Glencore is embroiled in a new scandal over allegations that it supplied aluminum made by an oligarch’s Russian company
- The FTSE 100 mining and commodities giant shipped large quantities of aluminum to LME-registered warehouses in South Korea
- The metal was produced by Rusal, a Russian metals conglomerate controlled by Oleg Deripaska, one of Vladimir Putin’s closest allies
- The delivery is likely part of a long-term deal signed in 2020 that would see Rusal supply Glencore with 6.9 million tonnes of aluminum by 2024
Glencore has been embroiled in a new scandal after it was reported that it had supplied aluminum produced by an oligarch’s Russian company to the London Metal Exchange (LME).
The FTSE 100 mining and commodities giant shipped large quantities of aluminum to LME-registered warehouses in South Korea.
The metal was produced by Rusal, a Russian metals conglomerate controlled by Oleg Deripaska, who is one of Vladimir Putin’s closest allies and has been sanctioned by Britain.
Glencore has been embroiled in a new scandal after it was reported that it had supplied aluminum manufactured by an oligarch’s Russian company to the London Metal Exchange (LME).
The shipment highlights the difficulties the company is facing as buyers shun Russian metal following the invasion of Ukraine, according to a Reuters report, citing sources with knowledge of the matter.
The delivery is likely part of a long-term deal signed in 2020 that would see Rusal supply Glencore with 6.9 million tonnes of aluminum by 2024.
While there are currently no restrictions on buying Russian metal, many buyers do not want Rusal aluminum in their products.
As a result, there are concerns that the unwanted metal has entered the LME system, the last resort for products and consumers, which could distort prices. Glencore shares fell 2.1 per cent, or 10.05p, to 473p after the report. The company declined to comment.
The shipments are another headache for Glencore after it admitted multiple counts of bribery to secure preferential access to oil in African countries like Nigeria, Cameroon and Ivory Coast in a London court this year.
The scandal also saw the firm face a £888million fine from US regulators. Aluminum prices rose briefly last week after it was revealed the US government is considering a ban on Russian imports.
The jump has been blamed by traders as a knee-jerk reaction to fears that Rusal, the metal’s largest producer outside of China, could be sanctioned.
Meanwhile, the LME released a discussion paper last month in which it considered banning new shipments of Russian metal from trading on the exchange.
Such a move could send shockwaves through global markets given Russia’s status as a massive producer of key industrial metals such as aluminium, nickel and copper.
