Our New Northern Neighbor
- Blog Post by: Paul Austin
- October 17, 2012 - 9:45 AM
Controversial Swiss commodities giant Glencore has acquired significantly more of a financial stake in the PolyMet sulfide mine proposal in northern Minnesota. The company has purchased 5 million shares of PolyMet – putting its ownership of the proposed mine at approximately 25 percent. This latest acquisition is in addition to a relationship formed between the two companies in 2008 that will give Glencore first priority on PolyMet's production of concentrates, metal or intermediate products at prevailing market rates for a minimum of five years.
PolyMet’s continued existence depends on regular infusions of cash from Glencore. In addition, Glencore has the exclusive right to market all materials mined and processed at the PolyMet mine. Although PolyMet characterizes Glencore as merely an investor, PolyMet’s dependency on Glencore’s financing and Glencore’s control over all minerals PolyMet produces gives the company tremendous control over the future of the proposed mine. Glencore will be in a position to deeply influence decisions about how the mine is operated, what types of environmental mitigation is performed, and conditions for workers.
Most Minnesotans are not familiar with Glencore. The company was founded by Marc Rich, the international commodities trader who was indicted by the United States government on charges of tax evasion and illegally making oil deals with Iran. From human rights violations, to dealings with rogue governments and dictators, to causing costly environmental catastrophes, Glencore has left in its wake numerous devastated communities that regret the day they came to town.
Examples of Glencore’s troubling record include:
- The CIA named Glencore as having paid over $3 million in kickbacks to Saddam Hussein to obtain oil during the United Nations’ embargo on Iraq.
- In 2011, Grant Thornton, an internationally renowned accounting consortium, unveiled Glencore’s scheme of inflating costs and diverting profits to overseas tax havens, costing the Zambian government hundreds of millions of dollars in tax revenue
- In 2012, a BBC investigation uncovered evidence that Glencore funded paramilitary operations in Columbia to conduct a massacre of a local Indian tribe so Glencore could acquire the land and expand its mining operation.
- According to Bloomberg BusinessWeek, Glencore has the highest employee fatality rate amongst its closest peers.
Minnesotans expect our corporate partners to behave honestly and ethically. The question for Governor Dayton is, how exactly will it benefit Minnesota to have Glencore doing business here?
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