Chilean copper giant cuts Global link

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The Independent Online
A main copper supplier has suspended business dealings for next year with Global Minerals and Metals of New York as a result of speculation about its involvement in the Sumitomo copper scandal.

Codelco, the Chilean state-owned copper producer, has put on hold its contracts to supply copper to Global in 1997.

Global and its president, David Campbell, were subpoenaed last week by the New York attorney general to supply documents relating to their dealings with Sumitomo and its fallen, former star copper trader, Yasuo Hamanaka, to a grand jury investigation.

Global is also helping the US Commodity Futures Trading Commission with its civil investigation into the market and has been caught up along with several other firms such as Winchester Commodities of the UK in inquiries on both sides of the Atlantic into how Sumitomo's copper trader lost pounds 1.2bn over the last 10 years.

Among the lines of inquiry, investigators are seeking to establish links between problems at Codelco, which lost $170m two years ago because of unauthorised trading by an executive, and the Sumitomo affair.

Elliot Sloane, a spokesman for Global, said: "Codelco is saying they are going to honour their existing 1996 contracts, and they are going to come back to the table sometime this year and talk about next year." He added: "They never renew their contracts this early in the calendar year."

Mr Sloane said Codelco informed Global before Sumitomo announced losses of $1.8bn on 13 June. Codelco is thought to be a substantial customer of Global which also has extensive dealings with Zambia.

Mr Sloane said that Codelco has become wary as a result of speculation about Codelco and Sumitomo "so they decided to take a wait-and-see approach, let everything die down and come back and talk to us in the fall".

Two of Global's traders in Chile, Carlos Derpsch and Owen Guerrini, left for "personal reasons" in recent days. Mr Sloane said Mr Derpsch and Mr Guerrini were cleared of involvement in the Codelco scandal, which he claimed was "totally separate" from Sumitomo.

"Sumitomo are still buying copper from Global. All our bankers are still banking us, and all our brokers are still trading us," Mr Sloane added.

London copper traders said that squeezes in the copper market linked with Sumitomo may date back to June 1988.