Third arm, First dynasty

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].