South Africa’s ‘overnight billionaire’ – straight out of Joburg
Ivan Glasenberg went to bed on 18 May 2011 as CEO of the world’s largest commodity trader. The next day, he woke up as one of the richest men in Europe, worth over £6 billion (R60 billion at the time).
Until May 2011, everyone knew Glencore was a massive company, but no one knew how much it was worth, how much money it made, or who its largest shareholders were.
Glencore employees were forbidden from talking about the shares they owned and how valuable their holdings were.
The only indication was the annual event, at which white envelopes detailing the company’s performance over the past year were handed out to employees with shares in the company.
Even in its listing prospectus, Glencore refused to name its major shareholders, keeping the page blank. This was despite having one of the longest pre-listing documents ever, running to 1,637 pages detailing the company’s global business and risks.
Only two weeks before its shares began trading on the London Stock Exchange and in Hong Kong did the company list its ten major shareholders. Glasenberg was on the list along with other employees, but no one knew just how much he owned.
On 19 May, this was revealed to the world. Glencore’s listing minted five new billionaires, with Glasenberg the richest at a net worth of over £6 billion (R60 billion). The company was valued at £37 billion (R370 billion).
Glasenberg paid so much tax following Glencore’s listing to his canton in Switzerland, Rüschlikon, that the town cut its tax rate by 7% for all other residents. He is estimated to have paid £240 million in taxes in 2011.
This was the culmination of a career spent trading coal in South Africa, Australia, and Hong Kong. Glasenberg, the ‘King of Coal’, pulled Glencore out of the shadow of its founder, Marc Rich, and turned it into a blue-chip stock.
From the quiet Swiss town of Baar, Glencore has interests stretching from Canadian wheat to Peruvian copper and Russian oil.
Today, Glencore is the largest metals trader, a top-three oil trader, and the world’s largest wheat trader.
In The World For Sale, Jack Farchy and Javier Blas say Glencore’s traders are the mirror image of Glasenberg – a South African accountant with a penchant for working extreme hours.
The South African’s “insatiable appetite for work” transformed Glencore into the world’s largest metals trader, a top-three oil trader, and the world’s largest wheat trader.
Below is the story of how Glasenberg joined Glencore in 1984, rose to become its CEO in 2002, and eventually passed on the reins to another Wits-trained accountant, ‘Mini-Ivan’ Gary Nagle.
Racewalker, coal trader, billionaire
Glasenberg, born to an immigrant Jewish family on 7 January 1957, had an upbringing similar to many South African mining tycoons.
His father, Samuel Glasenberg, was born in Lithuania and came to South Africa to run a luggage importing and manufacturing business. Little is known about Ivan’s mother, Blanche Vilensky, apart from her being born in South Africa.
Ivan grew up in the Johannesburg suburb of Illovo, and his fierce competitive spirit was stoked at Hyde Park High School, where he matriculated in 1974.
Glasenberg’s teachers never thought he would amount to much in his professional career, labelling him outspoken, cheeky, and failing to live up to his potential.
His focus during this period was on his first passion – racewalking. By his early 20s, Glasenberg was South Africa’s national junior champion in the sport and nearly went to the 1984 Olympics.
This dream was stymied by the country’s exclusion from international sports due to the government’s Apartheid policies.
Turning to focus on his studies, Glasenberg graduated from the University of the Witwatersrand with a Bachelor of Accountancy in 1982. Unknown at the time, the university would effectively become a training ground for some of Glencore’s most profitable traders.
He worked at the accounting firm Nexia Levitt Kirson, earning his Chartered Accountant designation before entering the world of commodity trading.
In the same year that he married his wife Elena Beverley Orelowitz, Glasenberg joined Marc Rich & Co. as a marketer in its South African business.
Marc Rich & Co. was notorious for evading international sanctions on the trade of commodities, using code names for its Johannesburg office to conduct deals with the Apartheid government forbidden by international law.
It did the same with Iranian and Iraqi oil, with its founder, Marc Rich, being prosecuted for various crimes, including tax evasion. Rich was pardoned by President Bill Clinton on his last day in office.
Glasenberg quickly moved from the marketing division into March Rich & Co.’s coal department for South Africa and Australia.
His talent and extreme work ethic, including regular 16-hour days, quickly pushed Glasenberg up the ranks of the company. Within five years, he was named manager of its Hong Kong and Beijing offices and became head of coal in 1991.
In just over a decade, the South African accountant had risen to become CEO and was charged with cleaning up the company’s image and bringing it into the 21st century of commodity trading.
Instead of flying in private jets from country to country, organising deals and evading sanctions, the company would set up shop in the Swiss town of Baar and trade commodities from behind computer screens.
This was the result of a disastrous set of trades by its founder, Marc Rich, who lost $172 million trying to corner the Zinc market in 1994. Rich was forced to sell his share of the company he founded to Glencore International.
Glencore’s name is an abbreviation of Global Energy Commodity Resources.
Glasenberg’s first few years as CEO were spent putting out fires from Glencore and Marc Rich’s past. The company was accused by the CIA of illegal dealings with ‘rogue states’ such as Apartheid South Africa, the Soviet Union, Iran, and Iraq.
The company was said to have a history of busting trade embargoes to profit from corrupt or despotic regimes. The CIA found Glencore had paid millions of dollars in kickbacks to world leaders to obtain oil and other commodities from sanctioned states.
Glencore denied these charges and Glasenberg pushed on with reinventing the company. It invested heavily in rare earth metals, particularly cobalt, in the Democratic Republic of Congo (DRC).
This was fraught with danger. In 2005, Glencore’s proceeds from an oil sale to the country were seized as part of an investigation into corruption in the DRC.
Glencore was listed on the London Stock Exchange and in Hong Kong in 2011, minting five new billionaires and making Glasenberg one of the richest men in Europe.
Glasenberg then began to use the connections he nurtured in the coal-trading business to build Glencore into a mining giant.
Setting Glencore apart from its commodity-trading peers, Glasenberg pushed the company to own and operate its own mines to benefit from controlling the entire value chain.
Using his position as an executive director of Xstrata Plc, a mining company headquartered in Switzerland, Glasenberg drove the merger of Glencore and Xstrata to form a mining and trading powerhouse.
This is still the largest mining merger ever, with Glencore buying Xstrata for £39.1 billion ($62 billion at the time). It created an entity with revenue of $209 billion in 2012.
Glencore then went stratospheric. The company’s operations in 40 countries handled 3% of the world’s oil consumption and had more ships than the British Royal Navy.
The company is now worth over £52 billion (R1.5 trillion) and is listed on the Johannesburg Stock Exchange.
Glencore retains operations in South Africa through its various coal mines and ownership of Astron Energy, which operates an oil refinery in Cape Town with a capacity to process 100,000 barrels per day.
Glasenberg reinvented Glencore completely in his nearly two decades as CEO, bringing the company out of Marc Rich’s shadow and exposing the inner workings of commodity traders.
The company now runs its own mines across the world, competing with Rio Tinto, BHP Billiton, and Anglo American.
He remodelled the company in his own image, filling its ranks with South African accountants. Farchy and Blas say the country’s “clipped accent” dominates the small Swiss town of Baar.
Glasenberg moved to Switzerland to run Glencore and is an official resident of Australia, where he is the country’s fifth richest person.
‘Mini-Ivan’ Gary Nagle, also a Wits-trained accountant, took over the position of Glencore CEO in 2021 when Glasenberg retired.
Ivan Glasenberg, now worth $8.8 billion (R160.1 billion), regularly visits his relatives in South Africa, where his brother, Martin, runs the family’s 65-year-old business – Elegant Travel Bags.
He is still married and has two children. Glasenberg remains a fitness fanatic, running and walking daily.
- By Shaun Jacobs
- This article was first published on Daily Investor and has been republished with permission. Read the original here.
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