Mining Blog

8. June 2011,

The European Investment Bank announced on 1 June that it had frozen all new loans to commodities trader Glencore and its subsidiaries, which listed on the London Stock Exchange last month. The EIB cited “serious concerns” over the group’s corporate governance.

The EIB provided a $50 million (£30 million) loan to the firms’s Mopani Copper Mines in Zambia in 2005, to help pay for modernisation of a copper smelter.

But, two weeks ago, an open letter signed by a group of European parliamentarians – accused the company of tax evasion and of causing widespread pollution (see below on this blog)

Glencore denied the allegations and the EIB now says it has commissioned an independent probe into the issues.

The EIB announced that, if there were “any conclusive proof of tax evasion” this would lead to local penalties and “could trigger early repayment of the loan”
Additionally, the EIB said in its statement that its concerns went “far beyond” Mopani..

Other projects with EIB involvement include the Ambatovy nickel project in Madagascar (in which Sherritt International Corporation, Sumitomo Corporation and Korea Resources Corporation are partners) and Lundin Mining’s Tenke Fungurume copper-cobalt project in the Democratic Republic of Congo.

Just 11 days after its London and Hong Stock Exchange launches, Glencore’s shares were trading at 523 pence – down 1.5 percent – and still below their 530 pence debut price. (Source: Reuters, 1 June 2011).

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