A Scary Merger

More control? What if the most powerful companies in the world become even more powerful?

The call it thebiggest company you never heard of.” But soon you will hear about it because its becoming even bigger. Next month we will hear about a impressive merger in the business world: the one of Anglo-Swiss multinational mining company Xstrata and the Swiss multinational commodity trading and mining company Glencore. Glencore is by the way already the world’s largest commodities trading company with a share of 60% in zinc market and 50% share of the copper market. They are further highly involved in grain and oil trading. Xstrata is the world’s largest producer of ferrochrome. In short: these two companies are already HUGE by themselves. Now, they might become one. Which gives them … more money and more control.

As Foreign Policy writes: “Already the world’s biggest middleman, (Glencore) now wants to control the entire business chain, from mines and smelters to storage facilities for finished products, and from pumping oil to shipping it to refineries, while trading and hedging all along the way, industry experts say.”

What is interesting is that both companies have an incredible record of human rights violations. Right now, more and more people in Latinamerica protest against the mining companies and most of these protests are directed at one of the two giants we are talking about today. In the Dominican Republic, Argentina and Peru people protest against Xstrata and in Colombia mine workers strike against the conduct of Glencore.

In May, for example, two people were killed and 50 injured in protests against the Xstrata copper mine Tintaya in Peru. The government suspended the freedom of assembly. The protesters say that the mining causes terrible environmental pollution and that the region is not benefitting enough from what is estracted from their land.

Glencore, on the other hand is buying minerals from children. Kids as young as ten in teh Democractic Republic of Congo climb down small mines to search for cobalt and copper. Obviously, they are not at all protected.

In Bolivia, Glencore is no longer welcome. Their mines have been repeatedly seized by the government.

Here is what the people of Public Eye wrote about Glencore when it won the Public Eye Award in 2008: “Glencore is quite literally impenetrable, not just because of the coal dust rising from its mines in Colombia but also because it is very secretive about its business practices. … Glencore has no scruples when it comes to mining raw materials. Colombia is the best example. Here, Glencore’s coalmines are causing massive pollution that represents a serious health hazard for the local population. True to form, the commodities multinational is very anti-union and fires workers when they try to organize themselves.”

People in Switzerland at the same time feel ashamed of these Swiss-based companies and feel for the people in the affected regions. That is why the protests have also reached the small European country. Tages Anzeiger, one of the most-read newspapers in Switzerland titled in July: Glencore and Xstrata are becoming a risk for the reputation of Switzerland. The local group “Solidarity with the victims of comodity trading multinationals” criticize that these companies infringe human and social rights, pollute the environment and increase the global distance between poor and rich. More and more initiatives in Switzerland are emerging which try to control the companies which are based in the country.

4 thoughts on “A Scary Merger

  1. The Swiss shouldn’t feel guilty, its the fact that enormous hungry countries can hide their money in endless Swiss bank pockets that lures them to being “Swiss” in the first place. Unscrupulous, anti competitive, underhanded and dirty and now incredibly powerful…how much further up the chain can they go?

    • It’s good they do feel guilty though coz that’s the only way I can imagine that the government will act to make this whole business with low taxes and secret bank accounts more transparent and “fair”. After all…Switzerland is so proud of its direct democracy.

      • Yeh but never underestimate the incredible persuasive power of enormous business to persuade governments to keep doing what they do best (shelter the rich and punish the poor). As you say…at least “guilt” is a good start 🙂

  2. Thanks for raising awareness. Like all the media mergers and acquisitions in the US, it can’t be a good thing when one firm (or a small group of firms) dominates an industry.

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