The over-reacher?

The over-reacher?

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.