Aurubis AG, Europe’s leading copper producer, faces potential losses in the hundreds of millions of euros following a significant metal theft incident, prompting the company to revise its profit forecast for the year. The extent of the damage is still unknown, but Aurubis has detected substantial discrepancies in its metal inventories and shipments related to its recycling operations, according to a company statement.
A comprehensive metal inventory audit is underway and expected to conclude by the end of September.
The global metals industry has been marred by a series of scandals in recent years, including a shocking revelation by commodities trader Trafigura Group regarding an alleged massive nickel fraud. Aurubis, during a routine review of its metal inventories, uncovered noteworthy disparities in target inventory and specific shipments of input materials for recycling, as disclosed by the German company.
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In June, Aurubis had reported an ongoing investigation by the public prosecutor’s office and the police into a suspected theft ring targeting precious metal-bearing intermediate products produced by Aurubis. As part of the inquiry, searches were conducted in several Aurubis employee workspaces and on-site offices of contractors at the Hamburg facility.
The latest developments have led Aurubis to conclude that it has been the victim of further criminal activity beyond what was reported in June. The company has engaged the state office of criminal investigation in response to these findings. The potential damages could reach into the low three-digit million euros, the company stated.
High-value industrial metals like nickel and copper have long been attractive targets for criminals, and the industry has recently experienced a fresh wave of scandals involving missing metals. In February, Trafigura disclosed an expected loss of nearly $600 million due to what it termed a “systematic fraud,” wherein cargoes of nickel purchased by the company were found to contain no nickel.
Additionally, this year, the London Metal Exchange sent shockwaves through the market when it discovered that a small number of bags of registered nickel in its warehousing network actually contained stones instead.
Similar to Trafigura, Kataman Metals LLC, a trading firm based in the US, recently claimed to have paid $3.3 million to New Alloys Trading Pte. for a quantity of nickel. Upon opening the containers, however, Kataman found them devoid of any nickel.
Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
