The world’s biggest commodity trader is facing the possibility of a bribery investigation by British prosecutors over its work with Dan Gertler, an Israeli billionaire and close friend of Congo President Joseph Kabila.
That’s on top of other disputes, like a conflict with Gertler over unpaid royalties.
The Swiss trader is also fighting the government over a new mining code that hikes taxes, and is part of a court case with Congo’s state-owned miner Gecamines, which is pushing to dissolve a local operating unit, saying Glencore overburdened it with debt.
The Glencore unit says the debt situation is solvable and dissolving the business is premature.
Still, the legal challenges cast a shadow over Glencore and highlight the risks of doing business in the central African nation.
In the last 10 years, while other major competitors such as Rio Tinto Group and BHP Billiton turned away from Congo’s rich resources, unnerved by the difficulty of operating in the country, Glencore’s chief Ivan Glasenberg invested heavily.
With copper and cobalt prices surging on demand for electric car batteries, Glencore is positioned to reap the rewards, but now is being hemmed in by its legal troubles.
“Glencore’s more questionable transactions in the DRC with Gertler are coming back to haunt them,” said Ben Davis, an analyst at Liberum Capital in London. “No doubt this will cause cheer amongst Glencore’s risk-averse peers, who have been berated by Ivan for misguided investment strategies.”
Glencore’s rise to become the world’s biggest cobalt miner and third-largest copper producer is due at least partly to its relationship with Gertler.
Ties between Glasenberg and Gertler date back to 2007, and through a series of investments they developed partnerships in the Mutanda and Katanga Mining copper and cobalt operations.