Glencore's 1st sustainability report shows 18 deaths

LONDON Wed Sep 7, 2011 10:01am EDT

Related Topics

LONDON (Reuters) - Commodities group Glencore released its first sustainability report on Wednesday showing it paid $780,000 in major environmental fines last year and had 18 fatalities.

Glencore, one of the world's largest commodities trader, promised to launch sustainability reporting during the run-up to its listing earlier this year after spending decades as a private company, revealing minimal information about its business to the general public.

In addition to its trading activities, Glencore also produces commodities such as copper in Zambia, zinc in Kazakhstan and coal in South Africa.

The 106-page report said the company incurred four major environmental fines each worth more than $10,000, relating to encroachment on protected land at unidentified locations and for emissions, water discharge and tailings disposal in Kazakhstan.

In contrast, the world's biggest mining group BHP Billiton reported environmental fines of $35,057 for its 2010 financial year ending in June and miner Rio Tinto paid $540,328 in fines last year.

Glencore said it was making progress in installing equipment to capture sulfur dioxide emissions at its Mopani copper operation in Zambia and the project was due to be completed in 2015.

The company reported 18 fatalities last year, of whom eight were contractors. This compares with three deaths for Rio, five at BHP Billiton and 26 at India-focused Vedanta Resources during its 2010-2011 financial year to the end of March.

"Our first priority is to protect our people from all injury and make Glencore a zero-harm operation," the report said.

Glencore also said it had joined the Extractive Industries Transparency Initiative, which seeks to boost accountability and governance by getting companies to publish what they pay governments and the nations to disclose how much they receive from mining and oil production.

Glencore said it had paid $575 million last year in tax and royalties to governments, including $89 million in Africa and $308 million in Asia, from its industrial activities, which had revenues of $10.8 billion.

Glencore's total revenues were $145 billion, the bulk from trading activities, and total core profit was $6.2 billion, but the group has historically paid very low taxes on its trading operation, according to analysts.

Liberum Capital has said Glencore, based in the low-tax canton of Zug in Switzerland, has paid a corporate tax rate close to zero on its trading business up until last year due to its partner ownership structure.

In contrast, BHP Billiton paid $7.1 billion in company taxes on $71.7 billion in revenues and Rio Tinto paid $7.45 billion in net taxes to governments on gross revenues of $60.3 billion.

Zambia, Africa's top copper producer, said earlier this year it planned to audit more miners after previous audits had turned up as much as $200 million in unpaid taxes.

Glencore's Mopani Copper Mines said a leaked audit that found the company had not paid all its taxes was based on flawed methodology.

(Reporting by Eric Onstad; editing by James Jukwey)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Photo

California's historic drought

With reservoirs at record lows, California is in the midst of the worst drought in decades.  Slideshow