Spain's catastrophic mine sludge risk | US Senate investigates insurance companies over climate | Norway pushes deep sea mining

Welcome to Portfolio Intelligence Daily, where we spotlight under the radar investment themes and idiosyncratic risks, often involving emerging markets, supply chain issues, ESG risks, and the impact of regulatory changes.

Today:?

• Concerns grow in Spain over catastrophic mining sludge risk
• US Senate investigates insurance companies over climate risks
• Norway pushes deep sea mining

Theme summaries are curated by Auquan’s analyst team using our Portfolio Intelligence Engine to uncover investment insights at scale using NLP and generative AI.?

Concerns grow in Spain over catastrophic mining sludge risk

The expansion of Atalaya Mining’s mining waste ponds in southwestern Spain is raising concerns about the safety of the local community and the environment and the need to prevent a catastrophic collapse of the rafts.

• The mining waste ponds are located in the province of Huelva, in southwestern Spain
• If the Andalusian government approves the plan proposed by Atalaya Mining, the huge mining waste ponds will grow upwards by 42 metres, which is equivalent to the height of a 12-story building. The ponds currently contain 182 million cubic metres of toxic sludge.
• This expansion would bring the rafts within 150 metres of the first houses in El Campillo, and would also increase the risk of a catastrophic collapse.
• Environmental experts have warned that the collapse of the rafts could release a torrent of toxic sludge that would travel 111 kilometres and devastate the surrounding area.
• The toxic sludge contains high levels of heavy metals such as lead, copper, and arsenic.
• A collapse of the rafts could release this toxic sludge into the surrounding environment, contaminating water supplies, agricultural land, and wildlife — and cause a major economic and social disruption in the region.
• The Andalusian government has said that it is developing an emergency management plan in case of a collapse, but details of this plan have not yet been released.

“The Spanish authorities should evacuate the area. Investors from the mine recently called me to ask me about the catastrophe risk and I told them the same thing: the probability of losing human lives, a natural disaster and that they lose money, is very high." — Steven Emerman, researcher from the University of Utah (source)

Select timeline

• June 11, 2023 | The colossal mining rafts of Rio Tinto plan to grow 42 meters high and the neighbors admit their fear (El Pais)
• June 10, 2023 | UPDATE - EMED Mining gets Rio Tinto green light (Proactive Investors)
• May 16, 2023 | Atalaya Mining PLC Announces Publication of 2022 Sustainability Report (Yahoo! Finance)

#mining #atalaya #esg #spain #environment

US Senate investigates insurance companies over climate risks

The U.S. Senate Budget Committee has launched an investigation into major insurance companies' climate risk evaluation and fossil fuel support.?

• The investigation is being led by Senator Sheldon Whitehouse, with Senators Bernie Sanders and Ron Wyden
• Whitehouse has said that he is concerned that insurance companies are not adequately assessing the risks posed by climate change — and providing financial support to fossil fuel companies, which are contributing to climate change
• The investigation will focus on seven major insurance companies: AIG, Berkshire Hathaway, Chubb, Liberty Mutual, Starr, State Farm, and Travelers. The committee is expected to request information from the companies about their climate risk assessment practices and their investments in fossil fuel companies.
• The investigation comes at a time when the insurance industry is facing increasing pressure to address climate change — and a number of major weather disasters that have caused billions of dollars in damage.?

“Witnesses have warned that sea level rise and wetter, more intense storms could eventually make more than $1 trillion in coastal real estate uninsurable, and therefore unmortgageable, leading to a coastal property values crash; that more frequent and intense wildfires could result in a similar death spiral for western property in the wildland-urban interface; that climate-related losses are making it harder for the insurance industry to price risk, already resulting in insolvencies among regional insurers; and that, as demand for oil and gas declines, hundreds of billions of dollars in fossil fuel assets may be stranded.” — Sens Wyden, Whitehouse, and Sanders

Select timeline

• June 12, 2023 | Senate Budget Committee launches investigation into insurance companies’ climate risk evaluation, fossil fuel support (Reinsurance News)
• June 9, 2023 | Lawmakers launch probe of insurance firms’ funding of fossil fuel industry (Washington Post)
• June 9, 2023 | Wyden, Whitehouse, Sanders Launch Investigation into Major Insurance Companies’ Climate Risk Evaluation, Fossil Fuel Support (Sen Wyden)

#insurance #climatechange #fossilfuels #aig #berkshirehathaway #chubb #libertymutual #starr #statefarm #travelers

Norway pushes deep sea mining

Norway is considering opening a vast area of the ocean floor to deep-sea mining, despite concerns about the environmental impact of the practice.

• Norway's proposed deep-sea mines would be located in the Norwegian Sea and Greenland Sea. These are two areas of the ocean that are rich in minerals, including copper, zinc, and cobalt.
• Environmental groups and the fishermen's association have expressed opposition to the plan over concerns of potential damage to marine ecosystems, release of harmful pollutants, a lack of regulation, and uncertainty about the long-term effects.
• The Norwegian government and the Norwegian Petroleum Directorate (NPD) believe that deep-sea mining could become a significant new industry in Norway and could help boost the supply of metals that are crucial to the energy transition.

Select timeline

• June 9, 2023 | Norway considers opening Germany-sized area to deep-sea mining (mining.com)
• June 9, 2023 | Norway seeks to open vast ocean area to deep-sea mining (FT)
• June 9, 2023 | Norway Considers Opening Huge Area To Deep Sea Mining (Oil Price)

#norway #mining #deepseamining #energytransition #cleanenergy?

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