Glencore hits new high after $180 million corruption settlement with DRC

By Geoffrey Smith 

Investing.com -- Glencore (LON:GLEN) stock opened at its highest level in over a decade on Monday, extending this year's blistering rally after saying it had settled a long-running dispute over corruption allegations in Africa.

The London-listed mining and commodities trading giant said it will pay $180 million to settle allegations of corruption by its executives in the Democratic Republic of Congo between 2007 and 2018, drawing a line under an issue that has clouded its reputation for years.

The settlement adds to the $1.1B that Glencore paid to the U.S. earlier this year after admitting that it bribed officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, and Venezuela, as well as the DRC. It had also paid £280M (£1=$1.2276) to settle related charges in the U.K.

The company hadn't previously indicated that it expected to have to make a separate settlement to the DRC. It had booked provisions of $1.5B against the expected settlements in its 2021 report, and the amount announced on Monday appears to take the overall cost of the settlements above that, even though the company said it had made no new admissions as part of the settlement with the DRC. Parallel investigations by Swiss and Dutch authorities are still continuing.

The market has tended to look through Glencore's legacy corruption problems this year, concentrating instead on the super-profits it has generated as a result of high prices for commodities, especially oil.

"Glencore today is not the company it was when the unacceptable practices behind this misconduct occurred," chairman Kalidas Madhavpeddi said at the time.

While copper, its biggest money-spinner, has experienced a more mixed year due to the stop-start recovery in China, Glencore's trading operations have been able to protect it largely against any volatility.

By 03:30 ET (08:30 GMT), Glencore stock was up 1.6%, as mining stocks in general extended their recent gains on news of further loosening of COVID-19 restrictions in China. China's gradual shift away from the Zero-COVID has given new momentum to miners in the last month. Glencore stock is up 55% year-to-date.