Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Trafigura Group’s head of metals operations is leaving as part of a global restructuring of its logistics team, the latest shakeup at the trading house since it was hit by a vast alleged nickel fraud.
Svetlana Kabanova, who ran operations for Trafigura’s metals trading unit, is leaving the company, according to people familiar with the matter. Instead of separate heads of energy and metals, Trafigura will now have a single global head of operations, one of the people said. The restructuring had long been planned but it has recently been accelerated, the person said.
Trafigura is one of the world’s dominant metals traders, but its metals team has been under pressure since it revealed that it was facing losses of $577 million after finding that metal cargoes it bought didn’t contain the nickel they were supposed to.
Kabanova couldn’t be reached for comment. She is the latest person to leave the metals team at Trafigura — Bloomberg has previously reported the departure of nickel and cobalt trading head Socrates Economou, and a senior metals trader in Mumbai, Harshdeep Bhatia.
Trafigura has said it doesn’t believe that any of its employees were complicit in what it has described as a “systematic fraud” perpetrated by Indian businessman Prateek Gupta. A spokesman for Gupta has said that he is planning a “robust response” to the allegations.
The new combined head of operations will report to Trafigura’s executive management, according to the person familiar with the matter. Trafigura’s back- and middle-office functions, such as operations, are overseen by chief operating officer Mike Wainwright.
Operations teams play a vital role for commodity trading houses like Trafigura by managing the practical logistics of buying, selling and transporting raw materials around the world. The teams coordinate shipments and inspections and ensure that the company knows where its commodities are and has the necessary paperwork. At Trafigura, the role includes responsibility for assessing and seeking to reduce logistical, credit and hedging risk, according to the company’s website.
Trafigura’s own legal filings have revealed numerous shortcomings in the company’s controls in its dealings with companies connected to Gupta.
For example, the trading house paid for cargoes of nickel based on shipping documents that contained discrepancies, such as not showing the “HS” code that is used to identify the goods being shipped. And it did not always insist on getting a “certificate of analysis,” verifying the contents of the cargoes, before paying for them.
In an interview with Bloomberg TV last week, Trafigura chief executive Jeremy Weir said the company was reviewing its missteps in relation to the nickel loss. “We’re not perfect, but we’re doing a very significant audit around where we’ve come up short,” he said. “You can imagine we’re reviewing this really, really closely.”
(By Jack Farchy and Archie Hunter)
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