The birth of an "enigma"

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.