MAC: Mines and Communities

Glencore probed yet again by Swiss authorities

Published by MAC on 2020-06-23

It's the world's largest commodities trader - and minerals exploitation has been key to its fortunes in recent years.

Following Glencore's London Stock Exchange listing in 2011 (although it's still "homed" in Switzerland) [see:  The monster has landed ] the huge, sprawling, conglomerate has become enmeshed by numerous accusations of human rights, bribery and corruption [see: How Glencore operates in DRC ].

Now, just a few weeks after opening an investigation, the Swiss Attorney General is preparing to launch  criminal charges against this "wheeler of all deals".

Glencore hit by another probe over Congo dealings

Cecilia Jamasmie

22 June 2020

Mining and commodities trader Glencore (LON: GLEN) is facing a criminal
investigation in its home country for failing to have organizational
measures in place to prevent alleged corruption in the Democratic
Republic of Congo (DRC).

The probe by the Swiss Attorney General, announced after market close on
Friday, adds to the list of multiple, but separate alleged corruption
and bribery investigations targeting the miner.

The Swiss Federal Prosecutor’s office said the move was the result of a
wide-ranging investigation by law enforcement agencies opened in May.

They are looking into the activities of commodity traders based in the
country and Glencore is the first company to be specifically targeted as
a result of the process.

The Swiss probe is likely to increase pressure on chief executive
officer Ivan Glasenberg. He told investors in February to prepare for
more leadership changes and hinted that his own departure may come
sooner than anticipated.

A month later, Glencore said it had found certain facts that “may be
relevant” to the probes it’s facing, adding it had shared them with

BMO Metals and Mining analyst Edward Sterck believes the Swiss probe
does not change Glencore’s reputational risk profile. “In our opinion,
[it] just increases the potential fine in the event Glencore is found
guilty,” he said in a note to investors.

Sterck noted the additional financial risk was “relatively low” compared
to fines handed out previously by the US Department of Justice (DOJ) and
the UK Serious Fraud Office (SFO) to other companies.

Piling up

More ongoing investigations in the UK, the US and Brazil, have concerned
investors and shaken the company up over the past two years.

The DOJ launched its investigation into Glencore’s activities in Congo,
Nigeria and Venezuela in July 2018.

The US Commodity Futures Trading Commission (CFTC) initiated a probe in
April last year, looking at whether Glencore had fallen afoul of certain
provisions of the Commodity Exchange Act and engaged in “corrupt
practices in connection with commodities.”

In December 2019, the SFO opened its own bribery probe into the mining
company and some of its executives, as well as employees and agents.

Glencore is the biggest western company operating in DRC, Africa’s
largest copper producer and the source of more than half the world’s cobalt.

The firm is just one of a few top resource companies facing probes into
possible corruption and bribery. Rio Tinto (ASX, LON: RIO) is also under
investigation by the DOJ and the SFO over a questionable $10.5 million
payment it made to a French consultant. That person reportedly helped
the company win the rights to the giant Simandou iron ore deposit in


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