Private trader Glencore is to list in London this month
Greed Inc: A special investigation into pollution, dubious tax practices and exploitation of African workers at Glencore
News that the London Stock Exchange is on the verge of a mammoth flotation didn’t spread quite as far as the Zambian mining town of Mufulira. Even if it had, it’s unlikely the townspeople there would have seen much cause for celebration.
Commentary on Glencore by Nostromo Research
Glencore, the world’s most powerful mineral, metals and food commodities’ trader, is expected to “go public” on the London and Hong Kong stock exchanges within the next month, raising around US$12 billion in the process. Few people will try to prevent this.
Those who love Glencore (mainly its 485 partners and 2,700 traders) expect to be rolling in even more ill-gotten gains in the near future. Even those who loathe it (99% of the global population at a rough count) may hesitate in front of the argument: “Better the devil you know than the one you don’t”. But, whatever Glencore will now have to reveal according to the UK and HK listing rules, one prospect is certain: Glencore will be putting more money into acquiring and operating mines. Already, nearly a fifth of what it expects to raise in London ($2.2 billion)is earmarked to increase its stake in the Kazakhstan zinc, copper and gold miner, Kazzinc to 93%. And a bid to buy out Xstrata (currently 34.4% owned by Glencore) is certainly on the cards.
As the Financial Times opined on April 15th: “The… financial heft that will result from [Glencore’s] initial public offering…will allow the company to vertically integrate through acquisitions, becoming a bigger producer in markets in which it trades.” And: “This makes an oligopolistic market structure likely…[whose] cost is borne by consumers the world over.”
Ivan Glasberg, Glencore’s head honcho, in an interview published by the Financial Times, has no scruples about defending his conglomerate’s past practices, nor boasting that business will be the same as usual after the flotation: “Unfortunately, God put the minerals in different parts of the world. We took the nice, simple, easy stuff first from Australia, we took it from the US, we went to South America and we dug it out of the ground there. Now we have to go to more remote places.”
And – just in case we don’t get the point: “ ‘We are not going to change the way we operate. Any talk that going public will hinder us is not true. It will not affect us at all,’” he says. He repeats the point several times: ‘Being public will have absolutely no effect on the business.’”
· Chair of the new “publicly” owned Glencore plc will be Hong Kong businessman Simon Murray, 71, a polar explorer and former Vodafone board member.
· The “senior independent director” will be none other than Tony Hayward – the chairman of BP when that company was responsible for the worst oil-related disaster in recent history in the Gulf of Mexico last year.