Under a financial spotlight, next month's vote by shareholders on the risks of a Euro 70B merger by Xstrata and Glencore, investors have lasered in on return on investment.
But major risks, for example, carbon pollution and the chances of carbon resources becoming stranded by global risk avoidance of "climate change" which is a media buzzphrase at the moment, are causing investors to hold off.
Because fully 1/3 of Xstrata’s revenues come directly from coal.
Coal, which is purchased and burnt to supply electricity for the planet's inhabitants via a costly grid and coal fired power stations, which are under increasing cost pressure to cut investment in coal, replacing it with much cheaper options, like "natural" gas, and cost pressures from renewables.
Governments know unless greenhouse gas emissions from coal, oil and gas burning are slashed, we are heading for a 6C rise in global temperatures that would be financially, economically and environmentally catastrophic.
In Glencore’s 1,637-page prospectus for its IPO, a paragraph stated the risk of a "Carbon Bubble" in global financial markets, like the "Tulip Bubble" of the 1600's http://goo.gl/hd91
“Regulation of greenhouse gas emissions could also have a material adverse effect on the demand for Glencore’s products,” it said.
But the Fossil fuel giants are drilling like crazy at the moment, blowing up the carbon balloon ever bigger WHY? GARGANTUAN PROFITS -
An example of the "Carbon Bubble" in action>
From 2005 to 2008, gas supplies dried up due to depletion, prices of NG went to $13 per mBTU ($2 during the 90's).
It was the promise of vast riches that sucked the drillers in.
Drilling companies descended on Texas, purchased rights, and began drilling with gay abandon
High costs were buried under hyped claims and production rates, then prices cratered below $3 MBTU, below costs of production.
Attracting investment kept the MASSIVE pyramid scheme afloat.<>
ExxonMobil reported its 2011 profits at $41 billion, the 2nd highest EVER. The record? ExxonMobil, 2008 at $45 billion.
This year a group called the Bank of England chief, Sir Mervyn King to expose the fact a bubble was developing, where shares of giant companies that are sharetraded are dependent on carbon based models. And these companies will collapse if left to their own disastrous systems.
The group has warned that the 5 top companies on the FTSE 100 are supporting the value of the index.
Even BP guidance suggested global greenhouse gas emissions rising 28 per cent by 2030.
Therefore, should companies outlay billions a year to discover and develop expensive, outrageously carbon polluting resources that will be financially unviable for those in global risk accountancy and life as we now know it on the earth