London Calling - November 30 2003
London Calling! November 30 2003
Keeping it in the family
London certainly is calling! This week sees the Mining Journals Mines and Money
Congress (hereinafter M&M), a spree the worlds leading mining publication has been sign-posting for months. The Financial Times got into the act last month with a puff piece entitled Miners move to London to tap a cash seam. Nothing surprising there - except the FTs revelation that Jim Slater has just joined with son Mark, to form AIM-listed Galahad Gold.
Slater pater was the key partner in the notorious stock picking, asset-stripping, Slater Walker investment bank, which crashed to earth with a resounding thud in the mid-seventies. Walker had been a Tory cabinet minister and one of Jonathan Aitkens Young Meteors in the 1972 book of that name. Later he got dubbed a minus millionaire. But collective English memories are short, while miners are an accommodating tribe to their own, however lapsed they may be. Galahad has only two and a half million quid in the bank, and nearly a fifth of this is already earmarked for its overweight board. Who cares?
Jim Slater isnt short-listed for one of the prestigious awards due for presentation at this weeks M&M. Nonetheless, up for the gongs (should we say buttons?) is an impressive pack of other booty hunters. The event makes little pretence at anything but raising cash. Sure, theres a token green in attendance: Richard Sandbrook is ex-co-founder of Friends of the Earth and the eminence grise behind the Global Mining Initiatives MMSD project. But, while hes addressing the M&M on the role of pressure groups, his session is not about sustainable development - rather sustainable spending.
Curiously the glossy M&M programme doesnt mention Robert Friedland although hes down to introduce a workshop on China. In fact, Toxic Bob was in London earlier this month, hosting a dinner for the Mongolian prime minister amid the paintings at Wallace House and touting his new Oyu Tolgoi (Turquoise Hill) copper/gold project.
Friedlands Ivanhoe Mines got access to Mongolia partly by chummying up to George Dubya Bush and backing the Republican party. George Bushs own father, when president, peddled market reforms in the gold-rich country by despatching Secretary of State, James Baker, there in 1990.
Ironic, one might feel, that the administration which recently placed an embargo on investment in Burma, should be so keen to back a company which is glaringly violating that ban.
Unfortunately for Midas Man, Forbes magazine rather dirtied the welcoming waters on November 24th, with an abrasive article on Ruthless Roberts past that also threw strong doubts on the due diligence claims of his Mongolia play. (Mineweb has since rallied to his side).
Toxic Bob does seem genuinely devoted to proving up this potentially huge new mine,
rather than simply treating it as a cash yak. Indeed hes arranged to buy up BHPBillitons last vestige of interest in the venture. Just as he claimed he had a duty to assist the downtrodden Burmese people by opening up the Monywa copper mine, so Friedland owes the inhabitants of Mongolia a similar money-spinner.
Ivanhoe, Friedlands main corporate vehicle, is backed by an impressive board, including Robert Hanson. Trading as the Hanson Group his own dad, Lord Hanson, received heavy bombardment from anti-smoking and native pressure groups during the 1990s when the company ran both BAT and Peabody Coal. (Contributing to lung disease from two different quarters, some might claim). Over recent years little critical has been heard about the Hanson enterprise.
That is, until last month.
In late October, Californias Attorney-General declared the Hanson group sand pirates, accusing it of stealing from the state and ripping off taxpayers to the tune of US$200 million (£119 million). Its alleged that Hanson manipulated the royalty it pays on sand taken from San Francisco Bay, under-reported its production and going beyond the designated leases.
The Guardian Awards
The M&M prize-giving reminds us that the Guardians just published another of its admirable Giving Lists, examining the philanphropy of the FTSEs Top One Hundred companies.
Among the miners, Rio Tinto shines - its number six among the most generous British corporations, donating 2.7% of its pre-tax profit to worthy causes (which is 1.7% more than Rio and partner Freeport donate to the Amungme people, plagued by their Grasberg mine in West Papua). BHP Billiton has slipped to 17th slot from number 16 last year (perhaps because it gave so much away to ex-CEO, Brian Gilbertson?) And Anglo American drags behind at number 29.
More interesting and certainly of greater import is the chart provided by the Guardian
(based on last years research by Amnesty International and the Prince of Wales International Business Forum) of countries with bad human rights records but in which British companies continue to put money.
BHPBilliton invests in no less than six of these 27 culprit states; Anglo American in four of them, and Rio Tinto in three (Brazil, Indonesia and Turkey).
Strange, however, that the list omits Laos (where Rio Tinto hangs on to a slice of Oxiana), while China snags BHPB but not Rio Tinto, with which the regime transacts a huge volume of trade Nor are any of the Big Three miners damned for doing business in India, although theyve all been very active there of late especially on tribal peoples territory.
and the alternatives
One hopes that the Dirty Digger awards framed as alternatives to the M&Ms and also to be presented next week will help amplify the true record, putting not only the major players, but smaller outfits like Ivanhoe, in their place.
Which is not even to begin mentioning the environmental and human rights implications of the impending London stock exchange float of Vedanta, the biggest of its kind this year..
Watch this space!
[Sources: Galahad float: FT 21/11/2003; Mineweb 19/11/2003; Jonathan Aitken, The Guardian 6/9/2003; Mineweb on Oyu Tolgoi:, 11/11/2003 Friedlandia: FT 12/11/03; Forbes magazine, 24/11/2003; BHP sale to Ivanhoe FT 3/11/2003; Hanson in sand storm: FT 28/10/2003; The Guardian Giving List 17/11/2003]
[London Calling is published by Nostromo Research, London. The opinions expressed do not necessarily reflect those of any other individual, organisation or editors of the MAC web site. Reproduction is encouraged with full acknowledgment]