Investment Bank puts freeze on Glencore

The European Investment Bank has frozen all new loans to Swiss-based commodities firm Glencore and its subsidiaries, citing "serious concerns" over corporate governance.

This content was published on June 1, 2011 minutes and agencies

The EIB, the European Union's lending institution, provided a $50 million (SFr42 million) loan in 2005 to Mopani Copper Mines, a Zambian subsidiary of Zug-based Glencore, to help pay for modernisation work.

But Mopani has since been accused by some non-governmental organisations – most recently campaign groups in an open letter signed by a group of European parliamentarians – of tax evasion and of causing widespread pollution.


Glencore has denied the allegations, which stem from a leaked version of a pilot audit report commissioned by the Zambian tax authorities. The EIB has commissioned its own independent probe into the matter.


"We welcome the EIB taking a close look at Mopani, since we are confident that we will be completely exonerated," a spokesman for Glencore said on Wednesday.


Glencore, the world's largest diversified commodities trader, listed on the London stock exchange in May in a record-breaking market debut. The initial public offering raised some $10 billion.


Mopani, in which Canada's First Quantum owns a minority stake, has generated over $380 million in tax payments to the Zambian government since its privatisation in 2000, through royalties, duties and income taxes.

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