Sunday, January 17, 2021

Ivan Glasenberg steps down as head of Glencore

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Ivan Glasenberg is due to resign after nearly two decades at the helm of Glencore, completing the change of guard in the world’s largest commodity trading groups.

Mr Glasenberg, who joined Glencore in 1984 and has been managing director since January 2002, said on Friday he would retire next year and hand the reins over to Gary Nagle, a fast-talking South African who runs the coal activity of the company.

“Gary started with me in the coal division 21 years ago,” Mr. Glasenberg said at the company’s annual investor day. “He is 45 years old, he has a lot of experience in the world. I am very proud and happy to say that Gary can move this business forward in the future.

Mr Glasenberg, who turns 64 in January, reported the succession a year ago, telling investors he didn’t want to be an “old” manager of the company. He owns just over 9% of Glencore, a stake worth around £ 3bn at current prices.

Glencore was born from Marc Rich & Co, whose eponymous founder was considered the godfather of modern commodities trading. But it was under Mr. Glasenberg that he became a natural resource monster.

His departure marks the end of an era. Mr. Glasenberg – a running champion – is the latest in a trio of executives who have come to define the modern commodity trading industry.

Trafigura, which also has its roots in Marc Rich & Co, lost Claude Dauphin in 2015 after his death while in business in Colombia. Ian Taylor, the longtime managing director of Vitol, the world’s largest independent oil trader, passed away this year following a long battle with cancer.

Mr. Glasenberg was the only one of the three titans of commodities trading to go public, using the proceeds of his exceptional public offering in 2011 to build a legacy that went beyond trading and assets. However, its shares are now trading at less than half of their opening price in 2011.

In closing a $ 31 billion deal to take over Xstrata in 2012, in which he won a scuffle with mining company CEO Mick Davis to run the merged company, he added the asset base needed to support his commercial weight.

But despite the IPO which pushed him into the public spotlight, like his rivals, he never quite abandoned the derisory approach to the trading industry.

In 2018, the US Department of Justice subpoenaed Glencore for possible violations of the Overseas Corrupt Practices Act relating to its operations in Nigeria, Venezuela and the Democratic Republic of the Congo.

Glencore has always denied wrongdoing and said it is cooperating with investigations. A number of his main lieutenants – who are part of the “Billionaire Boys’ Club” that the IPO helped create – have resigned in recent years, including oil trading chief Alex Beard, copper chief Aristotelis Mistakidis and, more recently, zinc boss Daniel Maté.

Among the internal candidates who were in the running to succeed Mr. Glasenberg, Mr. Nagle is the most similar to Mr. Glasenberg and the most experienced executive in asset management, a much larger part of the activity of Glencore since its merger with Xstrata.

The other favorites were Kenny Ives and Nico Paraskevas, his copper counterpart.

Nicknamed “mini-Ivan” by many in the mining industry, Mr. Nagle is a graduate in business and accounting from the University of the Witwatersrand, Mr. Glasenberg’s alma mater.

Like the outgoing leader, he also rose through the ranks in Glencore’s coal business, but with a stint as head of the company’s ferroalloys business in South Africa.

News of Mr Nagle’s appointment came as Glencore, the world’s largest exporter of thermal coal, stole a march on rivals by setting new emissions targets that will make it the first major miner to be fully aligned. on the objectives of the Paris agreement on climate change.

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Glencore is committed to reducing its greenhouse gas emissions to net zero by 2050, including those produced when a customer burns their coal, oil or gas. It will do so by exhausting its coal assets.

He also signaled his intention to resume dividend payments next year after suspending them this year due to rising debt and the Covid-19 pandemic.

Tyler Broda, analyst at RBC Capital Markets, said Mr. Glasenberg’s retirement was not “positive,” but “new leadership should allow for a bolder approach from management to address some of the challenges that have crept in. in the investment file in recent years ”.

These include the future of its coal business and regulators’ investigations into allegations of corruption and bribery. Mr Glasenberg’s departure could pave the way for a settlement with the US authorities.

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