Mining Blog

Gold bulls, bears, bullies – and bullion

7. March 2013, Comments (0)

“The largest gold companies are seeking to lure investors back to the $300 billion industry after a string of money-losing multibillion-dollar takeovers and over-budget projects. Barrick and its competitors are vowing to focus on margins and to get a grip on soaring production costs, rather than boosting output”.

So commented Bloomberg at the end of last month (27 February 2013), pointing out that: “The average cash cost of 10 of the biggest gold miners was $694 an ounce in the third quarter [of 2012], 49 percent higher than in the same period two years earlier…The average gold price rose 35 percent in the same comparison”.

Put bluntly, the big gold diggers have been effectively cheating the rest of us by underestimating the actual expense involved in extracting each ounce of the gilded metal.

Little wonder, then, that their profits have been falling, and that – instead of buying company shares – investors have been putting their cash into Exchange Traded Funds (ETFs), based on the physical holding of gold bullion.

According to data compiled by Bloomberg: “The weight of gold behind those ETFs, which include the $64.9 billion SPDR Gold Trust, has quadrupled to 2,530 tons since the start of 2007″.

However, Goldman Sachs Group, reporting on February 25th, isn’t so sure that this particular rally will last, saying: “[T]he boom in ETFs may now be at an end, with physical holdings poised for the biggest monthly decline since 2008. The gold cycle has probably turned as the recovery in the U.S. economy gathers momentum and investment holdings shrink”.

Moreover, says Bloomberg: “[I]t’s not yet clear whether gold miners will benefit from the change in sentiment”.

So – amid a lot uncertainty all round, now come these belated attempts by the industry leaders to “come clean on costs”.

Wearing a golden heart on his sleeve, J Paul Rollinson, the new CEO of Kinross Gold, in mid-February admitted that: “Everyone was trying to run through the funnel of building these new projects as big as you can, as fast as you can”.

Destruction

There’s surely no need to point out what this has meant in terms of destructive impacts on people and environment, prompted by promotion of such falsely-predicated, bullish, market sentiments.

What now? The corporate bullies are promising to cut their mining suits to fit the true costs they bear.

Except that, according to the London-based World Gold Council, there’s “no universal agreement” as to exactly what these costs are.

And that leaves the door open to further conniving – and conning- on the part of the big miners.

On February 27th, Dominican Republic President, Danilo Medina, announced that a contract with Barrick – the world’s leading gold producer – to develop a US$4 billion mine was “unacceptable” and has to be revised to provide more benefit to the country.

This is similar to policy statements made by many other governments in recent years. But, now, the likes of Barrick have a potential new weapon in their armoury with which to beat off such urgent and legitimate demands.

Nick Holland, CEO of Gold Fields, says the newly-revealed relative “poverty”, at the heart of gold miners’ own governance,”could be positive for getting more realism into governments about how much tax they really should be levying on us.
“There’s not the super profits that you’d [sic] have them believe you’re making.”

It all makes for a somewhat confusing and uncertain picture.

But one thing’s for sure: the old gold dogs aren’t going to lie down yet, without putting up a fight.

A looming, copper-bottomed, threat to communities

13. January 2013, Comments (0)

“It’s simply criminal”. That’s what, in January 2011, Mines and Communities (MAC) called “the type of purely speculative activity that currently seems to be driving the [copper] market to bullish heights” [http://www.minesandcommunities.org/article.php?a=10660&l=1]

At the time MAC declared that “the recent copper market boom is a dangerous illusion… triggering potential massive new investment in existing mining projects and… spurring revival of mines which should have been properly closed down and rehabilitated years ago”

This wasn’t the first occasion on which MAC had sounded a warning bell. Back in October 2009, it quoted a well known UK specialist in copper markets, Simon Hunt, as asking: “Could the drove of optimists – now creeping out of the woodwork all over the shop – have got it seriously wrong? If so, prudence alone (not to mention ethics) requires a concerted shift to a global post- mining scenario”.

In November 2010, the market price of copper began rising to unprecedented heights, spurring the huge investment bank, JPMorgan, along with BlackRock, the world’s most diversified investor in mining, to propose setting-up commodity-based exchange traded
funds (ETFs) which would buy and store the metal in their own warehouses.

Their ostensible aim was to promote copper as a “store of value”, similar to that long-established for gold. But, as Simon Hunt warned at the time: “The record copper price is being driven by speculators, hedge fund buying, and Chinese stockpiling and hoarding. Although copper is up 55% since its low of $2.77 in late June [2010], the supply and demand fundamentals simply do not support all time record prices”.

Hunt’s view was supported by geologist Micky Fulp, who commented:
“At this juncture, it does not appear to me that basic supply and demand fundamentals are strong for the copper market in the short term. There is evidence to indicate that the market is overbought by speculators and hoarders.

“That said, there are other factors, especially the new copper ETFs that could drive prices substantially higher”.

In recent weeks, JPMorgan has apparently won the day, having been granted permission by the US Securities and Exchange Commission (SEC) to set up its XF Physical Copper Trust Fund – an ETF in all but name – and store copper under its own control.

The move has already been heavily attacked by a New York law firm (representing copper fabricators) which claims it will “grossly and
artificially inflate prices for an industrial commodity in short supply and …wreak havoc on the US and global economy.”

Micky Fulp agrees, saying that “since 30% of the copper stored in warehouses is not available to the market, prices might skyrocket.”

For which we should read: more exiguous profits for the hoarders, hedge funds and unscrupulous traders, as consumers pay well over the odds for a vital metal whose supply is being deliberately “shorted”.

Inevitably this will spur the opening, re-opening, or expansion of copper mines the world certainly doesn’t need, creating even further trials and tribulations for communities across the planet, from Argentina, Bougainville and DR Congo, through Panama and Peru to the USA and Zambia, who will suffer the consequences

To re-iterate what MAC wrote in January 2011: “Digging copper has long proved one of the most damaging and life-threatening
activities in the extractive sector.

“There might be justification for mining the red metal, so long as it is used to improve peoples’ lives – notably by bringing electricity to their homes… But there’s surely only one way to describe the type of purely speculative activity that currently seems to be driving the market to bullish heights. It’s simply criminal”

(For latest news on a huge copper deposit in Panama, which is currently subject to a takeover battle between banks and other mining funds, see: http://moneytometal.org/index.php/Leucadia_National)

A New Brooming of Dubious Dealers in 2013?

8. January 2013, Comments (0)

The recent winter “lull” hasn’t prevented regulatory authorities in three jurisdictions – the UK, Australia and Canada – from spotlighting the recent dubious activities of four mining financiers.

In mid-December 2012, the UK Takeover Panel ruled that the notorious Bakrie Group, and an investor called Rusan Roeslani, must reduce their shareholder voting rights in London-listed Indonesian coal giant Bumi plc from 50.3% to less than 30%.

The Panel said both had acted as a “concert party” when injecting their Indonesian coal assets into Nat Rothschild’s Vallar plc in 2011. They should either have mounted a takeover bid of Bumi on securing more than 30% of the company’s shares; or else gained a waiver from the Panel – which they didn’t.

In response, Roeslani has resigned from the Bumi board, while Bakrie’s nominee, Nalin Rathod, stepped down as the company’s CEO at the end of the year (December 31 2012) [Mining Journal 21-28 December 2012].

Dirty Doings Down Under

Then there’s Gina Rinehart – one of the world’s richest women – whose flagship Hope Downs 4 iron ore project in Western Australia is valued at close to $2 billion and, once operational, will have annual capacity of 15 million metric tons.

It’s now been belatedly revealed that Rinehart had almost-doubled her after-tax profits to Aus$1.2bn by the end of June 2011, as she finally “gave in to pressure…to disclose details of her fortune” [Reuters 3 January 2013].

The report, released by the Australian Securities and Investments Commission (ASIC), also showed that Gina’s Hancock Prospecting Ltd had borrowed money from Rio Tinto.

According to Reuters, at the end of June 2011, “Hancock Prospecting sat on a cash pile of A$1.68 billion…and more than doubled its dividend to A$12.5 million from A$6.1 million in 2010″ – something which must have shocked the growing number of Ms Rinehart’s critics.

The “G-man”

This blog has already mentioned a man called Bobby Genovese (known in the industry as Bobby G). In December 2012, he filed a document with Canadian regulators showing he’d made more than 250 transactions in 2011, involving shares in a company called Liberty Silver, shortly before it listed on the Toronto Stock Exchange (TSX).

Strong doubts were expressed last year as to the degree of control Genovese had over Liberty Silver and the lack of transparency involved in his trading of its shares.

Now, Canadian regulators have announced that the BG Group (not to be confused with musical legend The BeeGees, of course) and two his other entities held around 8.6 million LIberty Silver shares, or more than 10% of the total, at the time.

Comments Canada’s Financial Post: “Before listing on the TSX, Liberty Silver issued almost 70 million shares for fractions of a penny each, and there have been anonymous allegations that Mr. Genovese has undisclosed control over tens of millions of them.

“It is not clear why Mr. Genovese waited so long to make the transactions public. Some of them are more than a year old” [Financial Post, 31 December 2012].

Well, sometimes – as with Gina Rinehart – public concern can cause a controversial wheeler-dealer to issue details of their private wealth, even if they don’t technically have to do so.

So, will we find even more speculators of such a distateful ilk, being forced to air their “dirty linen” in public as the new year unfolds?

Just watch this space!

PS: And, of course, do pay regular visits to the From Money to Metal wiki data base, which regularly acts as a “laundry” for such revelations. See:

http://moneytometal.org/index.php/A_data_base

A Russian financial coup d’etat

12. December 2012, Comments (0)

London’s renowned Chelsea football team hasn’t been doing well of late – in fact it’s performance has been pathetic.

This may cause the team’s owner, Roman Abramovich, some sleepless nights, as he pores over the lacklustre goal sheets from the comfort of his multi-million dollar London town house.

However, the Russian oligarch – whose personal wealth was estimated by Forbes magazine at US$12. 1 billion earlier this year – this week had a distinct “result”.

His private equity firm, Millhouse Capital, has secured a stake in Russia’s biggest mining company; and with it significant voting power over the world’s premier nickel producer – Norilsk.

Moreover, Abramovich now appears able to block two fellow Russian oligarchs, Oleg Deripaska and Vladimir Potanin, in any decisions taken by Norilsk – a company that the two men have been fighting over for several years.

On 11 December, Reuters parsed the details of this deal, concluding that, not only had Abramovich got the best out of it, but that ordinary shareholders in Norilsk had been cheated of their fair share in Abramovich’s largesse.

According to Reuter’s Moscow correspondent, Polina Devitt, Roman will pay his cash straight to Vladimir Potanin and Oleg Deripaska, “depriving other investors of the windfall” . Devitt called this “one of the biggest prizes handed to insiders in the post-Soviet carve-up of Russian industry that created a clique of politically powerful tycoons” [Reuters, 11 December 2012].

It would probably “force Norilsk to borrow to fulfil promises to increase its dividends”, while JP Morgan Cazenove in a research note added that “…Norilsk Nickel (as well as its minorities) will not receive any cash from Millhouse Capital’s arrival as minority shareholder…

“Abramovich will buy a 5.86 percent stake for $1.5 billion and be given voting control over about 20 percent. Alexander Abramov, Abramovich’s partner in Evraz, Russia’s largest steelmaker,could become the new board chairman at Norilsk Nickel…”

In turn, Deripaskas’s RUSAL (the world’s biggest integrated aluminium producer) will hold 27.8 percent and Potanin’s Interros Holding end up with 30.3 percent in Norilsk.

Reuters says that the arrangement will “… leave the three billionaires with nearly equal voting stakes, meaning Abramovich can impose a resolution in any dispute between the other two”.

To the victors – the spoils

In recent years,Norilsk’s operations have come in for heavy flak from environmentalists over pollution and toxic emissions from its mines and processing plants; it remains delisted by Norway’s government Pension Fund.

Whether the minority investors in the company (some of whom are listed on the From Money to Metal database) have done much to address the company’s bad behaviour is questionable. However, the pre-emptive stake in Norilsk, now purchased by Abramovich, provides little confidence that its performance will improve.

On the contrary, as the major stakeholder in Russia’s London-listed Evraz steel company, Abramovich has to bear some responsibility for what – arguably – are the worst mining and mineral related disasters in the country in recent times. [See: http://moneytometal.org/index.php/Millhouse_Capital]

Deripaska (whose RUSAL aluminium company is reportedly $10.7 billion in debt) must also have cracked open a few vodka bottles, as he seemed to become the second key beneficiary of the deal: “…Norilsk Nickel will stick to a pledge to pay dividends, another key demand by Deripaska, in the amount of $3 billion per year for 2012-2014″ [Reuters ibid].

Is “Toxic Bob” all set for a London listing?

5. December 2012, Comments (0)

Although he’s not the world’s wealthiest mining billionaire (Mexico’s Carlos Slim owns that dubious accolade), Robert Friedland is certainly its most notorious.

Known from student days as “Toxic Bob” (probably referring to his alleged drug dealing – but the nickname has justifiably stuck) he’s launched projects that would sit high on any objective list of the world’s most damaging extractive enterprises.

In 1985-86, gold heap leach pads collapsed at his first mining venture, the Galactic Resources’ Summitville mine in Colorado.

As the Mines and Communities website graphically reported in 2001, the mine “was about as safe as ice lollies made with water drawn from a Rangoon sewer…cyanide solution – sprayed in thousands of gallons over the heaps – began leaking from the pads, which then overflowed. Worse, acidic wastes laced with heavy metals from ore and rock began forming the deadly cocktail known as acid mine drainage”. See: http://www.minesandcommunities.org/article.php?a=1531&l=1

Nor can Toxic Bob escape at least some responsibility for his early promotion of Golden Star Resources which, alongside Canada’s Cambior, was responsible for the massive 1995 Omai tailings dam collapse in Guyana. See:

http://www.minesandcommunities.org/article.php?a=3807&l=1

Arguably, however, even more opprobrium should be cast on the better-known mining companies that have bedded down with him in recent times.

Standing tallest among these is Rio Tinto, which partnered with Friedland in the early years of Papau New Guinea’s Lihir gold venture, and poured money into his Oyu Tolgoi copper-gold play in Mongolia after 2007.

But it’s Rio Tinto’s financial alliance with Ivanhoe – while the latter was still profiting from the Monywa copper mine under Bumese military rule – which has raised most ire over the past five years. See: http://www.minesandcommunities.org/article.php?a=9563&l=1

To the London lists!

This week, Robber Friedland announced his intention to launch an Initial Public Offering of hares (IPO) on the London Stock Exchange (LSE) “during the first half of next year”. He did so at the Mines and Money conference, hosted by the Mining Journal in north London.

Following Rio Tinto’s takeover of Ivanhoe last year, Robber Friedland left the company to swiftly form Ivanplats Ltd, which holds a platinum, gold and copper deposit in South Africa and two copper projects in the Democratic Republic of Congo. It has additional assets, spread across South Africa, Gabon and Australia.

In October 2012, Ivanplats raised over Cdn$300 million (US$305 million) from its initial public offering on the Toronto Stock Exchange. This immediately became the largest Canadian mining IPO after Tahoe Resources Inc. raised C$348 million in 2010.

It was also the most significant global metals and mining IPO since Glencore’s on the London Stock Exchange, completed in 2011.

So now, this tarnished king of copper is about to throw his insidious shadow over the Capital of mining capital.

The good citizens of London have been duly forewarned!
See also:

http://moneytometal.org/index.php/BMO

Big Gold Bulls burst into billion dollar raid on bullion

29. November 2012, Comments (0)

What a change a year can make! Or, in this case, just ten months.

In January 2012, the SPDR Gold Trust reported outflows of $534 million during the previous year, even though its competitors, Market Vectors Gold Miners ETF and iShares Gold Trust, recorded inflows of $2.8 billion and $2.7 billion respectively.

At the heart of this gilded wheeling-dealing was John Paulson, the hedge funder manager who’s the most significant player in gold stocks.

At that time, the Financial Times went so far as to call Paulson’s dominant role in the gold market a ‘curse’ and foresaw a “dash for cash” [Mining.com 9 January 2012].

And, according to Mining.com: “Knowing that Paulson & Co holds more gold than many central banks, and that it is struggling, it only takes a short leap of imagination to worry that he might be forced to sell it. Indeed, in the third quarter of last year, Paulson & Co sold ETF shares equivalent to roughly 34 tonnes of gold – and in September the gold price fell 11 per cent” [Mining.com ibid].

But, barely a year later on 21st November 2012, Bloomberg reports that: “Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever” [Bloomberg, 21 November 2012].

The news service went on to say that: “The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg”.

Paulson & Co was reported to have a $3.66 billion bet through the SPDR Gold Trust – “the biggest gold-backed exchange- traded product”, while Soros Fund Management had “increased its holdings by 49 percent in the third quarter” [Bloomberg ibid].

Shooting up with coal: a criminal fix

22. November 2012, Comments (0)

Now here’s an unusual spin on the notion that coal is a sort of narcotic, used to satisfy our widespread addiction to carbon-fired electricity.

According to Australia’s Herald Sun newspaper, Mexican drug cartels have been engaged in the direct ownership and operation of mines along the coal-rich US-Mexican border.

“The cartels reap immense returns from the sale of the solid fossil fuel to state-owned companies, often obtaining profits as high as 30 times their initial investment, while also obtaining an effective channel for money laundering.” [Mining.com 19 November 2012].

The “Zetas” – founded by renegade members of the Mexican special forces and renowned for “some of the most heinous acts of violence during regional drug wars – are, says the newspaper,”believed by experts to be the first cartel to make a foray into the mining sector.”

Heriberto Lazcano, a Zetas head honcho, was killed during a gun battle with the authorities in the coal mining town of Progreso on October 7th. He allegedly “owned his own coal pit in the region, while the cartel has reportedly long engaged in illegal coal mining in the mineral-rich state of Coahuila.

“The entry of Mexico’s drug cartels into the mining sector has a nearby precedent in Colombia, where local drug barons often took up stakes in gold and coal mines”.

In addition to gsinng “immense profits” from their mining ventures, Mexico’s drug cartels are also said to”avail themselves of a convenient means of legitimizing and diversifying their earnings. Licit high-income businesses make it easy for the cartels to launder their illegal proceeds”.

According to the November issue of CTS Centinale – a monthly security newsletter from the Combatting Terorrism Center at West Point (USA) – the Zetas aren’t exactly a cartel. As well as making money by trafficking narcotics from Guatemala to the U.S. border, they also ” engage in extortion, kidnapping and smuggling…

“After a split with the Gulf Cartel in 2010, the Zetas applied their military training and loose structure to create an entire nationwide criminal enterprise. The formula worked regardless of the fact that few Zetas today have any military training, [and] because of who held the whole structure together: drug boss Heriberto “Z-3″ Lazcano”.

But this doesn’t mean the exploitation of coal or other noxious substances have come to an end with the kiling of Lazano, since, says CTW Centinale, the Zetas “are more like a decentralized network of criminal cells…”

Mining-trading mega-merger now finalised

21. November 2012, Comments (0)

Finally, it’s happened. The long-awaited merger between the world’s biggest metals trader and one of the world’s largest mining companies was concluded yesterday.

On Monday the London Mining Network posted its warnings about the consequences of this mega-deal:

Reaction to merger proposal of Glencore and Xstrata

London Mining Network press release

19 November 2012

On Tuesday 20 November, shareholders of mining giant Xstrata are due to vote on the proposed $33 billion takeover by Glencore. London Mining Network, a civil society group that monitors the impacts of London-listed mining companies is raising concerns over the environmental and human rights impacts of the two companies, and asking if the newly merged “mining monster” will be able to act with even great impunity in future.

Richard Solly, the coordinator of London Mining Network issued the following statement:

“Both Glencore and Xstrata have extremely poor environmental and human rights records. Glencore’s Colombian subsidiary, Prodeco, is associated with paramilitary land-grabbing and the violent repression of civil society. In Zambia its mining and smelting operations have been criticised for illegal toxic pollution of air and water which has resulted in the hospitalisation of numerous local people, while the company has done its best to avoid paying taxes. There are more such controversies associated with the company in Peru, the USA and the Democratic Republic of Congo.

Xstrata’s operations have a similarly blemished record. At the Cerrejon coal mine in Colombia it has benefitted from unjust removals of agricultural communities to make way for mine expansion, while in Peru it is embroiled in violent conflict with the local community at Tintaya over fears of pollution from its copper mine. Protests have led to killings and illegal detention of mining opponents. In the Philippines, the wife and children of a local tribal leader who is opposing the entry of the company’s Tampakan mine have been killed while they slept by army elements who have been sent in to ‘restore order’ and protect the mine.

Glencore and Xstrata are each already huge companies in their own right. Together, they will combine metals production and metals trading, exerting control all along the mining value chain (particularly in the production and trading of thermal coal). At a time when there are concerns that banks have become too big to fail, mergers within the mining industry are creating beasts of companies who have enough market muscle to exert monopolistic tendencies. In May this year, Glencore’s Chief Executive Ivan Glasenberg talked about how the mining industry can counter growing attempts by developing countries to get a better share of mining tax revenue. How much of a better position will the new Glenstrata be in to get its own way?

If Glencore succeeds in swallowing Xstrata our fear is that the combined company’s approach to human rights, community rights, worker rights, Indigenous rights, environmental pollution and taxation will be a combination of the lowest standards applied in each company – a real Frankenstein’s monster of a company, but with a less developed conscience.”

For more information or comment, contact Andy Whitmore on 0775 439 5597 / whit@gn.apc.org

** ENDS **

For more info on Glencore’s controversial environmental and human rights record, see: http://www.minesandcommunities.org/list.php?r=333

For more info on XStrata’s controversial environmental and human rights record, see: http://www.minesandcommunities.org/list.php?r=851

American conservationists linked to tiger destruction in Burma

20. November 2012, Comments (0)

Barack Obama’s recent official trip to Burma may seem to have conferred a “seal of approval” on the recently-elected government. Ironically, even as he prepared to address the country’s leadership, some Burmese groups were attacking villagers belonging to the Rohingya religous and ethnic minority group. The government has failed to stem these atrocities, which have already cost hundreds of lives and forced many to flee the country. And opposition leader, Aung San Suu Kyi, has so refused to condemn the government’s inaction.

Meanwhile, a Burmese land rights activist and environmentalist, Bawk Jar, has warned that: “The massive environmental destruction inflicted on the Hukaung (aka Hukawng, Hugawng) Valley by large scale logging, gold mining and plantations has very likely killed off all the existing tigers in the area” [The Irrawaddy, 16 November 2012].

Located in north western Kachin State, the entire valley, consisting of almost 22, square kilometers (8,452 square miles), is officially home to what the Burmese regime declares is the world’s largest tiger reserve. However, Bawk Jar claims to have observed a sharp decline in the Hukaung’s environment over the past decade and local hunters have told her “ there are no more tigers left.”

She accuses Burma’s Yuzana Corporation of “bear[ing] the bulk of the responsibility for destroying the Hukaung Valley’s environment” [The Irrawaddy, ibid].

The owner of the Yuzana Coporation is a Burmese national called Htay Myint.

Described as “one of Burma’s most powerful tycoons”, Myint is also a member of parliament for the country’s ruling Union Solidarity and Development Party (USDP).

Importantly – especially in the light of Obama’s recent visit to Burma – Mr Myint has also been placed on the US Treasury’s Office of Foreign Assets Control sanctions list, due to his close ties to the former junta [The Irrawaddy, 31 August 2012].

Since 2006, says Ms Jar, and with the cooperation of local authorities, the corporation has expropriated more than 200,000 acres of farmland from more than 600 households in the valley. Activists claim that: “The once-thriving small scale farming plots have been transformed into full scale cassava, tapioca and sugarcane plantations. Yuzana’s land seizures directly impacted more than 10,000 people in the valley who have been left destitute without means to feed themselves” [The Irrawaddy 16 November 2102].

During the lead-up to the Burma’s 2010 election, as the relationship between the KIO and Burma’s government worsened, Yuzana increased its own militia by arming 800 employees, many of whom were ex-military personnel, according to the Kachin Development Networking Group (KDNG), an organization focused on environment and human rights issues in Kachin State. [The Irrawaddy, ibid].

In August 2012, after angry farmers displaced by Yuzana – some at gunpoint – launched protests, petitions and lawsuits, the firm returned a small portion of their land [The Irrawaddy, 31 August 2012]. Nevertheless, this is believed to comprise less than five percent of the total area seized by Yuzana [The Irrawaddy, 16 November 2012].

Compounding the food shortage in the valley, the large scale open pit gold mining operations of Yuzana, along with smaller unregistered mines “have also killed off much of the once vibrant fish life in the local rivers”, says Bauk Jar. “The lack of fish is particularly noticeable along large stretches of the Mogaung River where Yuzana’s cyanide-intensive shoreline mining operations regularly send large amounts of toxic waste” [The Irrawaddy, 16 November 2012].

Role of US “conservationists”

Despite his busy southeast Asian schedule, president Obama might also at least have taken note of the alleged part played by two US organisations in promoting this destruction.

The Hukaung tiger reserve was established in 2001 by Burma’s then-ruling military junta, with the enthusiastic backing of the US-based Wildlife Conservation Society (WCS). Critics claim this process received “ almost no input whatsoever from local villagers or valley residents” [The Irrawaddy ibid].

Officially the reserve was expanded in 2004 to encompass the entire Hukaung Valley. But, claims the KDNG: “[L]ocal reports suggest little conservation has actually taken place since. In fact, over the last eight years government authorities have actively encouraged wide-scale clear cut logging, mining and plantation farms to take root in this ecologically sensitive area” [The Irrawaddy, ibid].

Since becoming involved in the valley and its purported conservation, the WCS and its partner organization Panthera, a tiger-focused conservation group, have alleged that “the biggest threat to the region’s tigers was from local villagers and hunters” [The Irrawaddy, ibid].

The Panthera Corp was set up and is run by Thomas Kaplan, the owner of a high-flying mining private equity fund called Electrum Strategic Resources LLC. [See: http://moneytometal.org/index.php/Electrum_Strategic_Resources_LLC[.

Yet, says The Irrawaddy, both WCS and Panthera “have failed to make a direct mention of Yuzana or the firm’s allies in the military who were busy expropriating land, chopping down trees and destroying the tiger habitat, a clear and deliberate oversight….WCS failed to respond to repeated requests from The Irrawaddy regarding the current status of the tiger reserve [The Irrawaddy ibid].

Likewise, Panthera has so far not responded to the newspaper’s questions regarding the fate of the tiger reserve [The Irrawaddy ibid].

Don’t bank on clean coal, says leading insurance company

15. November 2012, Comments (0)

Two reports were released this week, which attempted to assess the future for global coal demand and use.

Although both the International Energy Agency (IEA) and the UK’s AXA Investment Managers believe that demand for the black stuff will decline over the next 20 years, it certainly won’t be by much and, in the meantime, is set to increase. Nor will any eventual reduction in coal burning substantially abate global greenhouse gas emissions, or other coal-related pollution, at anything like the rate required.

According to the reports, global coal demand will rise in the short-term as emerging markets rely on it to power economic expansion. However, The International Energy Agency (IEA) said in its World Energy Outlook that, although coal would remain the world’s leading fuel for power generation over the next two decades, its share would drop, mainly losing out to rising demand for natural gas and renewables.

Just a fortnight ago, PricewaterhouseCoopers (PwC) warned that, under existing industrial growth scenarios, global greenhouse gas emissions would unacceptably accelerate by 2050. Coal-burning would be a major contributor in this fateful direction.

PwC did say that carbon capture and storage (CCS) of carbon released from coal-fired power plants could help slow our headlong rush towards doomsday.

Invited by Reuters (13 November 2012), to comment on the two reports, The Global Coal Association was also confident that increased power plant efficiency will reduce pollution from the burning of lower-quality, and therefore dirtier, coal.

But AXA’s report vigorously dissents on both these counts, asserting that: “For the next round of rapidly growing economies, the incentive bias towards coal will be shorter-lived than expected (and) stricter pollution controls may render many new coal-burning installations obsolete”.

In respect of CCS, AXA judged that the technology “…will not turn coal into a sustainable source of energy for power generation. The polluting effects of coal are not limited to CO2 alone. CCS technologies are energy-intensive and could take decades to mature.”