On 20 May 2011, The Times Business Editor, Ian King, voiced little doubt that “small” investors, at least, should steer clear of carving out a stake for themselves in this particular golden calf.
In a remarkably robust comment, King damned Glencore as "...a business with dubious morals. It trades grain amid food riots and has been accused of profiteering and environmental offences in numerous poor and war-torn countries”. He went on: "Most of those signing up to buy shares in Glencore's flotation are major Middle Eastern and Far Eastern investors. Few of the traditional City institutions will touch the shares with a bargepole. The question is, should you?"
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I posted yesterday about goings on in a proposed merger between Xstrata and Glencore - particularly involving a major shareholder, Qatar Holding. To-day The Network is having a closer look at Glencore.
Are money and morals mutually exclusive when money is large, omnipresent, and the clear focus of the actors involved? This question can be asked of many corporate players but, in researching Glencore, questions of ethics and morality come up time and again - across the globe. I think Australians should look closely at this corporation because, if the much mooted merger of Glencore and Xstrata comes into play after meetings in September, Glencore and Xstrata will become the third largest minerals and mining company in the world and a rival for BHPBilliton and Rio Tinto.
Check these links below
In Australia, the Australian Competition & Consumer Commission has looked at the proposed merger and won't intervene to stop it. What a surprise!
Seems to me that we need a body that can look at corporate ethics and whether corporations are worthy of receiving social licence/certification to carry out their operations in Australia. Sometimes one thinks it would be just as easy for Hitler Inc to come into the country and build gas ovens. Why do nations everywhere have to open wide their doors to corporate cowboys simply because they are now wearing city suits and steering, not horses, but fancy motor vehicles?
Bolivia has nationalised Glencore mines there. This is part of an overall economic policy carried out by the Bolivian Government under President Evo Morales. Read more about this here.
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Do either of them have links to Exxaro?
ReplyDeleteMy research tools are the basics offered by the internet. I can find little to no relationship with Xstrata. However, Exxaro's interests in iron ore and zinc means that their interests if not joined certainly abut one another. However, Glencore is another story. See the following links
ReplyDeletehttp://af.reuters.com/article/investingNews/idAFJOE7BE03G20111215
http://www.ventures-africa.com/2012/06/south-africa-exxaro-sells-zinc-asset-to-glencore/
Steve, it seems to me from what I can see is that Exxaro is not a big boy in the mining game. However, Glencore and Xstrata are big players and, if the merger goes through, will become really big players. Seems to me that the bigger corporations get, provided they bed down acquisitions successfully and keep them profitable, they just become a larger species of corporate shark traversing the earth to see whom they might devour.
It would be well to keep an eye on Exxaro because, though small, there would be, I think, certain "synergies" and strategic holdings in Africa could be a good move for international players provided there is peace in the neighbourhood.
I have come to write these posts about the Xstrata Glencore merger because I take an interest in what Xstrata is up to because a) Xstrata mines on the Barkly Tableland in Queensland the Northern Territory. This place and its people are very special to me. b) I am a former union official with the Australian Workers Union (AWU)which is THE metalliferous mining union in Australia and its power in modern times relies on this particular membership base. Tied into all this is the leadership of the government of Australia which is tied up with significant AWU players who provide strong support to our embattled Prime Minister.
The two big international players, Rio Tinto and BHP Billiton, are claimed by Australia as its own - although with mergers and so on they are not of pure native blood and breeding. But if Xstrata brings Glencore into the equation as major world players, these are not PLU (people like us).
Now, from a union point of view, there is enough to contend with in dealing with our own whom we have been dealing with for generations. Xstrata is a bit of a case but with Glencore involved this is ups the ante. Rio and BHPB have not always been good corporate citizens - particularly with overseas environmental debacles. Glencore appears, by all reports, seems to bring a particular nastiness which includes the alleged use of child labour.
I am interested to hear from you on anything you might uncover. You come from a great mining country as I do - and mining is an interesting industry. I particularly love geologists. I feel that they are the most optimistic people ever.
Mining is very important to the economy of Australia as it is to South Africa. It is also, at this point in time, causing great social and environment concerns. Large segments of the Australian population are showing great concern in which governments don't appear willing to be too involved. Interesting times!
Please be in touch by email if you uncover matters of mutual mining interest at your end.