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Societe Generale/SG

Societe Generale/SG
Based in Paris
Active in Indonesia, Ecuador, Namibia, Tanzania, Peru, Canada, Western Australia, Australia, Burkina Faso
Targeted base metals, coal, energy fuels, precious metals

Societe Generale/SG is a major French investment bank, riven by scandal in early 2008 when one of its derivatives dealers (aka “rogue trader”) was discovered to have committed a massive fraud. Among SG’s mining-related stakes is one in the Toka Tindung gold mine project in northern Sulawesi (Indonesia), operated by UK-AIM listed Archipelago Resources, from which German bank, West LLB, appeared to withdraw support in January 2008 [see MAC website, 21 January 2008].

In April 2008 SG joined a bank syndicate (led by Scotia Capital (qv), and including National Bank of Canada, NM Rothschild and Toronto Dominion Bank), to provide a five-year revolving credit facility to Canada’s Iamgold, for the bankrolling of its mine ventures in Ecuador, Tanzania, Peru and Canada [Mining Weekly, 28 April 2008].

In December 2008, along with the Commonwealth Bank of Australia, Societe Generale Australia Branch, arranged a debt facility for Avoca Resources Ltd’s US$47.2 million Higginsville gold project in Western Australia [MJ 12 December 2008].

A month later, in January 2009, SG was granted security by the world’s second-largest zinc miner, Oz Minerals of Australia, over its Century, Rosebery and Avebury mines in Australia, following a dispute between the bank and company. Societe Generale was also expected to gain security over Oz’s Canadian exploration assets by the end of January, as the company tried to refinance a total of $560 million in debt. Trading in Oz Mineral's shares was suspended in November 2008: they had lost around 85 percent of their value since January that year, due to plunging commodity prices [Reuters, 22 January 2009]. In mid-2011 SG joined by Nedbank Capital, Standard Bank Plc, Barclays (Barclays Capital) and Rand Merchant Bank, provided a US$141 million finance facility to fund further expansion of Paladin Energy's Langer Heinrich uranium mine in Namibia [MJ 2 September 2011] (see also RBC Capital Markets ).

On the eve of the 2011 climate change conference (Conference of Parties) held in Durban, South Africa,four organisations (urgewald of Germany, BankTrack, and South Africa groups Earthlife Africa and groundWork) identified SG as one of the Top Twenty heaviest financiers of coal fired electricity and coal mining in the period 2005-2011. According to their report, the bank had released 4,742 million euros of such funding [Bankrolling Climate Change, urgewald et al, 2011].

On 15 April 2014, Friends of the Earth France criticised SG's backing for the huge Alpha Coal mining project in Australia, saying it did not comply with SG's ownn environmental and social principles.

Having assessed the project’s risks to biodiversity, water resources, the Great Barrier Reef and the climate, the group urged Société Générale to withdraw its support immediately.

Friends of the Earth recalled that the bank in November 2013 had promised only to engage in Alpha Coal if the project met its environmental and social principles, yet "it is clear that the two are irreconcilable as project risks are enormous," said Lucie Pinson, private finance campaigner for Friends of the Earth [Friends of the Earth France, press release, 15 Aril 2014].

In September 2014, Societe Generale, along with Credit Suisse(CS) provided US$75 million of debt funding to Vancouver-listed Roxgod Inc, for development of its Yaramoko gold project in Burkina Faso [MJ 3 October 2014].

Societe Generale also operates an exchange traded commodity fund in nickel, although in 2014 it saw its share price drop by 25.31% [Investors Chronicle 23-19 January 2015]