You are here
Glencore's head of oil retires amid US probes; accident at its Congo mine kills at least 41
[LONDON, KINSHASA] Glencore's head of oil, Alex Beard, who helped make the firm one of the world's top three oil trading houses, will retire this month, the company said on Monday in yet another management shake-up amid US probes into its activities.
Separately, at least 41 miners have been killed on Thursday when part of a copper and cobalt mine owned by Glencore collapsed in Congo.
Glencore, founded by trader Marc Rich, has come under US scrutiny in the past year over its business in the Democratic Republic of Congo, where it produces cobalt and copper, and in Venezuela and Nigeria, where it trades oil and refined products.
Mr Beard, 52, will be replaced by the head of oil marketing, Alex Sanna, 37, who was key in expanding Glencore's refined products trading in recent years. Mr Beard's move follows the retirement of other top allies of Glencore CEO Ivan Glasenberg - Chris Mahoney, the long-serving head of Glencore's agricultural business, and Aristotelis Mistakidis, the head of copper.
Glencore is worth US$44 billion and Mr Mistakidis held a 3.2 per cent stake in the company, worth US$1.4 billion at current prices, while Mr Beard held a 2.5 per cent stake worth US$1.1 billion. Mr Glasenberg is the largest shareholder of Glencore, with 8.8 per cent, and built the firm from predominantly a trading house into a mining giant via its merger with Xstrata in 2012. He has said he may retire within the next three to five years.
Mr Glasenberg, 62, revealed his retirement plans a few months after news broke about US investigations into Glencore.
Last July, Glencore said it had received a subpoena from the Department of Justice (DOJ) requesting documents and records on compliance with the US Foreign Corrupt Practices Act and money-laundering statutes.
A previous US probe nearly destroyed Marc Rich in the 1980s when the United States accused the company of "trading with the enemy", Iran. It indicted Mr Rich, who was pardoned years later by President Bill Clinton in 2001 during Mr Clinton's last days in office. Mr Rich died in 2013.
Sources told Reuters the current DOJ investigation was focusing on the role of intermediaries and how they helped Glencore obtain contracts, including in oil trading.
In April, Glencore said the US Commodity Futures Trading Commission was also investigating whether the company and its units may have violated certain regulations through "corrupt practices".
The company said that probe was at an early stage and had a scope similar to that of the DOJ investigation.
Sanna's trading division will continue to report to Mr Glasenberg, but oil assets, previously under Mr Beard, will be transitioned to Peter Freyberg, the head of industrial assets, Glencore said on Monday.
Meanwhile, part of a copper and cobalt mine owned by Glencore collapsed in southeast Congo, killing at least 41 artisanal miners on Thursday, the provincial governor said.
The accident occurred in the KOV open-pit mine at the Kamoto Copper Company (KCC) concession, in which Glencore subsidiary Katanga Mining owns a 75 per cent stake, said Richard Muyej, the governor of Congo's Lualaba province.
"It was caused by the clandestine artisanal diggers who have infiltrated (the mine)," he told Reuters. "The old terraces gave way, causing significant amounts of material to fall."
"KOV is a delicate site and presents many risks," he added.
Glencore said in a statement that it had confirmed 19 fatalities so far and was assisting search and rescue operations by local authorities.
Artisanal mining on the edge of commercial mine sites is a big problem across Africa. The rudimentary, outdated and unregulated practices miners employ can often compromise safety: mine disasters in Congo alone cost the lives of dozens a year.
Thousands of illegal miners operate in southern Congo, which produces more than half of the world's cobalt, a key component in electric car batteries.
Glencore said an average of 2,000 illegal miners sneak daily onto the KCC concession, which spans a vast flat expanse on the outskirts of the city of Kolwezi near the Zambian border and is one of the country's largest copper deposits.
Delphin Monga, provincial secretary of the UCDT union which represents KCC employees, said a crack in part of the pit had been noticed on Wednesday. He said KCC had put up red warning signs, but the diggers had ignored them.
This is not the first accident at the mine. In 2016, a 250-metre wall inside the KOV pit collapsed, killing seven mine employees.
Mr Muyej said that the authorities were meeting to decide on new measures to secure large mines.
At least nine illegal gold miners died in Zimbabwe when they were trapped in a mine last month.
Twenty-two died in a previous Zimbabwean gold-mine flood in February, and 14 tin miners were buried alive in Rwanda after heavy rains in January.
In February, about 20 people died when a truck carrying acid to Glencore's Mutanda Mine in DRC collided with two other vehicles.
Congo's military deployed hundreds of soldiers last week to protect a copper and cobalt mine owned by China Molybdenum from illegal miners.
Shares in Glencore closed down 4.9 per cent, their worst day of trading since December. The company said the incident has not affected output.
BMO Capital Markets analyst Edward Sterck said if the incident is related to illegal mining, any impact may be relatively short-term beyond an investigative period.
"However, preventative action will likely be needed and it could impact Glencore's social licence to operate," he added.
KCC produced a total of 152,400 tonnes of copper and 11,100 tonnes of cobalt last year. Glencore's nearby Mutanda project produced 199,000 tonnes of copper and 27,300 tonnes of cobalt.