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Aurubis, Europe’s largest copper producer, said it had been the target of a huge theft that could lead to hundreds of millions of euros of losses and would cause the company to fall short of its full-year financial target.
The German copper company said late on Thursday that it had identified discrepancies in stockpiles and shipments of metal tied to its recycling business in Hamburg that led it to conclude that it had been a target of “criminal activity”.
The company, which produces about 1.1mn tonnes of copper sheets a year, said that its findings of “serious indications of shortfalls in metal” had led it to involve Germany’s State Office of Criminal Investigation.
The scandal is the latest to rock the metals industry after global commodity trader Trafigura accused an India-born trader of perpetrating a $590mn nickel fraud against it, and bags of nickel were found to be full of stones in London Metal Exchange warehouses earlier this year.
The industry’s reputation has also been further tainted by a string of frauds and thefts in China in recent years.
While cautioning that the exact financial damage could not currently be assessed, Aurubis said in a statement that it “cannot currently be ruled out that the damages might be in the low, three-digit-million-euro range”.
As a result, its forecast for earnings before tax in the year to the end of September of €450mn-€550mn would not be achieved. Aurubis is working on a review of its inventories that is due to be completed by the end of September.
The company has launched investigations by internal and external experts to gain a better grasp of what happened and to propose measures to improve security at its sites in Hamburg.
Aurubis is Europe’s largest copper smelting and recycling group with processing sites across Europe, including a large complex in the southern part of Hamburg. It made €18.5bn of revenue last year.
In June, the company announced that it had been the target of “past criminal activities”, which led the Hamburg public prosecutor’s office and police to launch probes into current and former Aurubis employees and contractors.
At that time, it said they were investigating “a suspected theft ring targeting precious metal-bearing intermediate products generated from Aurubis’s production processes”.
It is currently unclear whether the cases of criminal activity announced on Thursday are separate to the one in June or not, but the criminal gang is thought to be different.
Aurubis said it had the capacity to absorb the losses and they would not affect its capital expenditure and growth plans.