Glencore’s Copper Transactions Shine Light on Europe’s Reliance on Russian Goods
A Circuitous Route:
In July, commodities giant Glencore moved thousands of tons of Russian copper to Italy through an indirect route via Turkey. This transaction highlights a broader issue: Europe's underlying dependence on Russian commodities.
Documents and photographs accessed by the Financial Times reveal that Glencore procured at least 5,000 tons of copper sheet manufactured by Russia's Ural Mining and Metallurgical Company (UMMC). This shipment then traveled from Russia to Turkey before arriving at its final destination: the Italian port of Livorno.
Sanctions in Focus:
It's worth noting that while there aren't overarching sanctions on Russian metal trade, there are targeted restrictions on specific oligarchs and producers. The UK and the EU have imposed sanctions on key figures within UMMC, but not on the company as a whole. On the other hand, the US introduced broader sanctions against UMMC in July.
While it may raise eyebrows, no evidence suggests that Glencore acted in violation of any sanctions. However, this move does underscore Europe's dependence on Russian commodities, with Turkey emerging as a significant transit point. The transaction also points to Dubai's role in acting as a gateway for the entry of Russian goods into Europe.
The copper in question was acquired by Glencore from Haldivor Energy, a UAE-based entity founded in 2019. From there, it was directed to the Carlo Colombo wire rod mill in Lombardy, Italy, where it is to be used in the manufacturing of electrical cables, transformers, and electronic devices.
Glencore's Stance and Future Endeavors:
A statement from Glencore indicates that this transaction represented the conclusion of a contract inked prior to the recent hostilities between Russia and Ukraine. Since then, they have initiated no new business dealings with UMMC. Glencore has also stated its policy, which came into effect in March 2022, of not engaging in new business ventures with Russia. Furthermore, Glencore's business transactions with Russia aren't limited to copper. The company is still purchasing Russian aluminum as part of an ongoing agreement with Rusal, which is projected to end in 2024.
These intricate trade relationships reveal the complexities of international commerce, especially in times of geopolitical tension.
