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Glencore is more of a crime syndicate than a business

The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar in this November 20, 2012 file photo, REUTERS, Arnd Wiegmann.

The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar in this November 20, 2012 file photo, REUTERS, Arnd Wiegmann.

Published May 31, 2022

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By Sizwe SikaMusi

Glencore, the largest natural resources company in the world, is more of a crime syndicate than a business.

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Here's a bit of history.

Glencore was founded in Switzerland in 1974 as Marc Rich + Co. AG by American Marc Rich and his partners.

In less than ten years, Marc Rich + Co. AG was the largest and most profitable independent oil-trading company in the world.

No one could avoid dealing with this company.

By the mid-1980s, Rich + Co. was trading one million barrels of crude oil per day.

It soon became the largest commodities trading company globally, trading not only oil but also many metals and minerals from aluminium to zinc and everything in between.

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How did Marc Rich do it?

According to the House Committee on Government Reform in the US, Marc Rich’s trading empire "was based largely on systematic bribes and kickbacks to corrupt local officials".

The committee also said Rich made his fortune by "doing business without legal, ethical, or even moral constraints."

According to author Daniel Ammann, in his book The King of Oil: The Secret Lives of Marc Rich, he was told by a Swiss trader who had worked for the oil magnate that "[Rich] is only interested in making money, and for that he is prepared to stop at nothing," and that a competitor in the aluminium industry said, "Rich is without scruples. He does not owe his fortune to brilliance alone".

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By many accounts, Marc Rich became very wealthy because he was amoral.

He traded with anyone, including the Apartheid government, and in 1983, he fled from the United States to avoid charges of tax evasion and making illegal oil deals with Iran during the Iranian hostage crisis in 1979.

After becoming a fugitive for 18 years and being on the FBI's Ten Most Wanted List, President Bill Clinton pardoned Rich, after the fugitive mogul's ex-wife Denise Rich had donated US$450 000 to the struggling Clinton Library and, "over US$1 million to Democratic campaigns in the Clinton era."

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Speaking of Apartheid, the South African regime may have been the single greatest source of Marc Rich's wealth.

He said violating oil sanctions for South Africa was his company's "most important and most profitable" business.

He made about $2 billion between 1979 and 1994, selling oil to the apartheid regime in South Africa when it faced United Nations sanctions.

International sanctions were put in place to put pressure on the Apartheid regime. Bypassing sanctions meant that Marc Rich + Co. sold oil to the Apartheid regime at inflated prices and made huge profits.

This, of course, strengthened the regime and kept Apartheid ticking along. This is how they did it: In the 1980s, the Soviet Union supported Cuba with cheap oil. Instead of transporting this oil over long distances from Russia, Cuba traded a portion of this oil with Marc Rich + Co., which delivered the same amount of oil to Cuba from Venezuela.

This arrangement meant Marc Rich + Co. could buy the Soviet oil meant for Cuba at a reduced price and sell it to South Africa and other countries for a profit.

Despite its links to the Apartheid regime, Marc Rich + Co. continued doing business in South Africa post-1994 after being renamed Glencore in 1993.

Today, Marc Rich's successor companies, Glencore Xstrata and Trafigura, control the price of just about every commodity.

They also dominate a considerable share of South African and global natural resources, led by South African billionaire Ivan Glasenberg who worked for Rich in the 1980s.

Another one of Rich's students is Alan Duncan, a British minister between 2010 and 2019. During his employment at Rich's company, Duncan violated sanctions in the 1980s by supplying oil to South Africa. He is alleged to have moved oil from Brunei to Durban and earned about £100K a year in the process.

John Deuss is another one of Marc Rich's proteges. Deuss, a Dutchman described as "sleazy", supplied 57% of South Africa's oil imports by 1981, and made $500 million.

Deuss used false flags, forged cargo papers and mid-sea cargo transshipments to move oil for the Apartheid regime.

In 1991, he signed a new contract to supply 45 000 barrels per day, an increase of 15 000 from the previous year.

These examples are to demonstrate the calibre of individuals that led Marc Rich + Co./Glencore.

Fast forward to 2021, former Glencore CEO Ivan Glasenberg refused to appear before the State Capture Commission after he was implicated as being the "mastermind" behind the "collapse" of Eskom, after allegedly bribing the current president of South Africa, Cyril Ramaphosa with a chairmanship at one of his mining companies in 2012.

Glencore and Ramaphosa first did business together in 2005 when Glasenberg picked Ramaphosa’s company, Shanduka as its BEE partner on a coal export project before joining forces again in 2012 to supply coal via Glencore subsidiary, Optimum.

The allegations against Glencore were as follows: Cyril Ramaphosa was given a 9.64% stake in Glencore and become Chairman after the company had bought Optimum Coal Holdings (Eskom’s coal supplier in 2011).

According to former Eskom GCEO Brian Molefe, Glasenberg and Glencore appointed Ramaphosa to Optimum, to exert "political influence and the extent to which Glencore would be able to exert pressure on Eskom directors and management."

In 2014, Glencore subsidiary Optimum, chaired by Ramaphosa, renegotiated a 40-year coal contract with Eskom, demanding an increase from R150 to R530 a ton and a waiver of the R2 billion penalties accrued from failing to meet the existing supply agreement.

When Eskom tried to enforce the penalties, they were threatened with Ramaphosa's name, according to former Eskom Interim CEO Matshela Koko, while the Glencore subsidiary claimed it only owed R16 million in penalties.

To further show the decades-old culture of skullduggery at Glencore; Clinton Ephron, who was Optimum CEO at the time Ramaphosa was appointed to chair the company's board, went to the State Capture Commission and lied under oath saying Ramaphosa was never the Chairman of Optimum.

In February 2022, Glencore set aside $1.5 billion to be used to pay fines for bribing government officials and market manipulation in Brazil, Britain, the DRC, Nigeria, the US, and Venezuela.

Yet, interestingly, the South African government, under Ramaphosa, has raised no complaints against Glencore.

Sizwe SikaMusi is a history enthusiast and social media commentator.

Sizwe SikaMusi is a history enthusiast and social media commentator. Image, supplied.

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Related Topics:

EskomCyril Ramaphosa

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