London Metal Exchange for the first time in history banned trading for ethical reasons
The London Metal Exchange (LME) will delist 19 metal producers for the first time in trading history for non-compliance with ethical requirements for raw material suppliers, which will be one of the largest "shakes" in the entire 145-year history of the exchange, the Financial Times notes.
Previously, the LME used exclusively metallurgical and financial standards to determine who can trade on its floor.
However, this year the exchange adopted new trading rules that require all LME-listed producers to demonstrate that the cobalt, aluminum and copper they supply to the market are sourced in a human rights manner and do not contribute to the financing of conflict or corruption.
The move was prompted by concerns raised in 2017 that the cobalt traded on the LME was produced using child labor in the Democratic Republic of the Congo. This metal is key in the production of batteries for electric vehicles and smartphones.
More than 96% of producers provided the LME with information about the origin of their raw materials at the end of June, and those who do not meet the requirements will no longer be able to sell the metal on the market, the exchange said.
Trading in metals of companies that have not fully completed the compliance work will be suspended until it is completed.