Europe’s top copper producer Aurubis AG warned it may face losses in the hundreds of millions of euros after being hit by a massive metal theft, and no longer expects to meet its profit forecast for the year.
(Bloomberg) — Europe’s top copper producer Aurubis AG warned it may face losses in the hundreds of millions of euros after being hit by a massive metal theft, and no longer expects to meet its profit forecast for the year.
The company doesn’t yet know the extent of the damages but has discovered significant discrepancies in inventories and shipments of metal associated with its recycling business, Aurubis said in a statement. It’s conducting a special inventory of metal reserves that should be completed by the end of September.
The global metals industry has been repeatedly rocked in recent years by a series of scandals, including the shock revelation by commodities trader Trafigura Group that it was the victim of a massive alleged nickel fraud.
“During a scheduled review of metal inventories, Aurubis has identified considerable discrepancies in target inventory as well as in individual samples from specific shipments of input materials for the recycling area,” the German company said.
Aurubis said in June the public prosecutor’s office and police were investigating a suspected theft ring targeting precious metal-bearing intermediate products generated from Aurubis’ production processes. Several Aurubis employee workspaces and the on-site offices of contractors at the Hamburg site were searched as part of the investigation, it said at the time.
The latest evidence “has led Aurubis to conclude that it has been the target of further criminal activity following the cases reported in June,” the company said on Thursday. Aurubis has involved the state office of criminal investigation.
“It cannot currently be ruled out that the damages might be in the low, three-digit-million-euro range,” it said.
High-value industrial metals like nickel and copper have historically been an attractive target for criminals, and the industry has recently been hit by a fresh series of scandals involving missing metal.
Trafigura said in February that it expected to lose nearly $600 million in what it called a “systematic fraud,” after finding that cargoes of nickel it had bought didn’t contain any nickel. The London Metal Exchange also this year shocked the market after discovering that a small number of bags of nickel registered in its warehousing network were filled with stones instead.
(Updates with details throughout.)
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