For these reasons -- and especially because major mineral deals in Kazakhstan often need Nazarbayev's personal approval -- investors require a powerful local sponsor with close contacts to the president. Glencore's is one of the best: oligarch Bulat Utemuratov, a major investor in Verny Capital, Kazzinc's second-largest shareholder (after Glencore), with a 42 percent stake.
Glencore's Kazakh partner founded ATF Bank early in the post-communist era and became a billionaire when he sold out in 2007 to Italy's UniCredit. An old-school ex-Soviet power broker, he owns through Verny the Ritz-Carlton properties in Moscow and Vienna. Thanks to Glencore, Utemuratov, who is now Nazarbayev's special envoy to neighboring Kyrgyzstan, is about to become far richer: According to its IPO prospectus, Glencore plans to pay Verny $3.2 billion for its holding in Kazzinc, which would up Glencore's stake in the company to about 93 percent, making Kazzinc the firm's largest single equity holding after Xstrata.
A former head of Kazakhstan's powerful National Security Committee who once held a top position in the ruling party and served as chief of staff to Nazarbayev between 2006 and 2008, Utemuratov is known among insiders as the president's "consigliere." He is one of the few people in the country who can dependably get a meeting or phone call with Nazarbayev at any time, a Western expert on Kazakhstan told me. "You can't do any large-scale business in Kazakhstan without the president's approval, and you can't get that without direct access to the president, which Utemuratov gets for you," the person said. "If you need something, you can have your CEO go over a number of times to meet with the president and that might work, and you might get help if you can get the head of state from your home country to exert influence on him. But the most efficient and surest way to get what you need is to have support from someone local who is extremely close to Nazarbayev, and Utemuratov is one of very few people on that list."
In May 2011, a group of opposition politicians issued a public letter complaining that Kazzinc and other former state firms had been privatized under murky conditions that allowed Utemuratov and other insiders to pick up vast stakes thanks to their ties to the ruling family. Glencore could be stripped of its assets in the country, said the letter, adding, "Upon any change of regime in Kazakhstan to a democratic one, any acquisition of any shares in Kazzinc … will be subject to review."
ONE NIGHT LAST JUNE, I had dinner in Geneva with two men with deep ties to the oil-trading business. The food at Au P'tit Bonheur was rich and expensive; the temperature was mild and the sky clear. We sat on a terrace, which afforded a splendid view of the city's famous lake and the Alps.
"We're all bandits here," one of the men told me when I asked what made Switzerland such an attractive base for traders. "You can be accepted as long as you bring a lot of money."
His friend heartily agreed, saying, "You have to pay your parking and your taxes and respect your neighbors, but if you want to cut a deal with a bandit, it's OK."
It's hard to imagine bandits holing up in Glencore's gleaming white steel-and-glass headquarters in Zug, a charming canton a few hours from Geneva and just north of the Alps, near where Marc Rich founded the firm. Here the population of residents and registered companies both hover around 27,000, and the corporate tax rate averages around 15 percent, low even by Swiss standards. Income taxes are also low -- in Rueschlikon, the town where Glasenberg lives not far from the Glencore headquarters, citizens recently voted to drop them further because of a recent windfall. Glasenberg's post-IPO fortune of an estimated $7.3 billion is so huge that his taxes alone are sufficient to fund the town's entire budget.
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