PolyMet & Glencore

Glencore is a huge multinational corporation based in Switzerland, with more than $215 billion in annual revenues and $124 billion in assets (2019). WaterLegacy began to investigate Glencore’s financial relationship to the PolyMet NorthMet copper-nickel mine project as early as 2011 in an Overview report on PolyMet and Glencore.
In 2018, when details of Glencore’s control of PolyMet were revealed in stock exchange disclosures, WaterLegacy petitioned the Minnesota Department of Natural Resources (DNR) to require that Glencore be named on PolyMet permits. Putting Glencore on the permit would hold Glencore financially responsible for any costs or liabilities resulting from PolyMet pollution or tailings dam failure.

WaterLegacy’s appeal of the PolyMet permit to mine asked the Minnesota Court of Appeals to require that a contested case hearing on the permit review whether Glencore should be named on the PolyMet permit to mine.

While appeals of the DNR permit to mine were pending, Glencore purchased a 72% controlling interest in PolyMet and assumed the power to take over PolyMet’s board at any time. On January 13, 2020, in its opinion overturning the PolyMet permit to mine and requiring contested case hearings, the Minnesota Court of Appeals specifically ruled that the required contested case hearings should examine whether Glencore should be named on the PolyMet permit to mine.

WaterLegacy and Friends of the Boundary Waters outside of the Governor’s mansion on Halloween 2019. Photo by Eoin Small.

Why should we care if Glencore controls the PolyMet mine?

Labor Abuses & Financial Exploitation

Glencore is notorious as one of the worst corporations in the world for labor abuses and financial exploitation of the communities in which its mines are located.

A police officer takes aim at an indigenous woman protesting a Glencore mine in Peru in May 2012. Photo by Miguel Gutierrez.

  • In Peru, workers at the Antamina mine were subjected to health and safety violations on a regular basis and were denied fair payment for bonuses and overtime.
  • In Australia, Glencore refused to re-hire former employees at the Collinsville mine who were union members and evicted the former workers and their families from company housing.
  • In Colombia, a paramilitary group responsible for murdering trade unionists trained at a camp located inside a Glencore mine.

Glencore is truly deserving of this recognition as one of the most irresponsible companies on the planet… Glencore has mistreated workers and harmed communities on nearly every continent.

  • In 2018, a coalition of industrial unions representing Glencore workers in Argentina, Australia, Bolivia, Canada, Chile, Colombia, the Democratic Republic of the Congo, Germany, Italy, Norway, Peru, South Africa, the United Kingdom, and Zambia put together a Special Report: Glencore, the commodities giant with no soul. The Report emphasized financial exploitation as well as human rights abuses:
The McArthur River mine in Australia has not paid royalties to the government since it opened in 1995, and in 2017, the tax office ruled that Glencore had understated its taxable income by diverting US$190 million offshore. The company was also accused of tax evasion in Zambia in 2011, and in 2018 the UK Court of Appeal upheld sanctions against Glencore for tax evasion.

Toxic Pollution & Evasion of Responsibility

Glencore has caused toxic pollution and has sought to evade responsibility for pollution clean-up on several continents.

  • WaterLegacy’s PolyMet & Glencore report summarized Glencore’s environmental history, which includes fish kills and drinking water contamination resulting in hospitalizations of 800 people at Glencore’s Mopani mine in Zambia and an unfunded pollution liability of $411 million left behind at Glencore’s Metaleurop copper processing subsidiary in France.
  • In 2017, Glencore proposed to massively expand its controversial McArthur River lead and zinc mine in Australia. Glencore proposed that responsibility for the mine site would revert to the government just 50 or 100 years into a rehabilitation and monitoring process expected to take 1,000 years.

Bribery & Corruption

Glencore has a long and continuing history of bribery and corruption.

  • In 2018, the U.S. Department of Justice launched an investigation of Glencore for money-laundering and violation of the Foreign Corrupt Practices Act.
  • Glencore has also been under scrutiny for circumventing U.S. sanctions against Russia. Glencore participated in a deal where Glencore and Qatar provided Russia with a huge cash infusion by temporarily “buying” an $11.5 billion stake in Russia’s state-owned oil company.
  • In July 2018, shareholders filed a lawsuit against Glencore for losses due to failure to disclose U.S. Department of Justice investigations. On January 7, 2020, the shareholders filed an amended class action complaint, which Glencore is now seeking to dismiss. Among other claims, the amended class action complaint against Glencore alleges:
Glencore operations are far riskier than its competitors. Glencore often exceeds the limits of what is allowed in the modern global economy. Glencore does so by doing business in some of the poorest and most corrupt countries in the world.

Glencore engaged in corrupt practices and illegal payments in the DRC [Democratic Republic of the Congo], Venezuela, and Nigeria that subjected Glencore to increased risks of scrutiny by U.S. and foreign government bodies . . . The risk resulted in investigations into Glencore’s compliance with money laundering and bribery laws, as well as the Foreign Corrupt Practices Act. While the U.S. Foreign Corrupt Practices Act makes it a crime for companies to bribe overseas officials to win business, this practice was commonly used by Glencore to gain an economic advantage.

What do we know about Glencore’s control of PolyMet?

In late March of 2018, right after the formal comment process on the PolyMet permit to mine closed, PolyMet was required to file an NI 43-101F1Technical Report on the Canadian stock exchange information site. The Technical Report revealed:
  • Glencore owns all the rights to all products from the PolyMet sulfide mine and plant for the entire duration of mine production. 
  • Glencore advises PolyMet on finances, technical issues and detailed project design for the PolyMet mine project. By March 2018, Glencore had three members on PolyMet’s Board of Directors and a member on every PolyMet Board committee.
  • From 2012 to 2018, projected NorthMet mine costs skyrocketed. At the same time, the rate of return has dropped by two-thirds, from 30.6% to around 10%, making PolyMet much less attractive to independent investors.
  • The March 2018 Report acknowledged PolyMet’s dependence on Glencore for financing, stating that the risk that PolyMet’s mine project will fail due to failure to raise money “is partially mitigated through the company’s ongoing relationship with Glencore.” When the Report was filed, Glencore had options to buy up to 40% of PolyMet stock.

On  June 27, 2019, the Star Tribune reported that Glencore’s ownership of PolyMet had increased from 29% to a 72% majority ownership.

Paula Maccabee, the lawyer for Minnesota-based WaterLegacy, called Glencore’s majority role a “debacle.”

She said she’s concerned that Glencore is not on any of the PolyMet permits, nor does the name “Glencore” appear in the financial assurance deal the state signed with PolyMet in its permit to mine. “Glencore is not responsible for any (of PolyMet’s) mine treatment, financial assurance or any liability for mine toxic pollution or a catastrophic dam failure at the tailings waste disposal facility,” Maccabee said.

On June 28, 2019, PolyMet filed an official Material Change Report with Canadian securities regulators reflecting Glencore’s 72% ownership. On July 2, 2019, PolyMet filed a filed an Early Warning report with Canadian regulators revealing that Glencore and PolyMet had entered into a corporate governance agreement allowing Glencore to take over the PolyMet board of directors at any time.

What can you do?

WaterLegacy supporters have submitted over 550 comments, emails and petitions calling for scrutiny of Glencore and requesting that Minnesota require that Glencore be named and financially accountable on any PolyMet permit to mine.

You can continue to communicate this message to Governor Tim Walz. Paste the following text or draft your own variation:

Glencore is the real power and money behind the PolyMet NorthMet project. I urge you to investigate Glencore’s history of harming the environment, evading taxes, and abusing workers worldwide. At very least, don’t allow Glencore to take profit from Minnesota copper-nickel minerals without being on financially responsible on the permit to mine and water pollution permit for costs of mine reclamation, long-term pollution and liability due to toxic seepage and potential dam failure.
Volunteer holding paper maché pumpkin that reads: Put Glencore on all PolyMet mine permits. Governor’s mansion, Halloween 2019. Photo by Eoin Small.