Katanga Mining Company shareholders lost an astounding 98% of their investments this week and are begging Glencore International AG, the world’s largest supplier of commodities and raw materials, to help them out.
Lucky for the citizens of the Democratic Republic of Congo, Glencore will oblige. Glencore will assume a majority shareholder position and essentially run mining procedures, timelines, and regulations in Katanga and a few other Congolese provinces. According to Cailey Barker, a mining analyst in London:
Without this deal, Katanga was probably going out of business. Glencore knows it’s a great asset with cheap, easy metal, and they are willing to put up the money to protect that.”
Apparently, protecting great assets is what Glencore is good at. Investigative reports have revealed that Glencore has busted UN trade embargoes with corrupt and despotic governments by doing extensive business (read: protecting great assets) with the apartheid regime in South Africa, the Hussein administration in Iraq, and loads of other rights loving governments. In Colombia, Glencore subsidiary Cerrejon was accused of forcefully displacing local Wayuu Indians off of their land for mining purposes (read: protecting great assets). Congo, here Glencore comes!
Kabila could follow in the steps of Bolivian president Evo Morales and seize Glencore’s holdings without providing compensation, but given Congo’s awesome history of stringent regulation and human rights protection in mining areas, Glencore will most likely change their organizational culture and mining practices.
Contextually, over past 6 to 9 months, global copper prices have dropped by 65% and cobalt by 66%. It’s worth following these markets as they significantly impact the order and strategic logic of many rebel groups operating in the DRC. Glencore’s presence will inevitably shift the current landscape of violence as they will contract with different rebel groups to assist labor ‘recruitment’ for extraction and quarry exploration.
Bets on which rebel group is most likely to benefit this business transaction?