Glencore finds itself engulfed in fresh scandal over claims it delivered aluminium produced by an oligarch’s Russian firm

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  • The FTSE 100 mining and commodities giant has shipped large quantities of aluminum to LME-listed warehouses in South Korea.
  • The metal was produced by Rusal, a Russian steel conglomerate controlled by Oleg Deripaska, who is one of Vladimir Putin’s closest allies.
  • The supply is likely to be part of a long-term contract signed in 2020 with Rusal to supply Glencore with 6.9 million tonnes of aluminum through 2024.

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Glencore has been at the center of a new scandal after it became known that it sold aluminum produced by the oligarch’s Russian firm to the London Metal Exchange (LME).

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The FTSE 100-listed mining and commodities giant has shipped large quantities of aluminum to LME-listed warehouses in South Korea.

The metal was produced by Rusal, a Russian steel conglomerate controlled by Oleg Deripaska, who is one of Vladimir Putin’s closest allies and is under British sanctions.

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Glencore has been at the center of a new scandal after reports that it sold aluminum produced by the oligarch’s Russian firm to the London Metal Exchange (LME).

The shipment highlights the difficulties the firm is facing as buyers shun Russian metal following the invasion of Ukraine, according to a Reuters report citing people familiar with the matter.

The supply is likely to be part of a long-term contract signed in 2020 with Rusal to supply Glencore with 6.9 million tonnes of aluminum through 2024.

Although there are currently no restrictions on the purchase of Russian metal, many buyers do not want Rusal’s aluminum in their products.

As a result, there are fears that unwanted metal has entered the LME system, the market of last resort for products and consumers, which could distort prices. Shares of Glencore fell 2.1%, or 10.05 pence, to 473 pence after the release of the report. The company declined to comment.

Supplies are another headache for Glencore after it admitted in a London court this year to multiple allegations of paying bribes to secure preferential access to oil in African countries, including Nigeria, Cameroon and the Ivory Coast.

The scandal also resulted in an £888 million fine from U.S. regulators. Aluminum prices rose briefly last week after news that the US government was considering a ban on imports from Russia.

Traders blamed the jump as a reflex reaction to fears that Rusal, which is the largest producer of the metal outside of China, could face sanctions.

Meanwhile, the LME launched a discussion paper last month considering the possibility of banning new shipments of Russian metal from trading on the exchange.

Such a move could shock global markets due to Russia’s status as a major producer of key industrial metals such as aluminium, nickel and copper.



Credit: www.thisismoney.co.uk /

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