Not gold diggers but coal diggers...

All You Need To Know About Glencore

Company: Although Glencore would be a fantastic name for a single malt whisky, it’s actually a commodities giant with a global presence. This Anglo-Swiss company deals in commodities like coal, copper and silver. It’s also vertically integrated, which is a fancy way of saying it owns every link in the supply chain. So its business is not only in mining these commodities, but it also processes and trades them. In 2013, it bought over mining company Xstrata for $29.5 billion.

The Boss: Boy, this deserves an article of its own. Marc Rich, the company’s founder, was America’s most wanted white-collar criminal until Bill Clinton controversially pardoned him on his last day as president.

These days, the firm is run by Rich’s protege, Ivan Glasenberg, who became a billionaire when Glencore went public in 2011. Not much is known about the secretive CEO who seems to hate giving interviews. But in 2015, he was in the limelight for Glencore’s turnaround plan, after it was crushed by plunging commodity prices.

Main Moneymakers: “We dig dig dig dig dig, heigh-ho!” In real life, the seven dwarves would be working for Glencore as it controls 150 mines all over the world. But a huge chunk of its revenue is not made through pure mining but from trading. In fact, it’s the biggest commodities trader in the world.

Competition: Other mining giants like BHP Billiton, Anglo American and Rio Tinto. Glencore attempted to acquire Rio in 2014, but the offer was declined. Now, Rio Tinto is worth four times more than Glencore.

Revenue: $ 152.9 billion (2016)

Red Flags: It’s got the same problem your online shopping-addicted partner has: debt. To be exact, around $30 billion in 2015.

Glencore’s profits depend a lot on commodity prices. And indirectly on China, which currently gobbles up nearly half of the world’s commodities. If there are any changes that affect its insatiable appetite (like policy), then that could hammer commodity prices.

Fun Fact: Putting money over politics (and ethics), the company has been linked to a string of controversies. From doing business with an apartheid-era South Africa despite a UN trade ban to colluding with Saddam Hussein in Iraq, Glencore hasn’t met a shady deal it doesn’t like.

 

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