Glencore clean-up backed by EU loan
Commodities giant Glencore has used loans guaranteed by British and European taxpayers to clear up its own pollution mess in Zambia, it has emerged.
Giant float: Full dealing in shares starts today
Its activities will be cited by a group of 50 European politicians who are today calling for a moratorium on EU lending to mining companies.
The fresh chapter in the saga of Glencore's flimsy public image comes on the same day that the firm becomes a fully-fledged company listed on the London Stock Exchange.
But the rapturous applause from City bankers who pocketed millions from London's largest ever float was overshadowed by stinging criticism from politicians across Europe, including five from Britain.
More than 50 members of the European Parliament have signed a letter calling on the European Investment Bank (EIB) to freeze loans to firms such as Glencore's Zambian subsidiary Mopani Copper Mines.
Mopani received a £42m loan in 2005 from the EIB to refurbish the ageing copper smelter it took over after years of privatisation.
Originally set up by members of the European Union to aid economic development in former Iron Curtain countries, the EIB can lend to nations such as Zambia to help their development.
The smelter at Mopani is behind the toxic sulphur clouds that affect the surrounding area, meaning Glencore's subsidiary effectively received publicly guaranteed money to reduce any pollution it causes.
Glencore, which believes the EIB's presence as an investor assists its efforts to improve its environmental record, made a £2.4bn profit last year.
Alongside Mopani's ongoing pollution problem, the cross-party group will cite allegations, first revealed in the Daily Mail, of tax avoidance. The company denies any wrongdoing on tax.
The blow came as Glencore's shares suffered a dreary day of 'grey-market' trading, where institutions trade in its stock as a prelude to full dealing.
Glencore fell 10p to close at 514.5p, well below the float price of 530p. Corporate governance concerns have weighed on the stock, amid a flurry of global accusations.
Belgian subsidiary Glencore Grain Rotterdam is embroiled in a court case over 'violation of professional secrecy, corruption of an international civil servant and criminal conspiracy'.
Investors such as Standard Life have also criticised the shambolic way the company handled the appointment of chairman Simon Murray.
Nonetheless, the clamour for shares from institutional investors saw demand outstrip supply by threefold.
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