See http://af.reuters.com/article/investingNews/idAFJOE82405O20120305.

Bumi plc's Kaltim Prima Coal mine in Indonesia. Photo: JATAM

London Mining Network has today published a report calling on the government to include a review of regulatory regimes as part of the current discussion on the Financial Services Bill. The Bill is replacing the existing FSA with a new body, the Financial Conduct Authority, which will inherit the FSA’s role as UK Listing Authority.

Looking at eight case studies, the report, UK-Listed Mining Companies & the Case for Stricter Oversight, argues that:

• Many mining companies listed in London have very poor records of complicity in human rights abuse, environmental pollution or destruction of people’s cultures and livelihoods around the world.
• Once listed in London, some mining companies have continued to flout the law in the countries where they operate, or engage in damaging tax avoidance, or break accepted international mining industry standards, with no move by the UK Listing Authority to discipline them.

John McDonnell MP, who will be chairing the Parliamentary launch of the report today, said:

“We cannot stand by and witness these global mining companies brutally impoverishing and destroying the lives and environments of whole communities. We need not only to expose this exploitation but also to demand that a firm system of international regulation, control and accountability is put in place that halts the destructive activities of these corporate pirates.”

Peter Frankental, the Economic Relations Programme Director of Amnesty International UK, said:

“This report by London Mining Network presents a challenge to the Government to ensure that the proposed regulatory body has the powers to require mining companies to meet acceptable human rights and environmental standards as a condition for listing on the London Stock Exchange”.

Richard Solly, Co-ordinator of London Mining Network, said:

“This report provides a reminder to the Government of the need for measures to ensure that the London Stock Exchange does not continue to act as a repository for dodgy companies that harm the environment and abuse human rights. The ease with which such companies can list in the UK is an indictment of the existing regulatory framework”.

The report can be downloaded from http://londonminingnetwork.org/docs/lmn-the-case-for-stricter-oversight.pdf.

The eight London-listed mining companies looked at tin the report are African Barrick, Brinkley Mining, African Minerals, London Mining, Vedanta Resources, Glencore, GCM Resources and Bumi.

The Government has introduced its Financial Services Bill, which is being considered in Committee between 21 February and 20 March.

See http://www.minesandcommunities.org/article.php?a=11486&l=1.

See http://www.minesandcommunities.org/article.php?a=11440&l=1.

Among the foreign companies with copper interests in Zambia are Vancouver-based First Quantum Minerals;  Glencore International Plc; London-based Vedanta Resources Plc; and Barrick Gold, which owns Lumwana Mine, Africa’s largest copper mine, through its acquisition earlier this year of Equinox Minerals Ltd.

See http://www.mining.com/2011/09/23/copper-miners-in-zambia-fearful-of-king-cobra/.

The Swiss-based company’s transformation into a public company has been littered with embarrassing accusations over corporate governance including allegations – denied by the company – that it avoided tax in Zambia.

Criticism from campaign groups and investors has persuaded the company to address its image problem, with its first sustainability report set to be published in September.

See http://www.thisismoney.co.uk/money/markets/article-2031166/Glencore-declare-support-ethical-mining-spruce-image.html.

Matters of grave concern: Vedanta Collapses

Taking place here today (27 July 2011) is the Annual Shareholders’ Meeting of one of the world’s 20 leading mining companies, London-listed Vedanta Resources plc.

This company stands apart from its peers by having the worst health, safety and environment record of any mining company based in the UK – indeed virtually anywhere in the world.

We invite you to examine some of the accidents and disasters occurring on Vedanta’s watch within the past five years; the latest just eleven days ago:

16 July 2011: A waste dump at a Vedanta iron ore mine in Goa (India) collapses in numerous places: millions of tonnes of mud and silt flood into the village of Mulgao, swamping farmland, choking rivers and threatening people’s lives.

5 April 2011: Toxic wastes cascade from a breach in Vedanta’s caustic red mud pond at its Lanjigarh alumina refinery in Orissa (India), contaminating the adjacent Vamsadhara River.
16 May 2011: There’s a “copycat” failure at the same pond. Amnesty International warns that “thousands of families in…Orissa are [now] facing serious health risks during the imminent monsoon season.”
In July 2011, the Chief Minister of Andhra Pradesh says the pollution has crossed the state border and “people in many mandals [administrative divisions] of Srikakulam district are facing health hazards due to contaminated drinking water.”

1 November 2010: Vedanta’s subsidiary, Konkola Copper Mines (KCM) in Zambia is fined for polluting the Kafue River, killing fish and leaving local inhabitants without tap water. This is the very river polluted by Vedanta four years earlier.
On 6 November 2006, acidified effluents cascaded from burst slurry pipelines at KCM. They gushed into the Kafue River, raising its copper concentrations to 1,000% of acceptable levels, concentrations of manganese to 77,000% (sic) of the legal limit; and those of cobalt to 10,000%. Domestic water supplies are cut off for 75,000 residents in the town of Chingola.
26 March 2010: Four workers die when ground collapses around them at Vedanta’s Nchanga copper mill in Zambia.

24 September 2009: A chimney, under construction for a coal-fired power plant at Vedanta’s Korba aluminium complex in India’s Chhattisgarh state, topples to the ground.  At least 41 workers are buried alive. Vedanta is accused by Korba’s police chief of illegally embarking on the construction at the outset. Three top Vedanta officials are arrested and charged with “culpable homicide” – one degree below murder.
In October 2010, Vedanta’s chairman, Anil Agarwal, is summoned to give evidence at the Korba District Court in answer to a charge of Criminal Trespass relating to the previous year’s events. He refuses to attend.

24 August 2009:  During heavy rains, a vast mudslide sweeps into underground workings of Vedanta’s Mt Lyell copper mine in Tasmania, Australia. The mine is closed, leaving 180 workers and their dependents stranded without paid leave.

Collapse of Vedanta’s credibility

Between November 2007 and 2011 a significant number of investment funds ejected Vedanta Resources from their portfolios, citing the company’s unethical behaviour and its failure to address human rights and environmental issues.

Among these were: Norway’s Government Pension Fund; the Church of England; PGGM (a major Dutch Pension Fund); the Joseph Rowntree Charitable Trust; and Northwest and Ethical Investments (Canada).

If you, your Pension Fund or Bank, currently finance Vedanta in any way, we urge that you seriously examine evidence of the company’s woeful failure to meet rudimentary operational standards, during the eight years since its admission to trading on the London Stock Exchange.

Norway’s Council on Ethics in November 2007 concluded that, continuing to invest in Vedanta would present “an unacceptable risk of contributing to grossly unethical activities.”

Since then, such activities have multiplied. So, too, have the reputational risks of backing a company that makes a mockery of “corporate social responsibility.”

For further information on Vedanta’s record, please see:
http://www.minesandcommunities.org/list.php?r=831

This leaflet was authored by Nostromo Research
for London Mining Network,
http://londonminingnetwork.org
Phone 07929 023214
Email contact@londonminingnetwork.org

See http://www.minesandcommunities.org/article.php?a=11039.

However she finds severe fault in the much-lauded Extractive Industries Transparency Iniative (EITI).

She claims it may hinder, rather than help, in restoring stolen profits to the countries where they were generated.

See: http://www.minesandcommunities.org/article.php?a=10997

See http://www.minesandcommunities.org/article.php?a=10967

See http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=127651&sn=Detail&p.

“The added value of mining projects for development is highly debatable” says Thijs Berman (S&D) who presented the letter in the European Parliament today. “Due to favourable tax regimes, low labour standards and a significant environmental impact, it is rarely the hosting country or its population benefiting from these mining projects. It is rather the international mining companies that make the profit and I don’t see why they would need public financial support for that. At least not until standards and regulations are in place that can guarantee a positive outcome for those who need it: poor countries and their population.”

The letter refers to previous successful processes in other sectors such as the World Commission on Dams or the World Bank’s Extractive Industries Review as worth following.

It singles out Glencore’s operations in Zambia for particular critcism.

See http://www.eurodad.org/whatsnew/articles.aspx?id=4521

Glencore has leapt straight into the FTSE 100 list of the UK’s largest companies and – with a market value likely to  be at around £36 billion – will become the fourth or fifth biggest mining company traded on the London Stock Exchange’s premium main market.

And make no mistake, although Glencore’s trading in foodstuffs is a key part of its global business (attracting a wealth of criticism in recent years),  its main profits are derived from the exploitation of oil and minerals.

Those choosing to buy Glencore stock this week may blithely hope that this monstrous enterprise will now forced to clean up its numerous dubious acts. But they certainly shouldn’t bank on it.

See http://www.minesandcommunities.org/10916.

Glencore clean-up backed by EU loan

Commodities giant Glencore has used loans guaranteed by British and European taxpayers to clear up its own pollution mess in Zambia, it has emerged.

http://www.dailymail.co.uk/money/article-1390154/Glencore-clean-Zambia-backed-EU-loan.html

Glencore makes weak Hong Kong debut
http://uk.news.yahoo.com/glencore-shares-down-2-8-hong-kong-debut-012836652.html

Greed Inc: A special investigation into pollution, dubious tax practices and exploitation of African workers at Glencore

News that the London Stock Exchange is on the verge of a mammoth flotation didn’t spread quite as far as the Zambian mining town of Mufulira. Even if it had, it’s unlikely the townspeople there would have seen much cause for celebration.

See http://www.dailymail.co.uk/news/article-1383242/Greed-Inc-A-special-investigation-pollution-dubious-tax-practices-exploitation-African-workers-Glencore.html.

Commentary on Glencore by Nostromo Research

Glencore,  the world’s most powerful mineral, metals and food commodities’ trader, is expected to “go public” on the London and Hong Kong stock exchanges within the next month, raising around US$12 billion in the process. Few people will try to prevent  this.

Those who love Glencore (mainly its 485 partners and 2,700 traders) expect to be rolling in even more ill-gotten gains in the near future. Even those who loathe it (99% of the global population at a rough count) may hesitate in front of the argument: “Better the devil you know than the one you don’t”. But, whatever Glencore will now have to reveal according to the UK and HK listing rules, one prospect is certain: Glencore will be putting more money into acquiring and operating mines. Already, nearly a fifth of what it expects to raise in London ($2.2 billion)is earmarked to increase its stake in the Kazakhstan zinc, copper and gold miner,  Kazzinc to 93%. And a bid to buy out Xstrata (currently 34.4% owned by Glencore) is certainly on the cards. 

As the Financial Times opined on April 15th: “The… financial heft that will result from [Glencore’s] initial public offering…will allow the company to vertically integrate through acquisitions, becoming a bigger producer in markets in which it trades.” And: “This makes an oligopolistic market structure likely…[whose] cost is borne by consumers the world over.”

Ivan Glasberg, Glencore’s head honcho, in an interview published by the Financial Times, has no scruples about defending his conglomerate’s past practices, nor boasting that business will be the same as usual after the flotation: “Unfortunately, God put the minerals in different parts of the world. We took the nice, simple, easy stuff first from Australia, we took it from the US, we went to South America and we dug it out of the ground there. Now we have to go to more remote places.”

And – just in case  we don’t get the point: “ ‘We are not going to change the way we operate. Any talk that going public will hinder us is not true. It will not affect us at all,’” he says. He repeats the point several times: ‘Being public will have absolutely no effect on the business.’”

Note:
·       Chair of the new “publicly” owned Glencore plc will be  Hong Kong businessman Simon Murray, 71, a polar explorer and former Vodafone board member.
·       The “senior independent director”  will be none other than Tony Hayward – the chairman of BP when that company was responsible for the worst oil-related disaster in recent history in the Gulf of Mexico last year.

A while ago, the world’s biggest gold producer bid more than C$7 billion for Zambian copper miner, Equinox. The takeover is likely to proceed without hitch now that Barrick’s only major competitor, China’s Minmetals, has withdrawn from the race. The market hasn’t been that impressed by Barrick’s move and doubts were expressed as to whether it’s particularly prudent for a company that’s so far only dabbled in the red metal.

See http://www.minesandcommunities.org/article.php?a=10873.

Barrick Gold is a Canadian company that is the world’s largest gold producer and in which a number of UK-based funds invest (see http://moneytometal.org/index.php?title=Special%3ASearch&search=Barrick&go=Go).