Global Wrap: Glencore, Friedland and more

IN Global Wrap: Glencore under fresh investigation; Friedland takes on new chair role; Harmony raises for acquisition; and shareholder revolt at Turquoise Hill.
Global Wrap: Glencore, Friedland and more Global Wrap: Glencore, Friedland and more Global Wrap: Glencore, Friedland and more Global Wrap: Glencore, Friedland and more Global Wrap: Glencore, Friedland and more

Staff reporter

Glencore has been informed by the Office of the Attorney General of Switzerland (OAG) that it has opened a criminal investigation into Glencore International AG for failure to have the organisational measures in place to prevent alleged corruption in the Democratic Republic of Congo currently under investigation by the OAG.

Glencore said it would cooperate with the investigation by the OAG.

"This adds Switzerland to the United States, with a Department of Justice Investigation (launched almost two years ago in July 2018) and subsequent US Commodities Futures Trading Commission investigation (CFTC), and the United Kingdom, where Glencore is under investigation by the Serious Fraud Office," RBC Capital Markets said.

"Incrementally we don't see this changing the outlook too much with legal issues already discounting the shares - it does add an investigation in Glencore's home country, and we ponder whether a new investigation increases the time and complexity of various settlements."

Robert Friedland has joined the board of Toronto-listed developer Gold X Mining Corp as non-executive chairman.

Paul Matysek will relinquish the chairman role but will remain CEO.

"The great Michael Jordan once said, ‘some people want it to happen, some wish it would happen, others make it happen'. Robert Friedland has crafted a life of success after success and I'm thrilled that he has joined our board as chairman to keep making it happen for Gold X and our valued shareholders," Matysek said.

Friedland and Matysek previously worked together at Potash One, which was acquired in 2011 for C$434 million.

"Paul's team is now developing an important gold project in Guyana, a beautiful country of which I am very fond and with which I have had a long experience," he said.

"Given the state of the financial markets, and the large existing and open-ended geological potential of this project, I am happy to join Paul and his team at Gold X to lend a hand."

Harmony Gold Mining Company has raised US$200 million in a placement to new and existing institutional investors.

The proceeds will be used to complete the acquisition of AngloGold Ashanti's South African assets, comprising the Mponeng mine and Mine Waste Solutions.

"This successful placement is a validation of our investors' support for Harmony's stated strategy to safely grow quality ounces and increase margins, specifically through the acquisition of the Mponeng and Mine Waste Solutions assets," Harmony CEO Peter Steenkamp said.

"We intend replicating our success in South Africa, with decades of acquiring, operating, and extending the life of mines, and extracting additional value from mining operations."

Finally, the largest minority shareholder of Turquoise Hill Resources, Pentwater Capital Management, has written to the board calling for increased transparency in financial disclosures.

Pentwater claims the board benefits major shareholder Rio Tinto by failing to disclose "important and necessary financial information" to minority shareholders.

It said Turquoise Hill refused to disclose the amount of the cost overrun for the Oyu Tolgoi Shaft 2 and the reason for that cost overrun, as well as lengthy delays.

"How much of the delay was Rio's fault? How much did the delay of Shaft 2 contribute to the cost overruns? This information is certainly available to the company since Shaft 2 was completed over seven months ago. Why won't you let your shareholders know the truth?" Pentwater said.

It said Turquoise Hill refused to disclose if it was misled by Rio over the budget, and refused to disclose the nature of its funding shortfall.

Pentwater has asked for support from minority shareholders at next month's annual general meeting and "take action against the current culture of entrenchment, value destruction and misconduct at Turquoise Hill".

"The interests of the company's minority shareholders have been disregarded for far too long. Your vote is critical to initiate much-needed change, to restore accountability and to safeguard minority
shareholder interests in Turquoise Hill," it said.