In $36M Shipping Fraud, Trader Gets Stones Instead of Copper Ingots
One of the world's largest commodities trading houses says that it was defrauded by a shipper who sent 300 containers of painted paving stones instead of a promised $36 million consignment of copper ingots.
Last year, Swiss trading company Mercuria reached a deal with a Turkish supplier for a shipment of 10,000 tonnes of blister copper, an impure grade produced by copper smelters before refining. The $36 million contract called for shipping the copper ingots to a customer in China. When the first shipment arrived and was inspected, it turned out to contain not black-blistered ingots, but black-painted paving stones. By that point, about 6,700 tonnes of the cargo was already under way and Mercuria had paid more than $30 million, the company's lawyer told Reuters.
The copper was allegedly stolen after the containers were loaded but before they were shipped, with the perpetrators breaking and then replacing the anti-fraud seals in order to access the contents. The containers were then shipped out of Ambarli Port on eight separate voyages.
Mercuria has filed a complaint against the seller with Turkish law enforcement authorities, and a police investigation is under way. More than a dozen people have been arrested in connection with the inquiry. "It's been determined that the incident is the outcome of fraud perpetrated in an organized manner," Turkish police told Bloomberg.
"We are aware and closely following up with the latest news and developments in Turkey regarding the ongoing legal proceedings and investigations," said Mercuria in a statement. "Unfortunately the news somewhat reflects the truth and we have incurred a loss of more than 6,000 metric tons of copper blisters that we purchased due to substitution of cargo."
Copper is currently trading at prices not seen in ten years, reaching more than four dollars per pound. As the world demand for electric cars, solar panels and electronics increases, the demand for copper rises in parallel - along with the financial incentive for theft.