By Joe Wallace
LONDON -- Ivan Glasenberg, the longtime chief executive of
Glencore PLC, is handing over the reins of the global mining and
trading giant he built, saying Friday he would retire in the first
half of next year.
The Switzerland-based, London-listed company said it had tapped
Gary Nagle, a senior deputy who currently runs the company's coal
industrial assets, for the top job.
A successor to one-time-fugitive Marc Rich at the company that
would become Glencore, Mr. Glasenberg transformed it from a
privately held trading house into the largest coal marketer in the
world. An unapologetic promoter of coal, he continued to ramp up
that business despite a growing backlash from governments,
regulators and eventually investors, who criticized the fossil
fuel's contribution to climate change.
In the past few years, however, even Mr. Glasenberg began to
shift away from a focus on coal, emphasizing Glencore's big
position in commodities key to building electric cars and renewable
energy infrastructure, like nickel, copper and cobalt. The
announcement of Mr. Glasenberg's retirement came on a day when the
company also said it planned to reduce its emissions to net zero by
2050. That will partly be possible, the company said, because of
its depleting reserves of coal.
Mr. Glasenberg said he is handing off a company better
positioned than others to take advantage of this energy shift. "No
one has a portfolio of this mix to meet the energy demands of the
future," he told reporters Friday.
Mr. Glasenberg, a 63-year-old South African, joined Glencore in
1984 and has been CEO since 2002. He orchestrated the company's
stock-market flotation in 2011 and shortly after merged it with
miner Xstrata, transforming it from a privately held commodities
trading business into a publicly listed mining and trading
Two years ago, he started to lay out a timeline for when he
might stand down and more recently suggested his retirement was
"The old guys will be leaving," Mr. Glasenberg said on a
conference call last December. "I don't want to be an old guy
running this company -- and soon as those guys are ready to take
over, I will move aside."
Mr. Nagle, 45, currently based in Australia, plans to move to
Switzerland in the new year to work on the transition to new
leadership, Glencore said. He was widely seen as one of the
front-runners to succeed Mr. Glasenberg.
Mr. Nagle joined Glencore in 2000 and, like Mr. Glasenberg,
worked his way through the company's coal business. From 2008 to
2013, he was chief executive of Prodeco, Glencore's coal operation
in Colombia, before moving to South Africa to head the company's
alloys assets until 2018.
"Gary has worked with me for 20 years and has great capability,"
Mr. Glasenberg said in an interview. He told journalists he intends
to hold on to his large personal stake in Glencore, but he ruled
himself out of taking on the role of chairman. He said he would no
longer sit on the board, where he said he could overshadow Mr.
Tyler Broda, an analyst at RBC Capital Markets, said in a note
that Mr. Glasenberg's departure "should allow for a more bold
approach from management to tackle some of the challenges that have
crept into the investment case in recent years." He wrote the shift
could portend a spinout of Glencore's coal business.
Mr. Glasenberg said his successor had two key decisions to make:
what to do with Glencore's coal-mining operations and when to press
ahead with boosting production of various other metals key to
renewable-energy infrastructure, like copper and nickel. He said
there could come a time when investors become so reluctant to
invest in coal miners that Glencore has to spin off or sell its
coal operations. For now, Glencore said it is sticking by its plan
to run its current mines until they deplete.
Coal accounts for around 5% of Glencore's revenue and 10% of its
earnings before interest, tax, depreciation and amortization,
according to analysts at Jefferies Group LLC. That is down from
about 30% of earnings in 2018, before coal prices slumped.
Shares in Glencore finished more than 3% higher Friday in
Founded as Marc Rich & Co. in 1974, Glencore initially
traded metals, minerals and crude oil. The U.S. attorney's office
in Manhattan would eventually indict Mr. Rich, partner Pincus Green
and the company on 65 counts, including buying oil from Iran during
the 1979 hostage crisis.
Mr. Rich and Mr. Green were later pardoned by President Bill
Clinton. The company became known as Glencore after Mr. Rich sold
his stake in the early 1990s.
A former coal trader, Mr. Glasenberg took control of the firm's
world-wide coal business in 1990 and spearheaded its dominant
position in coal mining, snapping up operations in Colombia, South
Africa and Australia.
After being named CEO in 2002, he built a reputation for being
one of the mining industry's most astute deal makers. When he took
Glencore public, he became a billionaire on paper. Mr. Glasenberg
still owns a 9.1% stake in Glencore worth about $3.8 billion,
according to data provider FactSet.
In 2013, he merged the then trading-focused Glencore with mining
giant Xstrata in a $29.5 billion deal that created one of the
world's largest coal, copper and zinc producers.
During his tenure, Mr. Glasenberg -- a champion racewalker --
also became known for his bluntness, aversion to personal publicity
and hands-on management style. Once asked in an interview with The
Wall Street Journal if the company had a work-life balance, Mr.
Glasenberg said: "No. We work. You don't come here to take life
easy. And we all got rich from it, so, you know, there's a benefit
His hard-charging approach, and his large equity holding, kept
Mr. Glasenberg at the helm of Glencore through a crash in commodity
prices in 2015, even as other mining executives were pushed out.
That year, Glencore suffered a one-day stock crash of about 30%
that sparked concerns about the firm's debt-laden balance sheet.
Critics pointed to Mr. Glasenberg's risky bets in Congo and
elsewhere, as well as the 2013 deal with Xstrata, as major causes
for the firm's troubles.
A cost-cutting campaign over the following years, helped by a
rebound in commodities, repaired Glencore's finances, and Mr.
In more recent years, Glencore has come under fresh scrutiny
from U.S. authorities. It said in July 2018 that it had received a
subpoena from the U.S. Justice Department, demanding records
related to its compliance with American antibribery and
money-laundering laws in Congo, Nigeria and Venezuela.
Glencore has also said it is the subject of an investigation by
the U.S. Commodity Futures Trading Commission. It has said it is
cooperating with both probes.
Glencore said in August that it spent $56 million in the first
half of 2020 defending itself from various government
investigations, including those undertaken by the Justice
Department, CFTC, the U.K.'s Serious Fraud Office and Brazilian
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
December 04, 2020 13:39 ET (18:39 GMT)
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