Glencore International AG
Glencore International is the successor to the privately held Marc Rich + Co AG, founded by Marc Rich in 1974. Adventurer of Jewish origin Marc Rich created a company that works mainly with third world countries, the ruling regimes in which had problems with their recognition as economically developed countries, primarily the United States. Marc Rich's company bought (or exchanged) natural resources from these countries and sold them at great profit for itself in the world markets, to which, unlike the "bloody dictators", it had access. Rich's company traded Iranian oil bypassing the American embargo, bought nickel and gold in Castro's Cuba, traded with disgraced Libya and with South Africa when it was under international sanctions due to apartheid. Rich's company made huge profits due to the difference between the purchase price and the sale price, thanks to the lack of competition from the world's largest companies due to the foreign policy difficulties of partner countries. The favored treatment of Rich's company by the authorities of these countries was ensured, probably through bribes.
In the USSR, Rich's company began operating in the 1970s, when relations between the USSR and Western countries became complicated due to the “anti-Semitic” policy of the Soviet government. Rich's trade with the USSR reached significant volumes in the early 1980s, when the United States declared a trade embargo against the USSR due to the war in Afghanistan.
In 1983, Rich was accused by the US Attorney's Office, in particular, of tax evasion (Rich's company actively used offshore schemes in order to circumvent American laws). This imposed certain restrictions on the activities of Rich's company in the United States, although far from fatal, judging by the growth of Marc Rich's business.
In the early 1990s, Rich's company began operating in Russia. The security service of the Russian branch of the company was headed by the former consul of the USSR in Geneva, retired KGB general Gennady Ivanushkin. According to available data, the largest volumes of trade transactions were carried out indirectly, in particular, through the company of the Reuben brothers and the Chernoi brothers Trans World Group, to the creation of which, according to World Bank researchers, Marc Rich was directly involved. First of all, Trans World Group worked in the metallurgical sector. According to the company's own estimates, in the first half of the 1990s, it controlled half of the country's aluminum industry, which was the most profitable branch of the Russian economy after oil and gas.
In 1994, Marc Rich sells Marc Rich + Co AG to his partners (top managers), as a result of which the "odious" Marc Rich AG is transformed into the "respectable" Glencore International AG, headed by one of the top managers of the company, Willi Stroothotte. However, the newly minted corporation continues to sacredly adhere to Rich's principle of "catching big fish in troubled waters" and cooperates with regimes around the world that are objectionable to official Western diplomacy. In 2002, the results of the "Web" police operation initiated in Italy, during which the international relations of the Russian mafia were investigated, were summed up. According to the investigation, the Russian capital of a number of companies that launder money earned in a criminal way were pumped into the accounts of Glencore. In particular, the companies of Grigory Luchansky were mentioned, which, allegedly, were originally created by high-ranking Soviet officials. Ties were established between the Glencore corporation and the Benex firm involved in the dubious financial transactions of the Bank of New York with loans allocated to Russia totaling $ 7 billion. In 2002, the Glencore corporation was headed by Ivan Glasenberg, who was a key figure in Marc Rich's entourage.
In 1996-1997, the Trans World Group began to experience problems, and Glencore emerged from the shadow of its British-Russian partner. TWG clients who sold metal on the London Metal Exchange through this company are reorienting to Glencore. For example, Norilsk Nickel, which until 1997 sold 60% of its production to TWG, after 1997 signed a contract with Glencore to sell the same 60% of its production. Created with the support of the Chernoi brothers, Iskandar Makhmudov's UMMC company in the 2000s supplied copper to Glencore and its subsidiaries through offshore schemes. Another asset of Makhmudov Kuzbassrazrezugol, also supplied coal to Glencore through the Austrian trader Krutrade AG. Established in 2003, the Russian Copper Company of Igor Altushkin (Makhmudov's junior partner) supplied copper to Glencore in amounts close to 100% throughout the 2000s, although it announced future plans to get rid of Glencore's intermediation and independently sell its products on the London Stock Exchange metals.
The issue of dependence of Russian metallurgical companies on the Glencore corporation is quite complex and multifaceted. The answer to it lies both in the specific conditions of the formation of Russian private capital in the late 1980s and 1990s, and in the global system of the world economy.
The formation of private capital in Russia since the late 1980s took place under the dominant influence on this process of employees of foreign trade and intelligence structures of the Soviet state, in which Jews played a significant role, which is described in more detail in the Prehistory section (history of the formation of the power elite in Russia and the Urals until 1985). The Glencore corporation and related structures were under Jewish control, which may be an answer to the question of how the establishment of relations between the Soviet foreign trade departments and the Glencore corporation came about - through the Jewish diasporas, which played a significant role in the creation of the Comintern and the Soviet foreign intelligence that relied on it.
The global system of the world economy is such that the dominant role in it is played by the largest financial institutions, which, in parallel with the “invisible hand of the market”, and sometimes disguising themselves as it, have a significant impact on production processes, manipulating the price environment and credit resources. One notable example of this is the London Metal Exchange, which has been central to the relationship between Glencore and Russian steel companies. The London Metal Exchange has a five-tier membership system. The top-level members of this system (Ring) are large financial corporations from the USA, Western Europe and Japan. Members of this level determine the official price of metals on the exchange, which is the benchmark for metal trading around the planet. The London Metal Exchange acquired such a significant role thanks to the creation of a global transport and logistics infrastructure and the organization of a system of contractual transactions with derivative financial instruments that minimize the costs of large buyers and sellers of metals, making trading through the London Stock Exchange more profitable than directly from producer to consumer. This benefit, as well as the relatively closed membership structure of the London Metal Exchange, created the need for Russian metallurgists to work through intermediaries such as the Reuben brothers and Marc Rich, who were part of this closed system.
However, the Glencore corporation occupies the lowest level in this hierarchy, being a simple trader on the London Metal Exchange (fifth level). The same status has, for example, a subsidiary of the Magnitogorsk Iron and Steel Works. The question naturally arises: was the dependence of Russian metallurgists on the Glencore corporation to a sufficient extent due to the specifics of the world economic system, or was this dependence solely due to the criminal and corruption features of the formation of Russian private capital? There is reason to believe that the Glencore corporation is only part of the system, which includes large financial institutions. But Glencore's relationship with these institutions is not advertised, which allows respectable financial institutions to avoid responsibility for the actions of swindlers like Marc Rich that do not comply with the formal rules of doing business, not to mention their Russian partners, the Chernoi brothers, , together with criminal authorities, corrupt civil servants and intelligence officers. Thus, the ability of Glencore to trade on the London Metal Exchange could go beyond the rights of an ordinary trader.
An indirect confirmation of these assumptions can be the agreement concluded in 2012 between Rosneft, on the one hand, and Glencore and Vitol, on the other hand, on the supply of oil to these corporations in the amount of $ 50 billion over 5 years. It is assumed that this contract was concluded within the framework of servicing a credit line (presumably for $ 45 billion) provided to Rosneft by a number of international banks for the purchase of the oil company TNK-BP. In fact, Glencore and Vitol acted as guarantors of the return of funds for a group of banks that issued a loan to Rosneft.
In 2011, Glencore held an IPO on the London Stock Exchange. The total capitalization of the company amounted to $ 59.3 billion. During the IPO, about $ 10 billion was raised. This was the second largest IPO on the London Stock Exchange. The first place was retained by Rosneft, which raised $ 10.7 billion in 2006.
As of early 2012, 58% of Glencore's shares belonged to the company's management. The largest shareholders among them were:
- Ivan Glazenberg – 15,8%;
- Daniel Francisco Mate – 6%;
- Aristotle Mistakidis – 6%;
- Thor Peterson – 5,3%;
- Alex Bird – 4,6%.
In 2012, Glencore made a takeover of the large mining company Xstrata. As a result, Glencore became one of the world's largest mining companies with a capitalization of about $ 82 billion. In the process of this acquisition, the Qatar Investment Authority (Qatar Investment Authority, owned by the Qatar government) became the largest shareholder of Xstrata, whose actions increased the transaction value for Glencore. As a result of the merger of the two companies, the shareholders of Xstrata got 47.4% of the shares of the combined company, which means that the sovereign wealth fund of Qatar, which owned about 12% of Xstrata's shares, became a major shareholder of Glencore.
According to the Vedomosti newspaper for 2016, the largest shareholders of Glencore were:
- "Qatar Holdings" (investment division of the Qatar sovereign wealth fund) - 8,99%;
- Ivan Glazenberg – 8,42%;
- Daniel Francisco Mate – 3,19%;
- Aristotle Mistakidis – 3,17%;
- Thor Peterson – 2,8%;
- Alex Bird – 2,45%.
In December 2016, a consortium of Glencore and Qatar's sovereign wealth fund bought a 19.5% stake in Rosneft for € 10.2 billion from the Russian state-owned company Rosneftegaz. As a result, the consortium became the third largest shareholder of Rosneft after Rosneftegaz (50% plus 3 shares) and British Petroleum (19.75%). Russian President Vladimir Putin, in connection with the sale of Rosneft shares, said: "I very much hope that the arrival of new investors ... in the management bodies will improve corporate procedures and transparency of the company." The version was voiced that the deficit of the Russian budget was made up by selling shares of Rosneft.
According to the RBC newspaper, as part of the deal, an agreement was concluded that the limited liability partnership QHG Trading, created in the UK by Glencore structures together with Qatar Holding, will be able to annually receive from 4.5 million to 11 million tons within 5 years. oil produced by Rosneft. Thus, Glencore actually extended the 2012 contract with Rosneft.
Of the 10.2 billion euros spent on the purchase of Rosneft shares, Glencore invested only 300 million euros of its own funds. The Qatar Foundation has invested 2.5 billion euros. The rest of the funds were provided by banks on credit. The main creditor (5.2 billion euros) was the Italian bank Intesa Sanpaolo, whose management is allegedly very loyal to the Russian authorities.
One of the questions that arose about the deal was the question of its significance for the Qatar foundation. The fund was created to diversify income from the sale of oil and gas in Qatar, and therefore it is not very logical to use the fund's funds to buy shares of an oil company in Russia. The Qatar Foundation is a shareholder of Glencore, which, being an oil trader, is interested in this deal. But this could hardly be a sufficient reason for the Qatar fund to participate in the deal, given that the Qatar fund is not very friendly towards the management of Glencore, which in total controls more Glencore shares than the Qatar fund. It is most likely that in return for participating in the deal, the Qatar fund received an agreement from Russia to join the OPEC decision to limit oil production.
In some media, in particular in Novaya Gazeta, a version was voiced that senior government officials and top managers of Rosneft from the circle of Russian President Vladimir Putin used Glencore and the Qatar fund in order to get Rosneft shares into personal ownership. As far as Qatar is concerned, this version is unlikely, given that Qatar is Russia's political adversary in the Middle East and one of Russia's main competitors in the gas market. And using the enemy for the implementation of secret schemes means giving him a weapon to blackmail against himself. Another thing is Glencore, which has earned a reputation as a company that is very flexible in responding to the non-public needs of government officials, including Russian ones, with whom Glencore has a long history of relationships. According to the Vedomosti newspaper, after the completion of the deal, Glencore's effective stake in Rosneft was 0.54%, although under the terms of the agreement Glencore was to receive 9.75% of the shares. Who controls the remaining 9.21% of the shares is unknown.
Glencore is currently one of the world's largest mining companies and a major trader in oil and grain.
Date of information update: 2017.