Euro bank freezes Glencore loans

THE European Investment Bank has frozen all new loans to commodities trader Glencore and its subsidiaries, it said in a statement, citing “serious concerns” over the group’s corporate governance.

The EIB, the European Union’s lending institution, provided a $50m (£30m) loan to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore, in 2005, to help pay for the modernisation of a copper smelter.

But Mopani has since been accused by some non-governmental organisations (NGOs) – most recently by campaign groups in an open letter signed by a group of European parliamentarians – of tax evasion and of causing widespread pollution.

Glencore has denied the allegations, the bulk of which stem from a leaked version of a pilot audit report commissioned by the Zambian tax authorities. The EIB, in a statement issued to answer comments from NGOs, said it has commissioned its own independent probe into the matter.

Any conclusive proof of tax evasion would lead to local penalties and could trigger early repayment of the loan, the EIB said.