Exclusive-Gerald Group's 'tin concentrate' bought in Brazil revealed to be sand

LONDON (Reuters) - Gerald Group, one of the world's largest metals traders, bought cargoes in Brazil that were meant to contain at least 1,250 metric tonnes of tin concentrate that turned out to be sand, two sources with direct knowledge of the matter said.

The sources said Gerald has shipped at least 50 containers of sand to smelters in Asia over the last few weeks. Gerald is investigating what happened in Brazil with the shipments in question, the sources added, asking not to be named because they are not authorised to speak to the media.

Reuters could not establish where London-based Gerald bought the material from in Brazil or from which suppliers.

Gerald did not respond to three emailed requests for comment over the last week and did not answer repeated calls from Reuters.

The trader supplies tin concentrate to the Thai smelter Thaisarco, which does not price or pay for the material until after it has arrived and been authenticated.

The sources could not say exactly how much sand was sent to Thaisarco from Brazil.

"We have confidentiality agreements and a long-term relationship with Gerald," Thaisarco's Managing Director Andrew Davies said in response to a request for comment. "We are unable to disclose any specifics of our relationship."

Fifty containers would hold 1,250 metric tonnes of tin concentrate and Brazilian concentrate would yield 875 tonnes of metal. At current prices on the London Metal Exchange (LME), 875 tonnes of tin would be valued at around $24 million.

Documents that accompany metal shipments should include bills of lading, which detail the type, quality and destination of the goods carried, as well as certificates of origin and of content analysis.

The sources said they could not specify what kind of documents were attached to the cargoes in question.

In addition to selling tin to Thaisarco, Gerald typically sends tin concentrate to Malaysia Smelting Corp to turn into metal in a process known as tolling. Tolling is used by traders that do not have smelting facilities but want to retain ownership of the metal, rather than sell it to a smelter.

"Malaysia Smelting Corp did not receive any containers with sand," MSC said in an emailed response.

Brazil accounted for 18,000 tonnes, or 6%, of last year's global tin production of 310,000 tonnes, U.S. Geological Survey figures show.

Tin concentrate from Brazil typically contains about 70% metal. With regional variations, tin concentrate also contains byproducts or impurities such as iron, antimony, bismuth, lead and silver.

(Reporting by Pratima Desai; editing by Veronica Brown, Barbara Lewis and Catherine Evans)

By Pratima Desai