Photographs by Per-Anders Pettersson for Fortune

Glencore Digs Out of the Abyss

The commodities behemoth faced a ­crisis last year as prices of metals, grains, and petroleum products—as well as the company’s stock price—plummeted. A rare inside look at how the secretive Swiss giant survived and how it plans to thrive again in a post-boom world.

Shimmering below our eight-seater plane in the dazzling African light is a mammoth hole gouged out of the terrain of the Democratic Republic of the Congo. From the air, the green and black hues offer just a hint of the huge mineral wealth lying under one of the poorest, most remote countries on earth. Yet it is only after we have landed on a tiny airstrip and bumped along in an off-road vehicle for half an hour past mud-brick houses that the full extent of those riches becomes clear. From the rim of the pit, the rock 450 feet down at the bottom looks as if it has been drawn with neon Crayolas, its green popping against the deep-black earth.

“Some of the richest ore bodies anywhere are in Congo, and one of them is here,” says Pedro Quinteros, an engineer from Peru who has excavated minerals for decades on three continents and now serves as CEO of Mutanda Mining, the nine-year-old cobalt and copper facility we’re visiting. Here parts of the ore, he says, can be up to 30% copper. “In my country it is 1% copper. In Chile it is less than 0.5% copper,” he says with a note of awe, peering down to the bottom of the wide pit, where 110-ton trucks scoop up the rock and soil and then rumble back to the top carrying their priceless haul. “I have never seen anything like it in my career.”

As unique as this bounty is, so, too, is the company that owns it: Glencore. To most regular folk, the company’s name is largely unknown, and that’s not by accident. The commodities behemoth’s headquarters are far from the frenzy of Wall Street and the City of London, in the sleepy, low-tax town of Baar, Switzerland, near Zurich. In the quiet atmosphere inside Glencore’s four-floor glass-and-steel complex there, traders and managers move markets while looking out on rolling hills with cows grazing on them, the very picture of a Swiss chocolate box; indeed, visitors are offered fine Swiss chocolates preserved in climate-controlled wooden boxes.

From this idyll, Glencore has for decades carefully guarded its privacy while building one of the greatest—and, some would say, quite notorious—natural-resources operations that the world has ever seen. Its head-turning $170.5 billion in sales in 2015 is enough for Glencore to rank No. 14 on this year’s Global 500, far above household names such as AT&T, Chevron cvx , and GE ge . And the breadth of its reach is perhaps unsurpassed by any other company.

Click to enlarge.

In fact, the commodities that Glencore mines and moves now touch virtually every facet of our hyperwired lives. Charge your cell phone, turn on your computer, flick the light switch, drive your car, ride a train, take a flight, eat a bowl of cereal or a plate of sushi, or drink some sugared coffee—Glencore could have had a hand in all of that. The company uses warehouses and port facilities in Colombia, Australia, Peru, the Netherlands, and elsewhere, and in July, its fleet of 700 vessels (mostly chartered) outnumbered the U.S. Navy’s. And it is the only sizable company of its kind that mines, ships, and trades dozens of commodities in dozens of countries; its competitors, such as Cargill, Rio Tinto, and BHP Billiton, do only some of those things.

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Glencore’s model is classic arbitrage: Its hard-charging, ambitious traders in Baar, who can earn millions annually, boast that if something can be moved, they can sell it—and they do, on a big scale, making a small margin on every kilo, ton, and boatload by efficiently delivering commodities to customers. “It is hugely important for the world economy,” says Paul Gait, a senior analyst for Bernstein Investment Research and Management in London. “The world will always need raw materials. That is one thing that is certain.”

The chief architect of this empire is Ivan Glasenberg, 59, Glencore’s billionaire CEO—a laser-focused South African, company lifer, marathon cyclist, and onetime competitive racewalker. Since taking charge at Glencore in 2002, Glasenberg has quietly expanded his company’s footprint so that it now stretches from the Arctic Circle to the Australian desert and every region in between.

“Some of the richest ore bodies anywhere are in Congo, and one of them is here,” says Pedro Quinteros, an engineer from Peru who has excavated minerals for decades on three continents and now serves as CEO of Mutanda Mining, here parts of the ore, he says, can be up to 30% copper. “In my country, it is 1% copper. In Chile it is less than 0.5% copper. I have never seen anything like it in my career.”

Glasenberg’s company was one of the biggest beneficiaries of the long China-driven commodities boom that began around the turn of the millennium, as the cost of everything from oil to iron ore to zinc spiked and investment capital followed. Glencore was stung with equal force by the dramatic collapse in the prices of raw materials that began in 2014.

By the fall of 2015 some investors had begun to look at Glencore’s heavy debt load and wonder if the company could remain solvent. The stock tanked, dropping as low as 87% below its 2011 IPO price at one point. Glasenberg, a highly disciplined type who is up at 5 a.m. most days to cycle 30 miles before work, suddenly found himself scrambling to convince the investment community that his once-unassailable kingdom wasn’t headed for bankruptcy. He swiftly enacted a plan to sell off assets and reduce Glencore’s debt. The stock has rebounded somewhat but remains way off its highs.

GCO.chart-2b
Source: Bloomberg

In a rare move, Glasenberg cast aside his inherent aversion to publicity and agreed to give Fortune an inside look at his company and, even more unusually, to offer his own expansive views about its well-being. In his first interview outside of earnings season since 2013, he describes the selloff of Glencore stock not as a near-death experience but as an extreme response to a normal swing in the resources markets.

“Glencore was down significantly because that is what commodities do,” Glasenberg tells me evenly, sitting in a serene conference room in Baar. “I have seen this many times in my career.”

But the world has not often experienced such a large-scale and sustained bull market for raw materials as the one that has recently fizzled. The question is, How will Glencore operate in a post-boom world?

Glencore’s gargantuan size makes it an inevitable target of suspicion. And for years the company’s critics—mostly activists and NGOs—have claimed that Glencore has profited by nurturing political connections in troubled, often corrupt countries. Glasenberg has vehemently rejected the claims, and he says that Glencore makes a crucial contribution in the countries where it operates.

But Glencore will probably never escape such questions completely. The truth is, the company was born out of controversy.

A worker operates the copper smelter at the Mopani mining facility in Zambia. The mine employs about 14,000 people.

Glencore emerged from the commodity-trading business of Marc Rich, a ruthlessly savvy trader who effectively invented the concept of spot pricing—giving a current market price for raw materials rather than their futures price—in oil in the 1970s. In 1983, U.S. officials indicted Rich on charges of tax evasion, racketeering, and trading with the enemy, including trading in Iranian oil during the U.S. hostage crisis and selling oil to apartheid South Africa. Rich fled to Switzerland, where in 1994, Glasenberg and other senior managers bought him out for a reported $600 million and renamed the company Glencore. President Bill Clinton pardoned Rich on his last day in office in 2001, in an act that provoked a firestorm in Washington.

All that, however, is history—one that is barely mentioned in Glencore’s corporate literature. Insiders see Rich’s legacy in the company’s hard-driving trading culture and its relatively flat structure (the CEO is “Ivan” to staff), with fresh young traders rewarded for making big decisions. The company hires its traders straight out of university, then keeps most of them for life. The inbred culture stresses sleeves-rolled-up grit over formality, discretion over self-promotion.

An equally important legacy is Glasenberg himself, whom Rich hired in 1984 from the University of Southern California’s MBA program, then groomed as a trader of coal in Asia, where he ran Glencore’s Hong Kong and Beijing offices, rising to become Glencore’s head of coal in 1990.

Founding Father: Glencore grew out of the commodity-trading business of Marc Rich, an industry pioneer who fled the U.S. for Switzerland in 1983 after being indicted for tax evasion and racketeering. Rich was pardoned by President Bill Clinton in 2001.Photo: Jim Berry—Camera Press/Redux

After decades of shying away from public scrutiny, Glencore finally lifted its veil of secrecy by going public in May 2011, with a $10 billion listing, which valued Glencore at $60 billion. It remains the biggest ever IPO on the London Stock Exchange. The company is also listed on the Hong Kong Stock Exchange. The company’s 1,634-page prospectus set investors afire. Glencore revealed at the time that it was mining or trading a whopping 60% of the zinc metal in the “addressable market”—that portion (less than half) of the global market open to third-party buyers and sellers—as well as 50% of the copper and 45% of the lead. That was not all, however. Glencore also produces and trades large quantities of grains and soy; it has oil and natural-gas concessions in Equatorial Guinea, Cameroon, and Chad; and it owns a stake in Russian energy giant Russneft.

Glencore finally had the cash to snap up the major assets it had been eyeing for years. The IPO also turned several execs, including Glasenberg, into billionaires, since its senior managers control about one-third of Glencore. Today Glasenberg owns more than 8% of Glencore, and in 2014 he earned $198 million just in dividend payments alone. When the company went public, he paid $420 million in taxes to the tiny Swiss community of Rüschlikon where he lives, prompting local officials to hand every other resident a windfall tax break.

In 2013, Glasenberg led Glencore through a transformational acquisition. The company bought the remaining 60% stake it didn’t own in Xstrata, a Swiss mining conglomerate that it had created. That left Glasenberg sitting atop a giant that controlled every phase of commodities—from mining to finished product—allowing Glencore to offset downturns in one part of the business against another. The combined company generated $221 billion in sales in 2014, propelling it to No. 10 on the Global 500 last year. Glasenberg’s strategy seemed unstoppable.

But the giddiness was bound to collide with some hard realities. Glencore’s growth had been fueled by the rise of China, which consumes an astonishing 50% of the world’s aluminum, copper, nickel, and zinc. Racing to meet China’s almost insatiable hunger, the mining industry plowed more than $1 trillion into digging new mines and upping production in the 2000s, greatly increasing the amount of commodities for sale on world markets. Last August the boom came to a shuddering halt. China devalued the yuan, admitting that its economy’s growth had slowed more than expected and sending commodity prices plummeting.

Despite jitters on Wall Street, the Glencore traders in Baar were only slightly concerned. Many had lived through the 2008 global financial meltdown, when customers canceled their orders, leaving Glencore vessels idling at sea. Back then the world had appeared dangerously off-kilter. This time, China was still buying huge amounts of commodities, even if less than before.

Global Power: Glencore is the only sizable company of its kind that mines, ships, and trades dozens of commodities in dozens of countries around the world. Because metals are often found together, some of the sites shown in the map above represent areas producing more than one material. Global Power: Glencore is the only sizable company of its kind that mines, ships, and trades dozens of commodities in dozens of countries around the world. Because metals are often found together, some of the sites shown in the map above represent areas producing more than one material.

Yet unlike in 2008, Glencore was now a publicly traded company. Glasenberg’s unflustered response was no match for the intense anxiety of investors, who wanted swift action—something he was quickly forced to address. “If you are not public, you can say, ‘I don’t care what you think. We can manage,’ ” he says. “However, if you are a public company, it can hit your share price.”

That much became clear on Sept. 28, when Investec, a wealth and asset management company in London, emailed its clients a research note under the ominous title “Bermuda Triangle.” It warned that major mining companies like Glencore, Anglo American, BHP Billiton, and Rio Tinto had “gorged themselves on cheap debt” during China’s boom and now perhaps owed more than their assets were worth. Unless commodity prices rose quickly and unless mining companies balanced their budgets, Investec said, “nearly all the equity value of both Glencore and Anglo American could evaporate.”

The note hit like an earthquake. That day Glencore’s stock crashed 29%. It plunged further the next day, eventually falling to a small fraction of its IPO price. The panic escalated. One New York analyst declared on CNBC that “Glencore is like Lehman Brothers”—a doomed company whose downfall would have a global impact.

Glencore’s debt—measured as “net debt,” which excludes about $15 billion worth of marketable inventories—was at $29.6 billion. While Glencore felt that debt load was manageable, investors did not. So Glasenberg whipped into action with a strategy to slice Glencore’s net debt to about $18 billion by the end of 2016. He and his senior managers put $2.5 billion of their own money back into the company; Glasenberg alone put in about $210 million. They also agreed to forgo this year’s dividend payout, which would have totaled about $2.5 billion.

Glasenberg flew to the U.S. for a weeklong road show later in August, reassuring investors that Glencore was not in trouble and that China’s growth would pick up. What’s more, he pointed out, Glencore was still spinning off $3 billion in free cash a year. Nevertheless, Glasenberg has followed through on the plan to unload assets: In June, for example, Glencore sold 50% of its agriculture business for $3.1 billion to two Canadian pension funds, and it has put its Australian rail infrastructure and its gold mine in Kazakhstan up for sale.

Glencore CEO Ivan Glasenberg, 59, a company lifer who took the reins in 2002, has quietly expanded his company’s footprint so that it now stretches from the Arctic Circle to the Australian desert, and every region in between.

Today the Glencore CEO believes that the industry is suffering from a glut of commodities on world markets. If mining companies could only get a handle on production, Glasenberg says, prices would inevitably rise. “Mining companies have to wake up and stop increasing supply and look at demand,” he says. “And that is it.”

When you travel around the Copperbelt in Africa, it quickly becomes clear just how big a player Glencore is. At the tiny Kolwezi airport in the DRC’s southernmost province of Katanga, Glencore paid to rebuild the small runway and put up new buildings in 2011. On the road leading to the Mutanda copper mine, our vehicle rumbles over a new bridge crossing the Lualaba River, funded recently by Glencore at a cost of $10 million.

Sprawled across the wide middle of Africa, the vast Congo has long defined the term “resource curse,” used to describe countries whose immense mineral resources—it has tin, cobalt, copper, diamonds, gold, and other reserves—have led to rampant corruption and conflict, not development. Congo ranks 176 out of 188 countries on the UN’s development ranking, with a life expectancy of just 57 and an average income of about $446 a year. Hundreds of thousands of people have died in decades of war. And for years Katanga’s residents have raged against the government 800 miles away in the capital of Kinshasa for failing to invest enough in the province where the country’s copper is mined.

Passing through the gates of Glencore’s Mutanda copper mine, however, is like crossing into another country. Inside, the well-ordered, high-tech facility gleams, its 24-hour operation calibrated for maximum efficiency. The state-of-the-art equipment is a function of its newness. Rare for Glencore, the company built Mutanda from scratch. Nine years on, it now produces more than 220,000 metric tons of copper and 25,000 tons of cobalt a year. Signs remind the 5,000 workers that protective gear is mandatory and that drunkenness is a firing offense. Glencore has built a school nearby for workers’ children, and in case of emergencies all local residents can receive free treatment at Glencore’s hospital. Skilled staff live in cottages inside the compound for eight-week stretches and dine in a spacious clubhouse.

GCO.chart-1

What has sparked controversy is Glencore’s series of deals in Congo. The mining giant invested $200 million in 2007 for a stake in Mutanda, then acquired a majority stake in 2012 for an additional $420 million. It now owns 69% of the mine. Twenty six miles away in the town of Kolwezi, Glencore in 2008 found itself with a stake in Katanga Mining, a public company listed on the Toronto Stock Exchange, when a company it had a piece of merged with it.

In May 2012, just as Glencore was preparing to hold its first annual general meeting, in a casino near Baar, the London-based anticorruption NGO Global Witness emailed a damning memo to shareholders, alleging that Glencore’s acquisitions in Congo had “taken place amid opaque dealings.”

One question the report raised was why Glencore had turned down a chance to buy its remaining stake in Mutanda, in March 2011, from the government mining company Gecamines. Instead, Global Witness asserts, Glencore asked the government to sell it to a shell company owned by Dan Gertler. Gertler, an Israeli businessman with strong ties to Congo’s President, Joseph Kabila, still owns 31% of Mutanda through Fleurette Group, his Amsterdam-based company. Gertler, says Global Witness, snapped up the high-grade copper reserves for a mere $120 million—well below the estimated $849 million that the 20% stake appeared to be worth at the time Glencore went public, according to Global Witness, based on calculations by Glencore’s outside analysts for the IPO.

Global Witness’s suspicion—never proved—is that some of that money may well have ended up with Gertler’s friend, President Kabila, and that just as Gertler needed Glencore’s deep pockets to mine the minerals, Glencore likewise needed Gertler as a conduit to the government. “Gertler was given an easy, maybe a free, ride on what was the crown jewels of the DRC,” says Daniel Balint-Kurti, commodities researcher for Global Witness.

Workers move batches of copper sheets at the Mopani mine in the Copperbelt region of Zambia. The sheets are trucked to ports such as Dar es Salaam, Tanzania, and Durban, South Africa.

Glasenberg and others in Glencore have strongly denied the group’s findings, and Glasenberg twice invited Global Witness to Baar to tell the group so himself. The company claims its loans to Gertler were not unusual in the high-priced world of commodities and that they did not underpay for the mineral resources. Gertler has fervently denied buying companies in Congo below fair value.

“Why did we buy them so cheap?” Glasenberg says to me about the suspicions of a corrupt deal. “At today’s copper price, they ain’t cheap.” Besides, he says that, like all deals, it will take years before Mutanda’s real value is clear. “You don’t know if you paid the right price or not,” he says. “You know in 10 years. Ten years later we will open a bottle of champagne” if it succeeds.

Still, says Balint-Kurti of Global Witness, “we stand by what we said.”

Left unsaid in these criticisms is that it costs billions to dig out of the earth the minerals that keep our modern lives ticking and then to truck them hundreds of miles across multiple borders to a sea terminal. That is an undertaking only a few companies make. Take Mutanda, which lies in a sprawling, poor, dysfunctional country whose government has no means of exploiting its mineral wealth itself. Several international mining companies have shied away from operating in Congo. In May the U.S. company Freeport McMoRan sold its huge Tenke Fungurume copper mine to China Moly, and left.

By contrast, Glencore, with deep Africa experience and a stomach for risk, estimates it has invested about $5.5 billion in the country, including on infrastructure like water and electricity that it needs for its mines and that also have huge benefits for regular Congolese. “Reserves in the ground are worth nothing unless you can get it out,” Glasenberg says. “They need us coming in to develop it, and in the end what we pay for the reserve is irrelevant.”

The same is true across the border from Mutanda in Zambia. Unlike Congo, Zambia has had a well-ordered government for much of its history since gaining independence from Britain in 1964, with no civil wars. But in mining, Congo and Zambia share a sad history. Both governments took majority stakes in their copper mines, previously run by multinationals, after independence. And during the years of government control the shafts and rigs steadily fell into disrepair.

By 2000, Zambia was producing fewer than 300,000 tons of copper a year—half the amount it was producing 50 years before. Desperate for cash, Zambia put its mines up for sale. Glencore pounced, buying two big mines for an undisclosed amount in 2000—just as China’s boom was taking off. It renamed them Mopani Copper Mines, after Africa’s iconic shade tree.

Workers at Glencore’s Mopani Copper Mine in Zambia wait to descend underground for an eight-hour shift. The company has invested $1.1 billion to sink three new, much deeper shafts.

Glencore found rusted shafts and tapped-out upper-level ore beds from decades of digging. The company weighed its choices: Plow billions into sinking new, much deeper shafts, or shut down and leave Zambia. Glencore opted to sink three shafts, two of them more than a mile deep, at a cost of about $1.1 billion.

The company has invested heavily in other ways too, including opening a $21 million miner-training center in 2014 for its workforce of about 14,000 people. It has also established antimalaria treatment programs, two hospitals, and four schools. “Glencore decided we are in Zambia for the long haul,” says Mopani CEO Johan Jansen, a South African like Glasenberg.

For Glencore’s long haul as a public company, Glasenberg must continue to do what investors have demanded over this bruising year: Control spending and cut debt. Meanwhile, it waits for markets to rationalize.

Last September, Glencore suspended its Katanga Mining operations in Congo. Some 1,400 workers left, and about 4,000 stayed for when the mine reopens late next year. Tragically, seven people died in March in a landslide while maintaining the shuttered mine. Glencore insists the mining suspension is not part of its debt-reduction plan, but rather a means of making necessary upgrades to the aging facility. With copper prices at lows, though, it’s a good time to overhaul mines.

The need for patience is also true in Zambia, where Glencore’s managers are likewise waiting for the next big moment. “Commodities go in cycles,” Mopani CEO Jansen says. “They will go up again.” As soon as they do, he says, Mopani will be poised to dig more copper out of the ground, having spent big while others cut back.

Glasenberg is confident that day is coming. And when the world demands resources, Glencore will be ready to produce.

An earlier version of this story stated incorrectly that seven people died at Glencore’s Katanga mine in an underground landslide. The landslide was not underground.

A version of this article appears in the Aug. 1, 2016 issue of Fortune.

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