The History of Glencore from 1974-2024 – From Commodity Trader to Natural Resource Giant

Glencore has set itself apart by integrating its marketing and industrial business to generate value. As one of the largest commodity trading and mining companies in the world, the history of Glencore showcases the power of transformation and strategic growth.

Our experts at Business2Community pulled on a wide range of sources to bring you a comprehensive account of Glencore’s 50-year journey from a commodity trading business to one of the world’s largest natural resource companies. Read on to discover the company’s key milestones, ventures, controversies, and more.

Who Owns Glencore?

As a public company, Glencore International Plc is owned by various shareholders. With 9.934% of the company’s shares, Ivan Glasenberg holds the largest individual ownership stake. This is followed by Qatar Holding LLC with an 8.578% stake.

In 1974, Marc Rich and Pincus Green formed Marc Rich & Co. Following a management buyout in 1994, the company was renamed Glencore International. In 2011, the company had its initial public offering, listing on the London Stock Exchange (LSE). Glencore raised around $10 billion at a valuation of $60 billion, making it the largest non-privatization IPO in the history of the LSE and Europe at the time.

As of July 2024, Glencore’s market cap was $74.14 billion, placing it among the top five mining companies in the world.

Who is the Glencore CEO?

The CEO of Glencore is Gary Nagle. Nagle was appointed in 2021 to take over from Ivan Glasenberg, who led the company for 19 years. Since joining Glencore in 2000, Nagle has worked in various areas of the business including marketing and industrial businesses in Australia, Colombia, South Africa, and Switzerland.

During his tenure as chief executive, Nagle has focused on the following:

• Streamlining operations
• Maximizing investors returns
• Strategic acquisitions and deals
• Managing the company’s ESG transition

In 1983, Marc Rich + Co AG founder Marc Rich was charged with tax evasion, Iran sanctions-busting, fraud, and racketeering, in the biggest tax evasion case in US history. Rich fled to Switzerland, putting him on the FBI’s Most Wanted list.

After a series of zinc trades by Marc Rich cost the company $172 million, and almost sent Marc Rich + Co AG under, Ivan Glasenberg and others bought Rich out in a buyout deal worth $600 million in 1994.

In 2001, on his last day as president, Bill Clinton pardoned Marc Rich who’d been on the run from authorities for over two decades. This came after Rich’s ex-wife donated money to Clinton’s presidential library. The former president later said he regretted the controversial pardon and strongly denied the gifts had any effect on his decision.

Growth and Development of Glencore

Headquartered in Barr, Switzerland, Glencore produces and markets more than 60 commodities, through 60 assets and offices in over 35 countries.

The company’s core operations are divided into the following segments:

• Metals and Minerals
• Energy
• Marketing
• Recycling

The company’s diversified business model has given it an edge over competitors. As of 2023, Glencore’s revenue of $255.98 billion placed it ahead of key players like Rio Tinto and BHP who each reported revenues of around $54 billion.

Below we explore 50 years of Glencore history.

1974-1983: Glencore’s Journey Begins

Glencore was established as Marc Rich + Co AG in 1974 to market ferrous and non-ferrous metals, minerals, and crude oil, and shortly thereafter, expanded into oil products.

The company grew quickly. It raked in enormous fortunes during the OPEC embargo of the 70s by breaching international sanctions and trading with controversial regimes such as apartheid-era South Africa, Cuba, and Libya.

By 1981, the commodities trader had acquired Granaria, an established Dutch grain trading company that would later become Glencore Agriculture, the basis for its Agricultural Products business segment. Glencore later added coal to its Energy Products business segment.

1984-1993: Glencore Diversifies its Expertise

Despite the controversy surrounding its founder, Glencore remained operational, investing in mining, smelting, refining, and processing across three core business segments.

The transition from a commodity marketing company into a diversified natural resources group started with the acquisition of 27% of the Mt. Holly aluminum smelter in the US in 1987. This was followed by a 66.7% controlling interest in a zinc/lead mine in Peru in 1988.

In yet another strategic move to secure interests in both trade and production, the company acquired a majority stake in Xstrata (then Südelektra Holding AG) in 1990.

1994-2003: Glencore Enters a New Era

In 1994, Ivan Glasenberg and others bought Marc Rich out in a management buyout deal worth $600 million. To signify the dawn of a new era, the company was officially renamed Glencore, an abbreviation for Global Energy Commodity Resources.

In 1995, Glencore acquired the Prodeco coal project in Colombia, Colombia’s third-largest exporter of thermal coal.

The company acquired a stake in Mopani, Zambia – one of the African Copper Belt’s key producers of copper in 2000. The deal, made with the Zambian government, prevented the government from holding the mine to environmental laws for 15 years.

That year, a consortium representing Glencore, BHP, and Anglo-American bought a 50% stake in the Cerrejón mine in La Guajira, northern Colombia. The consortium took full control of the project in 2002 and started a massive expansion campaign.

This included violent expansions into the lands of the indigenous Wayúu communities where entire communities were forcibly evicted. Rivers providing drinking water were diverted, and those left were contaminated with toxic heavy metals.

In 2002, Ivan Glasenberg, who first joined the company in 1983, was appointed chief executive.

2004-2013: Glencore Goes Public

2007 saw Glencore acquire an equity interest of 13.88% in Nikanor Plc. In a bid to gain control of one of Africa’s largest copper mines, Nikanor merged with Katanga Mining Limited.

The merger resulted in Glencore’s 13.88% equity stake in Nikanor being converted into an 8.52% stake in the combined group. Katanga reached an agreement with Gécamines, the DRC state-owned mining company regarding various exploitation permits and mining rights.

To secure a favorable deal, the company paid controversial businessman Dan Gertler, the unofficial gatekeeper of the DRC’s mining industry and close friend of the then-DRC president, $45 million.

This resulted in the reduction of the signing bonus, or ‘pas de porte’ from $585 million to $140 million, an amount that was four times lower than that of most of its competitors.

To show its support for the extractive industries transparency initiative, the company released its first sustainability report in 2010. The report disclosed Glencore’s contributions to sustainable development in 2010 and prior years.

By 2011, Glencore had a large geographic footprint, with more than 50 offices in more than 40 countries around the world. In addition to holding industrial assets in key locations, the company’s operations were diverse, covering a wide range of commodities, industries, suppliers, and customers. This allowed the company to build a reputation for reliability and supply performance with other large, global companies like BHP Billiton and Shell.

Following its success going public in 2011, Glencore began trading on the London and Hong Kong stock exchanges. The next year, the company acquired Viterra in 2012 – providing a significant operational footprint for its agriculture business in Australia and Canada.

In 2013, Glencore merged with mining giant Xstrata. The deal, spanning 450 days, created a company with 190,000 employees in 50 countries and more ships than the British Navy. That same year, the $550 million Puerto Nuevo direct loading port was opened in Colombia.

The company also released an updated Code of Conduct and SafeWork program to help eliminate workplace injuries and fatalities.

2014-2019: Glencore Narrowly Escapes Bankruptcy

In 2014, the company rolled out its Human Rights policy across the group and became a member of the International Council on Mining and Metals (ICMM).

Throughout the year, Glencore continued to recycle capital selectively. Notable deals included the sale of the Las Bambas copper project in Peru for $6.5 billion and the consolidation of the Caracal oil assets in Chad. The Mopani Copper Mines’ $500 million smelter upgrade was completed, reducing over 95% of sulfur dioxide emissions from the site.

Glencore’s business model of borrowing money to fund trades almost led to bankruptcy in 2015 when a crash in global commodities prices left the company over-exposed and overwhelmed with debt. The company rapidly formulated a strategy to address these concerns. This included plans to:

• Reduce its $30 billion debt pile
• Raise $2.5 billion by issuing new shares issue
• Suspend its African copper outputs

Glencore became a member of the Initiative of the Voluntary Principles on Security and Human Rights (VPSHRs). It also published its first annual group-wide Payments to Government report.

In 2016, Glencore agreed to sell 40% of Glencore Agricultural Products to CPPIB, and 9.9% to the British Columbia Investment Management Corporation.

The next year, Glencore took full ownership of Mutanda and increased its stake in Katanga in the DRC. A joint venture with G500 in Mexico to launch 2,000 branded gas stations was also announced. In addition, the company set out to acquire a 49% interest in Hunter Valley Operations and Chevron’s South African and Botswana mid/downstream assets.

Meanwhile, Glencore acquired 36.9% of the voting shares in the Peruvian zinc, lead, and silver producer, Volcan. Glencore and the Ontario Teachers’ Pension Plan also announced the creation of a new partnership, BaseCore Metals.

Overall, 2017 proved to be Glencore’s strongest year at the time. The company outperformed all its UK-listed major diversified mining peers and shares made a notable recovery, increasing by 41%.

In 2018, Glencore acquired Australia’s Hail Creek coal mine, a large-scale, long-life, and low-cost operation located in central Queensland. However, the year was also marked by mounting legal challenges.

A group of US shareholders filed a class action lawsuit against Glencore, accusing the company of misleading them about corruption charges to protect its share price.

Additionally, Brazilian authorities launched an investigation into Glencore and its competitors for the potential bribery of Petrobras officials.

In April 2019, the US Commodity Futures Trading Commission also launched its own investigation into Glencore for suspected corruption in commodities trading.

Following engagement with investor signatories of Climate Action 100+ in 2019, Glencore announced that it planned to cap its annual coal output at 150 million metric tons. The company also launched its first Human Rights and Water reports to demonstrate its compliance and commitment to transparency.

2020-Present: Glencore Charts Its Low Carbon Transition

With Covid-19 emerging as an unprecedented challenge for the world, Glencore, moved quickly to adapt its business, protect workers, and support communities.

As of 2020, Glencore was among the largest global producers of copper, nickel, zinc, vanadium, and cobalt. Throughout the year, the company prioritized its investments in key transition and other metals.

The company also announced that it planned to align with the Paris Agreement on climate change. This included reaching net-zero carbon emissions by 2050 and reducing its carbon footprint by 40% by 2035 compared to 2019 levels.

In 2021, Glencore actively collaborated with its value chains to address the growing demand for low-carbon products. The company also strengthened its strategic partnerships with raw material and battery producers by signing several long-term supply agreements for responsibly sourced low-carbon aluminum and cobalt.

Notable contracts included:

• A five-year contract to supply Century Aluminum’s Natur-Al low-carbon aluminum to Hammerer of Austria.
• A deal to supply up to 1,500 tonnes of cobalt to FREYR in the form of cobalt cut cathodes from Glencore’s Nikkelwerk facility in Norway.
• Investment in and the long-term supply of responsibly sourced cobalt to Britishvolt.

From a 10-year revenue low of $142 billion in 2020, Glencore recorded record profits of over $255 billion in 2022. Unfortunately, the company’s stellar performance was overshadowed by a series of scandals that came to light that year.

Glencore bribery claims led to the company paying billions in settlements in 2022. Notably in May, the firm agreed to a $1.1 billion settlement in the US over a scheme to bribe officials in seven countries during the course of a decade.

Meanwhile, in November, a UK subsidiary of the company was ordered to pay more than $300 million for bribing officials $26 million in African countries to get access to oil between 2011 and 2016. Glencore corruption occurred on a large scale, taking place across five separate countries in West Africa.

In 2023, Glencore attempted a $25 billion hostile takeover attempt of Teck, sparking concerns in Canada about the potential loss of control over a national mining asset.

Despite Glencore’s offer representing a 20% premium, Teck rejected the proposal, stating the deal would expose its shareholders to a sizable thermal coal business, an oil trading industry, and a sizable jurisdictional risk.

However, in June, Teck confirmed it was engaging in preliminary negotiations with Glencore regarding the sale of its steelmaking coal business. By November, Teck announced the full sale of its steelmaking coal business to Glencore.

Following approval from the Canadian Government, the acquisition of a 77% stake in Teck Resources’ steelmaking coal unit, Elk Valley Resources (EVR) was finalized in July 2024.

The Glencore-Teck deal allowed Teck to divest its coal business and focus on critical minerals and the energy transition. For Glencore, the acquisition bolstered its existing thermal and steelmaking coal production operations in Australia, Colombia, and South Africa.

In the first quarter of 2024, Glencore announced that its production of copper, zinc, and coal was broadly in line with 2023 levels, while nickel increased by 14%. Despite challenging economic conditions, CEO Nagle remained optimistic about the company’s performance in 2024.

Glencore Dividend History

Glencore shares are listed on the London Stock Exchange under the symbol GLEN and on the Johannesburg Stock Exchange as GLN.Glencore sold 1.14 billion shares at £5.30 each (about $8.60) during its IPO in 2011. Since then, shares have traded well below those levels falling as low as £0.67 or $1.03 during the 2015 commodity crash. The shares have since made a recovery, trading at £5.33 ($6.93) in 2022 and remaining between £3-£5 ($3.90-$6.50) since then.

In the 10 years before its IPO, Glencore grew at a noteworthy compound rate, delivering an average annual return on equity of 38%, ranging from 16% at its lowest and 61% at its highest.

Following its IPO in 2011, the company paid $9.3 billion in dividends until 2015 when payments to shareholders were suspended. Dividend payments resumed in 2017, with the company committing to:

• A fixed $1 billion base distribution.
• A variable distribution representing a minimum payout of 25% of the free cash flow in the previous financial year.

History of the Glencore Logo

Glencore’s logo can be traced back to 1994 when the company first adopted the name Glencore. The distinct black uppercase wordmark has since become synonymous with the commodities producer and marketer.

While the inspiration behind the wordmark is unknown, it aptly reflects the company’s position as one of the world’s largest globally diversified natural resource companies.

The Future of Glencore

The history of Glencore highlights the power of a diversified business model. By becoming a producer and marketer of commodities, Glencore effectively diversified its operations allowing it to weather tough economic conditions and grow into a formidable energy company.

On the other hand, the company’s numerous bribery and corruption controversies highlight the importance of prioritizing ethical practices and balancing profits with sustainability and the protection of human rights.

As the world moves towards a low-carbon economy, Glencore plans to support ongoing global energy needs while investing in its portfolio of transition-enabling commodities. Its goals are underpinned by four strategic pillars:

• Managing its operational footprint.
• Responsibly reducing its Scope 3 industrial emissions.
• Advancing tomorrow through its transition-enabling commodities portfolio.
• Driving new business models.

Going forward, the company will need to demonstrate its commitment to environmental and social responsibility. In doing so, Glencore will restore its reputation and position itself as a leader in the global transition towards sustainable energy.

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