Business & Finance

EU bank freezes future loans to mining giant Glencore

BRUSSELS: The European Investment Bank (EIB), the EU's financial arm, has frozen future loans to Swiss mining giant G

Published June 1, 2011 Updated June 1, 2011 10:39pm

2 min

By Abdul Ahad

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"Due to serious concerns about Glencore's governance which have been brought to light recently... the president of the EIB has instructed the services to decline any further financing request from this company or one of its subsidiaries," the Luxembourg-based bank's website said.

Glencore subsidiary Mopani Copper Mines Plc (MCM) received 50 million dollars (34.6 million euros) in 2005 towards the 2007 renovation and modernisation of a copper smelter aimed at reducing sulphur dioxide emissions, due to be repaid by 2016.

Following a Zambian probe into tax affairs surrounding the mines and complaints by anti-poverty campaigners, the EIB has informed the EU's anti-fraud office OLAF and launched its own investigation.

"In the event that this investigation were to conclusively demonstrate tax evasion according to the Zambian authorities this would clearly expose MCM to local financial penalties and lead to events that may trigger early repayment of the EIB loan," the bank said.

Glencore rejected the accusations in a statement sent to AFP.

"We welcome the EIB taking a close look at Mopani since we are confident that we will be completely exonerated," it said.

"The allegations are based on an incomplete, draft desktop study that was circulated in Zambia several months ago. We publicly refuted the draft 'conclusions' of this document at the time."

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