Martin Abbott's appointment five years ago as chief executive at the London Metal Exchange (LME) raised a few eyebrows.

What did someone who had laboured in a coal mine, worked as a security guard, a journalist in the fashion world and an editor and publisher know about the complexities of running the world's largest metals market?

But industry sources say he rapidly grasped the role and has impressed even his critics. He has led the LME to the brink of an historic sale, overseen a rise in trading volumes to record levels and opened the way to building a clearing service.

Abbott, 51, said he arrived in an exchange administration that was full of good people but falling short of its potential.

Five years ago we were struggling to keep the market open on a daily basis, now we are seriously able to contemplate building a clearing house, he told Reuters in an interview.

That, I think, has been a really good journey. Right now the LME is not afraid to consider anything.

That includes the potential sale of the LME. More than nine suitors are eying the 134-year-old institution.

Its modest building on Leadenhall Street in the City financial district is one of the last bastions of open outcry, with futures in metals including copper, aluminium, zinc, lead, tin and nickel still changing hands in so-called ring trading as well as electronically and over the telephone.

The exchange, which accounts for 80 percent of traded volume in global metal futures transactions, saw record trading volumes last year of 120 million lots equivalent to $11.6 trillion (7.2 trillion pounds) and 2.8 billion tonnes of metal.

There's no need for us to sell the LME, the fact that people want to buy us is flattering, Abbott said.

And I'll take credit for the fact that five years ago, we still dominated the space that we're in, but I'm not sure that we presented an attractive operating unit as a purchase target.


While many in the industry gladly give him that credit, there are others, including some of his admirers, who say he must take responsibility for what they see as shortcomings in warehousing arrangements that have damaged the LME's reputation.

I think Martin has done some things very well, but he is quite controversial in other ways. It's fine to sell the exchange, but is the exchange's reputation better today than it was five years ago? said one of its shareholders.

I'm not sure on that basis you could argue that it's been a particularly successful period. If anything, it's much more controversial than previously, the shareholder said.

Logjams at some of the LME-monitored warehouses around the world have crimped available supply, artificially inflating premiums, critics say. Premiums are paid on top of LME cash prices to take delivery of metals such as aluminium or copper.

In response, the LME increased the minimum rates at which metals must be loaded out of warehouses. Critics say this is not enough, and have also expressed concern about big financial players owning warehouses even as they trade the commodity.

Abbott has adamantly defended the LME's warehousing policy. He has insisted the LME has not lost credibility and that it enforces a strong separation between warehouses and the trading arms of their owners.


Abbott got his first taste of the mining world when he was 18, working on and off in a coal mine throughout his law degree studies at university in Leicester.

I was a coal cleaner, Abbott said. My first day, I clocked on at 7.00 a.m., the first break was at 10.00 a.m. and I thought it was time to go home. I didn't clock off until 6.00 that night.

Now his early start takes him to the LME building on Leadenhall Street in the City financial district.

His first job in London was right next door, where he was a uniformed security guard, eventually becoming a guard in the Soho Square home of Drapers Record, a fashion trade magazine.

He worked his way up the stairs and into the office, first selling advertising and then as a trainee journalist.

It was great fun. I was surrounded by fashion journalists who were writing ephemeral descriptions of collections, he says. And I would be asking: what's the cost of producing the collection and how will you be making the transition from haute to ready to wear?

But the pay was bad so he answered an advertisement for journalists at Metal Bulletin, a high-profile trade magazine.

On my first day they sent me to the LME and said go and have a look at that, because that's what we write about.

He stood in the gallery overlooking the raucous open outcry trading, and thought: That looks like a lot of fun.

I quickly realised that in addition to that it was a global business and there was nothing parochial about it.

That was June 16, 1984, and he has never really left the LME's orbit. Since then, he has been Metal Bulletin editor and publisher, with stints at brokerages and the exchange itself.

From his time in the fashion world, he enjoys choosing well-tailored suits and ties. I think fashion is at times gloriously irrelevant, but it's fun, he said.

He has also learned as a journalist and in dealing with the media that there is very little you can keep secret.

The fact that it is secret to you doesn't mean it is secret to everyone else, so communicate as much as you can, he said.

Industry sources also say he has built a competent team.

I've never had any fear of having very good people work for me, he said. They say a good CEO should be able to make himself redundant.

And what if he is made redundant in any takeover of the LME?

I'll add a line to the bottom of my CV saying I created shareholder value and toddle off down to the job centre, he said. I don't think it's a given that someone would clean out the management, but it's certainly a possibility. There are no CEOs for life.

(Editing by Anthony Barker)