In reading some material related to the recent downfall of Brazilian Billionaire Eike Batista - there emerges this excerpt
"In the early 1980s Batista returned to Brazil and started a gold trading firm, Autram Aurem, raising seed money from connections in Rio and quickly establishing a far-flung network of 60 buyers of raw gold in the Amazon."The story goes onto the establishment of his own gold company. He seems to have employed an array of privileged information and deceit while mastering arbitrage at the same time (i.e., lied, cheated and stole). Entering 2000, environmental concerns and commodity fluctuations were giving Eike a rough ride. But by spring 2012, his fortune grew to more than $30B and he thrived on the billionaire lifestyle including his 'fleet' of private jets and yachts! And by summer, Eike was bleeding uncontrollably losing $1.5-2.0B per month.
This downfall has been attributed to the poor performance of one of his companies ~ which one? OGX ~ oil and gas exploration. He has found out that the oil business is not a licence to print money like some people tend to think.
Eike laments in a letter to Brazil seemingly genuine in his uncertainty about what went wrong? Questioning whether or not he really isn't just one of those self-centered hedonistic folk. I can't help but my mind wanders to the US Government. Like them, he is days away from default. The government's is 17-October. His is 30-October.
At a minimum he must only come up with $47MM ~ merely an interest payment - he is reportedly also seeking $250MM to keep operating. Meanwhile the US government needs to raise the debt ceiling by $52B from $1.699T to likely $1.75T. But unlike the government, which surpassed the current debt ceiling in May, it is not likely that Batista will be granted such flexibility. He's on his 5th restructuring advisor, and citing astrological charts as his path forward. Let's try and report back on this in a couple of years.
It is probably overly optimistic to think that this will have some effect on the illegal mining circumstances in the Amazon ~ where there is faith, there is hope.
This is an astounding story. And it is not a new story. There are reports of this going back into 2001-02. The most recent and dramatic changes have come from the rise in the price of gold since that time.
The broad geographical extent of the environmental damage is staggering. Environmentalists around the globe are very vocal about widespread environmental damage from oil and gas, and mining, and other activities. As environmental professionals we constantly strive to improve our environmental performance. This story has little to do directly with corporations and profits, and everything to do with simple human nature.
The illegal mining of gold by local communities and tribes is a profound statement of changes in fundamental values ~ and how priorities change. Indigenous populations around the globe have been moving into urban or industrial settings for decades to take advantage of the potential for a better quality of life. The allure is sometimes much greater than the reality. And while I am sure there are many perspectives of this reality (i.e., miners perspective HERE and Nature's article HERE), the physical devastation is obvious, as is the exposure of people to harmful activities and substances. The short term gains made in these activities are completely overshadowed by the decades of 'change' that will have profound effects of the functionality and productivity of the region.