No knight in shining armour for IvanhoePublished by MAC on 2001-05-01
Alarming mining-related news continues to filter out of one of the world's most beleaguered counties. The notorious mining entrepreneur, "Toxic Bob" Friedland, is seeking new investment to expand his company Ivanhoe's Monywa copper mine. And a US journalist investigating HIV/AIDS in Asia believes that Burma's gem mines are the source of its worst incidence anywhere on the continent - comparable to that in southern Africa.
No knight in shining armour
by Eric Snider
With copper prices almost double what they were a year ago and with production on the rise at Burma's Monywa mine, Ivanhoe Mines and its joint venture partner, Burma's military regime, are doing just fine for the moment. Ivanhoe claims to have written "expressions of interest" from companies in Korea, Japan and China that are willing to finance expansion of the JV Monywa mine to the adjacent Letpadaung deposit.
According to the latest rose tinted scenario sketched out in Ivanhoe's 2nd quarter report, if all goes according to plan, production should rise to an annual 50,000 tonnes of copper cathode during 2005 from the current 30,000 tonnes, and from there, with financing from one or all of the "interested" partners firmly in place, up to 200,000 tonnes in no time at all.
The joint venture company is counting on an increase in electric power supply to 40 MW by the end of of this year and on an additional 60 to 80 MW when it expands. There are some signs that at least one generator may be functioning at MEPE's new Monchaung plant by the end of this year and that the long-delayed Paunglaung power plant near Pyinmana may also limp into action in the next few months. So, one way or another, Ivanhoe and partner may get the power needed to drive the first phase of their production expansion program. None of the copper produced is currently used in the country.
Trouble is there is still no knight in shining armour waiting in the wings to come in and take the whole thing at Monywa off Ivanhoe's hands, so that it can concentrate on getting the "fabulous" copper and gold treasures buried in its Oyu Tolgoi prospect in Mongolia into production.
Folks who have written to Ivanhoe to inquire about the welfare of a chauffeur who was reportedly locked up for seven years after taking Ivanhoe's manager in Yangon too close to the home of Aung San Suu Kyi last Decemeber have been coldly informed by the company's Ed Flood that no such person ever worked for the company in Yangon. But readers of the English language edition of the July 28th edition New Light of Myanmar were treated to a rehash of the accusations by columnist Pauk Sa who hesitated not to drive home his point:
"Now, I will tell the truth about the matter. Ko Thet Lwin was appointed by the company as the driver of the project manager of the company, Dr Andrew Michell, a British citizen."
No doubt there. The two partners of Myanmar Ivanhoe Copper, it appears, are at odds over this one. Meanwhile, the "abandoned" driver continues to languish in prison.
Gems and HIV/AIDS
This is an excerpt from an August 11th interview between US radio programme Fresh Air and joufnalist, John Cohen
This is FRESH AIR. I'm Dave Davies, senior writer for the Philadelphia Daily News, filling in for Terry Gross.
Last December, the premier of China, Wen Jiabao, did something regarded as extraordinary. He allowed himself to be photographed greeting a former taxi driver from Shanxi province who's being treated for AIDS. The event signaled the awakening of the Chinese government to the threat HIV poses to its 1.3 billion people at a time when countries across Asia are hoping to avoid the catastrophic AIDS epidemic that has befallen sub-Saharan Africa.
My guest, writer Jon Cohen, recently published a four-part series on AIDS in Asia for the journal Science. In researching the series, Cohen traveled to six countries, talking to doctors, patients, public health officials, sex workers and drug users. Cohen has been writing on the AIDS epidemic for 15 years. His book on the search for a vaccine is called "Shots in the Dark." Cohen has also followed the AIDS crisis in Africa. I asked him how the situation in Asia compares .
DAVIES: You mentioned that the country of Thailand had had a relatively successful campaign battling the growth of the HIV/AIDS problem. By contrast, the country of Myanmar, formerly known as Burma, is ruled by a military dictatorship that took over in 1988. What did you find there?
Mr. COHEN: Well, I toured the country and I went officially again with a minder, and the health-care system itself looks like it has AIDS. It's just a bare-bones system that has very little to offer anyone. Medecins Sans Frontieres, Doctors Without Borders, has a clinic outside of Rangoon, now known as Yangon, that had started to treat people with anti-HIV drugs. They had 13 people on treatment--one three--in a country that probably has a higher prevalence than anywhere in Asia. Now the junta has changed. There is a more aggressive campaign to prevent HIV spread and to help HIV-infected people. But, you know, the virus waits for no one. And it takes advantage of every misstep that politicians make. And the Burmese government, the junta in Myanmar, has allowed the virus to trample through much of the country unabated. And given the role of heroin and the gem mines there, it further exacerbates the situation greatly.
It reminds me of South Africa. You know, South Africa has these diamond mines in the center of the country, and you see all this migration coming from both the east and the west coast. So typically men leave their girlfriends or spouses, their wives, and they go the center of the country for six months, work in these mines, make all this money. There are lots of sex workers there, lots of drugs, lots of alcohol. It's a perfect environment for HIV.
You see a very similar situation in Myanmar with the gem mines. They have ruby, jade, sapphire mines. And I met several men who go work at the mines for three, four months. There are a lot of sex workers there. If you have a good day, you make a tremendous amount of money. And what do you do at the end of the day? Well, you party with your friends, maybe you smoke some heroin, maybe you shoot some heroin and maybe you hire a sex worker.
That's life. And if you're going to really tackle HIV in Myanmar, that's where you've got to go. And I don't see much happening at those places, nor would they let me visit those places, to be frank. I mean, they didn't want me to see them.
DAVIES: Did you say you did speak with some gem mine workers, though?
Mr. COHEN: I did, yes. I met gem mine workers who had become HIV-infected at the mines, they believed. And they described the mines for me. And--I mean, I was very near the mines; they just wouldn't let me go right to the mines. And they had a long list of reasons, some of which may have been valid. There's no telling when you're dealing with a government like that.
Mr. COHEN: I mean, I must say, the government let me in. You know, they let me in officially. Loads of journalists go there as tourists. I didn't want to do that. They were very accommodating to me, given their history and reputation with the media.
DAVIES: What did the gem mine workers tell you about what was going on there, and their own knowledge of HIV when they were infected?
Mr. COHEN: It was a good time. Knowledge of HIV was low. Many people in Asia and Africa learn about HIV after they become infected. They don't even know about the disease. It was a good time had by all. I mean, the descriptions I heard of the gem mines made it sound like the Wild, Wild West.
DAVIES: And does the prevalence of HIV in that community pose a threat to other countries?
Mr. COHEN: Sure. I mean, there have been studies that have looked at HIV's spread outward from Myanmar and that has done--the study did a molecular epidemiological analysis where they looked at the gene sequences of the HIV strains traveling around Asia.
And they could map that the virus moved along the heroin trade routes from Myanmar in every direction. So certainly it spreads from there.
I mean, again, I'm always hesitant to, like, place blame. It's not Myanmar's fault that there's HIV in Asia. There's HIV in Asia because there's HIV anywhere the virus can go, and it will simply take advantage of any situation it can. Heroin trade routes--that's a great situation for a virus. It wants to move around. It wants to copy itself. I think we always have to see the world of HIV through HIV's eyes, so to speak.
To listen to the full interview, please visit:
We would like to publish this letter in full from Ivanhoe without further comment as it really speaks for itself.
Transmitted by Canada NewsWire on : August 19, 2004
Setting straight The Globe and Mail record on Ivanhoe Mines' investment in Mongolia
ULAANBAATAR, MONGOLIA, Aug. 19 /CNW/ - Ivanhoe Mines and the Mongolian Government have been engaged in good-faith negotiations toward a stability agreement for the construction of a world-scale mining complex at the Oyu Tolgoi copper and gold deposits discovered by Ivanhoe in southern Mongolia. The following letter, dated July 30, 2004, was sent to The Globe and Mail newspaper in Canada to address a misleading and incomplete record that was created by the publication of a story on July 26 that purported to cover alleged "criticism" of the purchase of a Mongolian Government treasury bill by Ivanhoe Mines in December, 2003. The newspaper declined to publish the submitted letter, which now is being distributed by Ivanhoe Mines in an attempt to provide a more complete factual record on the subject.
(Text of letter to the editor, The Globe and Mail, Toronto, July 30, 2004)
A Globe and Mail Report on Business story published July 26, 2004, misrepresented the true circumstances involving the purchase of a Mongolian national government treasury bill by Ivanhoe Mines in December, 2003.
The story implied, falsely, that Ivanhoe was the sole "benefactor" that helped the Mongolian government raise the capital needed to retire Mongolia's long-standing debt to the Russian Federation. The Globe did not tell readers that the Erdenet Mining Corporation, a Mongolia-Russia joint venture that owns the 26-year-old Erdenet copper mine, currently the largest producing mine in Mongolia, also participated in the initiative. Other investors, including Mongolia's central bank, also supported the initiative. While Ivanhoe invested in a $50 million treasury bill, an additional $200 million was provided by other investors.
With this support, the government was able to take advantage of an extraordinary, 98% discount repayment incentive on the $12 billion national debt that Russia was offering only until the end of 2003.
There is no connection between Ivanhoe's purchase of the Mongolian treasury bill seven months ago and Ivanhoe's negotiations with the Mongolian government for a long-term stability agreement that will set terms and conditions that will apply to Ivanhoe's planned Oyu Tolgoi copper and gold mine development in Mongolia's South Gobi region. Ivanhoe and the Mongolian government explained to The Globe that there was no connection between the treasury bill and the stability agreement. Yet much of the Globe story was woven around unsupported speculation and insinuations that there was something questionable about Ivanhoe's investment in the treasury bill. Contrary to an allegation reported by The Globe, there was nothing "clandestine" about the treasury bill purchase. It was properly handled by the government on behalf of the people of Mongolia. Ivanhoe's potential purchase of the treasury bill was disclosed in advance in a public prospectus and the subsequent completion of the purchase was announced in Mongolia and disclosed in an internationally circulated news release.
As Ivanhoe advised The Globe before it published its misleading story, the company has never heard criticisms from any quarter that the treasury-bill purchase was, or could create, a conflict of interest for the government. The purchase of a treasury bill does not disqualify the purchaser from dealings with the issuing government -- either in Mongolia or anywhere else. The record is clear. Ivanhoe purchased the interest-earning treasury bill, with no favours asked, offered or given by either side. The government recently re-affirmed to Ivanhoe that the loan will be repaid, on schedule and in full, at the end of this year.
As The Globe was advised, the stability agreement, covering such matters as rates of taxation, is an entirely separate issue. The Globe's suggestion that there is something unusual or surprising about the time being taken to conclude such a complex agreement is a misrepresentation.
Ivanhoe advised The Globe before the story was published:
- Oyu Tolgoi will represent the largest investment ever made in an industrial project in Mongolia;
- Oyu Tolgoi, a world-scale project, is much larger, and will be in production longer, than any mining project previously advanced in Mongolia;
- it is not unusual for stability agreements in other countries to take several months, and even years, to complete; and
- the government and Ivanhoe have recognized that the existing model form of stability agreement used in Mongolia is inadequate and that an alternative form has been drafted to reflect the scope, financial commitment and complexity of the project. The new form could serve as a template for other future large-scale development projects in Mongolia that are similar to the Oyu Tolgoi project. The agreement's terms are being negotiated within the current law and to a standard that will be acceptable to international banking and investment institutions.
The Globe's misrepresentation of Ivanhoe's sincere community support actions, taken on behalf of our hundreds of Mongolian employees, as well as our shareholders, is an unjustified cheap shot apparently to shore up the story's core of contrived controversy. The story's suggestion -- that Ivanhoe's long-term support of an orphanage, the support of the rebuilding of a South Gobi Buddhist temple razed during the Stalinist era and the creation of an infectious-disease clinic during the last year's SARS crisis are just image-grooming gestures to curry political favour in Mongolia -- is false and contemptible.
Robert M. Friedland
Chairman, Ivanhoe Mines Ltd.