Warehouse receipts and SKRs: what is real and what isn't

Much African copper waits in bonded warehouses before it is sold or shipped: in Dar es Salaam, Durban, Kolwezi, Ndola and inland dry ports such as Kapiri Mposhi. The receipt that warehouse issues is often the most important document a seller can show you.

What a genuine warehouse receipt shows

• the warehouse company, its address and its own reference number
• the owner or depositor of the goods
• the product, number of bundles or bags, lot or bundle numbers, and weights
• the date received
• conditions, charges and how the goods can be released or transferred

It is issued by the warehouse to its account holder. It is not something a seller creates.

"SKR" from a bank

SKR stands for safekeeping receipt. Banks issue them for valuables and securities held in their vaults. Banks don't normally store copper cathode, which arrives in bundles by the truckload. A "bank SKR" for hundreds of tonnes of cathode is a strong warning sign.

When copper traders say "SKR", they usually mean a warehouse receipt. Ask which it is.

How to confirm a receipt

1. Find the warehouse's contact details yourself, from its official website or the company registry.
2. Ask the warehouse to confirm the receipt number, the lot, the weight, the current owner and the date received.
3. Ask whether any other party has a claim on the goods, such as a financier.
4. If you are going to rely on it for payment, appoint an independent inspector to see and weigh the lot.

Ownership and transfer

Paying for copper in a warehouse is safe when the warehouse transfers the goods into your name, or releases them to you, as part of the same step as payment. Agree in writing how that transfer happens and confirm it with the warehouse before you pay. See test-and-pay.

Warning signs

• The receipt is in a different company's name from the seller, with no transfer document.
• The owner's name is blurred.
• The same receipt is offered by several sellers.
• You can't reach the warehouse except through the seller.
• The warehouse isn't one that inspectors and logistics firms in the region recognise. See fake warehouses.