The Man with the Golden ArmPublished by MAC on 2001-05-01
Nostromo Research / Minewatch Asia Pacific
THE MAN WITH THE GOLDEN ARM
Mr Robert Friedland goes to Asia
by Roger Moody
In 1994 Robert Friedland set his sights on Asia. If most other mining entrepreneurs had done the same, few observers would have taken much note, and even fewer alarm bells would have rung. When the world's biggest mining company, Rio Tinto (formerly RTZ) announced two years later, that it was doing the same ["Asia-Pacific profile boosted", South-East Asia Mining Letter, May 17 1999] a few chins nodded, but most eyebrows remained horizontal. However, Friedland is not a mining company, although he owns controlling stakes in several of them. Nor is he simply a mine promoter (financier), though he has provided hundreds of millions of dollars of other peoples' money, boosting the fortunes of his dubious projects. He may mix with traders and dine with brokers, but he is not to be found on the stock market floor. While he wheels and deals in millions of shares, he isn't known for playing the derivatives or futures markets.
In fact, Friedland doesn't seem to know much about the workface of mining at all, as his initial comparison of Burma's Monywa minesite with the Nevada desert seems to demonstrate. This naivety is doubtless cultivated, allowing him to blame his worst excesses on others - those "who really should have known".
In a word, our boy Robert is a "phenomenon" - although this is a term which disguises much more than it can possibly reveal. Essentially, this 49 year-old ex-hippy Canadian of US parentage, who has dabbled both in eastern mysticism and magic mushrooms, is a master of secrecy and manipulation - and is still in flight from US law. He has escaped unscathed from situations which would have driven most other exploiters into the ground (or off it). Most worrying, until recently he seemed well on the road to acquiring more bargaining power than any other person on the planet in one of its four most important (and profitable) industries (see footnote 1).
The birth of an "enigma"
Robert Friedland was engaged in tree farming and primal scream therapy [Forbes 10/2/97] when, in 1981, he launched his first minerals venture, the ill-fated Galactic Resources. Galactic was a "shell company", registered on Vancouver's "wild west" stock exchange: a modest opportunity waiting for a highly motivated opportunist. Over the next few years, Friedland took Galactic into various joint ventures (JVs), including the Ivanhoe JV, along the fabled Carlin gold belt in Nevada, and a stake in the Far SouthEast Gold Resources (FSGR) project in the Indigenous Philippine Cordillera, where it was partnered with the notorious domestic anti-union mining company, Lepanto..
But the company's showpiece was Summitville, a cyanide heap-leach gold project in the state of Colorado. Built half way up a mountain during mid-winter and opened in record time in 1985, the enterprise was about as safe as ice lollies made with water drawn from a Rangoon sewer. The liners on which the ore was heaped began stretching and collapsing almost immediately; cyanide solution - sprayed in thousands of gallons over the heaps - began leaking from the pads, which then overflowed. Worse, acidic wastes laced with heavy metals from ore and rock began forming the deadly cocktail known as acid mine drainage.
Although temporarily closed in 1989 by order of the Colorado state government, the site was reopened the following year. Mining was halted in 1991, but further heap leaching continued until 1992, at which point the US Environmental Protection Agency (USEPA) belatedly showed its teeth. Summitville, the operating company, was declared bankrupt that year: its parent Galactic followed suit in 1993 [Mining Journal (MJ) 30/8/93]. It had already sold its stake in FSGR to RTZ/CRA, the world's biggest mining company [MJ 25/1/91]. As we will see later, it was not to be the last time that Friedland courted the world's most powerful mining company, or its executives.
The USEPA has had to pay around US$50,000 a day at Summitville, just containing the cocktail of heavy metals and cyanide wastes, while final clean-up costs will almost certainly exceed US$100 million, mostly of US taxpayer's money [Roger Moody "The Mercenary Miner", Multinational Monitor Washington DC, June 1997]. Friedland quit all his posts at Galactic in 1990 [MJ 9/11/90] and later, with the USEPA in warm pursuit, fled the USA altogether. Although in 1996 trustees for the bankrupt Summitville company pleaded guilty to no less than 40 felony counts (for which they were fined the maximum US$20 million penalty), attempts to bring Friedland to court have so far failed.
Dubbed the "Exxon Valdez of the mining industry" [Thomas Hilliard, Mineral Policy Center, quoted in Moody, Multinational Monitor, June 1997], Summitville was the earliest display of Friedland's ruthless corner-cutting and grooming of the facts ("hyping", in the context of the Galactic disaster, would be a euphemism). Although the mine polluted surrounding land and waterways for a period of six years, the state of Colorado was very belated in trying to stop it. Not only had Friedland's characteristically charismatic style of presentation boosted Galactic's share price from an initial 50 cents Canadian to C$I8 a share within four years, but he had lured the Bank of America into providing debt financing, as well as selling shares in Galactic to Homestake, one of biggest gold miners in North America, with powerful friends in the American southwest.
By 1990 Friedland was looking for golden opportunities further south. His early ventures into eastern Venezuela (through Vengold) soon came up against knotty problems of land ownership, and indifferent drilling results: he later withdrew most of his investment. By then, however, he had struck it rich in Guyana. Junior Canadian company, Golden Star Resources (GSR), had been eyeing-up the country's biggest gold deposit, at Omai, on the Essequibo River. Friedland's strategy with GSR resembled that with Galactic: using shares in a company called South American Goldfields Inc, he bought his reverse way into GSR at a bargain price. Soon GSR sealed a deal with then-respected Quebecois company Cambior, and the Guyana government, as well as the World Bank and Canadian Export Development Corporation (to provide political risk insurance).
According to GSR, Friedland sold all his shares in the company in 1994; nonetheless, his brother and bosom confidante, Eric, continued in an executive role. If true, Robert's withdrawal from the company was fortuitous. For, in mid-1995, the tailings dam at the Omai mine collapsed completely, shooting several million cubic metres of diluted cyanide and heavy metals cascading into the Essequibo, the country's main river and its freshwater lifeline. It was one of the worst environmental disasters of its kind ever in South America. [For further details, see Five Minutes Before Midnight, Minewatch Briefing on Omai, London 1995.] Once again, Friedland escaped any legal sanctions (indeed it is now unlikely that Cambior or partner GSR will ever have to pay out adequate compensation to families and communities along the Essequibo). Once more, however, Friedland's moral responsibility - as the main person in charge of the company which financed and initially constructed this treacherous mine facility - cannot be in doubt.
Diamond Fields comes up trumps
Ironically, just a year after the Omai debacle, one of Friedland's other mining vehicles, Diamond Fields Resources (DFR), struck rich in Labrador, Canada, with the discovery, not of diamonds, but a huge base metals (mainly nickel) deposit on the territory of the Innu and Inuit. The Voisey's Bay find has been described as the biggest of its kind anywhere in the world. Whether or not Friedland was ever seriously tempted himself to put together a consortium to exploit the deposit, it was clear from early days that DFR required the backing of one or other of Canada's major companies. After flirting with the nickel miner Falconbridge, Friedland eventually arranged a takeover of DFR by Inco. The deal cost the Canadian company US$4.3 billion, but Friedland personally gained Inco shares and other benefits worth more than US$ 5 million. [Roger Moody "The Mercenary Miner", Multinational Monitor, Washington DC, June 1997]. In the stroke of a pen, Friedland had become the biggest single shareholder in the world's biggest nickel producer (though he later sold most his holding).
Friedland's partner in the establishment of DFR in 1993 was the soft-spoken Jean-Raymond Boulle, an ex-manager in Africa for the world's most lucrative minerals cartel, Anglo-De Beers (diamonds). In 1997, Boulle dramatically entered the chaotic stamping-ground of Zaire (now the Democratic Republic of Congo) where he lent personal support - including a private aircraft - to Laurent Kabila, pretender to the throne of the notoriously corrupt President Mobutu. In exchange Boulle got the rights to vast mineral deposits [see Roger Moody "Out of Africa: mining in the Congo Basin" in The Congo Basin, Le bassin du Congo, IUCN Netherlands, Amsterdam, 1998]. Although Jean-Raymond and Bob fell out over the spoils that year, by then the mercurial Canadian had his own fingers in both West Africa (DFR had taken over Sunshine Mining's diamond interests in Sierra Leone in early 1994. [MJ 8/4/94], and in death-dealing private mercenary armies.
Largely in order to restructure his interests in DFR, following the Inco takeover, Friedland had created a company called DiamondWorks. This was yet another corporate revamping, this time of a semi-dormant Friedland outfit called Carson Gold. Although it has diamond projects in war-devastated Angola (in particular the Camatchia kimberlite pipe at Luo [MJ 26/6/98]) DiamondWorks' main interest is now the potentially highly valuable Koidu diamond field in Sierra Leone. Originally acquired by Friedland in 1994, this deposit was later overrun by anti-government forces. In early 1996, the notorious South African private army, Executive Outcomes, teamed up with another company called Branch Energy, to recapture Koidu and hand it over to DiamondWorks.
The corporate links between Friedland's DiamondWorks and Branch Energy are not in dispute. They were confirmed in 1998 after Branch Energy was shown to have violated UN arms sanctions against all parties in Sierra Leone, with the complicity of the British High Commissioner in the country and the tacit consent of the British government. Nor is there any doubt that Branch Energy is corporately linked to another mercenary group, the notorious Sandline [see Roger Moody "The diamond dogs of war", New Internationalist, Oxford, March 1998; and Mary Louise O'Callaghan, Enemies within: Papua New Guinea, Australia and the Sandline Crisis: The Inside Story Doubleday, 1999].
Sandline's abortive role in trying to seize from Bougainville nationalists the Rio Tinto copper mine, on behalf of the now-discredited ex-prime minister, Julius Chan, is well attested - not least by an enquiry held by the Papua New Guinean government in 1997. Friedland's indirect role in the Sandline-Branch Energy-DiamondWorks nexus has still to be thoroughly uncovered, in particular whether he sought to gain personally from recapture of the Bougainville mine. Meanwhile, suspicions are bound to linger [see Mary Louise Callaghan, Enemies Within mentioned above].
However, memories are short in mining (the industry seems afflicted by collective amnesia). The Voisey's Bay coup was enough to wipe away any bad odour from Omai and Summitville, still lingering over Friedland at the time. Indeed, his ability to survive Summitville, Omai - and now his mercenary involvement - may even be regarded in some quarters as evidence he can weather any scandal. Certainly, when we look at his growing interests in Southeast Asia, it is initially difficult to find evidence that his worst excesses will be curbed.
Asia, here I come!
During the eighties, Galactic had acquired a share in the Far SouthEast gold project (FSGR) on Igorot land in the northern Philippines, then sold it to Rio Tinto in 1990, as Galactic descended into the mire of Summitville and eventual bankruptcy (2). It was not until 1994 that Friedland set his sights seriously on the Asia-Pacific again, and he made up for lost time: targetting first Kazakhstan, Indonesia and West Papua, then Vietnam, China, Mongolia and Burma [Canadian Financial Post 11/6/95]. His financial Trojan horses were First Dynasty, Indochina Goldfields (IGL) and Ivanhoe Capital Corp (ICC).
Ivanhoe riding roughshod
ICC was the privately owned venture capital corporation Friedland had used throughout the late eighties, both to fund his exploits and to secure personal financial coups. Indeed, when he resigned from Galactic in November 1990, "removing himself from any hand in management of the precious metals company" [American Metal Market (AMM) vol. 98 no. 218, 1990: "Galactic founder resigns"], Friedland declared he would now "devote all my time to Ivanhoe". Little known is that Ivanhoe entered an agreement with the discredited Galactic at the same time, under which the latter had first right to participate with either Ivanhoe or Friedland personally, in any future joint venture anywhere in the world [AMM ibid].
Friedland moved Ivanhoe from Vancouver to Singapore in 1996. Two years earlier, his entry into Burma had been facilitated by the Burmese Vancouver-based businessman, Reggie Tun Maung, who became the senior vice president of Invanhoe Myanmar Holdings, a wholly-owned subsidiary of Ivanhoe Capital Corp. Maung's son had married the daughter of the Burmese military regime (SLORC) deputy prime minister, Vice Admiral Maung Maung Khin; Reggie was also the president of the Vancouver Buddhist Society, to which Friedland had once donated around US$75,000 [Nation 13/12/96]. It was Ivanhoe Myanmar Holdings which in early 1994 was to seal a compact with SLORC's Number One Mining Company, in order to exploit the Monywa copper deposit [MJ 1/4/94]; the financing would later be bequeathed to Friedland's Indochina Goldfields (IGL) (see below) [MJ 22/8/95].
Meanwhile, a subsidiary of IC was taking over the Savage River mine in Tasmania, Australia, a year after it was officially closed in 1995, bequeathing to both community and environment some serious acid mine drainage problems. Technically, the mine is now owned by Australian Bulk Minerals (ABM) a subsidiary of Goldamere Pty Ltd - itself owned by ICC. Friedland promised not only to revive the mine, extending its life by thirty years and employing 260 people, but also carry out a feasibility study on siting a pig iron plant, to replace the old pelletising plant. However, closer scrutiny of the small print in his company's agreement with theTasmanian government (The Goldamere Pty Ltd Agreement Act 1996) reveals that the Friedland engineered "indemnity without limitation" in regard to "any liability for past pollution or site degradation or any future pollution generated as a result of past activities" (my italics) [Goldamere Ptly Ltd Agreement Act, Hobart, 1996].
The state government then promptly waived regulatory standards on the grounds that it was impossible to distinguish between past and current pollution: ABM was simply to uphold "Best Practice in Environmental Management" (BPEM) [Goldamere ibid].
The Tasmanian Greens (Green Party), briefed on Friedland's history by Australia's Mineral Policy Institute and others, tried to get the agreement annulled. Defending ABM, Gordon Toll (an ex-Rio Tinto mining executive who appears to have been important in lending credibility to "Toxic Bob" as he penetrated the Asia-Pacific region) claimed the company had never tried to hide from the state government facts about Friedland's past, or that of Summitville. But, if the Tasmanian Department of the Environment had relied solely on Toll's briefing it would have got entirely the wrong end of the stick: "It is a matter of record from the Canadian courts that the USEPA are liars, they are thugs", declared Toll in a radio interview in June 1997. "...There is no environmental disaster at Summitville - there was never any leakage of cyanide at Summitville, there has been no acid mine drainage at the Summitville mine since the 1890's" [Gordon Toll interview with Annie Warburton, ABC Radio 7ZR, 7/4/97, see also Mining Monitor, MPI, Sydney, June 1997].
Bull shopping Indochina
During this period (1996-97) Friedland was busy turning his other holding company, Indochina Goldfields (IGL) into another ramrod for private speculation in the region. IGL's preliminary prospectus promised the company would "...identify and establish an early presence in those countries...that combine the potential for significant ore deposits with limited exploration and development by foreign mining companies, due to past economic or political constraints" [quoted in Canadian Financial Post 17/5/96]. By mid-1996 Friedland directly owned 38.2% of IGL, after its first public flotation and registration on the Toronto Stock Exchange [Financial Post, Toronto, 14/6/96, Forbes Today 10/2/96]. He had also attracted investment from two industry heavyweights, the Canadian mining company, Teck, and Japan's huge Sumitomo, the world's largest copper trader [The Nation, 13/12/9]. IGL's 1996 public offering was underwritten by a raft of leading Canadian banks and brokerage firms, including First Marathon Securities.
Friedland's genius for drawing ostensibly respectable financiers into his manoeuvres was aptly demonstrated when, in the two years before the offering, five employees of First Marathon were invited to participate in a series of private placements, enabling them to secure IGL stock at heavily discounted prices. Allegedly one broker, Robert Hartkinson, invested over one and a quarter million dollars in the deal at up to C$5 a share. When IGL went public, with shares issued at three times this value (C$15 per share), Hartkinson and his colleagues made millions. This wasn't all: Friedland himself loaned C$3 million to IGL in February 1994 for "general corporate purposes". Later that year he was repaid with 16.78 million shares in the company, valued then at only C25 cents a share. In1996 their quoted value shot up to nearly C$186 million - a paper profit for Friedland of more than one hundred and eighty million dollars.
Still the scam didn't stop. That year, IGL secured its 50% stake in the Monywa copper project in Burma [MJ 31/5/96]. Ostensibly Friedland purchased the half share in this mine - but he also profited from the deal. Ivanhoe Capital's expenditure of C$4.36 million on the property was paid for with 5 million IGL shares, the worth of which later climbed more than tenfold. Indochina Goldfields' interests also include a 17% stake in Fiji's Emperor Gold Mines, whose disregard of its workforce and Indigenous rights is legendary [see 'Atu Emberson Bain, Labour and Gold in Fiji, Cambridge University Press, 1994]. Emperor had been targeted by Friedland in a classic manoeuvre to "turn around" the ailing enterprise. He bought nearly 14% of the company's stock from Emperor's chair, George Drysdale, at the eminently reasonable tag of A$1.85 apiece. Another 10% of the equity ended up in the hands of leading Malaysian entrepreneur, Tan Sri Azmi Wan Hamzah, who joined the board, along with Friedland nominees Edward Flood and Gordon Toll, (that outrageous apologist for Summitville), who became respectively the president and chief operating officer of IGL [MJ 22-29/12/95].
Third arm, First dynasty
There was yet another aspect to Friedland's astonishing reach. In1995 he had dined with Indonesian tycoon, Johanes Kotjo, one of Indonesia's ten richest exploiters. Out of this meeting of like minds came Friedland's decision to move his business empire from Denver to Singapore (with an operating office in Jakarta [MJ 10/5/96] and lodge himself for half the year, in a luxury villa on Sydney's waterfront, Australia. He would use a company called First Dynasty (Friedland was never one to shun hyperbole). First Dynasty had been formed in 1994, following another Friedland "reverse takeover" (like that of Golden Star Resources); this time of Starmin Mining by his company Ivanhoe Goldfields [MJ 7/6/96]. Ivanhoe was set up by Friedland in 1993 to "develop an early dominant position in gold mining in Indonesia and southeast Asia" [Ivanhoe press release 1993]. First Dynasty's Denver-based executives resigned in 1996 - promptly to take up similar positions in Ivanhoe Goldfields. Marcus Randolph, yet another recruit from the RTZ (Rio Tinto) stable, where he had been head of metals/mining, became First Dynasty's president, and Kotjo its chair [MJ 10/5/95 ibid].
Although focussed primarily on Indonesia (and West Papua), the first main product of this fruitful arrangement was that First Dynasty became ensconced in the highly promising Bakyrchik gold joint venture, at Vasilkovskoye in Kazakhstan, in which Teck (an investor in IGL) also became a partner [MJ 7/6/96]. Although the two companies seem to have lost in final bidding for this deposit in 1997 to Placer of Canada [Financial Times 10/10/97] - Kotjo in the interim had enabled Friedland to gain a stake in the promising Montagu Mimika exploration Contract of Work (COW) in West Papua, of which the Indonesian tycoon owned the majority stake. West Papua is the territory appropriated by Indonesia in 1967 under a fraudulent "act of free choice" that was really its antithesis [see Budiardjo and Long, West Papua: Obliteration of a People, TAPOL, London, 3rd edition 1988]. Never one to worry about human rights implications, Friedland ignored the fact that much of Montagu Mimika's COW is adjacent to the vast Freeport/Rio Tinto second COW: Freeport and Rio TInto claim this is the most prospective terrain on earth for copper and gold.
But Friedland’s sights in Indonesia were now set wider than the mountainous Indigenous territory of West Papua. He forged a firm relationship with one of Indonesia's biggest mining companies, the nickel and gold miner PT Aneka Tambang (ANTAM), which began to be privatised in 1996. Under an agreement reached that year, First Dynasty was to gain control of the producing Gunung Pongkor gold/silver mine and all that company's related mineral concessions in West Java, while PT Aneka Tambang received shares worth US$120-US$145 million in First Dynasty and the right to appoint two directors to its board [MJ 24/5/96].
ANTAM seemed delighted with the arrangement and was certainly not about to bite the hand that fed it: "We (have gained) the opportunity of working with First Dynasty and internationally recognised experts in evaluating innovative approaches to the privatisation of government-owned assets" the company declared [MJ 22-29/12/95]. Through the tie-up with ANTAM Friedland sealed a deal with yet another leading Indonesian exploiter, this time one of Suharto's sons, Bambang Trihatmodjo [The Nation 13/12/96]. (Later ANTAM floated up to 35% of its shares on the Jakarta Stock Exchange: it is not known how many of these were picked up by Friedland or his Indonesian co-conspirators.)
However, ANTAM's reputation has not improved in its three years association with the Canadian financial wizard. Five miners on a nightshift died at Gunung Ponkgor in October 1997 when a shaft collapsed. And villagers living on the island of Haruku, in central Indonesia, have filed numerous complaints about the pollution of the Wai Ira river by ANTAM - there in joint venture with Ingold (a subsidiary of Inco) - which adversely affects all their amenities ["Dead Miners worked illegally", Jakarta Post 21/10/97; "Hauruku Islanders reject mining", Down to Earth (DTE) London August 1997; "Hauruku islanders object to gold exploration", DTE February 1997].
First Dynasty has also benefited from investment by the Sterlite Group of India - a copper and aluminium smelter and refiner - through the latter's holding company, Twin Star. Under an arrangement agreed in late 1998, Twin Star would acquire US$7.5 million shares (about 43% of the equity) in Friedland's company, and be entitled to appoint three directors to First Dynasty's board. In return First Dynasty would gain capital to expand its modest gold tailings treatment plant at Ararat and open a gold mine at Zod - two sites in Armenia [MJ 27/11/98].
Twenty years ago, Robert Friedland would probably not have survived long as a loose cannon: if government regulators had not caught up with him following a massive disaster such as Summitville, big mining companies would have felt compelled either to neutralise or requisition his financial and opportunistic skills. Prerequisites for his emergence over the past decade have been successively: the erosion of multilateral government investments in mining; severe post-1980 market shocks experienced by big private mining companies in the west (and in particular the withdrawal of the world's biggest oil companies from almost all mining ventures; and, not least, the World Bank/IMF's Structural Adjustment Programmes (SAPs). The latter have enforced a fatal weakening of state regulation of the industry in many vulnerable debt-laden, yet minerally prospective, countries.
However, Friedland didn't just take advantage of these changes: he also helped engineer them. It is quite likely that the "junior" venture capital phenomenon would be a different - certainly lesser - beast, without his stock promotions during the late 80s. (The flotation of Golden Star Resources, for example, was the most important single offering on the Vancouver Stock Exchange in 1993, raking in more than C$30 million.) His negotiations with Inco over Voisey's Bay can be regarded as part of a strategy similar to that used by the legendary Texas oilman, T Boone Pickens, but far more opaque: namely to purge the lumbering, old-style mining companies of their penchant for lengthy board meetings and interminable rounds with conventional institutional investors [see Roger Moody The Gulliver File, Minewatch/WISE/International Books, Utrecht, 1993]. He has proliferated, diversified and often disguised his corporate operations, so as to take advantage of the opportunities provided by diminishing state oversight, more flexible operations in the field, and quick responses to other's greed (not least that of his corrupt and nepotistic friends among the "Asian Tigers").
But, above all, Friedland stands out for his readiness - indeed eagerness - to play a critical role, directly or indirectly, in territories where battles for control over resources, abetted by foreign intervention, is at its worst - (Indonesia, West Papua, Bougainville, Sierra Leone, Burma. He does not merely pounce on precarious companies or prospects that are undervalued - though he is an expert in the strategy. In the case of Bakyrchik, he was also willing to stand in keen competition with some well-established mining outfits. Nor has he concentrated solely on regimes where the rule can be manipulated (Indonesia's Contract of Work system may be highly favourable to foreign miners, but Kazakhstan's is more circumspect).
Rather, like a supreme commodity trader, "Buddhist" Bob has acquired some eminently workable deposit and selected metals (particularly gold) which historically have turned a quick and hefty profit. He has chosen financial partners with political clout and ready capital, and - crucially - registered his companies in tax havens (Isle of Man, the British Virgin Islands) or on stock exchanges in states (Canada, Singapore) where stringent regulatory oversight is subservient to "business as usual - and more of it". He has been able to count on complacency or complicity, not only from his private backers, but also several governments. Nowhere is this better illustrated than in his exploits in Burma and the protection afforded his operations there by the Canadian government.
When the Burmese military regime, the SLORC, began offering large stakes in the country's mineral resources to outside interests in 1995, Canadian venturers were first off the block. Two thirds of the initial sixteen mineral concessions were taken by Canadian juniors, of which no less than eight were controlled by Friedland's Ivanhoe Myanmar Holdings. By late 1998, six such juniors - Pacarc, East Asia Gold Corporation, Palmer Resources, Leeward Capital Corp, Mindoro Resources and International Panorama Resources, were still actively pursuing their "interests" in the country. In mid-1999 Friedland renamed IGL Ivanhoe Mines. It is the Monywa project that is now at the heart of Friedland's tawdry empire. Output from the Monywa copper mine, by early 1999, was running slightly ahead of schedule, allegedly with some of the lowest operating costs of any such mine, anywhere [Reuters 18/5/99 and Press Release from Ivanhoe Mines 10/7/99].
However, last year local people reported the tangible effects, such as skin irritation, of what appears to have been local water contamination caused by discharges from the Monywa plant [private communication]. There is also no doubt that this mine lends more credibility to the infamous regime - a 50% partner in Monywa - than any other mineral project in the country. Ivanhoe pays a 3-5% royalty directly to the military and is destined to be one of the country's biggest single foreign exchange earners. The SLORC has already benefited from selling Friedland further extensive mineral rights in Burma [Indochina Goldfields Ltd Press Release, Canada Newswire 8/8/97]. Friedland has boasted that his operations could generate at least an extra 100,000 tonnes of copper a year - to add to what is currently being sold to the mine's partners Marubeni and Sumitomo in Japan, and customers in Hong Kong, Thailand, Saudi Arabia, Malaysia, Korea and Pakistan [Ivanhoe Press Release 10/7/99].
A year ago (September 1998) Burmese pro-democracy campaigners in Canada challenged Friedland personally (by phone) about his vital promotion of the Monywa mine. Claiming that he had entered into negotiations over the project as long ago as 1990, had resisted requests for bribes ("signature bonus"), and was channelling the mine profits into various good works within the country ("I put out more for medical care [in Burma] than the government "), Friedland could scarcely disguise his admiration for the most vilified regime in Asia. According to him, the generals were not corrupt and were pursuing very enlightened forestry policies, while the way to "gain their approval" was by recognising that "they love their country". His only concession to public revulsion was to remark that "if they [the military] start killing students en masse, we would have to re-evaluate our involvement in Myanmar [Burma]" [private communication, Vancouver September 1998].
The Monywa mine falls firmly within the category of Burmese investments projects currently condemned by the ILO and which - were it operated by a US company - would likely make it subject to human rights legal action in the USA [Financial Times 5/7/99]. But, despite Friedland's notoriety, the Canadian Government did nothing to prevent IGL's initial entry into Burma. Indeed in 1997 Friedland was able to boast that "… in 1996 representatives of the company met with officials of the Canadian government in Ottawa [and] at no time did the government advise us against investing in Myanmar [Burma] or attempt to dissuade us from doing business in the country" [Canada Newswire 8/8/97 op cit] On the contrary, Canada's Export Development Corporation (EDC) is believed to be a key provider of political risk insurance to the Monywa mine [Indochina Goldfields Ltd, "Focus on Myanmar: case study"; presentation by Eric Edwards, Chief Financial Officer, to the Northern Miner 3rd Annual Southeast Asian Mining Conference & Exhibition, Vancouver June 25 1997]. Equally important, the Canadian authorities allowed Friedland to relocate to Singapore without any investigation of the deals which permitted IGL - and its investment partners - to extend their destructive and exploitative reach throughout the Asia-Pacific region.
Nearly a decade after the Summitville debacle, in 1998 a Canadian court refused the USEPA permission to indict Friedland for the Summitville disaster - the debacle that launched him into mining in the first place. This rebuff to the world's most experienced environmental protection agency was all the more galling given that the USEPA, along with the State of Colorado, two years earlier had finally commenced legal proceedings against Friedland in Denver, accusing him of critically defective decision-making at the mine. In response the Supreme Court of British Columbia temporarily froze US$152 million worth of Friedland's newly acquired shares in Inco, in order to pay towards the mine's clean-up [MJ 30/8/96]. An outraged Friedland claimed he had already offered a "substantial" financial contribution to mitigate the disaster, while he needed the Inco shares to finance "business opportunities" (no doubt primarily Monywa) and support lines of credit he had with the Bank of Montreal [Financial Times 9/9/96].
Clearly the authorities in his home country will not readily be persuaded to bring one of its most distinctive reprobates to justice. But Friedland's undoubted hubris might finally undo him. The prices reached for copper, gold and diamonds have become highly volatile in the past two years, under the impact of commodity scandals, price collapses and the shaking of entire economies in precisely the region on which Friedland has come most to depend, both for extraction and marketing. Morever, the stock market shocks of mid-1998, by revealing most shares to be woefully over-priced, could already have dented prospects for some of Friedland's putative ventures.
Finally, as global consciousness grows about both Indigenous self-determination and the negative consequences of mining in bio-diverse tropical regions, this unique - and uniquely damaging - mining impresario will face mounting resistance on several fronts. Not long ago, and not that far away from the protection of Burma's taskmasters, another, almost equally brutal, regime was confronted with evidence of Robert Friedland's history and self-aggrandisement. In 1997 The World Wide Fund for Nature (WWF) compiled a dossier on his exploits (based on material supplied by Nostromo Research) and presented it to the Indonesian authorities in support of their application for the Lorentz reserve in West Papua to be protected from all mining.
A few months after Suharto fell in 1998, the Ministry of the Environment in Jakarta promised that Lorentz would indeed be gazetted as a National Park from which mining - in particular Friedland's company, Montagu Mimika - would be banned.
When democratic rule is established in Burma... Well – readers are invited to come to their own conclusions.
(1) Although this profile does not deal with Friedland's non-mining assets, it should be noted that he has interests in oilfields in Indonesia (including Kalimantan) and in the Dagang oilfield being developed along with China's National Petroleum Corporation.
(2) This was the first apparent connection between Friedland and the world's biggest mining company - a connection later to flourish when Vengold bought into the British company's huge Lihir Gold project in Papua New Guinea in 1995. Several key Friedland personnel have been recruited directly from Rio Tinto in the past six years, notably Marcus Randolp,h who became president of First Dynasty, and Gordon Toll, formerly an RTZ group mining executive.
(c) Nostromo Research, Burma Action Groups and Minewatch Asia-Pacific 1999
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