of those metals in higher layers of the magma is often a good indication of a keel’s presence. Disko seemed to show an exciting absence.
“This is the best Norilsk analog in the world,” House had said before the trip, referring to a Siberian deposit site that was originally mined by Gulag prisoners under Stalin. Today, a company called Nornickel is the world’s largest producer of refined nickel, and its mines in the Norilsk region produced more than 4 percent of global cobalt in 2021. Over the past decade, the deposit has helped generate more than $120 billion in revenue. The two largest stakes in it are controlled by prominent Russian oligarchs. (One, Oleg Deripaska, was sanctioned by the U.S. in 2018 for his links to the Russian government following Vladimir Putin’s 2014 invasion of Crimea. The U.K. sanctioned Deripaska in March. The other, Vladimir Potanin, saw around $3 billion of his net worth temporarily wiped the day Russia invaded Ukraine in February.)
Among the earliest Western geologists to visit Norilsk, then part of the USSR, was a man named Peter Lightfoot. His knowledge is “encyclopedic,” according to House, who sought him out as one of KoBold’s earliest hires. A Canadian mining firm, Falconbridge (subsequently and coincidentally acquired by Glencore), had asked Lightfoot to evaluate Disko’s deposits back in the 1990s. At an early KoBold staff meeting, he had wowed his new colleagues by recalling the Falconbridge data with unfathomable precision—“It was almost like a parlor trick,” House says. But by the time Gertler was beginning his DRC copper-cobalt acquisitions in earnest, the then independent Falconbridge had abandoned further exploration on Disko after several drill holes turned up zip. It was an all too common cost-related decision in the boom-and-bust mining industry, but it left behind some tantalizing breadcrumbs.
“It has all of these signals, it has all of the right rocks, and it’s still not tested,” Lightfoot told me of the territory that is now the center of his focus.
Despite pressure to phase out hydrocarbons from global energy supplies, the exploration budgets of oil and gas giants continue to dwarf those of even the largest mining firms looking for battery metals. Consequently, “big mining companies tend to spend more money where they already know something exists—the chances of success are higher,” explains Lightfoot. With help from Jensen and Bluejay, KoBold’s exploration on Disko this summer will start with airborne surveys employing various technologies to measure the density, magnetism, and conductivity of larger tracts of land, along with electrical readings and geochemical analysis of sledgehammered rocks. What makes KoBold unusual are its proprietary machine-learning algorithms that can process data on a daily basis, mapping results into pixelated, predicative atlases that can help geologists on the ground determine the next day’s exploration and sampling targets. It’s not hard to see the trimmed costs, both financially and environmentally.
“IF GOD GAVE US A DIFFERENT PERIODIC TABLE, THEN THINGS WOULD BE DIFFERENT. BUT IT JUST IS WHAT IT IS.”
The technique should solve a “sequential planning problem” that has long bedeviled mining exploration efforts, according to Jef Caers, a Belgium-born director of Stanford University’s Center for Earth Resources Forecasting, who examines KoBold’s data as part of his academic research while advising the company. “You want to drill with the idea to confirm or to walk away,” he explains, something House describes as the “speed to kill.” If there’s no “there” there, KoBold can redeploy quickly with less impact on the land—and its financial outlays. “A lot of what we’re doing is trying to create both the culture and the DNA in the company that will fail fast and fail proudly,” says House.
KoBold’s almost instantaneous feedback loop represents a start-up approach the mining industry has never fully considered. The first several dozen employees—“curious, technically capable people who want to understand the cosmos around them”—were the cofounders’ top choices for each position, House says. The Stanford connection also helped attract Andreessen Horowitz, where general partner Connie Chan says KoBold’s ability to hire “world-class talent” encouraged her to invest in a sector that was outside her usual consumer tech wheelhouse.
As part of her due diligence, Chan and her team examined the broader battery industry, since the challenges around cobalt supply have encouraged researchers to experiment with replacing cobalt. But Chan says the literature and experts gave her reassurance about future demand for cobalt, at least in the medium term. “A lot of the other experiments around different kinds of batteries, I think, have a far, far, far lower chance of working and for sure not in a time frame that could be commercialized in the next decade,” she says on a call from Los Angeles, where she lives.
House admits cobalt supply shortages—and price spikes—could make the metal less affordable, but its properties ensure it remains the best-performing option. “If God gave us a different periodic table,” he quipped, “then things would be different. But it just is what it is.” At Apple, cobalt remains a cathode constituent. But auto manufacturers may see it differently. A vehicle battery requires several thousand dollars of cobalt; a phone handset just a few cents. To electrify the world’s automotive fleet at current market prices, we need a “tremendous amount” of metals, House acknowledges. According to KoBold’s calculations, using International Energy Agency estimates, the necessary discoveries of new cobalt, nickel, lithium, copper, and rare earth elements will be worth around $10 trillion at current prices. But, says House, “we’re staring down the barrel of catastrophe,” referring to the challenges in the context of climate change. “Otherwise, you fry.”
“We’re supposed to be going after the biggest, hairiest problems that are around,” says Eric Toone, the technical lead on the investment committee at Breakthrough Energy Ventures, the $2 billion–plus fund established by Gates that has backed KoBold. “There is almost no way to wrap your head around what scale means when we get talking about energy,” he says. “A billion dollars is certainly a significant amount of money, right? But compared to the amount that’s required to do what we’re trying to do, it’s a drop in the bucket.”
“There’s no other opportunity like the one that’s provided by people like Mr. Gates,” Toone concludes—which is why “you really don’t want to fuck this up.”
With a staff that’s roughly 70 percent PhDs, Breakthrough aims to back businesses it thinks will more quickly reduce carbon emissions. In 2019 it began vetting KoBold, first by gauging its potential to reduce emissions—the minimum is “at least half a gigaton per year of CO2,” says Toone—then by scrutinizing its technical feasibility, leadership, and business plan. Breakthrough invested in the same early funding round as Andreessen Horowitz, while Norwegian state-owned oil and gas giant Equinor subsequently purchased a stake. More recently, KoBold’s “machine prospector” has intrigued one of the mining world’s traditional behemoths, BHP, and the two are now partnering to explore a swath of Australia equivalent to roughly 6 percent of the country’s entire landmass. But rather than just lease out its software like a contracted supplier, KoBold’s famous backers have helped it financially to coinvest with other mining businesses, as it has done with Bluejay in Greenland. “I don’t want to get paid a few million dollars in service fees,” says House, hypothesizing. “I want to own half of the $10 billion asset we discovered together.”
The history of the KOV pit near Kolwezi is crucial to an understanding of the current stakes. After touring the site back in 2006, Rawlinson and his J.P. Morgan colleagues were whisked in battered SUVs to the Pink Palace, the only guesthouse in town. Run by a Belgian couple, it offered mattresses resting on concrete slabs. During Belgium’s colonial rule that ended in 1960 and for some time after, KOV and the nearby town had helped drive the DRC’s export economy. But after decades of underinvestment by a state-owned company, most of the region’s pits and underground mines had flooded or fallen apart, equipment had rusted, workers had gone unpaid. Rawlinson had only just taken the reins at J.P. Morgan’s European mining team when one of Gertler’s business partners approached the bank for help financing the KOV pit. Rawlinson was astounded by the “industrial archaeology site” they encountered, “a forgotten hellhole” without even a reliable power grid.PHOTOGRAPHS BY RICHARD MOSSE.
As settlement inhabitants move on to more economically viable areas, the still-standing homes are all that remain.
As for Gertler, the bankers knew few details about the origins of his ownership stake, just that it represented his first substantial foray into mining metals. Much of his prior experience lay in the diamond sector, and they had heard he was close to the country’s youthful president, Joseph Kabila. Gertler and his partners had chosen the Isle of Man, off the English coast, to register KOV’s new holding company. They named it Nikanor, for a semi-mythic figure who miraculously transported a pair of copper-alloy doors from Africa to Jerusalem for its Holy Temple. During the mine visit, the group passed kids—some looked barely past adolescence—digging in piles of discarded mining by-products, known as tailings, or carrying sacks of a cobalt ore called heterogenite. A video taken from inside the KOV pit in 2006 shows two children standing close to two adult locals, described by the man filming as “artisanal” miners—independent contractors who sell their mined ore to roadside cobalt traders. One of the children in the video throws a rock toward a Nikanor group and other visitors. That same summer the NGO Global Witness published a report that called for a strengthening of regulations against child labor in the Congo, where “the presence of children in the mines is so visible,” the authors wrote, “that it is very unlikely that companies would not be aware of the problem.” (A source close to Gertler told Vanity Fair that he would never approve of children working in danger, not least because he has 11 of his own. A spokesperson for Glencore, which took control of the mine in 2009, emailed the magazine that “there are no teenagers under 18 working for our operations in the DRC. We do not tolerate any form of child, forced, or compulsory labor anywhere in our business or our supply chain.”) Gertler meanwhile introduced the bankers to local officials, including the governor of the province, whom he referred to as a “brother.”
Future trouble may have been foreshadowed, but the J.P. Morgan team worked to minimize Gertler’s role and focused instead on the abandoned pit’s potential, forging ahead with plans for Nikanor’s imminent IPO. Buried in the prospectus shared with potential investors was an acknowledgement that Gertler had by then already faced allegations of “improper dealings with the Government of the DRC” (that lawsuit was dismissed) tied to the country’s diamond mines. The implication was that he had helped very senior officials line their pockets. As the IPO’s sponsors, the bankers ensured he was kept away from the London boardrooms where they pitched pension trusts and hedge funds, and they recruited Jonathan Leslie, a former head of copper at mining giant Rio Tinto, to act as executive chairman, alongside a new finance director, Peter Sydney-Smith. (Both executives declined interview requests from Vanity Fair.) Nikanor shares attracted $800 million when they began trading in July 2006 on London’s Alternative Investment Market, instantly making it the exchange’s most valuable business. On paper, Gertler’s 15 percent of the company was suddenly worth around $225 million, borne of an initial investment that has never been disclosed—but on paper was zero. (Gertler did not comment.)
Problems quickly emerged. Bateman, a consulting firm owned by one of Gertler’s fellow shareholders, Beny Steinmetz, had conducted the feasibility study prior to the public offering, but after the IPO, it became apparent that “the methodology for doing the costing was not accurate,” Nikanor’s head of funding at the time, Brian Scallan, told Vanity Fair. Lowball projections may have helped entice U.K. investors, but now they meant the company would require hundreds of millions in further funding to get off the ground. The news incensed the J.P. Morgan team, who felt they and their market clients had been hoodwinked. After failed talks with a potential Chinese suitor and as Nikanor’s stock price started sliding, Gertler and Steinmetz sought to take the company private again, with help from Glencore, which increasingly wanted not only to sell metals to a global market but to mine them too. The privatization plan was a highly unusual and controversial move for a recently listed business and prompted more angry recriminations. So, facing stiff resistance from executive chairman Leslie and J.P. Morgan executives, Gertler and his original partners used their controlling shares to instead vote through a $736 million cash injection that left Glencore with a sizable stake and significant control over Nikanor—including the ability to decide its top executives and the right to sell all mined material. Part of that cash included a $297 million Glencore loan to a Gertler-controlled company in the Cayman Islands, which massively expanded Gertler’s share in the business and unpicked the previous efforts of the J.P. Morgan team to downsize his role. Gertler’s increased shareholding wasn’t disclosed until several hours after the sale had gone through (and only then under duress), and Glencore’s loan to Gertler’s company was only incidentally disclosed months later, in a separate firm’s financial filings.
It was the first of more than a dozen transactions between Gertler and the Swiss firm that revolutionized global cobalt production, generating geysers of cash—and collateral damage. Many of the sales, loans, and divestments involved companies incorporated in offshore jurisdictions like the British Virgin Islands, where ownership is unidentifiable. Some had Congolese names—Ruwenzori is a mountain range that borders Uganda. Others, like Ellesmere Global Limited, offered a patina of British-sounding respectability. But what united many of these Gertler-affiliated corporate entities and trades was their utter opacity, making it hard for anyone to learn how his businesses had won access to prized Congolese mines, when exactly they had traded, or where the dollars (or euros or Congolese francs) ultimately ended up. The unwelcome attention that shoddy mining operations have drawn over the years continues to scare major miners and investors away from the country’s mineral riches and is indirectly driving the discovery efforts 6,500 miles away, in Greenland.
Kuupik Kleist was one of the last children born in Qullissat, the result of a Danish craftsman’s union with a local woman. He was adopted by an aunt and uncle, the town’s telegram operator, who punched out a final message to confirm the settlement’s closure on his own way out of town. Like many Greenlanders of his generation, Kleist was dispatched at an impossibly young age to a boarding school hundreds of miles away, where he pursued his education assiduously, all the while internalizing his anger over the unilateral closure of his hometown. He later led Greenland’s negotiations with Denmark over autonomy and in 2009 became the first prime minister of the self-governed nation, at the time publicly welcoming foreign investment at every opportunity. People from Scandinavia had arrived on a Greenland inhabited by Inuits in the mid-13th century, and the impacts of colonialism linger to this day, with the current secondary school syllabus still taught in Danish rather than the native Greenlandic tongue that is used in primary schools. Smaller settlements often lack educational provision for older children, making high school prohibitively expensive. On several domestic flights in Greenland, I sat beside a young teenager returning home from school or visiting a parent in a far-off settlement. A Greenlandic education historian estimates that by the end of colonial rule in 1953, there were just only a “few” college graduates in Greenland, all with Danish degrees. Today, only around one in eight students who enter primary school finishes secondary school.
While formally an autonomous territory, Greenland remains part of the Danmarks Rige, or Danish realm. Its government must still defer to Denmark on matters of defense and foreign affairs, and it relies on Danish taxpayers for roughly half its $600 million annual budget. For some time Greenlandic nationalists have argued the potentially lucrative revenues from mining could help replace that subsidy and strengthen the case for full independence. But Kleist, now retired from politics and working as a consultant to a foreign mining company, disagrees. “It’s not a means to liberate the state of Greenland,” he told me when we met in Nuuk, the fast-growing capital city. “Mining would never kind of pave the way for independence.”
The father of Naaja Nathanielsen, Greenland’s current mining minister, was also born in Qullissat, then sent to Denmark at six when his mother died. “He never went home,” Nathanielsen told me one morning when we met near the parliament building in Nuuk. Greenland has limited experience negotiating with well-funded foreign mining firms, but “being late to the party,” as she puts it, may provide advantages never available to a country like the DRC. “We were very much aware of what has been done around the world—and what has been done wrong around the world,” she said.
In November Nathanielsen spearheaded a ban on uranium extraction that may sink a joint Australian-Chinese mining project focused on rare earth elements. Months earlier, she and her ministerial colleagues had also ended oil and gas exploration because of “severe” risk of a potential spill. The World Wildlife Fund’s project coordinator for Greenland approvingly described the prohibition as a “gutsy” move, particularly given the potential for tax revenues. But Nathanielsen insists it was a no-brainer for a nation with a pristine Arctic environment where fishing provides thousands of jobs and a huge chunk of economic output. She is broadly supportive of the mining sector but plans to update transparency and environmental requirements. Currently, just two small mines operate in the entire country, extracting rubies and preparing to mine anorthosite, a mineral used in manufacturing.
“THERE’S NO OTHER OPPORTUNITY LIKE THE ONE THAT’S PROVIDED BY PEOPLE LIKE MR. GATES. YOU REALLY DON’T WANT TO FUCK THIS UP.”
All this might make Trump’s pseudo-imperial fantasy of buying Greenland not sound like such a lark, though that proposal ultimately ended up as a $12 million economic grant to encourage mining cooperation. At Greenland’s only mining school, where students learn to dynamite rocks and build pit roads, the director has developed a million-dollar partnership with U.S. counterparts to help construct a training facility for an underground mine—the kind that might be built on Disko. Well before that, though, Bluejay will need to sign an “impact benefit agreement” with the local community that could include employment guarantees. And given that any mine would be dozens of miles from the nearest residents with no roads in sight, as one Greenlandic investment expert speculated, “without foreign labor you will not be able to run projects like this.”
Toone, the technical lead at Breakthrough Energy Ventures’ investment committee, says the hardest—and fastest—race will be to complete the global energy transition before it’s too late. “The electrification of transportation is something that absolutely has to happen if we’re to make a significant impact on the production of greenhouse gases,” he says, while virtually all batteries used toward that effort today still require cobalt mined in the DRC under “conditions that I don’t think any of us would be comfortable with.” Within the next few years, if enough new deposits have been discovered elsewhere—in Greenland, or Australia, or maybe Canada—it still will not solve that problem fast enough. But the desire to make money may ultimately be the only solution available. As Toone says, “The kind of capital that’s necessary to do what we want to do here is going to come from investors who are seeking to earn a return.”
While I was reporting this story, Glencore invited me to see KOV firsthand. It is currently the world’s largest source of cobalt and is still a cash tap for Gertler, with Glencore’s KOV-anchored complex netting him $20,000 every hour or so in mining royalties. The vast canyon of minerals stretches more than a mile across and more than 1,000 feet deep. A geological kaleidoscope of oxidation fans out from beneath an observation deck on its northeastern flank; flaming red and bright lilac tinged with dark green. My December visit followed torrential rain, and black pipes as thick as culverts snaked into multimillion-dollar pumping stations to combat the streams of water. Every hour in the dry season, hulking shovel machines dump 3,000 tons of earth into enormous trucks that trundle up sloped roads cut into the mine’s walls; radar dishes scan for any concerning movement. Several years ago, seven workers died in a wall collapse. In 2019, more than 40 local creuseurs—French for “diggers”—died when a section of KOV they were excavating without the mine operator’s permission collapsed. Of the 9,000 staff and contractors Glencore employs around Kolwezi, some 1,200 now work in security, and the company has clearly made and continues to make significant efforts to stop similar intrusions.
Just outside Glencore’s concession, now largely ringed by 24 miles of concrete blast walls like the ones that surrounded U.S. military installations in Iraq and Afghanistan, an enthusiastic team of Congolese community liaisons greeted me and took me on a tour of a clean but empty new maternity clinic in Kamoto, a village that abuts the pits. Departing the clinic, we passed clusters of workers scavenging chunks of ore from a small pond at the village edge.
The trucks from KOV dump their loads near the pit’s edge, where miles of conveyor belts carry the material to a complex that transforms it into sheets of copper metal or powdery blue-green cobalt hydroxide, which is then poured into vast piles of 1,300-pound white canvas bags and trucked to East African ports, destined for yet more processing, primarily in China. Rusting freight train carriages lie in piles beside the rutted road, on land still controlled by Gécamines, the Congolese state-owned mining company that is a nonoperational partner in most of the company’s larger mines. Clint Donkin, Glencore’s top copper executive in Africa, explains how complex it has proven to be to run a professionalized operation here. “The concession is spread out over a large area,” he says, and “in amongst it is the infrastructure from the original workings.”
He was referring to various plots of land and aging facilities that separate Glencore’s underground mine from the vast pits and the refinery, which uses a chain of processes, including towering crushers, mills, and concentration systems, to convert ore into shining squares of copper and mountains of cobalt hydroxide. Back in 2006, the refining and concentrating facilities Donkin showed me were the only ones in the area but belonged to a Canadian competitor of Nikanor called Katanga. Its CEO, Arthur “Art” Ditto, was not initially interested in pooling resources with Nikanor, but over time the capital-intensive nature of restarting a mine depleted Katanga’s funds, just as credit markets tightened ahead of the 2008 financial crisis.
What came next was almost a transactional replica of how Gertler had gained control of Nikanor: His offshore firms grew his stake in Katanga; Glencore kicked in $265 million in loans to Katanga while also loaning money to Gertler’s companies, again undisclosed at the time. Within two years, all the original partners and competitors saw their shares diluted to the point of irrelevance. “I couldn’t trust Dan further than I could throw him,” said Eric Lilford, a former Nikanor board member Beny Steinmetz had brought in who resigned when the merger was announced, for “personal reasons,” calling Gertler “as crooked as they come.” Ditto, who resigned as Katanga’s CEO soon after the merger, said Gertler and Glencore executives had operated “like they were in the Wild West,” avoiding disclosure to mask their long-held ambition to combine the various mining assets. These were guys, he told me by phone from his retirement home in Arizona, “who play the game under different rules, a different way, in a way that I wouldn’t, I couldn’t.” Nikanor had burned through cash as well, though, and “would have been an abject failure for J.P. Morgan and the people who put money in” without the merger, one mining executive told me, “because it was no chance of ever being mined.” (The DRC’s mining minister, whose department had once chosen to separate the two projects, welcomed the “milestone” transaction.)
But by the time of the merger’s completion in late 2007, almost a decade of fuzzy and sometimes iniquitous purchases by foreign investors of the country’s most valuable mining rights—including at KOV—had begun drawing international scrutiny. Pressure from foreign NGOs in particular led the government to reexamine deals struck in the early years of the Kabila administration, a review that eventually led many foreign firms to pay sizable rebalancing payments back to the government to cement their existing rights. At a Zurich airport hotel conference room in mid-2008, Katanga’s board gave Gertler the mandate to lead negotiations with Congolese authorities over its own settlement payment. In just two weeks he negotiated down the requested total payment from $585 million to $140 million. The eventual settlement for KOV, his first big asset in the region, dropped from an initial request of $240 million to just $5 million.
And on it goes: Gertler bought a stake in another cobalt mine called Mukondo Mountain, and almost immediately work there halted while he renegotiated profit sharing with the mine’s operator, a firm called Camec. Not long afterward, Camec’s CEO, Andrew Groves, tried to buy Katanga before Gertler and Glencore could, and saw that effort stymied when his firm’s mining permit was unexpectedly suspended by the Congolese government. Within months, Gertler and Glencore controlled the combined Nikanor-Katanga, and Camec had announced a joint venture with Gertler at Mukondo; Groves hailed him in a press release as “one of the leading and most successful investors in DRC.” Days later, Camec’s permit suspension was lifted. Over a recent breakfast in London, Groves told me that he suspected interference from competitors led to the permit threat, but he didn’t criticize Gertler, calling him a fellow “fighter.”PHOTOGRAPHS BY RICHARD MOSSE.
Beneath the ridges of Disko Island is a potential wealth of battery metal deposits.
One of the most thorough delineations of Gertler’s modus operandi came in 2016, when the Department of Justice reached a settlement with Och-Ziff Capital Management Group for $213 million and the hedge fund’s admission of guilt in a scheme to bribe officials in the DRC and Libya. (Och-Ziff has since rebranded as Sculptor Capital and is publicly traded—NYSE: SCU—with more than $37 billion under management.) That agreement obliquely referred to a “DRC partner” throughout—widely reported to be Gertler. (Gertler did not comment.) According to the Department of Justice, Och-Ziff had an agreement with the DRC partner to fund mine acquisitions in the DRC and was aware that the tactics likely involved payment to public officials, which would be a violation of the U.S. Foreign Corrupt Practices Act. “The DRC landscape is in the making and I am shaping it—like no one else,” the DRC partner emailed a London-based Och-Ziff partner in 2008. Gertler has continued to deny the settlement agreement’s premise that he made around $100 million in bribe payments between 2005 and 2015.
In December 2017, the U.S. government directly accused Gertler of having “amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals,” and the Treasury Department’s Office of Foreign Assets Control added him to a sanctions list, alongside a raft of his businesses. In February 2017, Glencore paid $534 million to buy out Gertler’s remaining shares in Katanga and another mine, but he was still left holding some previously acquired royalties. The office of the DRC’s president announced that one of Gertler’s companies will return some $2 billion of oil and mining assets to the country—more than 2 percent of its GDP. The Israeli newspaper Haaretz reported that, according to “sources with knowledge of the proceedings,” Gertler’s representatives proposed he serve time in an Israeli prison in exchange for the closure of the investigations against him. Gertler’s lawyer told Haaretz that “no negotiations are being conducted on Gertler’s behalf with any law enforcement authority.” A representative told V.F. the report is “utter, utter nonsense.” For Brad Brooks-Rubin, a lawyer at OFAC during the George W. Bush administration and at the State Department under President Obama, the announcement highlighted concerns that sanctions can often come “a few steps behind what actors like Gertler are trying to do.” Brooks-Rubin, currently a senior adviser at The Sentry, an investigative and policy organization founded by John Prendergast and George Clooney, says enforcement requires greater action.
The government investigations have kept on coming, though, even if they take years to resolve. A senior Glencore executive, Aristotelis Mistakidis, who had been appointed in 2008 to the board of Katanga, faced penalties in a December 2018 settlement with the Ontario Securities Commission, as Katanga was on the Toronto Stock Exchange. The commission accused Katanga’s officers of having “failed to disclose material risks to its business,” specifically “public sector corruption in the Democratic Republic of Congo” and “the nature and extent of Katanga’s reliance on individuals and entities associated with Dan Gertler.” Glencore delisted Katanga from the exchange just as the pandemic was exploding, in April 2020, and still faces the American, British, and Swiss investigations. In its past two financial reports, Glencore had said it was “not possible to predict or estimate” the size or scale of the fines, penalties, or subsequent lawsuits that could stem from these various investigations. But in February, the firm announced it was putting aside $1.5 billion to resolve U.S., U.K., and Brazilian enquiries, while Swiss and Dutch authorities continued their own probes. Tony Hayward, Glencore’s chairman since 2013—who was replaced as BP CEO after the Deepwater Horizon disaster—stepped down last summer and was replaced by Kalidas Madhavpeddi. He’d led the Chinese mining giant China Molybdenum, which had been racing to match Glencore’s Congolese cobalt output—until this winter, when local authorities seized its largest asset.
As a confidant of then President Kabila, Gertler played a role in bringing peace to the DRC in the early 2000s, according to one former U.S. assistant secretary of state, even traveling to Washington in an effort to end the drawn-out conflict. But almost two decades on, he has been fighting his own kind of rearguard action for influence in the U.S. capital, hiring former FBI director Louis Freeh’s lobbying firm in late 2019, with Dershowitz as part of his team. In the chaotic days following the January 6 insurrection at the Capitol last year, the Trump administration granted Gertler a yearlong exemption from the earlier sanctions, allowing him to transfer any funds that had sat frozen in U.S. accounts. Treasury Secretary Mnuchin approved the special license without the knowledge of several senior State Department officials. Biden reimposed sanctions quickly after taking office, following condemnation from several Democratic senators and representatives.
Meanwhile, Gertler or his proxies began to register new companies, often in Kinshasa, rather than the Caribbean. He also began visiting a Congolese branch of a Cameroonian bank, Afriland First Bank, which businessmen with links to Hezbollah and the North Korean government have allegedly used to evade their own U.S. sanctions by ensuring that international transfers from that bank—including via the SWIFT system—do not share identifying details of transactions. (Gertler has denied trying to evade sanctions and any wrongdoing.)
Navy Malela, a former auditor at the bank, told me that when he saw the freshly sanctioned Gertler walk past his office in 2018, it was like seeing a “phantom.” Malela called a trusted colleague into his office and warned the coworker that if the man who had just walked down the corridor began to frequent their business, “we will have problems.” Malela and the colleague worked to alert the bank’s board to the presence of Gertler-linked accounts and suggested they be frozen, but in response both received threats from upper management. The two men eventually became whistleblowers in a series of sprawling accusations that involved foreign nationals and entities. Fearing for their lives, they fled Kinshasa and now live in undisclosed European locations. (Lawyers for Afriland have accused the men of stealing and falsifying bank data.)
“Dan Gertler inserted himself into every bloody mining transaction, he took an equity stake or a royalty or both,” says Lilford, the former Nikanor director. But Gertler has said his dealmaking has attracted unprecedented investment to the country, pushing up tax revenues and supporting local communities. He told one journalist that he should be offered a Nobel Prize, while his old friend Kabila—whose father once fought alongside Che Guevara in an earlier Congolese conflict—said Gertler had “braved the hurricane” during the country’s difficult period after the civil war, when others had abandoned the DRC.
Gertler visits the DRC less frequently nowadays, spending more time at his home outside Tel Aviv, but he did travel to Kinshasa in late February to sign an “amicable agreement” with the country’s justice minister to end ongoing litigation between the two sides. DRC president Felix Tshisekedi, as well as the DRC’s finance and mining ministers, refused repeated interview requests.
One of Kabila’s most influential appointees, the wealthy former chairman of the state mining company, Albert Yuma, once insisted to a local interviewer that Gertler’s wealth was “the fair reward for taking the risk.” And while a businessman with long experience in the DRC—and with Gertler—told me that “since everyone is corrupt, everyone holds hands” to protect one another, there are signs that a new DRC administration is seeking to change that status quo. During a speech in Kolwezi in May 2021, Tshisekedi told his audience he was “tired of the situation I’ve been seeing in this country for years now…. People are coming here with nothing in their pockets but they go back to become billionaires, while we ourselves still remain poor.”