Pitfalls and Pipelines - Philippine Indigenous Peoples Links

Chapter 1.2: Financial Innovations and the Extractive Industries
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dioxide emissions per unit of GDP by 2020. An independent
report of November 2011 suggested that, between 2006 and
2010, the country’s proportionate reduction in carbon emissions—including
those from coal-powered plants—was the
largest recorded by any nation in the four years between 2006
and 2010. 19
The Peoples Republic of China has also set a target of delivering
around 15 percent of primary energy from non-fossil
fuel within the coming decade, and has been slowly advancing
in this direction. 20
If good intentions are to translate into action, however,
many more coal mines will have to close in both countries,
and this is not likely to happen—at least in India—for up to
another decade.
Investment Conundrums
On the one hand, Ernst & Young’s February 2010 report
conceded that “[t]raditional investors will be looking for safe
options in 2010,” while “fewer lower risk projects are now
available.” On the other hand, somewhat quixotically, it went
on to claim that investors would then be willing “to consider
acquisitions with greater political risk.”
Little evidence of this has been forthcoming. On the
contrary, long-betting, mining-dedicated, investment funds—
those which place genuine faith in the future of the industry—
have largely shirked taking on increased risks. Hedge funds
which play the markets “short” have certainly not disappeared
from view.
Nonetheless, their distinct role as cash-rich moguls, betting
against a rise in share prices, rather than supporting
them, has diminished. RAB Capital, not long ago the most
significant of these mining-focused funds, found the value of
its investments drop drastically by 80 percent to only $1.4 billion
in February 2010, 21 and to under $1 billion in May 2011. 22