Glencore Xstrata sues Jamaica-owned firm over alumina shipments
Mining giant Glencore Xstrata (LON:GLEN) is suing Clarendon Alumina Production (CAP), a Jamaican state-owned company, after it awarded a profitable contract to one of the commodities trader’s competitors.
According to Financial Times (subs. required), Clarendon signed a sales agreement with Hong Kong-based trading house Noble Group Ltd in June, ignoring decades of trading ties with Glencore.
The Switzerland-based company reacted with legal actions in Jamaican and English courts aiming to curb CAP’s deliveries to Noble, as shows last week’s filing to US Securities and Exchange Commission (SEC) by the Jamaican government.
Glencore claims the pact with Noble will prevent CAP from shipping alumina it still owes to the Anglo-Swiss firm, according to the filing.
“The real basis,” said an anonymous senior government official, quoted by The Gleaner “is [Glencore Xstrata] doesn’t want us to go with a new partner.”
The argument heated even more after Jamaica’s Ministry of Mining, Phillip Paulwell, announced that Clarendon had already made its first alumina shipment to Noble under the debated agreement.
He said the deal would give Glencore’s rival “more alumina off-take and financing contracts, along with the opportunity to finalise new investor relations arrangements.”
The importance of the alumina sale contract between Noble Resources and CAP is that it gives the Asian trader the option to acquire the Jamaican firm and its stake in Jamalco, a bauxite miner and alumina refiner.
Image: Port at Montego Bay, Jamaica by Patrix99