|Bid||174.46 x 0|
|Ask||174.54 x 0|
|Day's range||173.18 - 176.68|
|52-week range||1.41 - 2,334.50|
|Beta (5Y monthly)||1.70|
|PE ratio (TTM)||N/A|
|Earnings date||06 Aug 2020|
|Forward dividend & yield||0.15 (12.82%)|
|Ex-dividend date||03 Sep 2020|
|1y target est||4.95|
The big shareholder groups in Glencore plc (LON:GLEN) have power over the company. Institutions often own shares in...
The Glencore share price looks cheap after recent declines, but the company is struggling with some legal issues that could hold back growth.The post Tempted by the Glencore share price? Here’s what I think you need to know appeared first on The Motley Fool UK.
These two UK shares could offer good value for money for long-term investors after the stock market crash, in my opinion.The post Stock market crash bargains: I'd buy these 2 cheap UK shares today and hold them forever appeared first on The Motley Fool UK.
The Glencore share price has been volatile, and it's recently come off a five-year low. Here's why I think it's a great time to buy now.The post The Glencore share price is climbing again. Here's why I'd buy now appeared first on The Motley Fool UK.
(Bloomberg) -- A year ago in June, a group of bankers marched into a U.S. Treasury office in Washington on perhaps the most important mission of their careers: to save a country from financial collapse. Among them was Willy Mulamba, Citigroup Inc.’s top executive in the Democratic Republic of Congo, a resource-rich but devastatingly poor nation in central Africa.Mulamba, a 51-year-old Congolese banker who had returned home after years abroad, was part of a small team desperate to dissuade Treasury officials from cutting the nation off from the U.S. banking system, even though corruption scandals swirling around recently departed President Joseph Kabila had infected several local banks. Global firms including ING Groep NV and Commerzbank AG had stopped processing most dollar transactions from Congo out of concern about violating U.S. anti-money-laundering rules or sanctions imposed on generals, government officials and, in December 2017, on one of Kabila’s most important financiers: Dan Gertler. The Israeli billionaire, Treasury said, had amassed a fortune “through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals.”By the time of the meeting, Citigroup was handling more than 80% of Congo’s international dollar transactions, an exposure well beyond the bank’s comfort level. Citigroup had come to Congo in 1971 and weathered decades of dictatorship, corruption and war. It would be an unusual twist of fate if this bastion of American finance was forced to close its Congo branch because of sanctions imposed by its home country.More importantly, Mulamba knew that if Citigroup pulled out, the dollars would stop flowing to Congo. That would be tantamount to a death sentence for an economy where 90% of bank deposits and loans are in dollars. Congo’s 84 million people would face hyperinflation and financial uncertainty, and its businesses could seize up.Across the table from Mulamba and his colleagues was Sigal Mandelker, then Treasury undersecretary in charge of the Trump administration’s burgeoning roster of sanctions. Mulamba told her the bankers were doing their best to respect the restrictions, even though it exposed them to threats and lawsuits from powerful people in Congo. Mandelker promised to work with the group to help them comply, according to six people who attended the meeting. That was enough for the bankers.Returning to Kinshasa, Congo’s capital, the bankers felt reassured. They held a press conference stating their intention to toughen controls, and Mulamba delivered a clear warning. “I ask our banks and our monetary and political authorities to focus on the questions of the fight against money laundering and terrorist financing,” he said. “We are a strategic sector, and we have to be protected.” To anyone who knew Congolese finance, it was obvious what he was saying: Stop holding suspect money, because one slip up could ruin all of us.What the bankers didn’t know was that a mile down Kinshasa’s main boulevard from where the press conference took place, in a two-story building with reflecting windows, one bank had made holding suspect money its business model, according to documents provided to Paris-based anti-corruption group Platform to Protect Whistleblowers in Africa, known by its French acronym Pplaaf, and shared with Bloomberg News.The bank was the Congolese subsidiary of Cameroon’s Afriland First Bank Group. Citigroup wasn’t processing dollar transactions for the unit, but it serviced the parent company — one of only two so-called correspondent banks doing so, according to Afriland’s website.In January 2018, a few weeks after the U.S. imposed sanctions on Gertler, a family friend named Shlomo Abihassira had walked into Afriland’s Kinshasa headquarters and opened an account for a newly registered company with the unpronounceable name RDHAGD Sarlu, bank documents show. Over the next five months, Abihassira, who lives in Israel, made 17 deposits totaling $19 million. That August, he transferred the funds in one go to another Afriland account registered to a company called Dorta Invest SAU, according to bank records. Dorta Invest, set up by French businessman Elie-Yohann Berros, sent most of the funds abroad to recipients, most of whom aren’t identified in the documents.A little more than a year after Abihassira opened the account, whistle-blowers shared with Pplaaf a cache of Afriland documents describing the flow of money. With the help of London-based corruption watchdog Global Witness, researchers spent more than a year making sense of the transactions. They scoured publicly available company registers, statements from firms and social media.What they found was a network of companies that emerged in Congo after the sanctions went into effect. Although Abihassira and Berros say they have no financial ties to Gertler, their associations with others connected to the Israeli businessman raise questions about whether they were effectively helping him continue doing business after the restrictions were in place.Whatever conclusions are ultimately drawn about Gertler’s relationship with Afriland, the tangle of undisclosed, informal linkages offers a view into what might be described as the last-mile problem for financial sanctions regimes. Regulators in Washington can impose weighty know-your-customer obligations on banks such as Citigroup. But on the fringes of banking, in corners of the world where corruption runs rampant, rules based on legal concepts like beneficial ownership or majority control can seem ineffectual in the face of personal loyalties, unwritten obligations and impenetrable corporate records. In the end, it’s a system that relies on whistle-blowers to expose the truth.“This is how, despite being sanctioned, Gertler appears to have continued reaping the vast financial benefits of his business activity in DRC — a country where over 72% of the population lives on less than $1.90 a day,” Pplaaf and Global Witness wrote in a report published on Thursday. The report said the organizations couldn’t prove that the network was used to evade U.S. sanctions and it doesn’t allege any criminal behavior. Gertler declined to comment for this story, or for the report. But in a series of letters to Bloomberg News and the two groups, his lawyers at Carter-Ruck in London said the Afriland documents do not show that Gertler engaged in sanctions evasion. The lawyers said he has no business relationship with Abihassira or Berros. They also said the bank records were stolen, that some documents were falsified and that an internal audit found that one of the whistle-blowers stole money from unrelated client accounts. Neither Afriland nor Gertler’s lawyers provided evidence for that last claim or proof that documents had been fabricated.Bloomberg, Le Monde in Paris and TheMarker, a business publication in Israel, were given access to the documents, findings and other information before the report’s release. Over the course of several months, Bloomberg independently obtained additional documents and spoke with people on three continents involved in banking in Congo and the U.S. and with knowledge of sanctions enforcement to confirm and complement the findings.The report describes how Gertler appears to have been connected to a complex structure to move money abroad, with more than a dozen shell companies, subsidiaries, local and foreign intermediaries and an octogenarian living in Moscow. While the bank documents provide a window into the network, they don’t show why transactions were made or where, in many cases, the money ended up. But they do offer clues.At the center of the network was Afriland. By the end of 2018, deposits by companies and individuals connected in some way to Gertler made up more than one-third of the Kinshasa unit’s total, which had jumped almost fivefold to $279 million from a year earlier, according to a PwC audit reviewed by Bloomberg. Whether Afriland knew it was handling dollars linked to Gertler or its compliance procedures weren’t thorough enough, the bank and its employees were exposing themselves to possible sanctions and fines if U.S. law was being violated.Afriland DRC and its parent company in Cameroon didn’t respond to numerous requests for comment. The Congo unit told Global Witness and Pplaaf that it hasn’t violated any regulations or assisted any of its customers in circumventing U.S. sanctions.Abihassira, whose father is Gertler’s rabbi in Israel, said in an email that he opened the account at Afriland to invest in Kinshasa real estate and that the company name stood for Royal Development Housing and General Design. Abihassira, who had little experience in Congo, confirmed the deposits and the transfers to Dorta Invest. He said he was returning money he borrowed from Berros after giving up on his real estate dreams.Patrick Klugman, a lawyer in Paris who represents Berros, matched the account given by Abihassira. He said his client was a businessman whose investments in Congo had nothing to do with Gertler.That lack of connection doesn’t help explain why, just a week after sanctions were imposed, Berros set up a company with an identical name — Fleurette Mumi Holdings — to one previously used by Gertler. Or why Abihassira hired a lawyer who has worked for Gertler to register his company. Or why Berros and Abihassira opened accounts at the same small Congolese bank that Gertler, his companies and several associates were using.Abihassira said the timing was coincidental and that he didn’t know the Congolese lawyer he hired had worked for Gertler. The lawyer, Simon Niaku, said in an email that he had not helped Gertler or any of his firms since the sanctions were imposed and had never met him, although his email signature bore the name and logo of Jarvis Congo, one of Gertler’s sanctioned entities. Within an hour, Niaku sent a second email requesting that Bloomberg ignore everything in the previous message that wasn’t about him. He didn’t reply to a follow-up email asking about his connection to Jarvis.Berros told Global Witness and Pplaaf that he copied Gertler’s company name because he saw him as an entrepreneurial role model.No other businessman wields the influence Gertler has had in Congo over the past two decades. The scion of Israeli diamond dealers, he mastered the family trade as a boy. At the age of 23, Gertler landed in Congo, stepping into the ruins of Mobutu Sese Seko’s 32-year reign. A rabbi in Kinshasa introduced him to Joseph Kabila, then 26, who became head of the army after his rebel leader father toppled Mobutu. The younger Kabila assumed the presidency four years later.Over more than 20 years of friendship, Gertler lobbied the White House on Kabila’s behalf, conducted secret peace talks and became Congo’s honorary consul in Israel. At first, Gertler dealt in gems, at one point holding a monopoly on Congo’s diamond exports. But the country’s real riches are its copper and cobalt deposits. Gertler started facilitating access for mining companies such as Glencore Plc and Eurasian Natural Resources Corp. On top of that, as Bloomberg News has reported over the past decade, the Congolese government sold him cut-price mining stakes, often in the lead-up to elections. Instead of trading in packages of precious stones, Gertler was now dealing in enormous mines.But his entanglements with Congolese politicians came back to haunt him. The U.S. Justice Department opened investigations into Glencore and New York-based hedge fund Och-Ziff Capital Management LLC. The U.K. Serious Fraud Office launched separate probes into Glencore and ENRC. Among other things, investigators looked at deals involving Gertler.In a 2016 settlement with the Justice Department and Securities and Exchange Commission, Och-Ziff, since renamed Sculptor Capital Management Inc., admitted to its role in a bribery conspiracy in Africa. An unidentified Israeli businessman, who was said to be Gertler in a related civil case, paid more than $100 million to Congolese officials over a decade to gain access to mineral rights. Gertler wasn’t charged with a crime in that case or any other, and he has denied wrongdoing. Glencore has said it is cooperating with the investigations, and ENRC has said it did nothing wrong.Meanwhile, Kabila’s grip on power was loosening. He had won elections in 2006 and 2011, but the constitution barred him from running for a third term. He delayed the vote, and when his security forces tortured and killed protesters, the U.S. imposed sanctions on some of his generals to pressure him to hold elections and curb human rights abuses. When that didn’t work, it went after Gertler, who “acted for or on behalf of Kabila” to set up offshore leasing companies, the Treasury Department said when it announced the action in December 2017.The sanctions prohibited Gertler, any companies in which he owned a majority stake and 19 designated entities linked to him from doing business with U.S. banks or effectively making transactions in dollars. Any assets under U.S. jurisdiction could also be frozen. In June 2018, Treasury added another 14 entities to the list because of their alleged links to Gertler.Not long before the December 2017 announcement, Gertler reincorporated and relocated several of his companies to Congo from offshore jurisdictions. Fleurette Mumi Holdings Ltd., a British Virgin Islands-registered company that collects royalty payments from Glencore’s two copper and cobalt mines, was moved to Congo and renamed Ventora Development Sasu, according to company records. The entity that had exploration rights for an oil block on Congo’s eastern border also was moved and renamed. And Gertler established a new holding company in Congo called Gerco SAS, whose owners are his wife and nine family members, filings show.Some banks in Congo, including Citigroup, had long refused to take on Gertler as a client, according to people familiar with the industry. But Afriland opened accounts for his new companies, as well as for Gertler, bank documents show. It did the same for Pieter Deboutte, the long-serving head of Gertler’s operations in Congo, who’s also sanctioned. Deboutte said the funds in his account were for private use.In all, Pplaaf received records for 20 accounts that can be traced to Gertler or people connected to him through common directors, lawyers, addresses or shareholdings. Some, including ones for Gertler and Ventora, are in euros or Congolese francs. Others are in dollars.Banks conducting transactions involving the U.S. financial system, whether based in the U.S. or abroad, are generally barred from processing payments involving sanctioned entities and individuals. Transactions in euros or other currencies also can run afoul of the Treasury Department if they involve a U.S. person or are deemed to be for the purpose of evading sanctions. In addition, the U.S. urges caution when considering transactions with entities that a sanctioned person “may control by means other than a majority ownership interest.”The bank records for the 20 accounts cover November 2017 to May 2019. Because money often moved among companies or individuals, and sometimes appeared to flow back again, it’s impossible to tally a total without counting some funds twice. But Berros’s Dorta Invest was likely the biggest recipient, recording $49 million of deposits in a five-month period.A week after sanctions were imposed, Berros registered a company in Hong Kong called Fleurette Mumi Holdings, identical in name to one of Gertler’s BVI entities. Berros told Global Witness and Pplaaf that he started planning the venture before Gertler was sanctioned but never got permission to use the name. His lawyer, Klugman, said Berros abandoned the project when he heard about the sanctions.Berros’s sudden success in securing rights from Congo also raises questions. A month after registering Evelyne Investissement SAU in September 2018 he obtained the rights to develop cobalt and copper permits bordering one of Glencore’s flagship operations. It was the kind of transaction Gertler would have been proud of: Out of nowhere, a new entrant to the industry positioned himself in the premier league of resource deals.In December 2019, Glencore said it had agreed to pay state-owned mining company Gecamines as much as $250 million for land rights adjoining one of the world’s biggest copper-cobalt mines. Some of these sites overlap those acquired by Evelyne. Glencore said in an email that Gecamines agreed to hand over the purchased territory unencumbered by claims from third parties such as Evelyne when the deal closes and that it had obtained assurances that none of its funds will benefit any sanctioned entities. Glencore also said it understands that Evelyne is now part of Eurasian Resources Group, the parent company of former Gertler partner ENRC, but Berros’s lawyer Klugman said his client remained the owner and that neither Gertler nor any of his companies has any association with Evelyne. ERG declined to comment, and Gecamines didn’t respond to requests for comment.An 87-year-old Moscow-based businessman named Ruben Katsobashvili loaned Berros $10 million for his mining project, Klugman said. A company registered under Katsobashvili’s name also bought its own copper and cobalt deposits for $75 million, according to a copy of the agreement and Gecamines financial statements. Like Dorta Invest, two companies belonging to Katsobashvili were established in Congo soon after Gertler was added to the sanctions list. Katsobashvili was also the source of the funds that Berros invested in Abihassira’s real estate project, Klugman said.A Wikipedia page created by an employee at one of Katsobashvili’s companies describes him as a billionaire commodities trader born in Georgia, the former Soviet republic. The page says Katsobashvili was a chess prodigy and the CEO and founder of several energy companies. But neither he nor any of those entities show up in company registers in Georgia or Russia. A company he controls in the U.K. lost 200,844 pounds ($250,000) in 2018, according to the most recent accounts. And a Swiss firm he owns hasn’t filed paperwork with the authorities there since 2016, save for a recent change in director, a public register shows.Katsobashvili owns a three-room apartment on the seventh floor of a 24-story residential building in a middle-class Moscow neighborhood. It was valued at about $380,000 in 2017, according to Russian land records. Russian vehicle records show that as of 2016 he owned a 2007 Peugeot 407. When a Bloomberg News reporter called Katsobashvili in June, he handed the phone to his wife, who said he couldn’t hear very well. She referred Bloomberg to Klugman, who also represents Berros. Klugman said Katsobashvili had set up a gold-trading company in Congo in 2012 that had no ties to Gertler, but Bloomberg couldn’t find any trace of it in public corporate registries.How Gertler, Berros, Katsobashvili and others came to have accounts at Afriland is a story that begins in 2006, when the bank opened an office in Congo. Afriland’s founder, Paul Fokam, presents himself more as an anti-poverty messiah than a banker, evangelizing about generating wealth through grassroots businesses. The bank’s expansion has also made him rich. Forbes says he has a fortune of $900 million, making him the second-wealthiest man in francophone Africa, a region of more than 20 countries.People familiar with the bank say that until Gertler was sanctioned they couldn’t recall a transfer of more than $500,000 or the subsidiary holding more than $2 million in cash on site. But in 2018, Afriland’s total assets more than tripled from a year earlier to $351 million, according to the PwC audit. Income from banking operations more than doubled to $16 million that year, with transfer and foreign-exchange fees making up 80% of the total.In Congo and Cameroon, as in the U.S., banks are required to know their customers and report suspicious transactions to regulators. They’re supposed to establish who owns an account or makes a transfer, what their reason for a transaction is and where they obtained the funds. Afriland’s due diligence left much to be desired, according to documents provided to Pplaaf. For one person who withdrew $14 million from Dorta Invest’s account, the bank recorded just a single name.PwC didn’t raise questions in its audit about Afriland’s clients, even though it cited a 28.5 million-euro loan to “a company which is a related party to another company under sanctions from the authorities.” The auditor didn’t suggest this transaction was related to Gertler and said it didn’t affect its overall conclusion. PwC declined to comment, saying it couldn’t discuss matters relating to a client. Fokam didn’t respond to requests for comment sent to the bank and to an institute he heads.As global lenders began limiting their exposure to Congolese banks amid an expanding U.S. sanctions program, it became difficult for Afriland’s Congo subsidiary to find a partner that would clear its dollars. So it had to rely on its Cameroonian parent to conduct business in U.S. currency, a practice known as nesting. That entity has two correspondent banks that allowed Afriland customers in Congo to access the U.S. financial system. One is Citigroup.Correspondent banks are required to conduct due diligence on the financial institutions they service — to know their customers, in anti-money-laundering parlance. But they aren’t required to do the same for their customers’ customers, unless they suspect those clients are dealing in illicit funds. Citigroup said it couldn’t comment about clients but that its correspondent banking network “is fully compliant with local and international laws.”A person familiar with the biggest clients at Afriland’s Congo unit recently ran a finger down a list of the companies identified in the PwC audit, pointing them out one by one. Almost every one, the person said, was connected to Gertler.Gertler, who lives in Israel, has tried to get the sanctions lifted. He hired former FBI Director Louis Freeh and former Harvard law professor Alan Dershowitz, who represented Donald Trump at his impeachment trial, to help make the case. Dershowitz acknowledged in an email that he’s working to get Gertler delisted. Freeh didn’t respond to requests for comment.For a while, despite the sanctions, Gertler’s status in Congo didn’t change much. And Kabila, who allowed elections to take place in December 2018, retains immense influence even though his handpicked successor didn’t win. The new president, Felix Tshisekedi, formed a coalition with Kabila, whose allies had secured commanding majorities in both chambers of parliament, as well as control of most governorships and provincial assemblies. Key ministers in Tshisekedi’s cabinet are Kabila loyalists. Despite evidence of fraud obtained from leaked electronic polling data showing that neither Tshisekedi nor Kabila’s candidate won the election, the results stood.Erich Ferrari, a Washington lawyer representing Kabila, said in a letter marked “cease and desist,” that the elections were legitimate, certified by Congo’s constitutional court and accepted by the U.S. and United Nations. He also denied that the legal basis for the sanctions against Gertler had anything to do with his alleged dealings with Kabila or that the ones against officials in his government were intended to pressure him to hold elections.But desperate for financial support from the International Monetary Fund and other donors, Tshisekedi has been making moves to clean up corruption. In December, a prosecutor opened an investigation into how Gecamines used a 128 million-euro loan Gertler gave the mining company before sanctions were imposed. That kind of scrutiny from the Congolese authorities is unprecedented. While Gertler isn’t under investigation, government mining officials face questions about where the money went, according to two people familiar with the case. In June, Tshisekedi’s chief of staff was convicted of corruption charges and sentenced to 20 years in prison, a verdict he’s appealing.If the spotlight shines on Afriland’s Congo unit, that could make things worse for Gertler. It could also put pressure on Citigroup to end its banking relationship with Afriland’s parent, or lead the U.S. to take further action — the scenario Willy Mulamba feared when he met with Treasury officials last year.Still, recent anti-corruption actions give him some hope. “The new government recognizes the need to be part of the global financial ecosystem if the country is to attract investment flows and see growth,” Mulamba says. “As such, they are working with Citi, the U.S. government and others to make this happen.”If it doesn’t happen, one former president, one businessman and one tiny bank could cast a country deeper into ruin. For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Glencore (LON:GLEN) share price has risen by 12.5% over the past month and it’s currently trading at 165.3. For investors considering whether to buy, hold...
The Glencore share price is rising but can the FTSE 100 (INDEXFTSE:UKX) miner reach previous highs while dealing with price wars?The post The Glencore share price is up 57% since the stock market crash! Is it a Buy? appeared first on The Motley Fool UK.
Switzerland's Attorney General's Office (OAG) has opened a criminal probe into commodity miner and trader Glencore <GLEN.L> over allegations it failed to have measures in place to prevent corruption in the Democratic Republic of Congo (DRC). In a statement on Friday, the OAG said it opened the criminal proceedings against Glencore this month, but it was not possible to predict the timeframe or course of the case. Prosecutors began investigations against "unknown perpetrators" after receiving a complaint in 2017 on suspicion of bribery of foreign public officials, the OAG said.
A joint venture in South Africa with commodities giant Glencore <GLEN.L> on Friday began consulting employees on possible job cuts because of the weak economic environment, it said. The Glencore-Merafe Chrome Venture <MRFJ.J> runs seven chrome mines and five ferrochrome plants in South Africa, and employs a total of 11,448, including contractors, the Merafe website says. "The (consultation) process is as a result of the worsening operating environment across the South African ferrochrome industry, including unsustainable electricity pricing," a company release on the Johannesburg Stock Exchange (JSE) said.
Glencore is down more than a third from its January highs. Anna Sokolidou tries to find out if it is now a bargain or a value trap.The post The Glencore share price is down 36%! Is it worth buying? appeared first on The Motley Fool UK.
Despite the Glencore share price rising by a substantial amount since the market crash, I still rate it a bargain buy at today’s valuation.The post The Glencore share price is up 51% since the market crash. I think it's a bargain buy. appeared first on The Motley Fool UK.
(Bloomberg) -- Tesla Inc. will buy cobalt from from Glencore Plc, the world’s biggest miner of the metal, as the carmaker looks to avoid a future supply squeeze on the key battery metal, a person familiar with the matter said.The contract will help Tesla shore up its cobalt supply for new plants in China and Germany, said the person, who asked not to be identified as the details are private. The opening of Tesla’s so-called gigafactory in China this year has helped propel its shares to a record, as investors turn bullish on Elon Musk’s ambition to transform the company into a global mass-market automaker.While there’s enough cobalt supply for now, demand is expected to surge in the coming years as Tesla expands in China and Europe and Volkswagen AG to BMW AG roll out fleets of electric vehicles. Warnings about long-term shortages caused cobalt prices to spike in 2017 and 2018, prompting Musk to work on reducing Tesla’s reliance on the metal. Even so, the accord signals that the metal will remain key to the company’s expansion over the next few years.The deal could involve Glencore supplying as much as 6,000 tons of the metal a year for lithium-ion batteries used in electric cars, the person said. Executives from the two companies had previously been hammering out terms for Glencore to supply raw materials for vehicles being produced at Tesla’s car facility in Shanghai, people familiar with the matter said in January.Glencore declined to comment and Tesla didn’t immediately respond to a request for comment. The Financial Times earlier reported details of the agreement to sell material for use at Tesla’s new factories.The accord is in line with other recent contracts the trader-cum-miner has struck, including a four-year deal in February to supply as much as 21,000 tons to battery producer Samsung SDI Co. Ltd. Glencore last year agreed multi-year plans to sell about 30,000 tons of cobalt to SK Innovation Co. and at least 61,200 tons to China’s GEM Co. BMW AG also agreed to buy cobalt directly from Glencore’s Murrin Murrin mine in Australia.With Tesla’s China plant expected to manufacture 1,000 to 3,000 cars per week, that would translate to about 1,200 tons of cobalt demand annually at full capacity, BloombergNEF analyst Kwasi Ampofo said in January. LG Chem Ltd. and Contemporary Amperex Technology Co. have agreed to supply batteries for the Shanghai factory. Tesla’s Germany plant near Berlin may produce about 500,000 vehicles a year once complete.While Glencore is in a prime position to benefit from a boom in electric-vehicle sales, it has so far struggled to make that happen. The company booked losses last year related to cobalt after prices collapsed in mid-2018 from too much supply. In November, it shut one of its cobalt mines in the Democratic Republic of Congo for a maintenance program that could last two years.After customers reneged on contracts in response to the price slump, Glencore spent last year locking in new long-term deals throughout the electric-vehicle supply chain.Direct deals with miners are rare in the auto sector, and the agreements between Glencore, Tesla and BMW signal carmakers are concerned about securing sufficient supply from ethical sources. Almost three-quarters of the world’s cobalt comes from the DRC, and as much of 20% of the country’s output is produced at informal makeshift mines where fatalities and human-rights abuses are commonplace.The nation is pushing for more influence over the supply chain and a bigger say in pricing. For example, it’s moving to centralize trading cobalt output that’s produced by about 200,000 artisan miners.Tesla has begun “to engage directly with smelter and mines,” including in the DRC, on standards around ethical and responsible production, it said in a 2019 Impact Report released last week. The work comes as Tesla expands global vehicle production and extends supply chains, the report said.The company said it will support sourcing of the metal from the DRC if it can be assured raw materials are coming from operations that meet social and environmental standards.(Updates with details on cobalt market from third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- A giant Glencore Plc coal project in Australia has been fast-tracked as the nation turns to its vast natural resources to lift the economy out of its first recession in almost three decades.The A$1.5 billion ($1 billion) Valeria mine in Queensland has been designated a “coordinated project”, which the state said Friday would help to get new jobs happening quicker. That comes as the national government stands firm in the face of calls at home and abroad to shift away from the highly polluting fuel.“This new mine has the potential to create hundreds of new jobs as Queensland recovers from the extraordinary shock of the global coronavirus pandemic,” state Treasurer Cameron Dick said. “Coal mining has a long history in Queensland and will continue to be a major industry for many years to come.”The coal industry brings in around A$70 billion in annual export revenue. The government is betting on strong consumption of the fuel in Asia even as critics warn that the falling cost of renewables and global efforts to combat climate change may see that demand evaporate.“A coal-driven economic recovery only throws us from one crisis into another,” said Gavan McFadzean, climate and energy program manager at the Australian Conservation Foundation. Support for major new coal projects eroded the credibility of the state government’s commitment to protecting the Great Barrier Reef and reaching net zero carbon-dioxide emissions by 2050, he said.Glencore’s proposed mine in the state’s Bowen Basin coal heartland will produce around 20 million tons a year of thermal and metallurgical coal, equal to about 4% of the nation’s output. That’s double the size of Adani’s controversial Carmichael project, also in Queensland, which has been targeted by climate activists for potentially opening up a new region to coal mining.“This is an important and positive step in progressing the project, which is still at an early stage but has the potential to deliver a major jobs and economic boost to Central Queensland communities,” Glencore said in a media statement. The project will now be subject to a streamlined planning process overseen by the state’s independent Coordinator-General.Valeria will replace production from other Glencore coal operations as they near retirement, including the nearby Clermont mine, and any thermal coal produced by the new project will be subject to the company’s cap on output announced last year.Pembroke Resources Pty’s 15-million-ton-a-year Olive Downs met coal project, also in the Bowen Basin, is proceeding with the state’s backing after receiving environmental approval last month. Queensland is also encouraging the development of new gas resources, with a joint venture between Royal Dutch Shell Plc and PetroChina Co. in April making an investment decision to proceed with their Surat Gas project.(Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News, has committed $500 million to launch Beyond Carbon, a campaign aimed at closing the remaining coal-powered plants in the U.S. by 2030 and slowing the construction of new gas plants.)(Updates with comment from conservation group in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A planned bid by Glencore to buy out the remaining stake in its Argentine soy crushing joint venture Renova will likely be scuttled by the government's plan for a state takeover of bankrupt partner Vicentin, two sources close to the situation told Reuters. Glencore and the president's office declined to comment.
(Bloomberg) -- As head of copper trading at Trafigura Group, Kostas Bintas typically spends his time trekking around the globe, signing the deals that last year helped make Trafigura the biggest merchant of one of the world’s most crucial metals.By March this year, he was stuck holding video calls with clients and colleagues from his home in Geneva. With the world on lockdown, the outlook for most industrial metals looked bleak. Yet even then, Bintas says there were early signs copper could emerge from the crisis even stronger.If anything, he’s even more bullish today. Demand is bouncing back in China and stimulus packages being unleashed across the developed world promise to transform the long-term outlook -- particularly with spending on copper-intensive green energy infrastructure. The coronavirus has also disrupted mines and delayed new builds, throttling current and future supply.“Copper is coming out of this crisis differently,” Bintas said by phone from Geneva. “When lockdowns were eased and people started to return to work, we were surprised to see our customers not only taking deliveries of volumes they’d already bought, but requesting more to cover themselves in case there were any further disruptions to supply.”Trafigura’s view adds clout to forecasts that the metal viewed as a global economic bellwether is heading for a V-shaped recovery. Not everyone is as bullish, with some forecasters suggesting copper’s rebound risks running out of steam. Yet Bintas has one key advantage: Trafigura’s vast network of traders gathering direct intel from the heart of the copper market.The company bought and sold 4.35 million tons of copper last year, Bintas said, surpassing rival Glencore Plc as the world’s top trader. A Glencore spokesman declined to comment.“Despite the noise of what the price is doing or the equity markets are doing, the most important thing is to isolate the signal that you’re getting from customers and suppliers,” Bintas said. “You can’t get more genuine feedback than that.”While copper prices slumped sharply in January as China went into lockdown, and again in March as the rest of the world followed suit, the metal has since been clawing back losses. Prices rallied as much as 2.3% to $5,906.50 a ton on the London Metal Exchange on Wednesday, the highest in more than four months.The rebound has been supported by a steady stream of data showing a recovery in demand that Bintas has witnessed in real time.Trafigura estimates that the virus has reduced mine supply by 400,000 tons, while so far in 2020 scrap availability has dropped about 700,000 tons from levels seen a year earlier. Collectively, that outstrips a 900,000-ton year-on-year drop in demand over the same period.In a sign of growing tightness, copper scrap supply has dried up so drastically that buyers in China were paying higher prices than for brand-new metal, Bintas said.“Demand is clearly on a recovery path, while these big supply centers in South America are still under pressure,” he said.For Trafigura, the coronavirus crisis has reinforced the benefit of its copper-trading muscle. The company and Glencore have both expanded in the business as smaller trading houses, hedge funds and investment banks exited the sector due to a raft of factors, including declining volatility in some parts of the physical market, stricter regulations, and higher costs of financing and staffing a globe-spanning trading team.In the case of the London-based hedge fund and physical trader Red Kite, which at one time supplied about 15% of China’s copper needs, some fund managers came to feel that having a toe-hold in the physical markets was becoming less useful as a guide to where prices were heading. But with the pandemic putting supply and demand front and center of investors’ minds, fundamental hedge funds are positioning themselves for a revival.“In terms of the value of having boots on the ground and the right connections, it takes a year like this to prove the point,” Bintas said.(Updates with Wednesday’s copper price.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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(Bloomberg) -- Argentine President Alberto Fernandez dipped into the play book of his deputy, Cristina Fernandez de Kirchner, with a plan to seize crop trader Vicentin SAIC, ringing alarm bells in the farming industry and among investors in the country.His government will take control of Vicentin for the next 60 days as it seeks congressional approval to expropriate the agricultural powerhouse, which filed for bankruptcy last year after being caught out in currency swings. Vicentin is a key player in a strategic industry, Fernandez said.“This is a statist vision for the 21st century,” Production Minister Matias Kulfas said in an interview late Monday after the announcement. The company wasn’t notified, he said.Under the plan, all of Vicentin’s assets -- the crown jewels of which are soy-processing plants that supply the world with meal for animal feed and cooking oil -- will be placed in a trust managed by the agriculture arm of state-run oil company YPF SA. Shares YPF rose 14% in New York Monday.YPF Agro would then absorb Vicentin entirely, creating a state commodities giant with major hands in shale drilling, fuel dispensing and crop trading -- and even giving the government more clout in the currency market, Kulfas said.Read More: Soy Farmers Bet Against Peso Just as Argentina Needs CashThe move comes at a delicate time for Argentina, which is negotiating a restructuring of $65 billion in overseas debt. It also revives memories of the 2012 nationalization of YPF and other companies during the presidency of Kirchner, and raises questions about how Argentina will lure private-sector investments to lift its economy off the floor.“History shows us that state interventions, in grain trading in particular, create severe distortions that end up deepening problems instead of solving them,” the Argentine Rural Society said in a statement.The main opposition coalition rejected the measure, calling it “illegal and unconstitutional.”The government contends that the repercussions of Vicentin’s financial crisis on Argentina’s farm industry were simply too big to ignore.“It is not in anyone’s plans to be expropriating companies,” President Fernandez told Radio Con Vos on Tuesday. “I’m not ashamed to say that I am a capitalist. But when capitalism became financial it lost ethical content.”The closely held firm is a major part of Argentina’s $20 billion-a-year crop export business, accounting for 7.4 million metric tons of oilseed-crush exports in 2019.“There’s a certain belief, especially among independent and small producers who have been quite damaged by Vicentin’s failure, that the company needed to be saved in some way,” said Juan Cruz Diaz, director of political consulting firm Cefeidas Group in Buenos Aires.But to many observers, the nationalization points to another issue: Who exactly is governing Argentina? Fernandez, who’s far from a free-marketeer but viewed as a moderate, or his deputy, Kirchner, a figurehead for fervent supporters of Latin American leftism and nationalism.Vicentin’s fate has been closely tied to politics. The company expanded under the presidency of market-friendly Mauricio Macri and then fell into disarray when Fernandez emerged as his likely replacement. Gabriel Delgado, an agriculture secretary under Kirchner, will lead the government’s intervention.The company defaulted on about $1.5 billion of debt last year. A court in Santa Fe province, where the company is headquartered, has been overseeing a bankruptcy in a procedure that’s similar to Chapter 11 in the U.S.A big chunk of Vicentin’s debt is owed to state-run Banco Nacion. But the expropriation plan was still a surprise to company executives, who’ve been in talks with existing partner Glencore Plc and other companies, a spokesman said.“The chosen path fills us with uncertainty and concern,” the company said in a statement.Switzerland-based Glencore has a joint venture with Vicentin called Renova, which includes one of the world’s biggest soy-crushing plants. Fernandez said it was too soon to say how a new state partnership with Glencore would work.Argentina is the largest exporter of soy meal for animal feed and soy cooking oil, and in recent years Vicentin has fended off multinationals to have the top share of those shipments.(Updates with Fernandez comments in 2nd and 10th paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Glencore (LON:GLEN) share price has risen by 22.5% over the past month and it’s currently trading at 166.8903. For investors considering whether to buy, ho...
Rosneft does not have enough crude to ship to buyers with which it has long-term supply deals, making it hard for the Russian company to continue with record oil cuts beyond June, four sources familiar with the matter told Reuters on Thursday. Rosneft has told the energy ministry it would be difficult to maintain cuts to the end of the year, as it has had to cut shipments to major buyers, such as Glencore and Trafigura, despite good demand, two sources close to the talks said on condition of anonymity. "There is no doubt Rosneft will strictly fulfil all obligations under supply contracts with its foreign and Russian counterparties despite output cuts made by the company as a part of OPEC+ deal," Rosneft CEO Igor Sechin said in a statement on Friday.
Glencore on Thursday defended its climate policy from activists who want targets set for the use of its products, with Chairman Tony Hayward saying the miner's current plan will cut greenhouse gas emissions. Pressure on miners has mounted after Norway's $1 trillion wealth fund this month said it would sell its Glencore shares because it produces coal. In a call ahead of an annual general meeting on June 2, activist charity ShareAction said Glencore should align its policy with the Paris climate goals by setting targets for Scope 3 emissions, which are generated when its products are used.
(Bloomberg Opinion) -- The waters off the South African oil storage terminal at Saldanha Bay are getting busy. A small flotilla of tankers full of crude is idling near the busy shipping lanes that link the Atlantic and Pacific Oceans. Their presence, along with similar gatherings of ships all around the world, will be a potential source of oil price volatility for months to come, as global demand begins to recover amid the biggest production shutdown in the oil industry’s 160-year history.Ships full of crude have been forced to anchor off the coasts of the U.S., China, Europe and elsewhere, as refiners have cut back processing and onshore storage tanks have been filled to near capacity. All over the world, tankers are being used to store oil instead.The reasons for most of this expensive excess storage is obvious: the global supply glut. But there’s something else at play here too as some of the world’s smartest oil traders have filled up tankers to take advantage once crude prices start motoring again.The floating supplies of oil are vast. Tankers carrying enough crude to satisfy 20% of the world’s daily consumption gathered off California’s coast in April with nowhere to go. Most are still there. At Durban, 800 miles to the east of Saldanha Bay, six giant Suezmax tankers, each holding about 1 million barrels of crude, have been anchored for up to six weeks. More tankers have amassed off Africa’s northwest corner, around the entrance to the Mediterranean Sea, after processors in Spain, southern France and Italy all cut runs or shuttered refineries.The vessels now off Saldanha Bay began to arrive in early April, carrying crude from Nigeria, Angola and the Republic of Congo. They have been joined over the past two weeks by four more ships, each of which loaded a similar volume of crude in the U.S. Gulf Coast.The area near Africa’s southern tip has always been a favorite place to hold cargoes of West African crude awaiting buyers in far-flung parts of the world. It is safer than locations farther north, where piracy has increased. It also gives owners the choice to send cargoes to either Asia or Europe, depending on where the most profitable opportunities arise.Holding oil in ships is more expensive than storing it in onshore tanks, but owners can respond much more rapidly to selling opportunities.Several of the vessels off South Africa were chartered by leading oil-trading companies, including Vitol Group, the world’s biggest independent oil trader; Glencore Plc, through its ST Shipping subsidiary; and Mecuria Energy Group Ltd., according to fixture data compiled by Bloomberg. The presence of such big-name traders suggests that these aren’t all just cargoes waiting to discharge into congested tanks, but are also the visible parts of trading strategies aimed at making the most of the first signs of a recovery in global oil demand.As I said above, the presence of many of these tankers can be explained by full onshore storage tanks, slower discharging operations and reduced refinery runs. But others will be the result of so-called contango plays, where traders buy cheap crude on the physical market and sell forward contracts to lock in a profit. Some are probably just waiting for prices to rise enough to make the cargo profitable.The eventual unloading of all of these floating supplies will have a significant bearing on the oil price. The gradual drawing down of the huge offshore stockpiles owned by refiners will help keep a lid on prices. But those held by canny traders will be sold whenever and wherever they are most profitable, and that will keep prices volatile.If you were hoping for a smooth recovery in crude prices as the initial disruption of the coronavirus epidemic recedes, think again.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Disruptions caused by the coronavirus crisis have pushed up prices for sulphur by about 10% this year in the Democratic Republic of Congo, driving up costs of a vital ingredient for mining cobalt and copper in the African nation. Coronavirus lockdowns and border closures in South Africa and parts of Zambia and Congo have disrupted transport and other logistics, delaying essential mining supplies. Congo, the world's biggest cobalt producer, accounted for 70% of global supplies in 2019 of the metal that is used in alloys for jet engines and batteries for phones and electric cars.
The Glencore (LON:GLEN) share price has risen by 9.00% over the past month and it’s currently trading at 149.18. For investors considering whether to buy, hold...
London's FTSE 100 rose on Friday after two straight days of losses as a jump in China's factory output for the first time in 2020 powered miners and oil and gas producers, while investors remained cautious about a looming coronavirus-fuelled recession. The commodity-heavy FTSE 100 was up 1.2%, with BP Plc and Royal Dutch Shell Plc providing the biggest boost. The mid-cap FTSE 250 rose 1% with data showing China's industrial production climbed a faster-than-expected 3.9% in April as the country returned to work after months of coronavirus-induced lockdowns.