By Marcus Leach
Serious concerns over Glencore's corporate governance have forced the European Investment Bank (EIB) to freeze all new loans to the commodities trading giant.
The EIB provided a $50 million loan to Mopani Copper Mines, a Zambian subsidiary of Glencore, back in 2005. However, since then Mopani has been accused of tax evasion and widespread pollution by certain campaign groups.
Glencore have denied all allegations.
"Due to serious concerns about Glencore's governance which have been brought to light recently and which go far beyond the Mopani investment, the President of the EIB has instructed the services to decline any further financing request from this company or one of its subsidiaries," an EIB statement read.
Glencore are confident that if the EIB take a closer look at their operation in Mopani they will see there is nothing wrong with the operation.
"We welcome the EIB taking a close look at Mopani, since we are confident that we will be completely exonerated," a Glencore spokesman said.
"The allegations are based on an incomplete, draft desktop study that was circulated in Zambia several months ago. We publicly refuted the draft conclusions of this document at the time."
Glencore, the world's largest commodities trader, listed on the London Stock Exchange last month, with its shares beginning trading at 530p each.