Glencore

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Glencore International AG
Image:Glencore Logo.jpg
Type Privately held company
Founded 1974
Headquarters Baar, Switzerland
Key people Ivan Glasenberg, CEO
Industry Raw materials
Revenue EUR 76,000,000,000 (2006)
Employees 2,000 in marketing, 50,000 in industrial production through subsidiaries (2006)
Website www.glencore.com

Glencore International AG (formerly called Marc Rich & Co AG) is one of the world's largest suppliers of commodities and raw materials, and is also among the world's largest privately held companies. As of 2006, it was Europe's sixth-largest company in terms of turnover.[1] According to The Sunday Times,[2] the company had USD 4,600,000,000 in shareholders' equity at the end of 2004 and is completely owned by its management.

With production facilities around the world, Glencore supplies metals, minerals, crude oil, oil products, coal and agricultural products to international customers in the automotive, power generation, steel production and food processing industries.

Contents

[edit] Controversial involvements

According to an Australian public radio report, "Glencore's history reads like a spy novel".[3] The company was founded as Marc Rich & Co. AG in 1974 by billionaire commodity trader Marc Rich, who was charged with tax evasion and illegal Iran deals in the U.S., but pardoned by President Bill Clinton in 2001. In 1993 and 1994, Rich sold all of his majority share in Marc Rich & Co. AG back to the company.[4] The enterprise, renamed to Glencore, was now owned and run by his former associates, including former Glencore CEO Willy Strothotte and present CEO Ivan Glasenberg.

[edit] Dealings with rogue states

ABC Radio also reported that Glencore "has been accused of illegal dealings with rogue states: apartheid South Africa, Communist Russia, Iran, and Iraq under Saddam Hussein", and has a "history of busting UN embargoes to profit from corrupt or despotic regimes". [3] Specifically, Glencore was reported to have been named by the CIA to have paid USD 3,222,780 in illegal kickbacks to obtain oil in the course of the UN oil-for-food programme for Iraq. The company denied these charges, according to the CIA report quoted by ABC.[3][2]

[edit] Investments in Colombia

Moreover, Swiss public television (TSR) reported in 2006 that allegations of corruption and severe human rights violations were being raised against Glencore on account of the alleged conduct of its Colombian Cerrejón mining subsidiary. Local union president Francisco Ramirez was reported to have accused Cerrejón of forced expropriations and evacuations of entire villages in order to enable mine expansion, in complicity with Colombian authorities. According to TSR, a representative of the local Wayuu indians also accused Colombian paramilitary and military units, including those charged with Cerrejón mining security, of forcibly driving the Wayuu off their land, in what she described as a "massacre".[5]

[edit] Investments in Bolivia

Through its Bolivian subsidiary, Sinchi Wayra (which it acquired in 2005), Glencore operates six businesses in Bolivia that mine and process tin, silver, gold and zinc.[6][7]; notable among these has been Empresa Metalurgica Vinto, reportedly the world's largest privately-run smelter complex, located in the department of Oruro, which was seized and nationalized by Bolivian President Evo Morales on February 9th, 2007. At the time of the seizure there were no plans to compensate Glencore.[8]

[edit] Association with mining companies

Glencore is also noted for its association with the publicly traded Xstrata mining group, also headquartered in the Canton of Zug, Switzerland. Glencore is reported to serve as a marketing partner for Xstrata.[2][9] As of 2006, Glencore leaders Willy Strothotte and Ivan Glasenberg are on the board of Xstrata, which Strothotte chairs.[10] According to The Sunday Times, Glencore controls 40% of Xstrata stock and has appointed the Xstrata CEO, Mick Davis.[2][11] Similar arrangements exist with Century in the U.S. and Glencore partial subsidiary Minara Resources Ltd in Australia.[12]

[edit] Corporate assets

As of 2006, assets fully or partly controlled by Glencore include:[13]

[edit] Production facilities

Area Facility Product Location Employees Glencore ownership
North America Evergreen Aluminum Aluminium Washington, USA 10 (plant idle) 100%
Columbia Falls Aluminum Co. Montana, USA 145 100%
Century Aluminum Company HQ: Monterey, USA 23%
Windalco Jamaica 1,200 93%
Alpart 1,300 93%
South America Prodeco Coal Santa Marta (port) and Calenturitas (mine), Colombia 256 100%
Carbones de La Jagua (formerly Caribe) La Jagua, Colombia 350 100%
Los Quenuales Zinc, lead Yauliyacu, Peru 1,998 97%
Iscaycruz, Peru 1,271 97%
Perubar Rosaura, Peru 444 85%
Sinchi Wayra Zinc, lead, tin 5 mines, Oruro and Potosi regions, Bolivia 3,427 100%
Aguilar mine Zinc, lead, sulphuric acid North west of Argentina 1,725 100%
Moreno Sunflower oil and meal Crushing plants: Necochea, Daireaux, Villegas and Grainer; Argentina 575 100%
Europe Portovesme Zinc, lead Sardinia, Italy 773 100%
Eurallumina Aluminium 575 100%
Kubikenborg Aluminium AB (Kubal) Sundsvall, Sweden 470 100%
Aughinish Alumina Alumina Ireland 472 100%
Africa Mopani Copper Mine Copper Zambia 8,848 73%
Eurasia OAO Russneft Oil Oil fields across Russia 10,000 40-49%
Rostov on Don grain export elevator and wheat flour mill Cereals Rostov on Don, Russia 470 100%
Kazzinc Zinc Kazakhstan 21,000 99%
Asia PASAR Copper The Philippines 1,047 73%
Australia Murrin Murrin Joint Venture Nickel, cobalt Western Australia 671 70.3% (effective)
Cobar Copper Mine Copper Cobar, Central Western NSW, Australia 267 100%

[edit] Other subsidiaries, participations and joint ventures

Name Activity Location Glencore ownership Notes
Xstrata plc Mining HQ: Zug, Switzerland ca. 14%, controlling 40%[2] See also text above.
Minara Resources Ltd HQ: Perth, Australia 50.5% Operates the Murrin Murrin project.
Cerrejón Coal mining Guajira department, Colombia 33.3% up until Q2/2006 BHP Billiton plc, Anglo American plc and Xstrata plc each own 33.3%. In 2006, Xstrata acquired Glencore's share.[14] See also text above.
Rusal Aluminium, alumina Russia 12% Announced merger / joint venture with RUSAL (66%) and SUAL Group (22%). World's largest aluminum and alumina producer with 110,000 employees in 17 countries.[15]

[edit] Footnotes

  1. ^ "Six Swiss companies make European Top 100", Swissinfo, October 18, 2006. Retrieved on October 22, 2006.
  2. ^ a b c d e Peter Koenig. "Secretive Swiss trader links City to Iraq oil scam", The Sunday Times, September 25, 2005. Retrieved on October 22, 2006.
  3. ^ a b c Stephen Long. "Swiss link undermines Xstrata's bid for WMC", ABC Radio, February 11, 2005. Retrieved on October 22, 2006.
  4. ^ "Glencore Buys Out Founder", New York Times, November 10, 1994. Retrieved on October 22, 2006.
  5. ^ Frank Garbely, Mauro Losa. "Paradis fiscal, enfer social", Télévision Suisse Romande, 29 June 2006. Retrieved on October 22, 2006. (in French)
  6. ^ http://www.glencore.com/pages/copper.htm#
  7. ^ http://www.mineweb.net/base_metals/601788.htm
  8. ^ "Bolivian troops seize key smelter", BBC News, February 09, 2007. Retrieved on February 7, 2009. (in English)
  9. ^ Alex Schärer. "Die Erben des Marc Rich", WochenZeitung, December 13, 2001. Retrieved on October 22, 2006. (in German)
  10. ^ www.xstrata.com, List of non-executive directors, accessed 22 October 2006
  11. ^ See also www.xstrata.com, Investor disclosure, accessed 22 October 2006
  12. ^ "Glencore ist größtes Privatunternehmen Europas", Handelsblatt, 16 August 2005. Retrieved on October 22, 2006. (in German)
  13. ^ This list may not be complete. Unless otherwise indicated, the source is: www.glencore.com, Worldwide Operations, accessed October 23, 2006. To access details, click on the percentages.
  14. ^ http://www.cerrejoncoal.com - About Us, accessed October 23, 2006
  15. ^ "ALUMINUM MERGER - Rusal, Sual, Glencore to create world leader", Canadian Mining Journal, October 15, 2006. Retrieved on October 23, 2006.
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