Glencore

• 1. Introduction

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  In October 2012, BBC News reported that Glencore owned more ships than the British Royal Navy. The company's operations in 40 countries handled 3% of the world's oil consumption. Glencore plc is an Anglo-Swiss commodity trading and mining company, headquartered in Baar, Switzerland. Its oil and gas headquarters are in London, and its registered office is in Saint Helier, Jersey. By some estimates, it is the world's largest commodity trader. It moves metals, minerals, crude oil, coal, natural gas and farm goods to customers in car making, power generation, steel production and food processing. So who built a business on this scale, and how did it grow so large? What did the public learn about it once it opened its books? What happened in the mines, refineries and ports where its raw materials began their journeys? And what does a company that profits from coal and copper do when the world starts setting climate targets?

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• 2. A Trader Named Rich

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  Marc Rich and Pincus Green, two commodity traders, founded Marc Rich & Co. AG in 1974. Almost twenty years later, the firm lost people. In 1993, a group of Rich's employees led by Claude Dauphin left to set up a rival trading company called Trafigura.

  The next year brought a worse blow. Rich tried and failed to take control of the zinc market, and the attempt cost the firm 172 million dollars. He was forced to sell his majority share to Glencore International, a commodities trading and industrial company. The company was formed in 1994 through a management buyout. Its name abbreviates Global Energy Commodity Resources.

  Rich's shadow did not leave with him. He had been indicted in the United States in 1983 on federal charges of tax evasion and of making controversial oil deals with Iran during the Iran hostage crisis. On the 20th of January 2001, President Bill Clinton granted Rich a pardon. It came on Clinton's last day in office. The offshore law firm Appleby had worked with Rich and the company on major projects even after the indictment.

  Glencore itself would stay a private company until May 2011.

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• 3. Going Public

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  The prospectus for Glencore's share offering in May 2011 ran to 1,637 pages. It revealed a private company that had stayed discreet for thirty-seven years. The offering was a dual listing in London and Hong Kong, and it valued the business at about 61 billion dollars. Gross proceeds were around 10 billion dollars, and the sale created five new billionaires. Trading was limited to institutional investors for the first week. Private investors could not buy shares until the 24th of May 2011.

  The prospectus also showed who owned the company. Ivan Glasenberg's shareholding was diluted from 18.1% before the offering to 15.8% afterwards. Daniel Mate and Telis Mistakidis, who were co-directors for zinc, copper and lead, fell from 6.9% to 6%. Reuters has described Glencore as known for an "opportunistic but lucrative acquisition strategy".

  The state-owned Aabar Investments of the United Arab Emirates committed 850 million dollars as a cornerstone investor. It planned to add another 150 million dollars in the global offer. That made Aabar the largest new shareholder, with a 1.4% stake. In November 2012, Aabar wrote off more than 392 million dollars of its one-billion-dollar investment, less than two years after buying in.

  The listings kept shifting. Glencore's shares began trading in Johannesburg in November 2013, and the Hong Kong listing was withdrawn from January 2018. By 2016, the Qatar Investment Authority was the biggest shareholder. In March 2022, Qatar's sovereign wealth fund announced it would sell a stake worth 812 million pounds, or 1.1 billion dollars.

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• 4. Swallowing Xstrata

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  By 2006, Glencore leaders Willy Strothotte and Ivan Glasenberg sat on the board of the mining company Xstrata, and Strothotte chaired it. According to The Sunday Times, Glencore then controlled 40% of Xstrata's stock and had appointed its chief executive, Mick Davis. Glencore had also acted as a marketing partner for the miner.

  In 2010, Glencore held a 60% global share of internationally tradable zinc and 50% of internationally tradable copper. It held 9% of the internationally tradable grain market and 3% of the oil market. At that point it was the largest company in Switzerland.

  In February 2012, Glencore agreed to buy Xstrata for 39.1 billion pounds, about 62 billion dollars, in shares. It offered 2.8 new shares for each Xstrata share and called the deal an all-share merger of equals. It was the biggest mining takeover ever. The combined group was expected to post 2012 sales of 209 billion dollars.

  The deal soon hit trouble at home. In June 2012, the two companies reconsidered a retention package after shareholders objected to a huge payout for executives. In total, 73 key executives stood to receive over 170 million pounds under the first version.

  Xstrata brought operations in more than 20 countries and 70,000 employees. Mining analyst John Meyer said the merged firm would rank as the fourth largest commodities trader in the world.

  Just before the takeover closed, Glencore was waiting on Chinese regulatory approval. Its annual income fell 25% as trading offset weak commodity prices. Net income fell 75%, partly because of an impairment tied to its holding in the Russian aluminium producer Rusal. The merger was completed on the 2nd of May 2013, and on the 20th of May 2014 Glencore Xstrata became Glencore plc.

  Xstrata's finance chief, Trevor Reid, then announced he would leave as an employee and become a consultant, after 11 years of involvement.

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• 5. Congo and Cobalt

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  In 2005, proceeds from an oil sale to Glencore were seized as fraudulent gains in an investigation into corruption in the Democratic Republic of Congo. Two years later, Nikanor was merged into Katanga in a transaction valued at 3.3 billion dollars. In 2007, Glencore also bought a 50% share in SAMREF Congo SPRL, a company holding 80% of the Mutanda mine.

  The damage at ground level drew reporters. At the Luilu copper refinery, waste acid flowed into a river for three years after Glencore took over. Glasenberg told the BBC programme Panorama, "It was impossible to remedy any way faster." Glencore said the pollution began long before it arrived and has now ended.

  A Guardian reporter found children as young as ten working underground at the Tilwezembe mine. Glencore's 2008 prospectus had said the mine was closed because copper prices had fallen. Glasenberg said the company does not profit from child labour and that local artisanal miners were responsible. Panorama tracked a copper shipment from the mine to a Groupe Bazano plant and then to a Glencore smelter in Zambia.

  Dan Gertler, an Israeli billionaire and close friend of President Joseph Kabila, sits at the centre of the deal-making. In July 2010, Global Witness says, Congo's government secretly transferred a 75% stake in the Kansuki mine at vastly undervalued prices to a company in which Gertler has an interest. A month later, Glencore took half the shares of that company and became the operator. Glencore said it had decided in general not to increase its shareholdings in Congolese projects at the time.

  On the 1st of March 2011, SAMREF recommended that the state company Gécamines sell its 20% of Mutanda to an entity also associated with Gertler. Then, on the 5th of November 2017, the Paradise Papers showed that Glencore had loaned Gertler 45 million dollars. The loan was tied to his help with officials in talks over a joint venture at the Katanga copper mine. Repayment would be owed if no agreement came within three months. Gertler and Glencore denied wrongdoing.

  The United States sanctioned Gertler in December 2017, and royalty payments to him stopped. He sued Glencore in a Congolese court. In June 2018, Glencore resumed paying royalties to his company Ventora Development, including 695 million dollars tied to Mutanda and 2.28 billion tied to Kamoto Copper. It paid in a currency other than dollars to skirt sanctions, and it discussed the arrangement with Swiss and American authorities. The same month, Katanga Mining agreed a debt-for-equity swap that wrote off 5.6 billion dollars of debt and paid Gécamines 150 million dollars. In July 2018, a new Congolese mining code forced Glencore to pay higher taxes.

  Cobalt raised the stakes. Congo supplies 60% of the world's cobalt ore, while China produces more than 80% of the world's refined cobalt. In March 2018, Glencore agreed to sell one third of its cobalt output, 13,800 tonnes, to the Chinese battery recycler GEM. At a commodities summit in Lausanne, Glasenberg warned that "if cobalt falls into the hands of the Chinese, yeah you won't see EVs being produced in Europe etc." Yet he also said he would sell Congolese cobalt mines to China if the price was good. Bloomberg reported that GEM withdrew from its purchase contract in December 2018 after a price crash. In December 2020, the agreement was extended to at least 2029.

  In February 2019, Glencore announced it would reduce production at Mutanda. The mine had produced 199,000 tons of copper and 27,000 tons of cobalt in 2018, roughly one-fifth of global cobalt production. A long-term supply contract with Tesla in mid-2020 lifted cobalt prospects, a year after BMW signed a similar deal covering the Bou Azzer mine in Morocco. On the 22nd of June 2021, Glencore reported that Mutanda would reopen toward the end of 2021 and return to production in 2022.

  The bill for the payments came later. From 2007 to 2018, Glencore paid 27.5 million dollars to third parties to bribe government officials in Congo. In December 2022, it agreed to pay 180 million dollars to Congo to settle the case.

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• 6. Mines and Communities

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  In 2006, Swiss public television reported allegations of corruption and severe human rights violations against Glencore's Colombian subsidiary, Cerrejón. Local union president Francisco Ramirez accused Cerrejón of forced expropriations and evacuations of entire villages to make room for mine expansion. A representative of the Wayuu community accused paramilitary and military units, including those guarding the mine, of driving her people off their land. She described it as a "massacre".

  In 2011, a Colombian court heard former paramilitaries say they had stolen land to sell it to Glencore's subsidiary Prodeco for an open-cast coal mine. The court accepted their evidence and concluded that coal was the motive for the massacre. Glencore disputed the ruling. A BBC investigation in 2012 found sale documents showing the company had paid associates of paramilitary killers. In 2009, Prodeco had been fined nearly 700,000 dollars for environmental violations, including waste disposal without a permit.

  The Dutch group Pax for Peace studied the Cesar mining region, where European power utilities source much of their coal. It reported that residents suffered paramilitary violence from 1996 to 2006. It said mining companies supported paramilitary forces, which the companies denied. Pax called the coal "Blood Coal".

  In Zambia, five non-government organisations filed a complaint with the OECD in 2011 about the Mopani Copper Mines. They alleged accounting manipulation to avoid tax. A draft report by Grant Thornton said transfer pricing and inflated costs had cost the Zambian government hundreds of millions of dollars. Glencore and its auditor, Deloitte, rejected the allegations. Payments to Zambia's government had increased by 2013.

  Pollution was a second charge at Mopani. According to a 2011 Reuters article, Zambian officials believed the mine caused acid rain and health problems in an area where 5 million people live. An upgrade finished in March 2014 and eliminated 97% of sulphur dioxide emissions. Before 2013, emissions had exceeded World Health Organization recommendations by a factor of 70.

  Tax disputes spread to other countries. In 2024, Chilean tax authorities began recovering more than 1.5 billion dollars in unpaid taxes from Glencore. The Australian Taxation Office suspects that some 25 billion dollars of cross-currency interest rate swaps by Glencore's Australian arm were used to avoid tax.

  In January 2019, a Swiss delegation led by Ignazio Cassis visited the Mopani mines. Amnesty International and Swiss watchdog groups heavily criticised the trip. Cassis defended it by pointing to modernised facilities, improved health care and better training for young workers.

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• 7. Pleading Guilty

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  As early as 2005, Australian Broadcasting Corporation's Radio National reported that Glencore had been accused of illegal dealings with rogue states. The CIA alleged that the company had paid 3,222,780 dollars in illegal kickbacks to obtain oil under the United Nations oil-for-food programme for Iraq. The company denied the charges.

  On the 3rd of July 2018, Glencore announced a subpoena from the United States Department of Justice. It sought records on compliance with the Foreign Corrupt Practices Act and money laundering law, relating to Nigeria, Congo and Venezuela. In April 2019, the Commodity Futures Trading Commission notified the company of its own investigation.

  On the 24th of May 2022, Glencore pleaded guilty to multiple counts of bribery and agreed to pay penalties of about 1.5 billion dollars. In the commission case, it pleaded guilty to charges of corrupt dealings with foreign governments and agreed to a 1.8 billion dollar fine. The corrupt practices ran from 2007 to 2018. They included making and concealing payments through intermediaries for the benefit of foreign officials in several countries.

  In Britain, the Serious Fraud Office brought its own case. Glencore Energy UK Limited indicated in court that it would plead guilty to five counts of bribery and two counts of failure to prevent bribery under the UK Bribery Act 2010. The office found more than 25 million in bribes paid in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan between 2011 and 2016. On the 21st of June, a British subsidiary again pleaded guilty to seven counts of bribery, with over 28 million in bribes reported.

  Glencore executives acknowledged "unacceptable practices" and "misconduct identified in these investigations". They said the company had been improving its ethics and compliance program. They predicted that fines would not exceed the 1.5 billion it set aside in 2021. Investigations by the Office of the Attorney General of Switzerland and the Dutch Public Prosecution Service continue. Since 2010, the Business & Human Rights Resource Centre has documented over 70 human rights abuse accusations against the company.

  Sanctions added another layer. In April 2018, Glencore cancelled a plan to swap an 8.75% stake in Rusal for shares in En+ Group, a company controlled by Oleg Deripaska. Glasenberg resigned from Rusal's board. In March 2022, Glencore condemned the Russian invasion of Ukraine and said it would review its stakes in En+ and Rosneft. British news outlets noted that it still loaded Russian oil products onto tankers in mid-March.

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• 8. Coal and Copper

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  In the first half of 2015, Glencore reported a net operating loss of 676 million dollars. Weak prices for coal and copper were behind it. Analysts also pointed to its debt of 30 billion dollars, and the company sold stock and assets to reduce it. In August 2020, it became the first major mining company to shelve its dividend because of the COVID-19 pandemic.

  In October 2020, Ivan Glasenberg argued that there was no environmental benefit in selling off coal assets. Other players would simply take over the mines with no regard for the Paris climate goals. He proposed capping coal production and running the mines down. The cash could then fund more nickel, copper and cobalt for the energy transition. In December 2020, he announced he would retire after nearly 20 years as chief executive. The South African Gary Nagle, who ran the coal business, would succeed him.

  In August 2022, the market expected record profit. Coal was growing fast during the global energy crisis, even in Europe, where it replaced expensive Russian natural gas. While BHP and Rio Tinto slowed because China wanted less iron and copper ore, Glencore grew mostly on coal. Analysts forecast that dividends could exceed 10 billion dollars in 2022. In September 2022, the company promised net-zero emissions by 2050 and a 40% cut in its carbon footprint by 2035 against 2019.

  Copper was the other bet. In February 2022, Glencore bought Newmont's 18.75% stake in the MARA project in Argentina, taking its interest to 43.75%. In 2023, it paid 475 million dollars plus a 0.75% royalty for Pan American Silver's 56.25% interest. Once running, MARA is meant to rank among the world's top 25 copper producers, with 200,000 tonnes a year for the first ten years.

  In November 2023, Glencore agreed to buy the steelmaking coal business of Teck Resources for 9 billion dollars. It also announced plans to spin off its coal assets by 2025 into a separate company. The purchase completed in July 2024, and in August 2024 the company said it would keep its coal business. More than 95% of shareholders who gave a view favoured keeping it. The acquired Elk Valley Resources mines have an average life of 31 years. They are expected to lift saleable coal by over 30% through to the end of mine life. The company says its climate plan must now be updated.

  The company's environmental record is also contested. In November 2023, it announced plans to inject up to 110,000 tonnes of carbon dioxide a year into an Australian groundwater basin. Hydrogeologist Ned Hamer warned that this could acidify the water and release heavy metals. In December 2025, Glencore announced it had taken a majority stake in FincoEnergies, a Netherlands-based fuel supplier, extending its reach into fuel distribution in north-west Europe.

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