Global mining giant Glencore, which has a large footprint in South Africa, shocked markets on Tuesday when the United States department of justice subpoenaed it for documents under the U.S.' money-laundering and anticorruption laws.
According to Business Day, the news wiped R100-billion off Glencore's market value in a day. The U.S. has not said exactly what the allegations against Glencore are, but reports suggest that late on Monday, the U.S. subpoenaed documents relating to Glencore's business in the Democratic Republic of Congo (DRC), Nigeria, and Venezuela.
Glencore mines cobalt and copper in the DRC and is an exporter of Nigerian and Venezuelan oil, the report said.
Glencore has a long history with South Africa — and its CEO, Ivan Glasenberg, was born here. According to Business Day, Glasenberg and President Cyril Ramaphosa are associates, with the latter's former investment vehicle, Shanduka, having been Glencore's local empowerment partner.
Ramaphosa sold his mining stakes when he returned to politics.
Glasenberg began his career trading coal in South Africa in the 1980s.
According to its website, the company employs 27,000 people in its South African operations, across three provinces, and its South African businesses concern coal and ferroalloys. It has been in the country since 1974.
Glencore has come under fire in South Africa before — for its role in a consortium that bought 10-billion barrels of South Africa's strategic oil reserves at a low price three years ago.
Buoyed by the election of Ramaphosa to the presidency, Glencore was planning to expand its operations into South Africa, according to MoneyWeb. The company was reportedly reaping the benefits of profits from coal and chrome assets, as prices rose amid promises of economic recovery that Ramaphosa's election would bring.
Glencore is planning to buy Chevron Corp's oil refining and fuel service stations in South Africa, the report added, in a $1-billion (~R13.7-billion) deal.
It is reportedly considering buying back Optimum Coal mine, which it famously lost in a controversial deal in 2015, according to Fin24. Then, it was alleged that the Gupta family conspired with government agencies to push Glencore out of the deal so that the family could purchase the mine.