LME lists Scale Distribution warehouse for Detroit

LONDON, Jan 10 (Reuters) - The London Metal Exchange (LME) has approved a metals warehouse owned by Scale Distribution Inc, part-owned by Australia's Macquarie Group MQG.AX , to operate in Detroit, the LME said on Friday.

Detroit is home to investment bank Goldman Sachs' Metro warehousing unit, where large stockpiles of aluminium and long queues for metal developed about three years ago.

Congestion at certain LME warehouses has drawn scrutiny from British and U.S. regulators and led to class-action lawsuits by end-users.

Mindful of increasing criticism and scrutiny, the LME last year announced a plan to slash maximum wait times, crack down on market abuses and review its agreement with warehousing firms.

Scale's Detroit warehouse has been approved to store aluminium, nickel, lead and zinc.

The LME also said it had delisted Long Beach in the United States as a good delivery point because the location no longer has any LME approved warehouses.

The LME approves and licenses a network of warehouses and storage facilities around the world. They are normally located in areas of net consumption and logistical hubs for the transportation of the material.

Macquarie bought a stake in Scale, a small British warehousing company, in February last year, in part to sidestep the queues that have plagued the LME's warehousing system.

Orion Mine Finance, a mining equity fund spun off from metals hedge fund Red Kite in September, has a 40 percent stake in Scale Distribution, according to trade publication Metal Bulletin, citing LME documents.

(Reporting by Susan Thomas, editing by David Evans)

((susan.thomas@thomsonreuters.com)(44-7919627932)(44-207 542 6880)(Reuters Messaging: Reuters messaging: susan.thomas.thomsonreuters.com@reuters.net))

Keywords: LME WAREHOUSE