Trafigura penetrates further into Peru

Published by MAC on 2010-04-08
Source: Business News Americas

Trafigura Beheer acquires 8.7% stake in Andean American for US$2.9mn, Peru

Ryan Dube

Business News Americas

30 March 2010

International commodities trader Trafigura Beheer has agreed to make an equity investment of Cdn$3mn (US$2.9mn) in Vancouver-based Andean American Mining, which at current prices translates into a roughly 8.7% stake, Andean's IR official Nancy Massicotte told BNamericas.

Trafigura will acquire some 7.5mn shares, Massicotte said, adding that funds will be used for further construction at the Invicta polymetallic project in Peru and general corporate affairs.

Andean American said in a release that Trafigura will receive a long term off-take agreement for the sale of copper, lead and zinc concentrates from Invicta.

The companies also plan to negotiate a project finance, cost overrun and working capital facility for up to US$15mn. Trafigura was also granted an option to increase its equity interest in Andean American by acquiring an additional 16% in the company.

Invicta is due to turn out 500,722oz gold, 3.22Moz silver, 41.5Mlb (18,824t) copper, 14.3Mlb lead and 5.59Mlb zinc and pull in revenues of US$600mn over its five-year life. Capex for the project is slated at US$65.3mn.

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Publicity-shy Trafigura boss Claude Dauphin may appear in court

The rarely-seen millionaire trader behind Trafigura, will be asked to give evidence in the High Court as a witness, when the oil trader battles a £6m breach of contract claim this year.

Rowena Mason

Telegraph

4 April 2010

Mr Dauphin, who lives abroad and stays out of the limelight, is one of the co-founders of the controversial commodities company, which last year settled Britain's largest-ever class action suit over a case related to toxic waste dumped in Ivory Coast.

The oil trading company is being sued by Kieran Looney, a training consultant, who it hired to improve its staff development programme.

It is understood that Trafigura has been notified of Mr Looney's intention to call his former employer as a witness, but the company declined to comment on whether Mr Dauphin intends to appear.

Mr Dauphin is not obliged to attend the court, but if he refuses, the claimant and his City lawyers Olswang are planning to apply to the judge for a witness summons.

The oil trading company tried to get High Court documents relating to Mr Looney's case removed from public view just weeks after trying to stop the media from reporting a parliamentary question about its toxic waste.

But its efforts failed, meaning the documents detailing Mr Looney's claims are publicly available. In the claim, Mr Looney argues that Trafigura breached their agreement by terminating his contract and asks to be paid £6m.

A Trafigura spokesman said the company strongly denies the allegations and is contesting the case.

Little is known about Mr Dauphin, except that he was previously a senior trader for secretive commodities firm Marc Rich & Co, which later became Switzerland-based Glencore.

However, Mr Dauphin hit the headlines in 2006 when he was arrested with four colleagues and spent five months in jail in Ivory Coast on charges related to the toxic waste. He was later released and the authorities dropped all allegations of wrongdoing. In a statement, Mr Dauphin described it as "a terrible ordeal... [to spend] five months in jail as innocent men".

The oil trader settled out of court over the toxic waste last September by giving 31,000 Ivory Coast residents £30m, without admitting any liability for the "slops" that ended up in their country in 2006.

Trafigura has already paid more than £100m to the Ivory Coast authorities for a clean-up operation and still faces court action in Amsterdam over allegations, which it denies, that it illegally exported toxic waste.

It has always denied involvement in dumping cheap, dirty oil slops in the Ivory Coast in 2006, saying it did not know that the residue would be abandoned by a company paid to discharge the waste.

It also says slops could have caused "low level flu-like symptoms and anxiety", but denies they could have caused more serious illnesses.

The company recently won an apology and £25,000 payout from the BBC after the corporation admitted libelling the group. The BBC now acknowledges that "the evidence does not establish that Trafigura's "slops" caused any deaths, miscarriages or serious or long-term injuries" to residents of West Africa.

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Trafigura to sell €400m in Eurobonds

By Samantha Pearson and Javier Blas

Financial Times

31 March 2010

Trafigura, one of the largest commodities traders, yesterday said it would sell €400m ($539m) in bonds on its first venture into the capital market.

The five-year Eurobond issue marks a significant departure for the reserved trader, which has until now relied on bank credit lines and reveals little financial information to outsiders.

Pierre Lorinet, Trafigura chief financial officer, said that the company wanted to branch out its funding and lengthen its debt maturity.

"The bond is not about raising money for specific purposes but rather about diversifying our funding sources away from banks," he said. Mr Lorinet added that Trafigura would consider another bond issue in 2011 but was unlikely to be a frequent issuer.

The bond issue is another sign that the traditionally publicity-shy Switzerland-based trading houses, which dominate global commodities markets, are lifting their veil of secrecy.

Glencore, the world's biggest trader, is moving towards a public listing, while oil traders such as Vitol have disclosed some financial details.

Trafigura this month approached investors about raising €300m and quickly obtained bids for €1bn from about 120 Europe-based institutional investors. "We were a bit surprised about the good reception," Mr Lorinet said.

The bond was priced at 410 basis points above the benchmark mid-swap rate. Trafigura does not plan to seek a credit rating, although it considers itself as investment grade. BNP Paribas, Lloyds, RBS and ING lead the issue.

Trafigura was founded in 1993 by Claude Dauphin and Eric de Turckheim, two former senior oil traders at Marc Rich & Co, the famed trading house which, after a management buy-out, transformed itself into Glencore.

Trafigura is the world's third-largest oil trader and second-biggest in metals. It reported sales of $47.3bn last year. It does not disclose its profitability, but rival executives estimate annual net income above $500m last year.

The move by Trafigura to tap the bond market comes as commodities prices rise.