The Swiss coal map
Adrià Budry Carbó and Robert Bachmann, 7. November 2022
When Marc Rich & Co. acquired a stake in the company Xstrata in 1990, the latter was still called Südelektra and specialised in funding large electricity infrastructure projects in Latin America. Under the direction of its new majority shareholder, it used its listing on the stock market to raise funds on behalf of Marc Rich & Co., thus initiating its diversification into the mining sector.3
At the same time, Ivan Glasenberg was appointed as the head of the coal division at Marc Rich & Co. – which was renamed Glencore in 1994. For Marc Rich, there was no doubt that Ivan was “the guy who will basically take Glencore to its next stage”.4 From 1998, he drove the company to take on debt to acquire coal mines. Commodity prices were extremely low at the time, but this preceded a super-cycle, a sustained period of growing demand exceeding supply, that delighted the sector. The bet paid off. Up to this point, Glencore had been a pure trader. It then obtained secure access to tens of millions of tons of coal as well as the possibility to influence the price by adjusting production. In 2000, Glencore was already the world’s largest exporter of thermal coal; accounting for a sixth of global trade.5
But these companies’ fortunes were not always plain sailing. In 2002, when Glencore urgently needed liquidity, management devised a plan to set up two coal giants in Zug in the blink of an eye. Listed in London and Zurich, Xstrata sold USD 1.4 billion worth of shares to acquire Glencore’s Australian and South African coal mines. Marc Rich’s former company once again specialised in coal trading, now with production assured by Xstrata – of which he is also the main shareholder, with a 39 percent stake. Glencore retained its empire; Zug its coal hub.
Xstrata was finally absorbed by Glencore in 2013. The latter financed the operation by floating on the London Stock Exchange two years earlier. The company run by Ivan Glasenberg became the uncontested leader in coal. Its power was such that it attracted other companies into its slipstream and led smaller traders to follow a calling to a market that had appeared dead and (nearly) buried.
At the start of the 2000s, most international mining companies set up their commercial department and/or headquarters in Zug, Lugano or Geneva.
Dozens of traders, specialised in selling a commodity that had suddenly become global, swarmed around them. Switzerland became a hub for the international coal trade.
Public Eye counted 245 companies currently registered in Switzerland’s commercial register with the aim to market coal extracted from mines that they own, or have bought on the markets, or in Over-the-counter agreements; or providing financial services associated with coal or one of its derivatives. Their number in Zug is 54; in Ticino it is 55 and in Geneva it is 78.
Javier Blas & Jack Farchy, The World for Sale, Ed. Random House UK, 2021, pages 43 to 71.
Javier Blas & Jack Farchy, The World for Sale, Ed. Random House UK, 2021, page 182.
Javier Blas & Jack Farchy, The World for Sale, Ed. Random House UK, 2021, page 190.
Javier Blas & Jack Farchy, The World for Sale, Ed. Random House UK, 2021, page 183.
Javier Blas & Jack Farchy, The World for Sale, Ed. Random House UK, 2021, page 186–187.