Thieves Defy Death to Tap Metal Price Boom as U.K. Cracks Down

Thieves in the U.K. are stealing sculptures, copper cabling from railroad tracks, church roofs, bells, manhole covers and even hospital equipment as demand increases for metals on the world’s commodities markets.

At least two people a month are killed trying to take copper power cables, railway scrap metal and lead from church roofs, according to London’s Metropolitan Police, which formed a special unit last month to tackle the crime. With copper prices forecast to jump this year, police said reported thefts are at a record, as are insurance claims by churches.

“Britain is under attack from metal thieves,” Dyan Crowther, Network Rail Ltd.’s director of operational services, said by e-mail. “The only way to significantly reduce metal crime is to take away the illegal market.”

Scrap metal is a 5 billion-pound ($7.7 billion) industry in the U.K. and the government is cracking down on the proliferation of illegal trading by requiring sellers to undergo identity checks and banning cash transactions, Home Office Minister Lord Henley said yesterday.

Each year about 15,000 tons of scrap is stolen, according to the British Broadcasting Corp. That’s roughly equivalent to the combined weight of three Royal Navy warships. The Association of Chief Police Officers estimates metal theft costs the economy about 770 million pounds a year in disruption to services and replacing the stolen components.

“The idea that you could possibly go cashless is something we’re considering,” Henley said. “At the moment you can just go there and sign in as Mickey Mouse or whoever.”

Electrocution

As the British economy stutters, thieves also are taking risks that can be more severe than being caught by police.

Two brothers from south London, Jason and John Tusting, were jailed last August for stealing copper cable from a railway line; they were caught selling the metal to a scrap dealer three hours after their accomplice, James Smith, 28, was electrocuted and died during the theft, police said.

“It’s extremely dangerous,” said Tony Glover, a spokesman for the Energy Networks Association in London. “They are playing with up to 33,000 volts, sometimes in a very confined space. There are many dramatic near-misses when people have had their faces blown away but survived with surgery.”

Rail-related metal theft rose to a record 2,627 incidents last year, up 9.6 percent from 2010, the British Transport Police said. Network Rail, the operator of the U.K.’s railways, estimates it has lost 43 million pounds in compensation and repair costs in England, Scotland and Wales since 2009.

1960s Law

The government plans to update the ineffective Scrap Metal Dealers Act of 1964. Sellers will be required to show identification, rather than simply offering their name and address under the current system, and higher fines and harsher restrictions will be introduced.

“Metal theft is a serious and growing problem and the government is working hard with industry, police and law enforcement agencies to tackle it,” Home Office Minister Henley said in an e-mailed statement on Jan. 4. “It is clear law dating back to the 1960s is not sufficient to deal with an increasingly organized crime.”

A metric ton of lead was worth $2,049 yesterday, according to the London Metal Exchange. The price of lead on the LME has doubled since 2008, according to exchange data.

Copper prices are forecast by Goldman Sachs Group Inc. (GS) to climb 26 percent to $9,500 a ton in the next 12 months, while analysts at Barclays Plc (BARC) are forecasting a shortfall of 234,000 tons as demand rises 2.5 percent next year.

Church Roofs

Churches, many with a large proportion of copper and lead on their roofs, as well as bells and lightning conductors, have for years been targeted by thieves. Last year, Ecclesiastical Insurance Group Plc, which specializes in church property, said it recorded more than 2,500 claims, beating the previous record of 2,400 in 2008.

The Church of England Diocese of Chelmsford in Essex, east of London, was worst hit, with 409 out of 600 churches stripped of metals, causing 944,000 pounds in damage over the past five years, according to James Bettley, chairman of the Diocese Advisory Committee.

“In some cases parishioners have slept in their churches, and the thefts still take place,” Bettley said in a telephone interview on Jan. 3. “People will take absolutely anything metal now and ask questions later.”

The diocese’s most targeted church is Hatfield Broad Oak, which dates from the 13th century and whose roof was stripped six times in the second half of last year by thieves, causing at least 100,000 pounds worth of damage. Bettley said the diocese may use fiberglass or coated stainless steel as a replacement.

Opportunists, Gangs

About 10 churches a day are being targeted in England, Janet Gough, director of the Cathedral and Church Buildings Division of the Church of England, said by phone.

“It’s a combination of opportunistic crime as well as the gangs that are taking the metal out of the country,” said Gough. “The regulation of the scrap metal industry is the single biggest thing that can make a difference. Cash transactions have to be banned.”

Stolen scrap metal finds its way onto major corporations’ assembly lines once it’s mixed with legitimate scrap in large processing yards. Often street collectors, known in the U.K. as rag and bone men, act as middle-men. They collect the stolen scrap from local yards where any identifying marks are burned off, Ian Hetherington, director general of the British Metals Recycling Association, said by telephone on Jan. 4.

In cases of organized crime, gangs use social networks to arrange to collect stolen metal at a temporary site and smuggle it out the country, Hetherington said. In the U.S., gangs use disused service stations, and in France, where cash transactions have been banned, they move metal in containers, he said.

Supply Chain

The association opposes banning cash deals, because it believes it would create a black market.

“At some point we all acknowledge that this material may well enter the legitimate supply chain,” Hetherington said. “Once you’re faced with material that’s been compressed, distorted, and possibly delivered in 40 ton containers, it’s very difficult to identify single items that might have been stolen,” he said. “The rules are ridiculously slack.”

Scotland Yard in December created its first dedicated unit, the Waste and Metal Theft Taskforce. Officers staged 275 inspections and searches of scrap-metal dealers’ yards in the first two weeks of the month, resulting in 15 arrests for offenses ranging from burglary to transporting scrap without a license, the Metropolitan Police said.

Telephone Cables

BT Group Plc (BT\A), the U.K.’s largest fixed-line phone company, saw 12 percent more attacks on its networks last year compared with 2010. It recovered 204 tons of stolen metal by visiting scrap metal dealers and working with police, Luke Beeson, general manager of BT Group security, said in an e-mail.

Part of the dramatic rise in metal thefts has been the plundering of statues and monuments.

In mid-December, a bronze sculpture by Barbara Hepworth, entitled Two Forms (Divided Circle) was cut from its plinth in Dulwich Park, south London. The two meter-high piece was insured for 500,000 pounds, though would fetch about 1,500 pounds as scrap, according to Art History News.

Brass and copper plaques listing the dead of two world wars were stolen at a peak rate of two or three a week in October and early November, according to the War Memorial Trust. Prime Minister David Cameron called the thefts “an absolutely sickening and disgusting crime.”

Brian Souter, chief executive officer of rail and bus operator Stagecoach Group Plc (SGC), called on the authorities to clamp down on all metal theft.

“The organized theft of metals is having a huge impact on the rail industry and its passengers, as well as on other critical aspects of the national infrastructure,” Souter said in an e-mailed statement on Jan. 3. “As well as the human cost of disruption, criminal activity in this area is now so damaging to our wider economy that we simply must act.”

To contact the reporter on this story: Katie Linsell in London at klinsell@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.