Chinese Port's Missing-Metals Mystery Deepens
Citic Resources Can't Locate Alumina at Qingdao, Amid Probe Into Commodities-Backed Loans
Citic Resources, a mining company, said earlier this month that it had applied to courts in Qingdao, on China's eastern coast, to secure metals it owns in warehouses. Citic Resources' parent is Citic Group, one of China's largest state-owned companies and a big financial concern.
Citic Resources, in a statement released Wednesday to the Hong Kong stock exchange, said Qingdao courts couldn't locate 123,446 metric tons of alumina, a mineral used to produce aluminum. Citic Resources said it stored 223,270 tons of alumina and 7,486 tons of copper at the port that was awaiting delivery to buyers. The company said it would now conduct its own investigation into the missing commodities. At current market prices, the missing alumina is worth about $50 million.
Qingdao courts couldn't immediately be reached for comment.
The statement came as Western and Chinese lenders are looking into suspected fraud in China involving metals that were used as collateral. Banks have lent hundreds of millions of dollars to Chinese commodities traders in recent years, using commodities such as copper, iron ore and aluminum as collateral.
Western lenders say they are trying to determine whether metals stored at Qingdao Port as collateral against loans were illegally pledged by a Chinese trading firm to more than one lender to obtain multiple loans.
Qingdao Port International Co. 6198.HK -0.60% , which operates Qingdao Port, on June 6 said Chinese authorities were conducting a probe into metals stored at the port. Chinese authorities haven't publicly commented on the probe.
Western bankers complain that they still can't access the storage facilities at Qingdao to check on the collateral promised to them in return for loans. They say they have little clarity on when they will be allowed access. "The foreign banks are not invited to any party that is going on there," said one person familiar with the matter.