Sergey Donskoy's questions to Glencore plc/ADR (GLNCY) leadership • Q2 2017
Question
Sergey Donskoy questioned Glencore's M&A strategy, asking about its appetite for more coal assets, the IRR hurdles for deals versus returning cash to shareholders, and the company's assessment of political risks associated with its major expansion projects in the Democratic Republic of Congo (DRC).
Answer
CEO Ivan Glasenberg stated that M&A is opportunistic rather than commodity-specific, citing the Hunter Valley deal as a unique situation. He noted a target IRR of around 15% for acquisitions. Regarding the DRC, Glasenberg acknowledged the political risks but highlighted that the operations are geographically distant from the capital. He also pointed out that any major disruption in the DRC would significantly raise copper and cobalt prices, creating a natural hedge for Glencore's broader portfolio.