(Bloomberg) — Glencore Plc is cutting out many of its intermediaries — the agents and dealmakers once essential to cracking the toughest markets — amid growing scrutiny of its operations around the world.
Under pressure from its compliance division, Glencore is dismantling much of its global network of trading agents, according to people familiar with the situation. To continue operating, the company is setting up teams in some countries, said the people, asking not to be named as the matter is private. In other places, Glencore is still using agents who pass strict compliance tests and have a clear role.
Glencore has long relied on intermediaries, who work on commission. The agents network with well-connected business and government officials in developing nations with the goal of securing commodity-trading deals. In a prospectus in 2003, for example, Glencore listed 64 field offices around the world, saying that included nine agents in eight countries “which act primarily for us.”
The change comes as the trading house founded by Marc Rich transitions from its swashbuckling roots toward a more conventional mining company and predates a Department of Justice investigation into its business practices. Chief Executive Officer Ivan Glasenberg is also searching for a successor as the company goes through a generational shift and many of his top lieutenants retire.
One country where Glencore has overhauled its operating strategy is Congo, the home of some of the richest copper and cobalt mines. In the past, now-sanctioned Israeli billionaire Dan Gertler was the its key partner.
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