One of the controversial friends of our Deputy President, via Polotiki. Ramaphosa’s controversial Swiss partner Glencore Xstrata | Linked to the notorious Marc Rich, the global giant is dogged by dispute Glencore Xstrata is the most controversial company in the industrial metals and mining sector GLENCORE Xstrata’s main coal operations in South Africa consist of joint ventures and consortiums in which Cyril Ramaphosa, the deputy president of the ANC, is a main stakeholder. Glencore Xstrata is a Swiss company that listed on the JSE in November 2013. It is the largest commodities trader in the world, and after the buyout of mining giant Xstrata in December 2012 it became the fourth-largest global mining company. Through a series of mergers and acquisitions that began in 2006 but gained significant momentum since 2011, Ramaphosa’s black empowerment mining companies and Glencore Xstrata have become one of the main producers of coal in South Africa. Between them, they also hold the largest export capacity for the industry in Richard’s Bay Coal Terminal. The core of the BEE partnership between Cyril Ramaphosa and Glencore Xstrata has been Shanduka Coal (previously Lexshell 668 Investments), in which Shanduka Resources has a 50.01% share and Glencore Xstrata 49.99%. Ramaphosa is the chairman and founder of Shanduka Resources and his family trust owns 30% of this private company. The first mergers and acquisitions made by Glencore Xstrata and Shanduka Resources involved buying companies with collieries in Witbank, — Graspan in 2006, Wakefield in 2007 and Springlake in 2009 — which are now operated by the joint venture. By 2011, the purchase of a majority interest in Umcebo Mining and Mopani Coal through a special purpose vehicle, Lexshell 826 Investments, allowed Glencore to own an effective 43.66% shareholding. Umcebo operated three mines and a stand-alone coal beneficiation plant, and had a 1.5 million tons per annum allocation capacity in the Richards Bay Coal Terminal, with an additional one million tons allocation through the phase-five expansion project. Lexshell 826 is composed of three shareholders: Glencore, through its Netherlands subsidiary Dremalo BV, with 29.441%; Moxitorque Investments, with 20.459%; and Lexshell 827 Investments, a BEE company, with 50.1%. Among the six members of the board of Lexshell 827 are Clinton Martin Ephron, who is responsible for all Glencore’s coal activities in South Africa, and Phuti Mahanyele, CEO of Shanduka Resources. Mahanyele is a protégé of Ramaphosa and replaced him on Lonmin’s board of directors after the latter’s resignation earlier this year. Ephron and Mahanyele have been, as heads of the energy and coal divisions of Shanduka Resources and Glencore in South Africa, main players in the day-to-day development of this partnership. In 2012, Glencore (through its wholly owned Netherlands subsidiary, Piruto BV) and Ramaphosa (through his wholly owned company Lexshell 849 Investments) acquired a 67% share of Optimum Coal. Optimum had two mines and nearly 12% of Richards Bay Coal Terminal’s total export allocation. Ramaphosa and Ephron are members of Optimum Coal’s board. Glencore Xstrata, through its own mergers and acquisitions and through the partnership with Ramaphosa’s companies, now controls 31% of Richards Bay Coal Terminal. According to the British risk consultant RepRisk, Glencore Xstrata is currently the most controversial company in the world’s industrial metals and mining sector. This index is based on reports by media and non-governmental organizations on activities that breach the UN Global Compact, “a strategic initiative whose purpose is to encourage businesses worldwide to adopt sustainable and socially responsible practices by aligning their strategies, operations and policies with 10 universally accepted principles in the areas of human rights, labour, environment and corruption”. Glencore was created in 1994 after Marc Rich, the notorious oil trader, sold all his shares in Marc Rich & Co AG to the management, and the new shareholders renamed it Glencore. Rich, who died on June 26 this year, was indicted in the US in 1983 for 65 criminal offenses, among them tax evasion and trading oil with Iran during the embargo. He was pardoned by the then president, Bill Clinton, during the last days of his administration, but Glencore was intent on drawing a line between itself and Rich. Glencore is not Marc Rich & Co — it is much bigger. In many ways, under South African CEO Ivan Glasenberg’s leadership it has become a true creature of the globalised world. As the largest commodities trader and commanding a fleet larger than the Royal Navy, Glencore trades more than 90 different commodities in more than 100 countries. Before Glencore went public in 2011, the public knew little about it. “The largest company you have never heard of” was a phrase that was repeated in the media. In 2008, the company won the Public Eye Awards — a “prize” for irresponsible corporate behaviour given by leading business ethics academics, environmentalists and international lawyers — because of secretive practices and “unacceptable” labour conditions at its Colombian coal mine. The Supreme Court of Justice in Colombia ruled last year that paramilitary units killed 18 farmers and displaced 48 families in 2002 so that the land could be sold to Glencore for coal mining. Although Glencore has denied owning the land or having a commercial interest in it, several parcels are titled to Prodeco, its Colombian subsidiary, and the company uses some of them for mining activities. In Zambia, Glencore has been criticised for allegedly manipulating copper prices to avoid tax payments and for causing severe air pollution; in the Democratic Republic of Congo it has been accused of pollution, tax evasion and using child labour; and an investigation by The Guardian in April this year revealed that Glencore sold metals, wheat and coal worth $659million to Iran during 2012, including aluminum oxide used for Tehran’s nuclear centrifuge program. Glencore Xstrata has denied all the accusations. times-e-editions.newspaperdirect/epaper/viewer.aspx TIMES-E-EDITIONS.NEWSPAPERDIRECT.COM
Posted on: Wed, 17 Dec 2014 19:19:35 +0000
Trending Topics
Recently Viewed Topics
© 2015