Premium Essay



Submitted By aminelakhdar
Words 476
Pages 2
Glencore’s bad international practices
Amine Lakhdar
Texas A&M University - Commerce

Glencore’s bad international practices As the world is enduring a serious financial crisis, big businesses have been challenged as never before. Protesters have been demanding a fairer form of capitalism. People want more socially responsible companies and genuinely popular capitalism. The case discusses one of the world’s most powerful conglomerates in the world which is Glencore. As it was recently introduced in London Stock Exchange, Glencore was questioned about its international practices. It is a commodity giant specialized in raw materials. The multi-billion dollar commodity giant is accused of profiting from child labor in several mining exploitation in the Congo, moreover, claims say that it is paying the associates of paramilitary killers in Colombia. An investigation proves that children as young as ten are working in the Glencore-owned mining concession and some confidential documents show a Glencore subsidiary made payments to the suspected associates of paramilitary in Colombia.
In the Congo, while international law prohibits anyone under 18 working in a mine, many of the miners were under the legal age. Although Glencore says it stopped operating in the mine since 2008, because of the collapse in the price of copper, it still owns the concession. Glencore chief executive Ivan Glasenberg said the mine had been taken over by local workers without its permission. He said the child miners were part of a group of freelance miners who "raided our land in 2010… against all of our authorization. We are pleading with the government to remove the artisanal miners from our concession."
In Colombia, At least 10 people were murdered when paramilitaries seized a patch of land called El Prado next door to Glencore's Calenturitas coal mining concession in 2002. The

Similar Documents

Free Essay


...Case Study Glencore & Xstrata Creating the fourth largest global mining company Reference Code: ML00007-065 Publication Date: January 2013 WWW.MARKETLINE.COM MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED GLENCORE & XSTRATA: CREATING THE FOURTH LARGEST GLOBAL MINING COMPANY © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED ML00007-065 /Published 01/2013 Page | 1 OVERVIEW Catalyst Glencore International, a commodity trading giant, is seeking to merge with diversified mining company Xstrata. The move was announced in February 2012 with the proposal accepted by shareholders in November 2012. The deal is worth $31bn and would create the fourth largest mining company in the world behind the top three of BHP Billiton, Vale, and Rio Tinto. The company would also possess leading positions in other commodities in power generation and agricultural products. Summary  Glencore is a company which operates in commodity markets, including mining. The company engages in both industrial activity and marketing, which allows it to safeguard against volatilities in an individual market. Further, by engaging in marketing, the company is able to adapt more effectively to adverse conditions. Glencore has demonstrated value creation in its acquisitions, with notable acquisitions including Kazzinc and Viterra. The company’s size also now allows it to negotiate big contracts, as it did with Rusal. Glencore was fast tracked...

Words: 9034 - Pages: 37

Premium Essay

Glencore Case Study

...Glencore, Xstrata and the Restructuring of the Global Copper Mining Industry in 2012 Diana Alvarez Valencia (1310200) University Canada West Dr. Paul Rome MGMT 661 Strategic Management Tuesday, May 12, 2015 Introduction and Problem Identification In this case study we will identify the problems that can be issued in the process of the merger between two of the largest commodities traders in the world, Glencore and Xstrata. It will provide the background of both companies, the situation analysis, identification of alternatives Companies Background. Glencore had been a trading company since their early years with the name of Marc Rich & Co. Glencore, was founded by March Rich; Rich was a consummate dealmaker, doing business with the entire world no matter their country background (fascist or communists). Moreover, Marc Rich always tried to get the cheapest price with his Middle Eastern contacts. His most important clients were embargoed nations like Israel and South Africa. In 1983, the US government indicted Rich on charges of illegal trading and tax evasion. After different issues and in the sake of create a better reputation the company – Marc Rich & Co. - rebranded itself as Glencore. (Hitt, Ireland & Hoskisson, 2013). Furthermore, one of the Glencore’s practices, is to get cheap tier 2 assets from doing business in developing countries considered high-risk by others rather than developing on its own. In 2002, Glasenberg become the CEO of the company.(Hitt, Ireland...

Words: 1518 - Pages: 7

Premium Essay

Glencore Xstrata Merger

...Glencore Xstrata: merge of equals | Mergers & Acquisitions | | Kirill Danilov IMBA April 2012 IE Business School | 1. Merger Rationale/Strategic Reasoning of the Transaction A soon merger between world biggest commodity trader Glencore and global leading mining company Xstrata will create new vertically integrated company with business value $90 billion. This deal will allow to created natural resources giant to become a fourth biggest one in the industry and cover full range of activities (from exploration to sales) in a value chain. Such companies’ fusion will create a perfect opportunity for shareholders’ value creation. However, there is significant number of factors and issues that should be considered and controlled during and after deal process to make this merger really successful. 1.1. Glencore Overview Glencore is a major worldwide producer and marketer of commodities. It operates in more than 40 countries and employs over 60 000 people. With headquarter located in Baar, Switzerland, Glencore is involved in such activities as production, sourcing, processing, refining, transporting, storage, financing and supply of natural resources. The company operates in three main industries: metals and minerals, energy products and agricultural products. It has as own production assets as sources them from other suppliers. Main customers of Glencore operate in oil and gas, power generation, steel production, food processing and automotive industries...

Words: 2050 - Pages: 9

Premium Essay

Credit Suise - Glencore Xstrata Analysis

...10 October 2011 Europe Equity Research Diversified Metals & Mining (Metals & Mining) Glencore and Xstrata Research Analysts Liam Fitzpatrick 44 20 7883 8350 Michael Shillaker 44 20 7888 1344 Nihal Shah 44 20 7888 3270 James Gurry 44 20 7883 7083 Specialist sales: James McGeoch +44 20 7888 0751 COMPANY UPDATE Merger potential ahead? Figure 1: Glencore vs XTA 12 month forward P/E 9.0 8.0 7.0 6.0 5.0 4.0 1 a 9-M y 2 a 6-M y 2 n -Ju 9 n -Ju 1 6-Jun 2 3-Jun 3 0-Jun 7 l -Ju 1 4-Jul 2 1-Jul 2 8-Jul 4 ug -A 1 ug 1-A 1 ug 8-A 2 ug 5-A 1 ep -S 8 ep -S 1 ep 5-S 2 ep 2-S 2 ep 9-S GLEN.L XTA.L Source: IBES consensus; prices as of 5 October 2011 ■ Summary: Following the recent underperformance and de-rating of XTA vs. Glencore, we examine the potential for an XTA-Glencore merger in this report. In keeping with its previous statements, we believe Glencore sees strong benefits to a deal and a combination would create an attractive highgrowth and differentiated major. The longer the relative rating gap exists, the greater the market’s focus on a potential transaction will likely become, in our view. At current levels, Glencore could use its premium-rated equity and pay a significant premium without a deal being dilutive, on our estimates. ■ Potential synergies: The main area of potential synergy we see is through...

Words: 1175 - Pages: 5

Premium Essay

Glencore, Xstrata and the Restructuring of the Global Copper Mining Industry

...Net assets equal shareholders' equity. Shareholders' equity accounts denote the ownership interests of shareholders Ownership interests of shareholders arise primarily from two sources: (1) amounts invested by shareholders in the corporation and (2) amounts earned by the corporation on behalf of its shareholders. These two sources are reported as (1) paid-in capital and (2) retained earnings. Assets minus Liabilities equals Shareholders' Equity. The primary source of paid-in capital is the investment made by shareholders when buying preferred and common stock. Several other events also affect paid-in capital. Retained earnings represents earned capital. Accumulated Other Comprehensive Income • LO18–2 Comprehensive income includes net income as well as other gains, losses, and other adjustments that change shareholders' equity but are not included in traditional net income. Comprehensive income extends our view of income beyond net income reported in an income statement to include four types of gains and losses not included in income statements: 1. Net holding gains (losses) on investments. 2. Gains (losses) from and amendments to postretirement benefit plans. 3. Deferred gains (losses) on derivatives. 4. Adjustments from foreign currency translation. OCI shares another trait with net income. Just as net income is reported periodically in the income statement and also on a cumulative basis as part of retained earnings, OCI too, is reported periodically in the statement...

Words: 709 - Pages: 3

Free Essay

Car Title

...Client Alert Global Mining and Metals Industry Group April 2013 Glencore’s Long March to Take Over Xstrata First published in Mining Journal, April 2013 At long last, Glencore has overcome the final regulatory hurdle and secured the approval of China’s Ministry of Commerce (MOFCOM) to acquire the 66 percent of Xstrata that it does not already own. But not before agreeing to part with one of the prized assets in Xstrata’s portfolio, the Las Bambas copper project in Peru. If no suitable buyer for Las Bambas is found by September 2014, Glencore will have to auction off one of its other copper assets of MOFCOM’s choosing. To clinch MOFCOM’s blessing of the deal Glencore also committed to continue offering longterm supply arrangements to sell copper concentrate to Chinese customers, as well as somewhat less stringent supply commitments on zinc and lead concentrates. It has been a long road for Glencore and Xstrata who announced their plan to combine in February last year. They have had to navigate the merger review processes in several major jurisdictions, which can frustrate the most patient of company executives. Glencore’s acquisition of Xstrata will unite one of the world’s largest producers and traders of commodities and one of the largest mining companies globally – but at what price? It was no surprise that competition authorities in those countries and regions most affected would closely scrutinize the deal. The transaction had to be approved by merger control authorities...

Words: 1370 - Pages: 6

Premium Essay

Mr. Modou L Manjang

...University of The Gambia [pic] NAME: Modou L Manjang DEPARTMENT: MANAGEMENT 1. A merger maybe defined as a combination of two or more companies to form one entity. This decision is usually mutual in both firms. In a merger, assets, employees and programs are combined to form either a new organization representing the best of the two companies or one of the companies posing as the surviving entity. 2. Glencore and Xstrata will have a great combining power. This is because Glencore operates in 40 countries from Australia to Argentina and Xstrata on the other hand is active in more than 20 countries globally. So this merger will result to a total number of 130000 employees with increased revenue of $200bn which would eventually create the world’s biggest exporter of coal for power plants and the largest producer of zinc. 3. The new changes would affect the structure, behavior and processes of the organization by the formation of a new executive body because there should be one organizational structure comprising of the different portfolios. Also, the employees will be eventually increased as the two companies merge together. Moreover, the culture of the newly formed organization will change as the two companies both had separate organizational culture. Lastly, they would also have the combining power of involving in commodities trading and mining and this will obviously the profitability and production level of the organization. 4. With...

Words: 892 - Pages: 4

Premium Essay


...1 | Алт | 31,575.1 тонн /2013/ | | | 62тэрбум | 2 | Нүүрс | 861тэрбум тонн /2012/ | 150тэрбум тонн | 17% | 128тэрбум | 3 | Зэс | 630.000 сая тонн /2013/ | 14сая тонн | 0.002% | 306тэрбум | 4 | Төмрийн хүдэр | 234750 тэрбум тонн | 600сая тонн | | 30тэрбум - төмрийн хүдэр | Эх сурвалж: Resources: Дэлхийн хамгийн том уул уурхаЙн компаниуд The global top ten richest mining companies № | Company name | CEO | Location | Revenue | Stock price | Website | 1 | Glencore Xtrata, 1974 | Ivan Glasenberg | headquartered in Switzerland | $200bn in 2013 | GLEN (LON) 325.75 GBX | | 2 | BHP Billiton | Andrew Mackenzie | headquartered in Melbourne, Australia | $67.83bn, Dec 2013 | BHP Billiton Limited (ADR)NYSE: BHP | | 3 | Rio Tinto, 1873 | Sam Walsh, Tom Albanese | headquarters in London | $54.6bn, Dec 2013 | RIO (LON) 3,082.42 GBX | | 4 | Vale, 1942 | Murilo Ferreira | Rio De Janeiro, Brazil | $48.9bn, 2013 | Vale SA (ADR)NYSE:...

Words: 1686 - Pages: 7

Premium Essay

Management and Glabalisation

...The world is a constant changing place, changes occur all the time; some expectedly and others unexpectedly, some of the changes have had a huge impact on the way that man lives life. One of the changes in the world that has a strong bearing on man’s life is globalisation, it helped change the way man consumer’s products and interacts with his surroundings. Globalization is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture (Al-Rodhan, 2006). Advances in transportation, such as the steam locomotive, steamship, jet engine, and container ship, and in telecommunications infrastructure, including the rise of the telegraph and its modern offspring, the Internet, and mobile phones, have been major factors in globalization, generating further interdependence of economic and cultural activities (Albrow,1990). The concept of globalization 'emerged from the intersection of four interrelated sets of "communities of practice": academics, journalists, publishers/editors, and librarians (Paul,2014). In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge(IMF,2000). Further, environmental challenges such as global warming, cross-boundary water and air pollution, and over-fishing of the ocean are linked with globalization (Bridges,2002). Globalizing...

Words: 3541 - Pages: 15

Premium Essay

Pacorin in Trieste, that enabled the Company to widen the range of services offered to the coffee industry and to expand its involvement in handling other commodities, notably cellulose, metals and rubber. By developing and establishing Silocaf (advanced industrial plant for processing of green coffee), Pacorini became the first logistic operator in Italy and around the world. In 1992 it exported its know-how in the USA and in Brazil, through own subsidiaries. In September 2010, all the companies of the Group operating in the metal business, after having achieved a market leader position in the Mediterranean, Northern Europe, Northern America and Asia by providing logistic services to the non-ferrous metals market, have been sold to Glencore Group. The steady progression from a family business to international group has now reached a stage where Pacorini is recognised as a reference point for operators and customers in the sectors of freight forwarding, shipping, warehousing, distribution of soft commodities, as well as the management of port terminals, processing of soft commodities and specialised transportation. The Pacorini Group is accredited by numerous international authorities, such as London International Financial Futures and Options Exchange (LIFFE) and...

Words: 290 - Pages: 2

Premium Essay


...NOT FOR DISTRIBUTION TO STUDENTS Contains Assignment Questions and Suggested Solutions AT1 Accounting Theory & Contemporary Issues 2012 Printing Session 2 Suggested Solutions Level 4 Certified General Accountants Association of Canada 100 — 4200 North Fraser Way Burnaby, British Columbia Canada V5J 5K7 © CGA-Canada, 2012 All rights reserved. These materials or parts thereof may not be reproduced or used in any manner without the prior written permission of the Certified General Accountants Association of Canada. Printed in Canada Every reasonable effort has been made to obtain permissions for all articles and data used in this edition. If errors or omissions have occurred, they will be corrected in future editions, provided written notification has been received by the publisher. Assignment 1 — Session 2 (Winter) This assignment is based on Modules 1 through 5 and is due at the end of Module 5. It is worth 5% of your final course grade. General instructions A. If this is your first time using the Online Learning Environment, check out the Course Orientation and the quick tutorials in the Support Centre. You will find general assignment FAQs in your Assignment Submission/Group Work area. B. Prepare your answers to these assignment questions in Word and save them as one Word document on your hard drive. For the recommended format and filename, see the Assignment Submission/Group Work/FAQ area. If this...

Words: 11145 - Pages: 45

Premium Essay


...Homework Assignment: Chapter 3 and Chapter 4 NOTE: Follow the instructions for sending your homework to me that you’ll find in the Learning Module 1 Lecture Notes. START COPY HERE (Chapter 3)************************************************************ Your Name: Xin Song Chapter 3 Homework (type your answer below each question; keep your responses concise) 1. Why is outsourcing such an attractive way for firms to tap into foreign markets? What are the risks of foreign outsourcing? 2. What are the key elements of sociocultural barriers to trade? How can companies overcome these barriers? 3. How has NAFTA impacted the U.S.? Overall, do you believe that it was a positive move for the U.S.? Why or why not? 4. Take a look at Fortune magazine’s most recent list of the 500 largest global companies ( HYPERLINK "" (If this link doesn’t work, just copy and paste the URL in your browser.) What are the top 10 companies on the list? What industry, if any, dominates this Top 10 list? What country, if any, dominates this Top 10 list? What country dominates the overall Global 500 list? 5. From golden arches to blockbuster movies, American business has clearly influenced cultures around the world. But foreign industries and companies have also shaped American culture. Brainstorm a list of 5 foreign goods or services that have influenced American culture; include the specific good or service as well as its country...

Words: 1161 - Pages: 5

Premium Essay


...Philippines will miss goal of halving poverty incidence this year   9  13 Google +0  0  Core  Benjamin E. Diokno | | THE PHILIPPINES will definitely miss its Millennium Development Goal (MDG) of halving poverty incidence by 2015. This follows from the official announcement last Friday that more Filipinos plunged into poverty in the first half of 2014, this despite the above normal growth during the last three years.    RELATED STORIESCore -- Benjamin E. Diokno:"Tweak the Constitution to strengthen weakened political institutions"Core -- Benjamin E. Diokno:"Justify the P3-trillion budget"Core -- Benjamin E. Diokno:"We’re losing the war against unemployment"Core -- Benjamin E. Diokno:"A GREEK TRAGEDY"Glencore to exit Tampakan project | By contrast, our ASEAN-6 neighbors -- Indonesia, Malaysia, Singapore, Thailand and Vietnam -- have met this lofty goal many years ago. This suggests that our Asian peers are doing things right while we continue to muddle through. Philippine authorities pledged to halve poverty incidence this year -- from 34.4% in 1991 to 17.2% in 2015. In 2012, the last year the Family Income and Expenditure Survey (FIES) was done, the poverty incidence was 25.2%. It was 26.6% in 2006 and 26.3% in 2009. Nothing much has changed: one in four Filipinos is poor. The real poverty picture may be worse than what the official statistics suggest. In 2012, the poverty threshold was P18,935 per year, P1,578 per month, or P52.60 per day. That’s the height...

Words: 1377 - Pages: 6

Free Essay


...Obama Reverses Decision to Allow Drilling Off Atlantic Coast, Eastern Gulf Updated 15 minutes ago More News » Nat Rothschild plans to create a global mining company by leveraging his name, hedge-fund experience and a personal network that reads like a Who’s Who of the commodities world. Source: Finsbury Ltd. via Bloomberg A member of the Rothschild lineage that helped bankroll Britain’s war against Napoleonic France, he’s leading a $3 billion takeover that will create the biggest exporter of coal to China. Advertisement Rothschild is leveraging his name, more than a decade of hedge-fund experience and a network that reads like a Who’s Who of commodities. He’s friends with Ivan Glasenberg, head of the biggest commodity trader Glencore International AG; advises Russian aluminum billionaire Oleg Deripaska; and is on the board of Peter Munk’s Barrick Gold Corp., the largest gold miner. “There’s no global coal company today,” Rothschild, 39, says in an interview. “There’s not a Barrick Gold in coal....

Words: 1287 - Pages: 6

Free Essay

Strict Compliance in Documentary Credits

...Essay Answer Guide on Strict Compliance (Qn 3 2009 (B)) ‘The strict compliance rule in relation to letters of credit does not require exact literal compliance in all circumstances and as regards all documents. The bankers is, therefore, required to exercise judgment whether the requirements has been fulfilled.’ Discuss. The use of letter of credit is the most common way of financing in an international sales agreement. Donaldson LJ in The Bhoja Trader had even seen it as “the lifeblood of commerce”. The documentary credit system (DCS) is useful in that it gives sellers greater assurance of being paid for goods supplied while allowing buyers to open a line of credit and facilitating effective payment. Before releasing payment though, the bank would have to ensure that documents tendered by the seller strictly comply with the buyer’s mandate. This strict compliance approach will protect the buyer’s interests. The doctrine of strict compliance has been justified in the context of commercial letters of credit on two grounds. First, on principles of agency (and contract) law, where the issuer must act within the mandate given by the applicant and obtain documents which comply strictly with the applicant’s instructions. Documents which go outside the mandate do not entitle the issuer to reimbursement. Secondly, the doctrine ensures that the issuer obtains documents which are commercially marketable and can be used in case the goods are lost or destroyed. The aim...

Words: 1874 - Pages: 8