Financial Times
Glencore sues Clarendon Alumina over contract award
Edited by : AL CIRCLE
2 min read
Glencore is suing a Jamaican state-owned company after it awarded a lucrative contract to one of the trader’s rivals.
Clarendon Alumina Production, which is owned by the Jamaican government, in June awarded a 12-year alumina supply deal to Hong Kong-based Noble Group, unseating Glencore from a trading relationship it had held for decades.
The London-listed trading house responded last month by commencing legal action in Jamaican and English courts seeking to restrict CAP’s deliveries to Noble, according to a filing last week at the US Securities and Exchange Commission by the Jamaican government.
Glencore alleges that the deal with Noble will prevent CAP from delivering alumina it still owes to Glencore, according to the filing.
Jamaica has the world’s fifth-largest reserves of bauxite, the raw material that is processed into alumina and then aluminium, a metal used in everything from fizzy drinks cans to aircraft.
But CAP, whose main asset is a 45 per cent stake in a bauxite and alumina company, has struggled amid low prices and high energy costs, making it a burden on Jamaica, one of the world’s most indebted countries.
According to the SEC filing, Glencore last month filed an application in a Jamaican court seeking to restrict CAP’s alumina shipments to Noble, and a claim in an English court seeking damages. Last month CAP obtained a discharge of an interim injunction that had been issued in Jamaica.
Glencore’s involvement in the Jamaican bauxite and alumina industry dates back several decades, when the company’s founder Marc Rich established its position in the country. However, the trader’s most recent contracts with CAP in 2000 and 2002 committed the Jamaican group to sell its alumina below global market prices and below CAP’s costs, according to a government report.
Clarendon Alumina Production, which is owned by the Jamaican government, in June awarded a 12-year alumina supply deal to Hong Kong-based Noble Group, unseating Glencore from a trading relationship it had held for decades.
The London-listed trading house responded last month by commencing legal action in Jamaican and English courts seeking to restrict CAP’s deliveries to Noble, according to a filing last week at the US Securities and Exchange Commission by the Jamaican government.
Glencore alleges that the deal with Noble will prevent CAP from delivering alumina it still owes to Glencore, according to the filing.
Jamaica has the world’s fifth-largest reserves of bauxite, the raw material that is processed into alumina and then aluminium, a metal used in everything from fizzy drinks cans to aircraft.
But CAP, whose main asset is a 45 per cent stake in a bauxite and alumina company, has struggled amid low prices and high energy costs, making it a burden on Jamaica, one of the world’s most indebted countries.
According to the SEC filing, Glencore last month filed an application in a Jamaican court seeking to restrict CAP’s alumina shipments to Noble, and a claim in an English court seeking damages. Last month CAP obtained a discharge of an interim injunction that had been issued in Jamaica.
Glencore’s involvement in the Jamaican bauxite and alumina industry dates back several decades, when the company’s founder Marc Rich established its position in the country. However, the trader’s most recent contracts with CAP in 2000 and 2002 committed the Jamaican group to sell its alumina below global market prices and below CAP’s costs, according to a government report.
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