Rakesh Sethi, chairman of Sapphire Minmetals Corporation Ltd., stated that Glencore Plc acted as a "senior partner" to Radiant World and its associated companies. This relationship was driven by Glencore's ambition to increase its iron ore trading volumes, with Sethi noting that Glencore desired "more volume, more market control, more customer base." Sapphire Minmetals was part of Radiant World until 2015, and Glencore still views them as a single entity, despite the companies claiming legal separation. Glencore has already recorded a $480 million provision, one of its largest trading losses as a public company, due to its dealings with Radiant World.
The broader dispute involves Radiant World alleging that Glencore orchestrated their arrangements, approved hires, directed payments, and advised on financing and trade pricing. In a letter to Glencore, Radiant World’s lawyers asserted that Glencore was "the dominant physical counterparty" and acted as the senior partner. This echoes a November 2024 WhatsApp message from Glencore's head of steelmaking raw materials, Peter Hill, who stated Glencore had "basically bank rolled your entire existence for the last few years." Glencore denies these claims, calling them meritless and stating it will vigorously contest them, citing that it has incurred losses and been exposed to risks by Radiant World's actions.
The relationship reportedly shifted in 2021 when a surge in iron ore prices led to losses on short derivatives positions held by Radiant World's network, which were bilaterally through Glencore. Sethi claims Glencore unilaterally closed these positions, crystallizing a loss. Radiant World's letter details Glencore closing positions in breach of agreement, asserting a $1.16 billion exposure, and demanding payment. Sethi estimates Sapphire's share of this exposure to be $300 million to $350 million. Subsequently, Glencore allegedly worked to help Radiant World and Sapphire secure financing.
Glencore began withholding payments to Sapphire approximately five or six months prior, offsetting them against money owed. Sethi claims Sapphire is owed $261 million and $79 million, with their total claim against Glencore potentially exceeding $900 million. Radiant World estimates its own losses to be over $1.4 billion. Both Radiant World and Sapphire Minmetals are facing an asset freeze imposed by the British High Court at the request of Jefferies Financial Group, and their activities are under investigation by the US Department of Justice, the Commodity Futures Trading Commission, and Singapore police. Radiant World and Sapphire have also recently made staff reductions across their offices in Asia and Europe.
