I was researching the history of Glencore (GLEN:LN) today and, specifically, its billion dollar deal making leader Ivan Glasenberg.
Glencore is the one of the largest diversified mining companies in the world with a market capitalization of nearly CAD $80 billion and 2013 top-line revenue of US $240 billion. They produce and trade in over 90 different commodities in over 150 operating sites, across 50 countries, employing over 200,000 people globally.
As Glencore’s CEO, Mr. Glasenberg is one of the most knowledgeable and influential people in the commodity sector. He has direct access to the heads of countries including China, India and Indonesia and as a result, has a unique perspective on the ‘true’ state of the commodity cycle.
There is not a lot of information on this South African-born accountant who joined Marc Rich in 1984 and helped develop Glencore’s enormous coal division. He is now the second largest shareholder who has become a multi-billionaire as a result.
Part of this search brought me to this video of The St. Gallen Symposium’s panel on the world economic outlook (May 8-9, 2014) which featured Mr. Glasenberg. In it, he discusses the commodity super cycle, Chinese commodity consumption, mine supply as well as sustainability.
The discussion was focused on the world economic outlook but was engulfed by questions guided towards Mr. Glasenberg’s view on growth given his business as a supplier of the raw materials that feed global growth.
Also on the panel was Raymond McDaniel the President and CEO of Moody’s Corp and Donald Kaberuka the President of the African Development Bank Group.
A few quotes from Mr. Glasenberg:
- On where China’s commodities will come from: “If China is growing at that rate (7%), they need resources. You have to remember, in the 60’s when Japan was growing, it pulled Australia with it. In the United States post World War II, it puled South America with it because a lot of the mineral resources had to come from South America…I’m very bullish on Africa.” (9:06)
- On the recent social/political challenges facing mining companies in 3rd world countries: “When the demand is there, take it. The big demand is not going to be there forever and if you’re not utilizing your natural resources another country might be utilizing theirs and you’re going to miss the boat.” (29:15)
- On the state of the super cycle: “In 2003 we (miners) hadn’t supplied. No one saw it (the big demand from China) coming and the mining companies couldn’t supply, so they were struggling from 2003 to 2008 to catch up…Unfortunately by the time they caught up, the crash came in 2008 and demand for commodities tanked. The super cycle hasn’t changed. China has still got a long way to go in terms of consumption of commodities per capita.” (43:10)