Digging deep into the world of commodities trading was no easy task for Swiss-based author Daniel Ammann and his latest biography. “The King of Oil” is an exclusive, no-holds barred biography of billionaire commodities trader, former fugitive and founder of the trading giant that became Glencore, Marc Rich.
Ammann, who was raised in Switzerland and educated at Zurich University, is an award-winning journalist with more than 20 years experience in newspapers, radio and television. He spoke to Reuters about his book:
Q: What was the motivation to write the book?
A: “Being a business journalist, I had always been intrigued by the life of Marc Rich. As a Jewish boy in Belgium, he barely escaped the Holocaust. Penniless he fled with his parents to the United States and made himself into the most successful and most controversial commodities trader of his time. What a story. A story, all the more, which had not been written yet.”
Q: How did you manage to get so close to Marc Rich?
A: “I wrote him my first letter in 2000 and then regularly sent faxes and e-mails but my requests for an interview were always denied. This changed in late 2006 after I had sent yet another letter, in which I boldly announced that I was about to write a biography. I guess, Rich liked my persistence, which happens to be one of the most important virtues of commodities traders. After our last interview I asked him why he ultimately had spilled his secrets, after what seemed liked eternal secrecy. “Age and maturity”, he answered
Q: Glencore, the former Marc Rich + Co, has a reputation for secrecy — why is this?
A: “It is the world’s biggest commodities trader but as a private company, until recently didn’t even publish sales figures or earnings. Its website consisted of a single page with no more than its logo and address. I learned that commodities traders take more pains to avoid publicity than even Swiss bankers. Their business often brings together clients who publicly will have nothing to do with one another. Discretion is one of the most important prerequisites for their success.
Q: What is considered to be Marc Rich’s worst deal?
A: “His company tried to corner the zinc market in 1992 and failed miserably. Marc Rich + Co invested more than $1 billion in this high-risk operation – without hedging the position. In the end the company lost $172 million with this almost megalomaniac attempt to manipulate the global zinc market. It took the company to the edge of collapse and was one of the reasons Rich was “weak” and later forced to sell the company to his management.”
Q: Which Rich deal benefited Glencore most?
A: “Not a single deal but three long time business relationships that are still existing today: with Iran, with South Africa and with Israel. They helped Marc Rich – and Glencore – to become the most influential commodities trader.”
Q: How great an impact did Denise and Marc Rich’s divorce have on Glencore [the former Marc Rich + Co AG]?
A: “A great one. The divorce was one of the most expensive ones the world had ever seen up to then. I reveal that it cost Rich a total of $365 million. Denise and Rich separated in 1992. In the end the costly divorce was one of the main reasons for Marc Rich to sell his company – together with the zinc disaster and the prosecution of Rich in the USA for tax evasion and for trading with Iran.”
Q: Did Marc Rich offer any advice for investors?
A: “Absolutely, he told me that all commodities will be good business. He said: “The world will produce more products for more people and will thus need more raw materials.” He thinks that oil will play an import role for a long time to come and that its price will go up in the long term.”
Q: What is your overall impression of Marc Rich?
A: “He is a once-in-a-lifetime trader, I would say. In the 1970s he literally created the spot market for crude oil together with a handful of partners. He was faster and more aggressive than his competitors. He was able to recognize trends and seize opportunities before other traders. And he went where others feared to tread – geographically and morally. Trust and loyalty are very important to him. In many deals he wouldn’t rely on contracts but on the idea that “my word is my bond”. As a private person he is charming and calm, he speaks with a very soft voice and has a good sense of humor.”
(Reporting by Michael Taylor; editing by Paul Casciato)
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