Conservation Minnesota

Glencore increases ownership of PolyMet mine proposal

Company’s history is cause for concern

Media Contact:
Molly Pedersen, Conservation Minnesota
Phone: 651-428-0547
E-mail: molly@conservationminnesota.org

MINNEAPOLIS, MN– Controversial Swiss commodities giant Glencore has acquired significantly more of a financial stake in the PolyMet sulfide mine proposal in northern Minnesota. The company has purchased 5 million shares of PolyMet – putting its ownership of the proposed mine at approximately 25 percent. This latest acquisition is in addition to a relationship formed between the two companies in 2008 that will give Glencore first priority on PolyMet’s production of concentrates, metal or intermediate products at prevailing market rates for a minimum of five years.

PolyMet’s continued existence depends on regular infusions of cash from Glencore.  In addition, Glencore has the exclusive right to market all materials mined and processed at the PolyMet mine.  Although PolyMet characterizes Glencore as merely an investor, PolyMet’s dependency on Glencore’s financing and Glencore’s control over all minerals PolyMet produces gives the company tremendous control over the future of the proposed mine.  Glencore will be in a position to deeply influence decisions about how the mine is operated, what types of environmental mitigation is performed, and conditions for workers.

Glencore was founded by Marc Rich, the international commodities trader who was indicted by the United States government on charges of tax evasion and illegally making oil deals with Iran. “Glencore is a company most Minnesotans have never heard of, but everyone should know about,” said Scott Strand of the Minnesota Center for Environmental Advocacy. “From human rights violations, to dealings with rogue governments and dictators, to causing costly environmental catastrophes, Glencore has left in its wake numerous devastated communities that regret the day they came to town.”

Examples of Glencore’s troubling record include:

  • The CIA named Glencore as having paid over $3 million in kickbacks to Saddam Hussein to obtain oil during the United Nations’ embargo on Iraq.
  • In 2011, Grant Thornton, an internationally renowned accounting consortium, unveiled Glencore’s scheme of inflating costs and diverting profits to overseas tax havens, costing the Zambian government hundreds of millions of dollars in tax revenue.
  • In 2012, a BBC investigation uncovered evidence that Glencore funded paramilitary operations in Columbia to conduct a massacre of a local Indian tribe so Glencore could acquire the land and expand its mining operation.
  • According to Bloomberg BusinessWeek, Glencore has the highest employee fatality rate amongst its closest peers.
  • Please see below for a list of independent resources about Glencore’s history.

“Minnesotans expect our corporate partners to behave honestly and ethically,” said Molly Pedersen of Conservation Minnesota. “Instead, Glencore has a history of doing whatever they think they can get away with, showing no regard for human suffering or environmental degradation caused by their destructive acts. The question for Governor Dayton is, how exactly will it benefit Minnesota to have Glencore doing business here?”

Mining Truth is a coalition led by Friends of the Boundary Waters Wilderness, the Minnesota Center for Environmental Advocacy (MCEA) and Conservation Minnesota. Its goal is to include all Minnesotans – including mining companies, non-profit organizations, businesses, politicians and private citizens – in a respectful, open, fact-based dialogue about the issue. Since the coalition’s launch in May 2012 it has offered in-depth research for the public, decision-makers and the media, and used social media, billboards, radio and online advertising, media coverage to raise awareness of the important decisions to be made regarding new sulfide mining proposals in the state.

While the list of bad behavior Glencore is responsible for is long, Minnesotans may best remember the company for making headlines in 2011 when it hired former BP Chief Executive Officer Tony Hayward. Hayward was head of BP in 2010 when its oil rig in the Gulf of Mexico exploded, killing 11 workers and causing pollution which killed fish and waterfowl and severely hurt the economy in local communities dependent on fishing and tourism.

“Partnering with a company like Glencore seriously weakens PolyMet’s claims it would mine responsibly in our state,” said Paul Danicic of the Friends of the Boundary Waters Wilderness. “Promising to operate the first sulfide mine in history that won’t pollute surrounding lakes and rivers is a steep enough claim – but proposing to use Glencore’s money makes it doubtful that PolyMet will be able to do it.”

Download this press release as a PDF.

Resources

This video from Australia’s ABC network provides an overview of Glencore’s history and control over global commodities.

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