Glencore trade with Iran may have helped Tehran avoid UN sanctions: report
Glencore trade with Iran earned the company $659 million in 2012, but it could have been a way for Iran to avoid the United Nation sanctions against the country over its nuclear program, reports Reuters.
According the news agency, which was granted access to a confidential U.N. Panel of Experts report, Glencore supplied thousands of tons of alumina to an Iranian company that has provided aluminum, a key ingredient in the manufacture of tubes used in uranium enrichment centrifuges, aiding Iran's nuclear program.
The document quoted by the agency shows that Glencore provided Iralco [Iranian Aluminum Co.] with "thousands of tons of alumina last year in exchange for a lesser amount of aluminum metal."
Although it is unknown whether any of the raw alumina sent to Iran was actually used to make the aluminum tubes, the terms of the deal between the companies imply that for every five tons of alumina supplied by Glencore, it received just one ton of finished aluminum. Typically it takes just only tons of alumina to make one ton of aluminum. So the big question is where the rest went.
Glencore acknowledged the deal was struck in August 2011 and said it first learned of a relationship between Iralco and Iran's nuclear centrifuge maker in December of 2012 and stopped further shipments immediately. The last actual shipment was made in October 2012, said the commodities trader.
Several reports in the media yesterday say Glencore's head of aluminum, Gary Fegel, is set to leave the company this summer, becoming the first senior executive departure since the merger with Xstrata earlier this month.
The timing and reasons for Fegel’s exit remain unclear, but many believe it is connected to the document Reuters got access to.