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:
Two tectonic plates moving towards each other, where the oceanic crust often subducts under the continental crust.
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:
|Year||Amount of Gold Exported||Gold (as % Share of Total Exports|
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.
Green Investing: How to Align Your Portfolio With the Paris Agreement
MSCI’s Climate Paris Aligned Indexes are designed to reduce risk exposure and capture green investing opportunities using 4 main objectives.
Green Investing: The Paris Agreement and Your Portfolio
In Part 1 of the Paris Agreement series, we showed that the world is on track for 3.5 degrees Celsius global warming by 2100—far from the 1.5 degree goal. We also explained what could happen if the signing nations fall short, including annual economic losses of up to $400 billion in the United States.
How can you act on this information to implement a green investing strategy? This graphic from MSCI is part 2 of the series, and it explains how investors can align their investment portfolios with the Paris Agreement.
Alignment Through Indexing
When investors are building a portfolio, they typically choose to align their portfolio with benchmark indexes. For example, investors looking to build a global equity portfolio could align with the MSCI All Country World Index.
The same principle applies for climate-minded investors, who can benchmark against MSCI’s Climate Paris Aligned Indexes. These indexes are designed to reduce risk exposure and capture green investing opportunities using 4 main objectives.
1.5 Degree Alignment
The key element is determining if a company is aligned with 1.5 degree warming compared to pre-industrial levels. To accomplish this, data is collected on company climate targets, emissions data, and estimates of current and future green revenues. Then, the indexes include companies with a 10% year-on-year decarbonization rate to drive temperature alignment.
Environmentally-friendly companies may have promising potential. For instance, the global clean technology market is expected to grow from $285 billion in 2020 to $453 billion in 2027. The MSCI Climate Paris Aligned Indexes shift the weight of their constituents from “brown” companies that cause environmental damage to “green” companies providing sustainable solutions.
Some companies are poorly positioned for the transition to a green economy, such as oil & gas businesses in the energy sector. In fact, a third of the current value of big oil & gas companies could evaporate if 1.5 degree alignment is aggressively pursued. To help manage this risk, the indexes aim to underweight high carbon emitters and lower their fossil fuel exposure.
Climate change is causing more frequent and severe weather events such as flooding, droughts and storms. For example, direct damage from climate disasters has cost $1.3 trillion over the last decade. MSCI’s Climate Paris Aligned Indexes aim to reduce physical risks by at least 50% compared to traditional indexes by reducing exposure in high-risk regions.
Together, these four considerations support a net zero strategy, where all emissions produced are in balance with those taken out of the atmosphere.
Green Investing in Practice
Climate change is one of the top themes that investors would like to include in their portfolios. As investors work to build portfolios and measure performance, these sustainable indexes can serve as a critical reference point.
Available for both equity and fixed income portfolios, the MSCI Climate Paris Aligned Indexes are a transparent way to implement a green investing strategy.
Decarbonization 101: What Carbon Emissions Are Part Of Your Footprint?
What types of carbon emissions do companies need to be aware of to effectively decarbonize? Here are the 3 scopes of carbon emissions.
What Carbon Emissions Are Part Of Your Footprint?
With many countries and companies formalizing commitments to meeting the Paris Agreement carbon emissions reduction goals, the pressure to decarbonize is on.
A common commitment from organizations is a “net-zero” pledge to both reduce and balance carbon emissions with carbon offsets. Germany, France and the UK have already signed net-zero emissions laws targeting 2050, and the U.S. and Canada recently committed to synchronize efforts towards the same net-zero goal by 2050.
As organizations face mounting pressure from governments and consumers to decarbonize, they need to define the carbon emissions that make up their carbon footprints in order to measure and minimize them.
This infographic from the National Public Utility Council highlights the three scopes of carbon emissions that make up a company’s carbon footprint.
The 3 Scopes of Carbon Emissions To Know
The most commonly used breakdown of a company’s carbon emissions are the three scopes defined by the Greenhouse Gas Protocol, a partnership between the World Resources Institute and Business Council for Sustainable Development.
The GHG Protocol separates carbon emissions into three buckets: emissions caused directly by the company, emissions caused by the company’s consumption of electricity, and emissions caused by activities in a company’s value chain.
Scope 1: Direct emissions
These emissions are direct GHG emissions that occur from sources owned or controlled by the company, and are generally the easiest to track and change. Scope 1 emissions include:
- Company vehicles
- Chemical production (not including biomass combustion)
Scope 2: Indirect electricity emissions
These emissions are indirect GHG emissions from the generation of purchased electricity consumed by the company, which requires tracking both your company’s energy consumption and the relevant electrical output type and emissions from the supplying utility. Scope 2 emissions include:
- Electricity use (e.g. lights, computers, machinery, heating, steam, cooling)
- Emissions occur at the facility where electricity is generated (fossil fuel combustion, etc.)
Scope 3: Value chain emissions
These emissions include all other indirect GHG emissions occurring as a consequence of a company’s activities both upstream and downstream. They aren’t controlled or owned by the company, and many reporting bodies consider them optional to track, but they are often the largest source of a company’s carbon footprint and can be impacted in many different ways. Scope 3 emissions include:
- Purchased goods and services
- Transportation and distribution
- Employee commute
- Business travel
- Use and waste of products
- Company waste disposal
The Carbon Emissions Not Measured
Most uses of the GHG Protocol by companies includes many of the most common and impactful greenhouse gases that were covered by the UN’s 1997 Kyoto Protocol. These include carbon dioxide, methane, and nitrous oxide, as well as other gases and carbon-based compounds.
But the standard doesn’t include other emissions that either act as minor greenhouse gases or are harmful to other aspects of life, such as general pollutants or ozone depletion.
These are emissions that companies aren’t required to track in the pressure to decarbonize, but are still impactful and helpful to reduce:
- Chlorofluorocarbons (CFCs) and Hydrochlorofluorocarbons (HCFCS): These are greenhouse gases used mainly in refrigeration systems and in fire suppression systems (alongside halons) that are regulated by the Montreal Protocol due to their contribution to ozone depletion.
- Nitrogen oxides (NOx): These gases include nitric oxide (NO) and nitrogen dioxide (NO2) and are caused by the combustion of fuels and act as a source of air pollution, contributing to the formation of smog and acid rain.
- Halocarbons: These carbon-halogen compounds have been used historically as solvents, pesticides, refrigerants, adhesives, and plastics, and have been deemed a direct cause of global warming for their role in the depletion of the stratospheric ozone.
There are many different types of carbon emissions for companies (and governments) to consider, measure, and reduce on the path to decarbonization. But that means there are also many places to start.
National Public Utilities Council is the go-to resource for all things decarbonization in the utilities industry. Learn more.
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