Friedland gains, as Rio Tinto is shamedPublished by MAC on 2009-07-20
Back in May 2009, two former Canadian goverment officials joined one of the country's most notorious mining companies in order to boost its fortunes in Mongolia and elsewhere. One of these was a former chief of staff for ex-Canadian Prime Minster, Jean Chretien. See: http://www.minesandcommunities.org/article.php?a=9235
Now, Chretien himself has contracted to serve the interests of Ivanhoe Mines and its primo genitur, Robert Friedland.
Perhaps this would not be so contentious if Ivanhoe were simply intent on getting final permission to open Mongolia's huge Oyu Tolgoi copper-gold mine. Following a recent session in Mongolia's parliament, that project now seems considerably closer to fruition.
However, recent disclosures by Canadian Friends of Burma (CFOB) show that Ivanhoe continues to profit from its copper mining in Burma, despite widespread public revulsion at the regime's continued oppression, and sanctions imposed by the US government. See: http://www.minesandcommunities.org/article.php?a=9046
In late 2006, Rio Tinto secured a crucial arrangement with Ivanhoe, under which the UK company gained an initial 9.95% stake in the latter company, in order to further the "development" of Oyu Tolgoi.
Rio Tinto's joint venturing with the Canadians was conditional on Ivanhoe completely withdrawing from Burma.
But not only has Ivanhoe failed to do so; Rio Tinto itself has utterly failed to oppose, or even criticise, Ivanhoe's blatant betrayal of the earlier undertaking.
Former Canadian PM Chretien hired by Ivanhoe; firm still owns Burmese mine
Canadian Friends of Burma
9 July 2009
Ottawa- The Canadian Friends of Burma (CFOB) is deeply troubled that former Prime Minister Jean Chretien has taken a consulting contract with the notorious Canadian firm Ivanhoe Mines to act as a "senior international advisor" to the company and its subsidiaries. CFOB is gravely concerned that Ivanhoe has hired Chretien not just to advance the firm's well publicized project in Mongolia but also to remove from the American Burma sanctions list Myanmar Ivanhoe Copper Company Limited (MICCL). MICCL is Ivanhoe's 50-50 joint venture with the Burmese military regime which operates Burma's largest mine.
Just days before President Bush left office this past January the US Treasury Department's Office of Foreign Assets Control (OFAC) added MICCL to the US government's Burma sanctions list. Ivanhoe has so far declined to comment publicly on this major development.
Although the Harper government imposed sanctions against Burma in 2007, Ivanhoe was exempted from the Canadian sanctions because they were already in Burma prior to 2007. When Ivanhoe's joint venture was added to the American Sanctions list in January the picture became much more complicated.
The American sanctions list is designed to target the Burmese junta's senior leadership, their business cronies and the financial networks that continue to prop up the violent military dictatorship. According to the Treasury Department when a firm or individual is added to the sanctions list "any assets the designees may have subject to U.S. jurisdiction are frozen, and all financial and commercial transactions by any U.S. person with the designated companies and individuals are prohibited."
Up until very recently Ivanhoe appeared to be in the clear as there was wide speculation that the Obama administration would lift the sanctions against Burma.
With the recent re-arrest of Suu Kyi and the ongoing show trial against her it now appears that Obama will keep the sanctions in place.
The fact that MICCL, Ivanhoe's joint venture with the Burmese military regime is on the US sanctions list may make it harder for Ivanhoe to raise finances for their other projects due to fears that Ivanhoe will face the wrath of the American sanctions.
CFOB Executive Director Tin Maung Htoo believes that "Ivanhoe desperately wants to get their Burmese joint venture off of the US sanctions list, its a major embarrassment for them and an impediment to their international business interests.
"Buying the support of a former Canadian Prime Minister will certainly boost Ivanhoe's efforts to remove their joint venture from the American sanctions list. I'm extremely disappointed to see Jean Chretien join forces with Ivanhoe and its infamous Chairman Robert Friedland, its really outrageous".
Despite denials Ivanhoe Mines still owns 50% stake in Burma
In October 2006 Ivanhoe's partner in its long stalled Mongolia project, Rio Tinto acquired a 9.95% stake in Ivanhoe Mines in a deal that stated that Ivanhoe was withdrawing from Burma. In February 2007, Ivanhoe announced that it had "sold" its 50% stake in MICCL operator of Burma's largest mine to an "independent third party trust" in return for a guarantee that when the trust sells the stake Ivanhoe will then be paid. After more than two and half years Ivanhoe continues to refuse to disclose the identity of the members of the blind trust, its structure or its activities. The Burmese military regime continues to own the other 50% of MICCL.
The "blind trust" is extremely convenient for Ivanhoe because the firm can continue to own a 50 percent stake in the mine and claim they've pulled out of Burma. Residents living near the Monywa mine believe that Ivanhoe has refused to address toxic pollution caused by the mine which has severely impacted neighboring farmland.
In May of this year Burma's pro military business weekly the Myanmar Times, reported that the Monywa copper mine run by MICCL resumed production after a year long hiatus. According to Deutsche Presse, production stopped in April 2008 after a deal with an Australian explosives supply firm expired. MICCL managing director Glenn Ford boasted to the Myanmar Times that the mine was "one of the lowest-cost production mines in the world".
At the end of 2007 Ivanhoe, citing a lack of knowledge about what was occurring at MICCL's Monywa copper mine, claimed that it was "prudent to record a $134.3 million write-down" in the value of their 50% holding in the Burmese joint venture thus reducing its value to zero. Ivanhoe continues to own a 50% stake in the joint venture as the trust has been unable to find a buyer for Ivanhoe's Burmese holdings.
Now a mine that is officially valued at zero by Ivanhoe's accountants could still continue to produce highly valued copper remains a question that Ivanhoe refuses to explain.
"This is creative accounting taken to a whole new level, Ivanhoe claims that the value of their Monywa assets is zero and yet the mine continues to be one of the lowest cost producers of copper in the world, Canadian government regulators must be diligent and investigate this charade" says CFOB board member Kevin McLeod.
Ivanhoe executives often praised murderous Burmese regime
Ivanhoe has long made self serving claims about Burma that show a complete disregard for the people of the country. In September 2000 then Ivanhoe President Daniel Kunz had this to say about a regime that is responsible for the death of hundreds of thousands if not millions of people during its four decade reign of terror;
"There are 146 different ethnic groups that have been at civil war for decades and decades . . . It's complicated. The military government, unfortunately, is probably the only form of government that can deal with such a complex problem." (Cohn Regg Martin Toronto Star Jan 28 2001)
Ivanhoe Chairman Robert Friedland's toxic past
Prior to launching his partnership with Burma's killer generals Ivanhoe Chairman Robert Friedland was CEO of another Vancouver based mining firm Galactic Resources. Galactic ran a disastrous gold mine in the San Juan Mountains of Colorado called Summitville. Thousands of liters of toxic mining waste leaked from the mine into a nearby river killing all aquatic life downstream for at least 17 miles. In December 2000 after nearly a decade long legal fight with US government authorities, Friedland agreed to personally pay US $27.5 million towards the clean up of the mine, the largest such fine in US history. To date US taxpayers have spent more than $200 million to clean up Summitville, called by many the costliest environmental mining disaster in US history.
Ivanhoe's activities anger Mongolians
Mongolia is the site of Ivanhoe's long planned and much hyped Oyu Tolgoi development, a controversial mining project which has attracted strong protests from many in Mongolia . In April 2006 Ivanhoe's Chairman Robert Friedland was burned in effigy at a massive protest in the Mongolian capital.
Friedland angered many Mongolians when he boasted about the benefits of Ivanhoe's Mongolian plan, "The nice thing about this, there's no people around. ...There's no NGOs....You've got lots of room for waste dumps without disrupting the population." ("DESERT STORM" York, Geoffrey The Globe Report on Business Magazine 30 Sept 2005).
Earlier this year Ivanhoe Mines hired Chretien's former chief of staff Eddie Goldenberg and Allan Gotlieb former Canadian Ambassador to the US, to lobby the Canadian government about the firms Mongolian mining interests. CFOB has filed a formal complaint with the Canadian commissioner of lobbying over concerns regarding both Mr. Gotlieb's and Goldenberg's filings with the commissioner. (see http://www.minesandcommunities.org//article.php?a=9235)
Ivanhoe Board Includes Chretien insider who praised Tibet's notorious Prison
Ivanhoe Board Member Howard Balloch was Jean Chretien's point man during the 1995 Quebec referendum. After the referendum the Chretien government appointed Balloch to be Canada's ambassador to China and Mongolia. It was during his tenure in Beijing that Balloch was invited for a tour of Tibet's infamous Drapachi prison, the notorious location where many Tibetan political prisoners have been tortured.
In Balloch's report of the prison tour which he sent back to Ottawa, the seasoned diplomat claimed that Drapchi Prison "offers real hope that there is progress being made in the humane treatment of convicted Chinese prisoners". He also wrote in the glowing report which was later obtained by CFOB through access to information that even with "with a fair degree of discounting" he had every reason "to believe that real efforts are being made "by the Chinese prison officials "to provide a humane and rehabilitative environment for those incarcerated".
Almost immediately after Balloch stepped down as Canada's man in Beijing he joined the board of Ivanhoe Mines. Balloch remained in China and opened a consulting company called the Balloch Group, where according to the National Post his staff continue to call him Ambassador and the office walls are covered in photos of Balloch shaking hands with important Chinese dignitaries from the days when he was actually a diplomat ("Into the Maelstrom" by Duncan Mavin Financial Post Oct 2007).
For a Previous CFOB press releases on Ivanhoe's jailed Burmese driver please go here
Media contact: Kevin McLeod at 613-746-4963, or Tin Maung Htoo at 613-297-6835
The Canadian Friends of Burma (CFOB) is federally incorporated, national non-governmental organization working for democracy and human rights in Burma since 1991. Contact: Suite 206, 145 Spruce St., Ottawa, K1R 6P1; Tel: 613.237.8056; Email: email@example.com; Web: www.cfob.org