Pitfalls and Pipelines - Philippine Indigenous Peoples Links

Chapter 1.2: Financial Innovations and the Extractive Industries
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Nonetheless, it was distinctly naïve to expect the minerals
sector as a whole to meekly roll over and die, just because many
of its investors had received the fright of their business lives.
Mining is a notoriously cyclical industry; and precisely for this
reason, its biggest players have devised means of coping with
dramatic falls in demand for their output. Because it can take
10 years or more to bring a major project on-stream, such
timelines are factored into the “bankable feasibility studies”
companies present to investors. So long as banks, private
funds, and multilateral investors (such as the World Bank and
its private arm, the International Finance Corporation), are
persuaded that an improvement in global economic growth
is inevitable—if not exactly “around the corner”—they are
prepared to wait-out some delays.
But for how long are they prepared to wait? New restraints
are continue being imposed on the industry’s expansion—
whether through domestic legislation, international treaties,
or civil society movements. Inevitably there will be increasing
costs of extraction, and many companies are already having
to meet higher bars on waste disposal and ambient pollution.
Pressures on them to pay a far greater proportion of their
profits to state, regional, or local governments have markedly
mounted in recent years—and will grow further.
I will argue here that, in reality, the minerals industry has
done little more than survive since late 2008—though survive
it has. Expectations that innovative methods of financing
would come to replace the disreputable tools of the recent past
have largely not been fulfilled.
Nonetheless, some of those quasi-criminal financial instruments
(which engendered the massive illusion of our wealth
being secure, when the opposite was true) have emerged
under different guises. Newer stratagems have been devised
to take even more cash out of our unsuspecting pockets. And
behind these are some of the very financial institutions which
were responsible for that “financial nuclear winter” (see Box
1 and Box 2).
Above all, those most vital of expectations on which the industry
has pinned its fortunes over the past decade, are on the