Huge scale of copper recycler fraud revealed

Copper smelter Aurubis has put the value of theft and fraud involving copper scrap announced during the summer at EUR 185 million.

In June, police began investigating reports of criminal activity at the Hamburg-based company with reports that shipments of scrap metal destined for its copper smelters were in fact worthless consignments of rocks. It has been alleged that some suppliers had manipulated details about the raw materials they were delivering and worked with employees in the company’s sampling department to cover it up.

Shortage

Aurubis had already warned that the cost of the crime would dent profits this year and, following an ‘extraordinary inventory’ on 31 August, it says the ‘precious metal shortage’ will negatively impact operating earnings before taxes by EUR 185 million. By way of compensation, it hopes to claim insurance pay-outs of around EUR 30 million and seize assets from the criminals involved.

A press release states: ‘For the current fiscal year, the company anticipates an operating result between EUR 310 million and EUR 350 million.’ Before the crimes, the forecast had been up to EUR 550 million.

In the latest release, ceo Roland Harings says: ‘We are working closely with the investigative authorities and at full speed to get to the bottom of the criminal activities. We have pulled all of the necessary internal resources together and are using external forensic specialists.

Security measures

‘At the same time, based on the findings of the investigation, we are immediately and comprehensively improving the level of protection against professional crime. Process improvements and additional security measures will be established. Our goal is to raise the level of security high enough to make theft and fraud impossible.’

Aurubis says it can rule out that any customers, and particularly deliveries to customers, were affected by the fraud. ‘The company cannot yet make any statements about which suppliers this will impact. This is part of the ongoing investigation.’

Harings added: ‘We will do everything in our power to ensure the recycling industry as a whole is not undermined.’