Pitfalls and Pipelines - Philippine Indigenous Peoples Links

44 Pitfalls and Pipelines: Indigenous Peoples and Extractive Industries
A total of $91 billion was spent by investors on equity (obtaining
shares) in mining companies during 2009. Although
118 IPOs (Initial Public Offerings of shares) had been completed
the previous year, they raised only $12 billion. On the
other hand, secondary share and rights offerings (those made
once a company has already been “floated”) secured $72 billion
in 2009 (compared with $49 billion in 2008); while purchases
of “follow up” equity rose slightly, to $77 billion. 6
Already, in early 2010, Ernst & Young had informed us
that “equity will play a greater role in the next wave of growth,
with the IPO market starting to recover.” 7
But, although Ernst & Young’s own “Mining Eye index”
(a weekly tracker of share values of the top 20 London
Alternative Investment market [AIM]-listed mining companies)
8 gained 173 percent in 2009, as of March 2010 the index
overall was still 40 percent down on the all-time high achieved
a year before. 9
According to the Financial Times’ Jonathan Guthrie,
shares worth £38.6 billion were raised on London’s miningheavy
AIM in 2011, compared with £75 billion in 2007.
Moreover, “the tally of AIM-quoted companies has dropped
from 1,694 to 1,117 and small-cap shares remain more deeply
under water than larger peers” 10
In 2010, the world’s leading minerals trading company,
Glencore, purchased assets it sold earlier to Xstrata 11 to help
the latter out of debt, and 26 months later, Glencore launched
the biggest mining-related IPO in history, valued by investors
at around £35 billion. 12
The most profitable London IPO of 2008-09, by UC-
Rusal, the world’s premier aluminium conglomerate, however,
was jettisoned in favor of a listing on the lower-profile
Hong Kong Stock Exchange. The following month, Vedanta
Resources—the largest-ever Indian entrant on the London
Stock Exchange, back in 2003—announced that it would seek
an IPO for its Vedanta Aluminium subsidiary. But it would
do so on the Mumbai (Bombay) Stock Exchange, with only
a secondary registration in London. To date, no offering has
been announced. Many other IPOs have been abandoned or
deferred since then—both in London and Hong Kong.