Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A Russian sales manager for the automation division of Finland-based mining technology supplier and engineering firm Metso, is said to have skimmed money off invoices and cycled the funds through several bank accounts and firms until they ended up in a company he owned in Panama.
According to Finnish media, the employee resold Metso’s valves using a network of companies owned by fellow Russians, increasing the price of the product in each and every stage. He then is said to have skimmed the difference off the original deal and directed it to his company account in Panama.
An audit concluded that the suspected activity took place outside Metso’s own scope of business and without the firm’s knowledge.
After receiving information about a possible misconduct, Metso informed the appropriate authorities and started a normal internal audit process about the case, it said in a statement Monday.
The audit, conducted together with an external team from PwC, concluded that the suspected activity took place outside Metso’s own scope of business and without the firm’s knowledge.
The company, which last year decided to put its mining division in the back burner due to weak sales, said it has terminated the employment contract for the individual as a result of the investigation.
As most mining suppliers, Metso has been hit hard by a sustained commodity rout. As a result, the company began last year a major restructuring aimed to switch the Metso’s emphasis from mining equipment manufacturing to sales of services and flow-control equipment, which together account for roughly 85% of its revenue.
The Finnish company is not the only one suffering the impacts of spending cuts among miners in the last three years. Its peers in a Nordic cluster of mining gear suppliers, including Sweden’s Atlas Copco, Sandvik, and Denmark’s FLSmidth have also been squeezed by it.
