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Media: Talvivaara minority owner suspected of corruption

Singapore-based Trafigura stepped in to help bailout the struggling Talvivaara mining operation.

Kuvassa on Kuusilammen avolouhos Sotkamossa.
Open quarry at the Talvivaara mine in eastern Finland. Image: Kimmo Rauatmaa / Lehtikuva

The Singapore-headquartered commodity trading firm Trafigura, owner of one-third of troubled mining firm Talvivaara, is under investigation by US authorities for suspected corruption and market manipulation, according to UK newspaper The Guardian. The allegations relate to the firm’s oil trading division.

Trafigura owns 29.7 percent of Terrafame, the company that runs the Talvivaara nickel mine in Sotkamo, eastern Finland. According to the Guardian report, the anti-corruption investigation into Trafigura is not related to its mining operations. Moreover the suspicions have focused on alleged manipulation and bribery in its oil trades.

According to the Guardian, the oil trading desk is being investigated by the US’ Commodities and Futures Trading Commission (CFTC). The agency has reached out to a number of private individuals and other entities and requested that they hand over information relating to their business with Trafigura over a period of several years. Meanwhile news agency Reuters reported that Brazilian state-owned oil company Petrobras is one of the companies being questioned over suspicions of fraudulent deals.

So far, no details of the suspicions have been released and Trafigura has not commented on the investigation. The global commodities trader, which had revenues of over 150 billion euros last year, was previously in the headlines over environmental disasters as well as allegations of corruption involving millions of euros in bribes and kickbacks from Petrobras oil trading division via intermediaries.

Trafigura upped stake in Talvivaara

Trafigura bought into Talvivaara in 2017, when the floundering mine was looking for external investors to help finance continued operations. At the time, Trafigura purchased a 15-percent stake in the eastern Finland mine from the Finnish government via its Galena investment fund.

At the same time, Trafigura received a seven-year option to purchase the mine's cobalt and nickel production as well as the lion’s share of zinc output.

Trafigura also bankrolled a significant portion of a 240-million-euro battery chemical plant that is to be constructed at the site. The Singaporean firm’s ownership in Terrafame has increased as part of a financing arrangement.

The state-owned Finnish Minerals Group owns 69.8 percent of Terrafame’s shareholding, while Trafigura holds 29.7 percent. The remaining 0.5 percent is held by Sampo financial group.

Terrafame employs 800 workers and the Talvivaara mine is the largest in Finland.

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