Economy

Glencore agrees $180m settlement with DR Congo over bribery allegations

Glencore reaches $180 million settlement with DR Congo over bribery claims as FTSE 100 miners face fines of more than $1 billion by 2022

  • Glencore has already agreed to pay £1.2bn in fines this year to settle claims
  • In the summer, the commodities trader was fined £900 million by the US Department of Justice
  • These scandals have overshadowed the excellent results of the Swiss-based company

Glencore has agreed to pay $180 million to the Democratic Republic of Congo to settle all alleged corruption claims in the country over an 11-year period.

It has already agreed to pay fines totaling £1.2 billion this year in connection with bribery offenses in multiple states in Africa and South America, and the manipulation of fuel oil prices in the US.

Swiss mining giant FTSE 100 said the latest deal covers all activities that have been the subject of investigations by the DRC’s National Financial Intelligence Service and Department of Justice, and the US Department of Justice.

Settlements: Glencore has already agreed to pay fines totaling £1.2bn this year in connection with bribery offenses and the manipulation of fuel oil prices

In the summer, the commodities trader was fined £900 million by the US Department of Justice after he was caught bribing officials in seven countries and manipulating fuel prices at two commercial shipping ports.

An investigation by the department found that Glencore had handed over approximately $27.5 million to third parties in the DRC, part of which was intended to be used as bribes to officials “to secure improper business advantages.”

Glencore’s assets in the Central African Territory include the mining operations of Mutanda and Katanga, both of which produce copper and cobalt.

Cobalt is a common element used for batteries in electronic devices such as mobile phones and laptops, while copper is considered a vital ‘energy transition’ metal given its prominence in technologies such as wind turbines and solar panels.

Kalidas Madhavpeddi, the company’s chairman, said: ‘Glencore is a long-standing investor in the DRC and is pleased to have reached this agreement to address the consequences of its past conduct.

“Glencore has been actively promoting its ethics and compliance program in the DRC in recent years and looks forward to working with DRC authorities and other stakeholders to facilitate good governance and ethical business practices in the country.”

Today’s fine follows a judgment from Southwark Crown Court last month that ordered the group to pay £281 million – the largest fine ever imposed on a company by a UK court – following an investigation by the Serious Fraud Office (SFO).

That investigation found that Glencore’s London-based oil trading desk had bribed more than £24 million to gain preferential access to shipments in Cameroon, Nigeria, Equatorial Guinea, Ivory Coast and South Sudan.

Some payments were found to have been in cash via private jet, while others were disguised as “service fees” or “signing bonus” in financial reports.

These scandals have eclipsed the record results of the London-listed multinational, whose adjusted profit in the first half of this fiscal year was $18.9 billion on rising commodity prices.

Rising thermal coal prices provided a particularly significant boost to the group’s performance due to shortages resulting from Covid-related lockdowns and the Russian invasion of Ukraine.

Glencore shares were up 2.1 percent by mid-morning on Monday to 569.8 pence, meaning their value has risen by more than half over the past 12 months.

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Jacky

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