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The next commodities king Add to ...

Ivan Glasenberg moves through his world like a phantom. Almost nothing is known about the CEO of Glencore International AG, other than that he is a South African-born accountant who learned the art of commodities trading from the notorious Marc Rich and went on to make Glencore the world's most successful trader of energy, metals and agricultural products.

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His style, however, is famous. Ask anyone who knows him, or knows of him, to describe the man and you will typically hear "ultracompetitive" or "highly aggressive." Indeed, his only known public interview, given a decade ago to the magazine of University of Southern California's Marshall business school, where he earned an MBA in 1983, highlights his urge to win.

The magazine said that Mr. Glasenberg became the race-walking champion of both South Africa and Israel in his youth. In 1984, he was bound for the Olympics in Los Angeles, but couldn't compete for South Africa because it was bounced from the games - punishment for its apartheid policies. Not to be sidelined, he appealed to Israel and missed landing on the team only because of a technicality related to his Israeli nationality.

Today he is 53 and runs for an hour every day in Zug, the low-tax Swiss canton south of Zurich favoured by the discreetly rich. That's where Glencore is based and where Mr. Glasenberg plans to leverage his own competitive instincts, and those of the 480 partners who own the company, into a new animal.

He plans to do so by delivering Glencore to the stock market, through an initial public offering or a merger with Xstrata PLC, the Anglo-Swiss mining company that trades in London and is owned 34.4 per cent by Glencore. With Glencore at its side, Xstrata in 2006 triggered a sweeping overhaul of Canada's mining industry with its hostile purchase of Falconbridge, breaking up the latter's merger with Inco, which in turn fell prey to Brazil's Vale SA. Several smaller Canadian mining companies got swept up in the consolidation craze.

The groundwork for a public listing is already in place. In December, Glencore sold a $2.2-billion (U.S.), five-year bond to a group of high-profile investors, among them First Reserve, BlackRock (which owns 6 per cent of Xstrata) and GIC, the Singaporean sovereign wealth fund. The bond is convertible into Glencore equity upon an IPO or merger and gives Glencore an implied value of $35-billion, though some analysts estimate its worth at $50-billion or more. The company said the bond is "part of an overall strategy to move Glencore toward the public equity markets."

Whether Glencore takes the IPO or merger route, the company's cherished privacy will all but vanish. But it seems a small price to pay for the transformation of Glencore, giving the company the potential to become an overnight mining super-major with super-sized ambitions and a currency to pay for them. Last year, Xstrata, led by fellow South African Mick Davis, tried to buy Anglo American PLC in a no-premium deal and was told to take a hike. The next offer could well be launched by the new Glencore-Xstrata, which would have a market value of about $90-billion, more than 50-per-cent greater than Anglo's, and would come with an executive team that would feel at home in a pool of great white sharks.

Will Mr. Davis buy into Mr. Glasenberg's dream of creating a colossus with more than enough firepower to compete with the Big Four of the global mining industry - BHP Billiton, Rio Tinto, Vale and Anglo? And if he does, would the new company be setting itself up for an epic culture clash?

Michael Komesaroff, a former Rio Tinto executive who owns Australia's Urandaline Investments, thinks it could. "The culture of a trading company is very different from the culture of a mining company," he said. "The traders are paid huge bonuses, not the mining side. How do you merge those two models? I'm not sure they are compatible."

Assets and trading

Glencore's traders are the dark princes of the commodities trading business. They don't give interviews, even though Glencore discloses more and more financial information as it creeps toward a public listing.

Mr. Glasenberg declined to comment for this story. Still, his intentions are broadly known because he regularly talks to credit analysts and the investors who buy Glencore bonds, and sits on the boards of several public companies. He is a director of Xstrata, Minara Resources, the Australian nickel producer that is 71-per-cent owned by Glencore, and Rusal, the newly listed Russian aluminum giant controlled by Oleg Derispaska. Glencore owns about 9 per cent of Rusal.

But public companies are not part of his career development, for he emerged from the ultrasecretive global trading web spun by Marc Rich.

Mr. Rich, who was born in Belgium and holds Spanish nationality, was the most wanted fugitive in U.S. history until his pardon by Bill Clinton on his last day in the White House in 2001. He made fortunes from trading oil and other commodities, though pushed his luck as far as the U.S. Justice Department was concerned.

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