EEC steps into tin crisis

Press, 27 January 1986, Page 14

EEC steps into tin crisis

PA London The European Economic Community (EEC) has agreed for the first time to take part in negotiations with bankers and brokers on resolving the three-month-old cash crisis facing the International Tin Council (ITC), ITC delegates said. The decision to join the talks came in response to a joint Dutch and German proposal made to a meeting of community delegates, the chief Dutch delegate, Mr Abraham van Overbeeke, told reporters.

It is the first time the EEC has agreed to enter negotiations to resolve the crisis since the London Metal Exchange, the main forum for trading, suspended dealing in the metal on October 24 after the ITC ran out of cash to support prices.

Van Overbeeke said the community had agreed to negotiate on the basis of a package put forward by a banker, Peter Graham, and a metal broker, Ralph Kestenbaum, whereby a new company with capital provided by ITC members, brokers and bankers, would take over ownership of the ITC buffer stock holdings of tin.

Producers and consumers are due to hold separate meetings ahead of a scheduled ITC session when the council must start establishing its nego-

dating position with the ITC’s bankers and brokers.

■The Dutch delegate said negotiations with the community would be conditional on export quotas being maintained, and on an orderly disposal of ITC stocks. He said the EEC proposal to the ITC made no mention of the sum community countries would contribute other than a statement, from which Britain excluded itself, that£loo million (SNZ274 million) was too much for all ITC members to pay.

Graham and Kestenbaum have proposed that all ITC members pay£ 200 million (SNZS4B million).

Delegates said another key step towards meaningful negotiations would be for Britain to reveal how much it is prepared to contribute to resolve the crisis, which the London Metal Exchange has said is threatening its future. Some delegates said there was considerable scope for negotiation between the ITC and the banks and brokers, who are owed hundreds of millions of sterling by the ITC. The ITC buffer stock holds some 85,000 tonnes of tin. .