Glencore boss Ivan Glasenberg will resign next year

"I don’t want to run this company as an old man," said Glencore CEO Ivan Glasenberg on Tuesday at an investor conference at the Baar headquarters. The native South African, who is now a resident of Zurich, will be 63 on January 7^th, and is now considering his retirement. He expects to be able to announce the name of his successor in the coming year, he said.

Glasenberg is a veteran of the mining and commodities trading company. The manager, who trained as an accountant in Johannesburg, joined the company in 1984 as a coal trader in his former home Johannesburg. At that time, Glencore still bore the name of company founder Marc Rich, and was a pure trading house. In the following years and decades, the group transformed itself visibly to become a raw material producer. Glasenberg soon took overall responsibility for the coal business and acquired a string of mines in Australia and South Africa at very cheap prices in the 1990s.

Glencore sold these mines to the British mining company Xstrata In 2002, making a profit of USD 2.5 billion. It was probably this deal that caused Glasenberg to be promoted to CEO soon after. He floated the company on the stock market in London in 2011. It soon became clear why: In 2012, there was a fusion between Glencore and Xstrata. As a result of this mega-fusion, Glasenberg became the boss of one of the largest mining companies in the world, in which Glasenberg personally holds a shareholding of 8.7 percent. At the current market price, this has a value of around CHF 3.5 billion. Together with their boss, many former Marc Rich traders have become millionaires, or even billionaires.

                                              Glencore CEO Ivan Glasenberg.

The company is now facing a generation change, says Glasenberg, and the new team is taking over a flourishing company. The precarious debt situation following the merger, which coincided with a sharp slump in commodity prices and placed the group in dire straits in 2015, has been cleared, and the group is expected to earn an operating profit (Ebitda) of more than USD 12 billion In 2019. But the investors are not really satisfied. The flow rates of coal, copper and cobalt will reduce further. Glasenberg justified the policy by stating that it makes little sense to extract the raw materials from the ground if they do not generate value for the shareholders. Following the announcement, the shares lost 3.7 percent of their value on Tuesday.

There are many uncertainties in the future. An investigation by the US judiciary into various alleged corruption cases in Congo, Nigeria and Venezuela hangs over Glencore like a Sword of Damocles. The business model is also less solid than Glasenberg would like it to be. With an annual production of around 130 million tonnes, Glencore is the largest privately-owned coal producer in the world. Only the state-controlled mine operators in China and India are bigger. Many Glencore competitors have quit the business in view of the global climate policy.

Glasenberg admits that the black gold business has become more difficult. But the manager would not be a good trader if he did not see it as an opportunity. Coal will remain an integral part of the global energy mix for many years, he says. It remains to be seen whether his successor will come to the same conclusion.