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Glencore’s Ivan Glasenberg Maneuvering to Create Mining Goliath

Ivan Glasenberg / Getty Images

A multibillion-dollar merger between commodities conglomerate Glencore and mining giant Rio Tinto may take place this year as Glencore’s CEO is pushing for the deal, a report said.

A Glencore-Rio tie-up would create the world’s biggest mining company — a $180 billion goliath with leading positions in iron ore, copper, nickel, zinc and coal as well as trading room floors and logistics networks, the Herald Sun said.

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Glencore is led by Ivan Glasenberg, a self-made billionaire who has built the fourth-biggest mining company in the world.

Rio chairman Jan du Plessis revealed in October the company had turned down a merger proposal delivered personally by Glasenberg, according to the Sun.

Glencore is listed in the U.K. Under takeover laws there, Glasenberg — a former accountant who grew up in apartheid South Africa — cannot make another bid until April. The clock is ticking and Glasenberg, who also holds Australian and Israeli citizenship, is ready for round two, the report said.

The 58-year-old learnt his business smarts working side by side with commodities tycoon Marc Rich, whose self-named trading house eventually become Glencore. Glasenberg joined Marc Rich & Co in 1984, starting out trading coal from South Africa before moving through the trading desks in Melbourne and Hong Kong, the Sun said.

He was part of the management group that bought the company from Rich in 1993 — changing the name to Glencore — and by 2002 was chief executive. The University of Southern California business graduate played a key part in pursuing the strategy of buying the mines, smelters and refineries that produce the commodities Glencore traded, according to the report.

Despite building one of the biggest commodity trading companies in the world, Glasenberg only truly stepped into the public spotlight in 2011 when he took Glencore public with a London Stock Exchange listing that valued the business at $60 billion. His stake weighed in at $US9 billion. The float was a stepping stone to a tie-up with Anglo-Swiss miner Xstrata, which ran coal and silver mines in New South Wales and Queensland, the Sun said.

What started as a “merger of equals” ended as an aggressive takeover, with Glasenberg besting Xstrata chief Mick Davis for the top job. The deal is the biggest mining takeover in history, creating a $US90 billion natural resources group in late 2012, the report said.

“He’s incredibly astute, he’s incredibly market-savvy, ” Andrew Michelmore, chief executive of mid-tier miner MMG, told Bloomberg.

Glasenberg says the only thing a mining executive should look at — and the only thing that matters to investors — is an asset’s rate of return, according to the Sun

“I don’t have the vision of this company, ” he told The Wall Street Journal. “I just want to do the right thing and get massive return on the equity, and I don’t know where it’s going to take me.”



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