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Erupting Gold Exploration Potential: The Pacific Ring of Fire

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The following content is sponsored by Kalo Gold.

The Pacific Ring of Fire infographic

The Pacific Ring of Fire

From bubbling pits of lava to deep ocean sinkholes and everything in between, the Earth is full of geological wonders. The Pacific Ring of Fire is a prime example of one such marvel. Like a necklace of pearls, this long belt of active and inactive volcanoes spans 40,000 km along the tectonic plate boundaries of the Pacific Ocean.

While many people see volcanoes as something to fear, for the mining industry, they can present huge potential. In fact, ancient inactive volcanoes could eventually become profitable mines. With 75% of the earth’s volcanoes and 90% of all earthquakes, the Pacific Ring of Fire is home to many rich mineral deposits, such as gold, copper, molybdenum, and other metals.

Today’s infographic comes to us from Kalo Gold and highlights how the Pacific Ring of Fire’s geology enables the potential for mineral discovery.

Magmas to Metals: Mineral Deposits on the Pacific Ring of Fire

Volcanic activity at tectonic plate boundaries reveals the natural processes of creation and destruction that shape the Earth along its Pacific Rim. The Pacific Ring of Fire is built on two types of tectonic plate boundaries:

  • Convergent:
    Two tectonic plates moving towards each other, where the oceanic crust often subducts under the continental crust.
  • Divergent:
    Two tectonic plates moving away from each other, often resulting in rifts and earthquakes.

It is at these subduction zones where volcanic and seismic activity aids the formation of mineral deposits. The subduction of one plate under the other creates immense pressure, forcing the hot magma that lies beneath the crust to rise towards the surface. This magma transports minerals that solidify when hydrothermal fluids (or magmatic water) rise and cool off, sometimes creating mineable deposits of valuable minerals.

Subduction zones in the Pacific Ring of Fire host the vast majority of the earth’s porphyry deposits and several epithermal deposits. Porphyry deposits contain copper, gold, and molybdenum, whereas epithermal deposits typically bear gold and silver.

However, turning a deposit into a mine requires much more than just the presence of minerals. Although mineral deposits are found all around the Ring, some regions have produced many more discoveries than others.

The Edge of Discovery: The South Pacific

The South Pacific has proven itself as one of the most productive regions for gold and copper mining along the Ring.

The region hosts the famous Grasberg mine, one of the world’s largest gold and copper mines, along with other prolific discoveries like the Lihir mine in Papua New Guinea, and the Cadia mine in Australia. But as these existing mines deplete, the opportunity lies in making new discoveries.

Fiji: The Next Edge of Discovery on the Pacific Ring of Fire

Fiji has a lot to offer to the mining industry with its prime location along the Pacific Ring of Fire.

The Fijian islands are endowed with rich deposits of gold, copper, and zinc. Fiji’s history of gold mining goes back to the 1930s with the Vatukoula mine, which is still in operation today. Furthermore, Fiji topped the Fraser Institute’s 2018 rankings of mining jurisdictions in Oceania in both investment and policy attractiveness.

Fiji’s government supports ethical exploration because the mining industry brings economic benefits to the country. In fact, gold has consistently been one of Fiji’s largest exports:

YearAmount of Gold ExportedGold (as % Share of Total Exports
20102,015 kg9.25%
20111,621 kg7.46%
20121,584 kg6.31%
20131,098 kg4.07%
20141,245 kg3.54%
20151,252 kg4.97%
20163,777 kg6.26%
20172,461 kg6.05%
20181,378 kg5.23%
20191,840 kg4.87%

Following a period of steady decline between 2010-2015, Fiji’s gold exports peaked in 2016 at 3,777 kg—making up 6.26% of its total exports. In 2019, gold was Fiji’s sixth-largest export, generating more than $50 million in value.

Fiji: Ready for the Next Big Gold Discovery

Fiji remains a hub of exploration activity with several mining companies on the hunt for its next big discovery.

The presence of Vatukoula, Fiji’s largest gold mine containing 10 million ounces of gold, suggests that other large gold deposits are waiting to be found. Although recent discoveries in Fiji do not come close to the Vatukoula’s grand size, it’s only a matter of time before Fiji reveals its treasure.

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An Introduction to MSCI ESG Indexes

With an extensive suite of ESG indexes on offer, MSCI aims to support investors as they build a more personalized and resilient portfolio.

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An Introduction to MSCI ESG Indexes

There are various portfolio objectives within the realm of sustainable investing.

For example, some investors may want to build a portfolio that reflects their personal values. Others may see environmental, social, and governance (ESG) criteria as a tool for improving long-term returns, or as a way to create positive impact. A combination of all three of these motivations is also possible.

To support investors as they embark on their sustainable journey, our sponsor, MSCI, offers over 1,500 purpose-built ESG indexes. In this infographic, we’ll take a holistic view at what these indexes are designed to achieve.

An Extensive Suite of ESG & Climate Indexes

Below, we’ll summarize the four overarching objectives that MSCI’s ESG & climate indexes are designed to support.

Objective 1: Integrate a broad set of ESG issues

Investors with this objective believe that incorporating ESG criteria can improve their long-term risk-adjusted returns.

The MSCI ESG Leaders indexes are designed to support these investors by targeting companies that have the highest ESG-rated performance from each sector of the parent index.

For those who do not wish to deviate from the parent index, the MSCI ESG Universal indexes may be better suited. This family of indexes will adjust weights according to ESG performance to maintain the broadest possible universe.

Objective 2: Generate social or environmental benefits

A common challenge that impact investors face is measuring their non-financial results.

Consider an asset owner who wishes to support gender diversity through their portfolios. In order to gauge their success, they would need to regularly filter the entire investment universe for updates regarding corporate diversity and related initiatives.

In this scenario, linking their portfolios to an MSCI Women’s Leadership Index would negate much of this groundwork. Relative to a parent index, these indexes aim to include companies which lead their respective countries in terms of female representation.

Objective 3: Exclude controversial activities

Many institutional investors have mandates that require them to avoid certain sectors or industries. For example, approximately $14.6 trillion in institutional capital is in the process of divesting from fossil fuels.

To support these efforts, MSCI offers indexes that either:

  • Exclude individual sectors such as fossil fuels, tobacco, or weapons;
  • Exclude companies from a combination of these sectors; or
  • Exclude companies that are not compatible with certain religious values.

Objective 4: Identify climate risks and opportunities

Climate change poses a number of wide-reaching risks and opportunities for investors, making it difficult to tailor a portfolio accordingly.

With MSCI’s climate indexes, asset owners gain the tools they need to build a more resilient portfolio. The MSCI Climate Change indexes, for example, reduce exposure to stranded assets, increase exposure to solution providers, and target a minimum 30% reduction in emissions.

An Index for Every Objective

Regardless of your motivation for pursuing sustainable investment, the need for an appropriate benchmark is something that everyone shares.

With an extensive suite of ESG indexes designed specifically for sustainability and climate change, MSCI aims to support asset owners as they build a more unique and personalized portfolio.

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Tracked: The U.S. Utilities ESG Report Card

This graphic acts as an ESG report card that tracks the ESG metrics reported by different utilities in the U.S.—what gets left out?

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NPUC Utilities ESG Report Card Share

Tracked: The U.S. Utilities ESG Report Card

As emissions reductions and sustainable practices become more important for electrical utilities, environmental, social, and governance (ESG) reporting is coming under increased scrutiny.

Once seen as optional by most companies, ESG reports and sustainability plans have become commonplace in the power industry. In addition to reporting what’s needed by regulatory state laws, many utilities utilize reporting frameworks like the Edison Electric Institute’s (EEI) ESG Initiative or the Global Reporting Initiative (GRI) Standards.

But inconsistent regulations, mixed definitions, and perceived importance levels have led some utilities to report significantly more environmental metrics than others.

How do U.S. utilities’ ESG reports stack up? This infographic from the National Public Utilities Council tracks the ESG metrics reported by 50 different U.S. based investor-owned utilities (IOUs).

What’s Consistent Across ESG Reports

To complete the assessment of U.S. utilities, ESG reports, sustainability plans, and company websites were examined. A metric was considered tracked if it had concrete numbers provided, so vague wording or non-detailed projections weren’t included.

Of the 50 IOU parent companies analyzed, 46 have headquarters in the U.S. while four are foreign-owned, but all are regulated by the states in which they operate.

For a few of the most agreed-upon and regulated measures, U.S. utilities tracked them almost across the board. These included direct scope 1 emissions from generated electricity, the utility’s current fuel mix, and water and waste treatment.

Another commonly reported metric was scope 2 emissions, which include electricity emissions purchased by the utility companies for company consumption. However, a majority of the reporting utilities labeled all purchased electricity emissions as scope 2, even though purchased electricity for downstream consumers are traditionally considered scope 3 or value-chain emissions:

  • Scope 1: Direct (owned) emissions.
  • Scope 2: Indirect electricity emissions from internal electricity consumption. Includes purchased power for internal company usage (heat, electrical).
  • Scope 3: Indirect value-chain emissions, including purchased goods/services (including electricity for non-internal use), business travel, and waste.

ESG Inconsistencies, Confusion, and Unimportance

Even putting aside mixed definitions and labeling, there were many inconsistencies and question marks arising from utility ESG reports.

For example, some utilities reported scope 3 emissions as business travel only, without including other value chain emissions. Others included future energy mixes that weren’t separated by fuel and instead grouped into “renewable” and “non-renewable.”

The biggest discrepancies, however, were between what each utility is required to report, as well as what they choose to. That means that metrics like internal energy consumption didn’t need to be reported by the vast majority.

Likewise, some companies didn’t need to report waste generation or emissions because of “minimal hazardous waste generation” that fell under a certain threshold. Other metrics like internal vehicle electrification were only checked if the company decided to make a detailed commitment and unveil its plans.

As pressure for the electricity sector to decarbonize continues to increase at the federal level, however, many of these inconsistencies are roadblocks to clear and direct measurements and reduction strategies.

National Public Utilities Council is the go-to resource for all things decarbonization in the utilities industry. Learn more.

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