Follow the “Shadow Banking and Destructive Mining: a Guided Tour” route on the map below:
View LMN Hedge Fund Tour in a larger map
Hedge funds, derivatives, exchange traded mechanisms and other complex financial instruments have emerged from the shadows over the past couple of years as a result of the banking crisis. There is widespread concern about their effects on the economy as a whole. But they are usually presented as if they were some rarefied form of speculation without any roots in the real world. In fact, this ‘shadow banking’ has been used to finance all manner of real economic projects with real impacts on real people – often very negative impacts. Among other things, it has been used as a way to finance destructive mining projects around the world.
On Saturday, 26 June, 2010, London Mining Network organised a tour of financial and mining companies in the Mayfair area in London’s West End. On this tour, we looked at the way shadow banking operates, how it helps finance destructive mining projects, and how London is central both to this form of finance and to the world’s mining industry.
Below you can watch short videos of the stops we made on the tour and hear about the companies whose offices we featured. Researchers Nick Hildyard of The Cornerhouse and Roger Moody of Nostromo Research explain the complex workings of shadow banking and the relationships with mining companies. You can see the presentation that Nick gave before we set off on the tour at http://lmn.handsupdev.com/docs/From-US-Sub-Prime-to-London-Prime.pdf.
You are welcome to take the tour yourself – the addresses of each of the companies are given at the links below.
1. Hermitage Capital, 2 – 3 Golden Square, London W1. Hermitage has helped finance, among other companies, Vedanta. For an idea of the extent of concern about Vedanta, see http://lmn.handsupdev.com/?s=vedanta.
2. Altima Partners LLP, 6th Floor, 23 Savile Row, London W1. Altima’s investments have included Peabody Coal. For information on Peabody, see http://www.minesandcommunities.org/list.php?r=649.
3. Blackstone, 40 Berkeley Square, London W1, and Carlyle, 57 Berkeley Square, London W1 – both private equity companies. Nick Hildyard speaks about these companies’ activities from the middle of Berkeley Square.
4. Glencore, 50 Berkeley Street, London W1. Glencore was at the time of the tour a private company involved in mining and commodities trading, and owned one third of London-listed mining company Xstrata. In 2012 Glencore listed on the London Stock Exchange and in 2013 it merged with Xstrata to form Glencore Xstrata. It is the biggest minerals trading company in the world. Roger Moody speaks about both Glencore and Xstrata from the middle of Berkeley Square. Read more about Glencore at http://www.minesandcommunities.org/list.php?r=333 and about Xstrata at http://www.minesandcommunities.org/list.php?r=851.
5. Number 1 Curzon Street has hosted a number of ‘shadow banking’ companies, including AIG, GLG and London’s first hedge fund billionaire, Louis Bacon. Nick Hildyard explains from the relative quiet of nearby St James’s Square, SW1.
6. Lonrho, 22 Arlington Street, London SW1. Lonrho may be a shadow of its former self, but it continues to engage in mining as well as a variety of other activities in Africa. And some of its directors are involved in other mining ventures which are causing grave concern as well, including GCM Resources. You can read more about Lonrho at http://www.minesandcommunities.org/list.php?r=484 and about GCM at http://lmn.handsupdev.com/?s=gcm+resources and http://www.minesandcommunities.org/list.php?r=1170.
7. ENRC – European Natural Resources Corporation – has offices at 16 St James’s Street, London SW1. From the relative quiet of nearby Bennet Street, Roger Moody explains the company’s links with Kazakhstan, Russian oligarchs, the Democratic Republic of Congo and the Central African Mineral Exploration Company. For more information on ENRC, see http://www.minesandcommunities.org/list.php?r=1877.
8. Paulson Europe, 70 Jermyn Street, London SW1. The London office of a US-based hedge fund which has invested heavily in AngloGold Ashanti, about which numerous communities are concerned. See also http://lmn.handsupdev.com/?s=AngloGold+Ashanti and http://www.minesandcommunities.org/list.php?r=46.
All videos by Susi Arnott, Walking Pictures Ltd
For more information about mine finance and the links with London, see the continuously updated wiki by Nostromo Research, From Money to Metal.