One of the world's largest commodity traders is seeking damages of up to US$6.9 million from Ghana's Volta Aluminium Company (VALCO) for breach of contract.

Switzerland's Glencore alleges that VALCO refused to raise letters of credit (L/Cs) to pay for the delivery of 26,250 metric tons of alumina. VALCO denies the Swiss company's allegations.

Urgent order

Glencore says VALCO ordered the alumina that is used in the aluminium manufacturing process and said that it needed the alumina urgently.

Consequently, Glencore says it shipped the order in August last year.

No L/Cs

After it received the goods, VALCO wrote to the seller to explain that it could not secure the L/Cs it needed to pay for the goods, according to Glencore.

The Swiss company views this as a breach of contract and is therefore suing VALCO in the commercial court in the Ghanaian capital, Accra.

Claims denied

VALCO disputes Glencore's allegations, saying the commodity trader is not entitled to its claims because there was no concluded agreement between the parties to enable it to ship the goods.

The Ghanian company claims the shipment was unsolicited and there is no contract.

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