Eurasian Resources Group proceeded with controversial Congolese mineral rights acquisitions worth tens of millions despite internal compliance warnings that transactions showed “unusual nature and size,” raising bribery concerns, according to internal documents. The 2020 Project Passport investigation—triggered after auditors flagged suspicious payments to French intermediary Elie-Yohan Berros—reveals systematic risk tolerance at one of the world’s top five cobalt producers even as the company faced concurrent UK bribery probes.
ERG’s compliance and legal heads initiated the internal review in mid-2020 after NGO reports alleged Berros functioned as a proxy for Dan Gertler, the Israeli billionaire sanctioned by the U.S. Treasury in 2017 under the Global Magnitsky Act for corruption totaling over $1 billion in mining deals with the Democratic Republic of Congo. The timing compounded existing jeopardy: ERG and Gertler were already subjects of a UK Serious Fraud Office investigation into separate alleged bribery connected to Congolese mining assets acquired between 2009-2013.
The documents detail payment flows to Berros for copper-rich concessions in Haut-Katanga and Lualaba provinces—the geological belt containing 3.5 million tonnes of proven cobalt reserves and 20 million tonnes of copper. ERG’s Africa division, operating primarily through subsidiary Metalkol RTR, paid Berros amounts described as “tens of millions” to secure exploration permits and processing rights in a region where opaque intermediaries routinely inflate asset valuations.
What raises particular scrutiny is the payment structure. Congolese mining law requires ministerial approval for concession transfers above $5 million, with detailed beneficiary disclosure. Yet Berros appeared to broker multiple transactions totaling significantly more without clear documentation of ultimate beneficial ownership—a textbook sanctions evasion red flag. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) specifically warns that Gertler uses “complex corporate structures and a network of intermediaries” to circumvent sanctions imposed after findings he secured mining rights at prices “far below fair market value” through corrupt arrangements with Congolese officials.
ERG’s position in Congo makes compliance failures particularly costly. The company operates the Metalkol Roan Tailings Reclamation facility, processing 7.6 million tonnes of copper-cobalt tailings annually, producing approximately 18,000 tonnes of cobalt metal—roughly 12% of global mined cobalt supply. With cobalt prices averaging $33,000-38,000 per tonne in 2020 and copper at $7,000-8,000, securing additional feedstock reserves directly impacts market positioning worth hundreds of millions annually.
The compliance presentation specifically noted concerns that “the risk of bribery” existed beyond normal due diligence tolerance levels—language typically reserved for transactions where red flags are unmistakable rather than merely elevated. Standard anti-corruption frameworks classify such explicit warnings as requiring enhanced due diligence, transaction suspension, or abandonment. That ERG’s Africa office proceeded anyway suggests either headquarters authorization overriding compliance recommendations or autonomous regional decision-making inconsistent with stated governance protocols.
The Gertler connection carries specific criminal exposure under U.S. law. Any entity facilitating transactions with sanctioned individuals faces secondary sanctions, including asset freezes, financial system exclusion, and criminal penalties up to $20 million for corporate violators under the International Emergency Economic Powers Act. European companies have particular vulnerability: the EU imposed its own sanctions on Gertler in 2018, creating parallel liability across jurisdictions where ERG operates refineries and maintains financial relationships.
Berros’s emergence as an intermediary exhibits patterns consistent with sanctions evasion typologies. Before 2019, his commercial footprint in Congolese mining appeared minimal. Within 18 months, he brokered transactions worth over $60 million—a velocity suggesting either preexisting hidden relationships or front-company arrangements. When Platform for the Protection of Whistleblowers in Africa and The Sentry published allegations linking Berros to Gertler in July 2020, both men issued denials but provided no documentation disproving the connection, such as transparent ownership structures or independent asset sourcing.
The UK SFO investigation running concurrently examined whether ERG paid bribes through Gertler-connected entities to secure favourable terms on the Frontier and Comide copper-cobalt mining projects. That case centers on $175 million in payments between 2009-2013 to companies allegedly controlled by Gertler, with allegations that Congolese officials received kickbacks facilitating below-market asset transfers. The SFO opened its investigation in 2019; as of 2020, when Project Passport launched, ERG faced the prospect of engaging the same alleged networks while under active criminal investigation for similar conduct.
ERG’s compliance architecture theoretically included multiple checkpoints. The company maintains a board-level ethics committee, employs Big Four auditors, and publicly commits to the Voluntary Principles on Security and Human Rights. Yet the documents reveal these mechanisms flagged risks without preventing questionable transactions—a governance gap between detection and enforcement that characterizes many resource sector compliance failures.
Congo’s institutional environment amplifies these vulnerabilities. Transparency International ranks the DRC 166th of 180 countries in its 2020 Corruption Perceptions Index. The Carter Center’s 2021 analysis of Congolese mining contracts found 68% contained irregularities, including undisclosed beneficial owners, suggesting systemic rather than isolated compliance challenges. Resource Matters documented that shell companies registered in offshore jurisdictions control approximately 40% of DRC mining permits by value, creating layered opacity that facilitates both legitimate tax planning and illicit financial flows.
The cobalt supply chain specifically attracts such arrangements. With electric vehicle battery demand driving projections of 260,000 tonne cobalt requirements by 2030—up from 140,000 tonnes in 2020—securing DRC reserves, where 70% of global cobalt originates, creates intense acquisition pressure. Major consumers, including Tesla, BMW, and CATL, face reputational risks if upstream suppliers engage in corruption, driving contractual requirements for clean supply chains that companies like ERG must navigate.
Project Passport’s covert nature—management explicitly sought to investigate “without tipping anyone off”—suggests concern about evidence destruction or continued misconduct. This approach mirrors internal investigation best practices when criminal liability is suspected, typically involving outside counsel and forensic accountants operating under attorney-client privilege. However, the documents show ERG “repeatedly dismissed warnings,” indicating investigators may have been tasked with finding exculpatory explanations rather than objectively assessing liability.
The financial stakes justify aggressive risk-taking from a purely commercial perspective. ERG generated $6.3 billion in revenue in 2019, with African operations contributing approximately 35% through copper-cobalt production. Securing additional Congolese reserves at inflated but still-economic prices—even with compliance premiums for questionable intermediaries—could add decades of production life and billions in net present value. This creates institutional incentives to interpret red flags permissively, particularly in jurisdictions where competitors face identical pressures.
Yet precedent demonstrates that enforcement agencies do not accept such calculations. Glencore paid $1.1 billion in 2022, settling U.S. and UK charges for DRC bribery between 2007-2018, including payments through intermediaries to Congolese officials. The settlement covered conduct overlapping ERG’s operational period and geographic focus, establishing a clear prosecutorial interest in Congolese mining corruption. Mining company Och-Ziff (now Sculptor Capital) paid $412 million in 2016 for bribes funneled through agents, including Gertler, demonstrating that indirect payment structures offer no liability shield.
The documents’ revelation that ERG proceeded despite explicit bribery risk warnings suggests either confidence in legal defenses or a calculation that operational imperatives outweighed compliance concerns. Neither interpretation indicates a robust anti-corruption culture. Whether prosecutors in the UK, U.S., or other jurisdictions ultimately charge ERG depends on evidence quality, jurisdictional reach, and resource allocation—but the internal record establishes corporate knowledge of substantial risks that the company chose to accept.
