Europe's Largest Copper Producer, Aurubis, Falls Victim to Massive Metal Scam
Europe's largest copper producer, Aurubis, has reported a major theft of metals. The company could incur losses in the hundreds of millions of euros. It appears that scrap suppliers manipulated details, as reported by Bloomberg.
After Aurubis announced a significant metal deficit and stated that it no longer expects to achieve its forecasted annual profit, its shares fell by 18%.
The company believes that some of its secondary raw material suppliers manipulated details regarding the scrap metal they provided and attempted to conceal this in collusion with employees in Aurubis' sample selection department.
"All we know at this point is that some of our secondary raw material suppliers seemed to manipulate details about the raw materials they were delivering to us, and they collaborated with our sample selection department employees to hide the shortfall from us," said Angela Zaidler, Vice President of Investor Relations and Corporate Communications.
The incident raises concerns about Aurubis' security measures. Earlier in June, the company had already reported uncovering a series of thefts targeting products containing precious metals.
However, according to the spokesperson, these two incidents are not related.
The new fraud, announced recently, concerns materials purchased for Aurubis' metal processing plant. In addition to ore from mines, the company also buys significant volumes of copper-rich scrap. These are various used items, from almost new manufacturing offcuts to old cables, pipes, and electronic boards. Suppliers provide estimates of the material's content, and after a visual examination by Aurubis' laboratory, they are paid based on the metal content.
It is only during the production process that the metal shortage can be detected. However, this can take time because, for example, in the case of copper for material processing, it takes four weeks.
Aurubis processes thousands of tons of these materials daily to obtain refined metal.
The company is conducting a thorough inventory check, which is expected to be completed by the end of September, and the German State Criminal Investigation Office is involved in the investigation.