EDINBURGH — Ivan Glasenberg built Glencore into the world’s most powerful commodity trader, helping his friends become billionaires along the way. With the heat being turned up by law enforcement agencies, graft-tainted Glencore is ready for a new boss. Glasenberg has said he is looking for a mini-me. The London-headquartered Financial Times points to South African Mark Nagle, new head of power coal, as a likely contender for the top Glencore job. A Lonmin annual report says Nagel, who joined that company’s board in 2013 at the age of 39, has a commerce and accounting degree from the University of the Witwatersrand, and qualified as a Chartered Accountant in South Africa in 1999. He has held a variety of appointments within the Glencore group, including more than five years as CEO of Prodeco, Glencore’s Colombian coal operation and CEO of Glencore’s Alloys Division. – Jackie Cameron
By Thulasizwe Sithole
The impending retirement of Glencore’s copper kingpin Telis Mistakidis marks the start of a generational shift at the top of the world’s most powerful commodity trader, says the Financial Times. While some senior executives have left the Swiss-based group since its 2011 stock market flotation, none of the inner circle surrounding the company’s workaholic boss Ivan Glasenberg have left — until now, it points out.
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“The departure later this year of 56-year-old Mr Mistakidis signals the break-up of the so-called billionaire boys’ club, which built risk-hungry Glencore into the commodity industry’s dominant and most talked-about company, according to analysts, bankers and investors. The leadership changes come as Glencore faces a string of legal challenges, including a US Department of Justice investigation into possible corruption and bribery that has put its business model under the microscope. ”
“They are facing attacks on multiple fronts,” the FT reports Anneke Van Woudenberg, executive director of Rights and Accountability in Development, a campaign group, as saying. “This has got to be creating headaches. They are all focused on the same central question: fraud, corruption and misreporting. The whole business model is coming under question.”
Glasenberg claims that Mistakidis’s retirement is for reasons of prudent succession-planning, rather than investigations facing the company over its activities in the Democratic Republic of Congo, one of the poorest and most corrupt countries in the world.
“He’s decided to retire and pass on the baton to the next generation,” Mr Glasenberg said. “None of us expect to stay here forever,” he added.
But analysts have questioned the management changes. Looming investigations by the DoJ and Canada’s Ontario Securities Commission have rocked the company, notes the FT.
“In July, Glencore said it had been subpoenaed by the DoJ for documents concerning its business activities in the Democratic Republic of Congo, Venezuela and Nigeria going back to 2007. Canada’s OSC is looking into accounting irregularities at Glencore’s subsidiary Katanga Mining, which owns a copper and cobalt mine in the DRC that Mr Mistakidis previously managed.
“In addition, prosecutors in Brazil recently announced that Glencore, as well as its rivals Vitol and Trafigura, were under investigation on suspicion of paying bribes to employees of state-controlled oil company Petrobras in exchange for contracts. These investigations have weighed on Glencore’s share price, which is down 29 per cent this year.”
Since 2002, when Mr Glasenberg took the helm, it has been run by a tight-knit group of traders who have been at the company since the 1990s, continues the FT. “The most senior lieutenants are Daniel MatĂ©, head of lead and zinc trading; Tor Peterson, head of coal trading; Alex Beard, head of oil; and Mr Mistakidis. They remain fiercely loyal to Mr Glasenberg, in part for his realisation that Glencore needed to expand beyond pure commodity trading into mining as commodity markets became more transparent and technology made information more widely available.”
Highlighting how Glencore has made them all “fantastically wealthy”, the FT says Mistakidis and MatĂ© have retained equity stakes worth about ÂŁ1.2bn each. “The management has been here a long time since the float, even though people thought since 2011 that a lot of the senior executives would leave,” said Mr Glasenberg. “They haven’t . . . and there comes a time when the next generation needs to take over.”
As the regulatory investigations progress, bankers say attention is likely to turn to Mr Beard, who is in charge of oil trading in Nigeria and Venezuela — two key areas of the DoJ investigation. In a recent report, analysts at Barclays raised the prospect of Glencore exiting so-called agency trading in its oil business. During last week’s update with investors, Mr Glasenberg hinted at further senior management changes, adding there was a “very good bench of people ready to take over”.
Above all, investors are most interested in who will eventually replace Mr Glasenberg, who turns 62 in January and plans to retire in the next three to five years if he has found a suitable replacement. Mr Glasenberg says he has a provisional shortlist of candidates, some of whom are running business lines, and that the ideal replacement would look much like himself and be about 45-years-old.
That effectively rules out the current crop of top executives, but puts those like Gary Nagle, the hard-charging South African who was named as the head of Glencore’s power coal business last week, into the spotlight. Indeed, many bankers think Glencore’s next chief executive will have to come from the mining side of the business rather than trading. “I’ve got my eye on a few guys,” Mr Glasenberg told journalists last week. “There’s three to four guys who could potentially be there.”
