Retailer Hartree is planning additional recruitment in its fast-growing metals business

(Bloomberg) — Commodity trader Hartree Partners LP is planning new hires at its metals concentrates business, which has rapidly grown into one of the larger mid-tier players since its inception three years ago.

Founded by a trio of Goldman Sachs Group Inc. veterans, Hartree is better known in commodity circles for its deals in energy markets like oil, gas and carbon. The unit responsible for buying and selling processed metal ore already has about 50 employees and will add more traders this year, said Pascal Larouche, who manages the concentrates business. It has also started investing in some metals companies to ensure access to their supply.

Larouche declined to comment on trading volume. However, a person familiar with the matter said the Geneva-based unit handled volumes approaching 1.4 million tonnes of copper, zinc, lead and precious metal concentrates last year, placing it near the top of a mid-sized group of established traders. On a much broader scale, the industry is dominated by a trio of heavyweights: IXM SA, Trafigura Group and Glencore Plc.

Commodity traders have enjoyed their most profitable period ever, as first the coronavirus pandemic and then the Russian invasion of Ukraine created volatile price movements and regional supply imbalances that the industry thrives on.

Some traders are channeling some of their huge oil and gas profits into metals farming and mining, anticipating growing demand for metals like copper, nickel and lithium that will benefit from the global transition away from fossil fuels. However, the industry has had mixed results in diversifying into other markets such as metals and crops, with some unmeasured forays later abandoned.

Hartree, while expanding his trading book, also began to develop equity partnerships with miners. He invested in miner Mallee Resources Ltd. and took delivery of the first concentrate from the Mallee’s Avebury mine in Tasmania in the fourth quarter. It also secured financing for Australian copper and gold producer Chinova Resources through a future takeover subscription.

“Our company is a big believer in energy storage and battery metals,” Larouche said.

Hartree’s founders are well known in metals markets: Stephen Semlitz was head of metals trading at J. Aron and Goldman Sachs when he, Stephen Hendel and Guy Merison helped build the bank into a commodities behemoth in the 1990s.

Backed by Oaktree Capital Management, Hartree has operated a refined metals trading desk in London since 2016, and a specialist metal concentrates unit, Hartree Metals Sarl, opened in 2019.

When it comes to battery metals, Landon Berns, who previously worked at trading house Traxys SA, joined earlier this year as head of cobalt and lithium trading.

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