Econ_May_05_2018

73 / 100

The Economist May 5th 2018 Business 61
1
2 core says it “entirely rejects” the calcula-
tion. According to audited accounts, KCC’s
last payments to a Gertler-related com-
panywere $54.7m in 2015. OnMay1st Glen-
core won a temporary injunction in a Lon-
don court against Mr Gertler taking further
legal action against KCC. But the court did
not rule on the legality of the Congo pro-
ceedings, and Glencore’s assets there re-
main frozen—at least until another hearing
onMay11th.
Mr Gertler’s move puts serious strain
on Glencore’s operations in Congo, where
it is the biggest producer of both copper
and cobalt. It is under attack there on other
fronts, too. Last month Gécamines started
legal proceedings in the DRC to dissolve
KCC, in which it is a joint-venture partner
with Glencore’s Toronto-listed subsidiary,
Katanga Mining, arguing that KCC’s $9bn
debt is draining the firm for Glencore’s
benefit. Katanga’s shares, which soared
last year on the strength of rising cobalt
prices (see chart), have plunged on fears
that Gécamines may nationalise the mine
and sell it to a Chinese rival.
Glencore says it hopes to recapitalise
KCC to save it from the possibility of na-
tionalisation. NGOs pressing for greater
transparency in Congo, such as Belgium-
based Resource Matters, say that would be
long overdue. They say the debts (mostly
borrowed from Glencore-related compa-
nies) have helped KCC cut its tax bill in a
poverty-stricken country in dire need of
roads, schools and hospitals.
Yet even if that matter is settled, Glen-
core faces another round of pain—a new
mining code that could sharply raise royal-
ty rates on mineral production. Glencore
and other global mining firms in the DRC
have so far failed to persuade the authori-
ties in Kinshasa to relax some of the terms
ofthe code, though negotiations are said to
be continuing.
MrGlasenbergmaybe partially reaping
what he sowed, analysts say. His firm long
did business with Mr Gertler, despite re-
ports about the latter’s relationship with
Mr Kabila. OtherWesternmining firms say
they steer clear of the DRC because of rep-
utational and legal risks. Glencore’s tra-
vails may be the result of Mr Kabila—who
has overstayed his second, and supposed-
ly final, term in office—squeezing mining
firms for cash to stay in power.
Glencore may survive the slugfest.
Some analysts say it may be encouraged to
make a big tax prepayment to Gécamines
to preserve its assets (it would probably
have to verify where that money goes).
Others say it may attempt to convince
America’s Treasury to relax sanctions
against Mr Gertler (companies may have
similarly intervened in the case of Rusal, a
Russian aluminium producer that has
been sanctioned by America—see
Schumpeter). But that is unlikely. Mean-
while, the gloves are off. 7
Kiboshed by Kabila
Source: Thomson Reuters
Prices, January 1st 2016=100, $ terms
2016 17 18
0
500
1,000
1,500
2,000
Katanga Mining shares
Cobalt
Will it end with a knockout?
I TWAS not the sort ofdo-it-yourself activ-
ity that Castorama, a French home-im-
provement chain, usually promoted. The
search engine on the firm’s website started
offering customers puerile responses to
their inquiries. Its auto-complete text func-
tion suggested such intriguing products as
a “bollock hammer” or “cock sander”. It
also returned offensive anti-Semitic
phrases. The firmblamedmanipulationby
unnamedactors andhad tobriefly scrap its
search function.
That incident, two years ago, was a re-
minder that much online search occurs
within websites. Internet giants such as
Google excel at bringing users to sites but
once there customers often rely on web-
sites’ own search functions to find pro-
ducts or services. Some firms build their
own engines; others use open-source soft-
ware, such as Elasticsearch, to supply
them. The results can sometimes be pain-
fully slowand undiscerning.
As e-commerce grows, so does demand
for search systems that are fast, accurate
and resilient to typos or tampering. A firm
that sawan opportunity in this is Algolia, a
French startup founded in 2012. It has a
search application that hunts the client’s
website and swiftly offers consumers rele-
vant results.
Algolia is growing unusually fast for a
European startup. It has some 200 engi-
neers and other staff, up from 60 in 2016,
most of them based in penthouse floors at
its new headquarters behind Paris-Saint-
Lazare station (its legal headquarters and a
marketing office are still in San Francisco).
The firmsays it has over 4,500 clients,more
than double the tally of two years ago,
mostly in America. Its platform is process-
ing 41bn search requests a month, as of
March, again more than double the equiv-
alent figure two years ago.
One client, Twitch, a live-streaming vid-
eo platform owned by Amazon, sees near-
ly 1bn visits to its site each month, leading
to lots of searches. Other customers in-
clude Stripe, a cloud-based payments firm;
Medium, a publisher; Crunchbase, a data-
base for techies; and various Fortune 500
and CAC 40 firms.
Its figures sound impressive, but there is
no ad spending attached to its searches
since users are already on company web-
sites. Algolia’smodel is to charge clients for
its bespoke service, rather than selling ads
and scooping up data about users. Its rev-
enues reached $1m in 2014, two years after
Entrepreneurship in France
Seeking the big
time
PARIS
Asite-search startup swiftly scales
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News"