Mercuria takes on Trafigura and Glencore in metals buying and selling drive | USAEMALL.com

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Swiss trading house Mercuria is preparing to invest even more in its rapidly expanding metals division and buy further stakes in mines, according to top executives at the company.

The Geneva-based group, which has roots in oil trading, has been snapping up copper supplies around the world as it challenges incumbent traders such as Trafigura and Glencore, after launching a metals unit last year.

Mercuria chief executive Marco Dunand said that the company’s metals business could eventually rival its oil trading operations in size.

“The metals market is still not completely mature . . . there are opportunities to co-invest in minority interests, or majority interests,” he said at the Financial Times Commodities Global Summit on Tuesday. “We are looking at substantial investment in that sector.”

Dunand said the company was looking not only at mines, but also at the logistics around mines and the entire metals supply chain.

This week, Mercuria struck a $200mn pre-payment agreement that will provide it with a supply of copper from the Mopani mine in Zambia, which is majority-owned by IRH, the Abu Dhabi mining group.

The deal between Mercuria and IRH is the latest in a series of deals by the Swiss trader to secure access to the copper concentrate produced by mines. These have included a joint venture with the Zambian government last year, and a marketing agreement with Congolese state-owned miner Gecamines earlier this month.

This year, the company would move about 750,000 tonnes of copper cathode and about a million tonnes of copper concentrate, said Kostas Bintas, head of metals and minerals at Mercuria.

“The idea was to start big, from day one, and it has been executed as such. Because nine months later, we are 70 people, that proves the point,” said Bintas, a veteran trader who joined Mercuria last year from Trafigura. 

Rival trading houses Vitol and Gunvor have also been building metals teams, as trading houses that were founded on oil start to prepare for the energy transition, which is expected to see high demand for copper and aluminium.

Traders say that having so many new entrants into the metals market — traditionally dominated by Trafigura, the largest private metals trader — has made it difficult to secure supplies of material, particularly for copper concentrate.

IRH, which is owned by International Holding Company, the business empire of Abu Dhabi royal Sheikh Tahnoon bin Zayed al-Nahyan, bought a 51 per stake in the Mopani mine in Zambia last year. IRH did not respond to a request for comment.