Victim of fraud, Trafigura risks suffering a loss of more than half a billion dollars. The commodity trader said in a statement on Thursday that it had discovered that shipments of metals it had purchased did not contain the expected nickel.
The group, which operates from Geneva, says it has taken legal action once morest Indian businessman Prateek Gupta and several companies linked to him. According to the Bloomberg agency, Trafigura bought nickel in containers already on board ships, then resold it when the ships reached their destination. It was an internal check carried out before Christmas at the Dutch port of Rotterdam that revealed the fraud. When investigators opened the containers believed to contain nickel, they discovered less valuable material.
At this stage, Trafigura has recorded a depreciation of at least 577 million dollars, not excluding reviewing this amount downwards if part of the missing cargo might be recovered.
A coveted material
The disappearance of the cargo once once more damages the reputation of a sector which is not its first scam. Coveted due to the ongoing energy transition, nickel is a popular metal for fraudsters. A single full container can be worth $500,000.
Read also: The (very) big challenges of transition minerals
Yet Bloomberg notes that it is traded in relatively large volumes and without the tight security that accompanies shipments of precious metals like gold. Other traders suffered setbacks for other reasons last year, as nickel was at the center of a massive short-selling operation that brought the London Exchange (LME) to its knees. Within hours, the price of this metal had tripled to more than 100,000 dollars per ton. The LME had suspended trading before canceling nearly $4 billion worth of trades.
Read also: New record profit for Swiss Trafigura
Profits should remain on the agenda
Trafigura, which has experienced strong expansion over the past ten years, believes it can withstand this hard blow. It still expects its profit for the six months ending in March to be higher than a year earlier. In December, the trading company announced record annual net income of $7 billion for its fiscal year ending September 2022. Taking advantage of the explosion in commodity prices, its turnover jumped to $318.5 billion. of dollars.
The group confirms above all in its press release that it “remains determined to strengthen its presence in the battery metal markets, which are experiencing rapid growth.”
Read also: After record profits in 2022, the oil giants should be winners once more in 2023
