Ivan Glasenberg’s Play For Xstrata Forces Him From His Cone of Secrecy – by Tim Treadgold (Forbes Asia Magazine – January 30, 2013)


This story appears in the 11 February 2013 issue of Forbes Asia.

Commodities trading has already made Ivan Glasenberg one of the richest people in the world. Now he was trying to pull off one of the world’s biggest corporate deals, one that would make him even richer. As chief executive ofSwitzerland‘s Glencore International he had usually managed to keep his head down and stay out of the news.

But last year, as Glencore waged its $33 billion takeover battle for miner Xstrata, he was learning that he could no longer live the secretive life, with just a few public appearances and a home high on a hill near the Swiss village of Rüschlikon, a 15-minute drive from Zurich.

So Glasenberg, pushed by his advisors, briefly emerged from his corporate cocoon to speak publicly and sit for a handful of media interviews. He was not happy about it. After all, he had learned the business from mysterious oil trader Marc Rich.

The most open event hosting Glasenberg was a meeting of the Melbourne Mining Club held, oddly enough, in London. Conducted under a marquee at Lord’s Cricket Ground, the 600 people on hand heard the guest speaker talk forcefully about his business and private lives. It was perhaps fitting that he opened up to an Australian organization because, after growing up and starting his career in Johannesburg, he gained Australian citizenship during a two-year coal-trading assignment for Glencore in Sydney in the late 1980s.

A few days after the talk he granted FORBES ASIA a face-to-face interview in his London office. But by then he had lapsed back into his cone of secrecy, insisting that the conversation be off the record–a demand that proved to be nonsensical because he largely repeated what he had said at Lord’s.

The 56-year-old Glasenberg is short, with a receding hairline and a tough demeanor. But after the first impression his gritty personality soon takes over, with his slightly high-pitched voice and sharp South African accent that cuts through background chatter. The way he dominates a room is a clue to his master plan that goes far beyond simple buying and selling of coal, copper, cotton and wheat.

In his sights is a status unrivaled in the raw materials sector since Cecil Rhodes held sway over much of southern Africa in the 19th century through the diamond trading company he founded, De Beers. Glasenberg might not be Rhodes, but there has not been an individual who figures to have such a powerful grip on a big mining house since Rhodes, nor has there been one willing to think and act so differently from his rival chief executives.

When he closes the Xstrata deal, which is expected by Mar. 15, the combined group will have a notional value of $92 billion, making his 8.27% stake worth $7.6 billion. (But until the last hurdles are cleared and the deal is complete, FORBES ASIA is keeping his net worth at $6.7 billion, down 7% since last year but maintaining his second-place rank on our list of Australia’s richest.) With coal, copper, zinc and nickel operations in Australia and 40 other countries around the world, Glencore will rival the world’s two biggest miners, BHP Billiton and Rio Tinto.

What’s different about Glencore is the personal control the CEO exerts over the company. None of Glasenberg’s rival CEOs in the mining and commodity-trading world has such a big personal stake in the companies they run. And he promises that he will never sell a Glencore share as long as he works there. This philosophy of having skin in the game extends deep into Glencore’s ranks. He said at Lord’s that he wants staff with the same entrepreneurial spirit that made him rich.

“A lot of deals are done or not done because chief executives are not fully aligned to shareholders,” he said. “We want people who work for us to be entrepreneurs. We like them to look at ideas. We like them to chase ideas. We like them to not be what I call a caretaker of an asset.”

Glasenberg charts a distinctly different path from his mining brethren on many other fronts. He prefers buying, not building, mines and other assets, a leaning shaped by Glencore’s 1998 investment in the deeply troubled Murrin Murrin nickel refinery in Australia. “Why should I build an asset when I can buy it more cheaply than you can build it?” he said. “We did build one asset in Australia, a refinery with a theoretical capacity of 40,000 tons of nickel a year. We’re still struggling to get 30,000 tons.”

For the rest of this article, please go to the Forbes magazine website: http://www.forbes.com/sites/forbesasia/2013/01/30/ivan-glasenbergs-play-for-xstrata-forces-him-from-his-cone-of-secrecy/