If you invest in raw materials world or the minerals, quickly the companies you invest in will go beyond the reasonably stable democratic country where you live. Minerals are found around the world and in some countries due to the person in power, essentially bribes or royalty fees to the ruling cabinet must be paid. It is very hard to be in the mining industry only dealing with saints, invariably by any definition of the word companies have to deal with sinners. Recently Eric Reguly examined Glencore’s dealings with some sinners.

Glencore is one the world’s biggest commodities traders and miners. The example in the article deals with Glenore’s operations in Africa but with minerals it could be multiple countries around the world. Africa is blessed with endless resources to be tapped – cobalt, copper, diamonds, oil. In the more regulated countries, some of the dealings with the unregulated countries keeps the lawyers files filled and invariably companies pay a fine without admitting breaking the law. Recently the US Department of Justice filed a suit against Glencore alleging it had broke the law regarding the Foreign Corruptions Act. Glencore in the Republic of Congo used the services of Dan Gerler (who has ties to the President) with great success. The background is the mining of cobalt in which the Congo is home to 60% of the world’s known reserves.

Linking to dividend paying stocks, we all have choices in terms of investments and some companies are easily removed from seemingly wrong doing. For example, if you invested in ExxonMobil for the most part it tries to the right thing at healthy margins, however the history of how the Rockefeller’s gained a monopoly and controlled the oil industry at the beginning of the 19th century while healthy for investors was not in keeping with the ethics of Mr. Rockefeller’s seemingly personal ethics.  At some stage many companies prior to gaining a dominance did something to lessen the competition. It is after they gain a dominance that from an ethical standard they are more easily invested in.

There are more questions than answers, till the next time – to raising questions.

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