Glencore Inc’s inclination for risk has long been mining industry tale. However, the firm is rapidly expanding into a part of the world that may have been improbable just a few years ago in Minnesota.
The Swiss-based commodity trader took majority control last June of PolyMet Mining Corp, which is growing a mine within the Midwest state close to the Canadian border estimated to carry a century’s price of copper and nickel, essential to the development of electric vehicles.
It’s the first time that Glencore has managed a significant mining project in the USA, the place President Donald Trump has cut mining regulations and red tape in a bid to boost domestic mining, a stamped change from predecessor Barack Obama, who favored stricter oversight of the sector and slowed or suspended several large mining projects.
Glencore for years has operated in areas deemed high-risk, high-reward, making its shares a draw for some buyers who noticed the other conservative investing policies of rivals, together with BHP Group, as too feeble.
However, resentment from institutional buyers and the electric vehicle industry with cobalt mining strategies and dangerous conditions has risen. In June, not less than 41 illegal miners were killed at Glencore’s Congo operations.
In the last year, Glencore’s shares have underperformed global compatriots BHP and Rio Tinto, which have prevented mainly the conflict partly by sticking with higher-margin bulk commodities, together with iron ore and coking coal, both ingredients for steel-making.
“It’s hard to inform if Glencore is doing enough to moderate risk. However, they seem to be taking the initiative,” stated David Neuhauser of Livermore Partners, which holds Glencore shares.