London Calling On A Recent City Shuffle

London Calling on a recent City shuffle

9th June 2006

Eager to quit Bangladesh - but still stuck in Peru

London Calling has been following the recent career of Chris Eager, former NM Rothschild's manager of mine finance investment. We've never met him - and don't expect to. However community members, opposed to two projects his companies are promoting, have certainly brushed against some of his employees. By which (to be more legally precise), we mean people hired by corporate enterprises whose behaviour must be laid at the door of Mr Eager and his fellow directors.

Well that's until a few weeks back. On May 9th, Mr Eager suddenly resigned as non-executive chairman of Asia Energy, a company he'd been instrumental in bringing to London's Alternative Investment Market (AIM) specifically to grab the huge Phulbari coal fields in northwest Bangladesh. The flak which Eager and his company has received, both within the country and from abroad, was almost certainly not anticipated when this ill-conceived project was launched with the backing of the UK Department for International Development (DfID). Now it's at the centre of a raging debate within the country as the government's new mining policy gets aired and resoundingly attacked (see below). This is due to the policy's promise to dish out Bangladeshi minerals to foreign companies mainly for export and at a derisory royalty. India's biggest private enterprise, Tata, is also fmirly in the running (see article below). Indeed it's way ahead of Asia Energy at this stage of the game, but a tie-up between the two is by no means off the cards.

We don't know whether Eager was levered out of Asia Energy because of his poor defence of the company. (In fact, it's hardly been a defence at all, considering that the Phulbari mine would necessitate the removal of 40,000 people, thus destroying much local business and uprooting Indigenous villages).

In any event, Eager remains the Chief Executive Officer (CEO) and a director of Monterrico Metals, whose Rio Blanco operations in north western Peru only this week incurred the wrath of local people. This wasn't by any means the first time - as readers of this website will
be well aware. Last November two protestors against the project were killed during a demonstration and, in March this year, the company was accused by a community representative of orchestrating violence against opponents of the project.

Beholden to Gerald

Eager has been replaced at Asia Energy by Gerald Holden, who (we're told) had "a distinguished career with Barclays Capital.[working] for the Barclays Group for over 20 years and in his recent role as Managing Director and Global Head of Mining and Metals has been instrumental in building Barclays Capital into a leading position in the Mining and Metals community around the world."

In other words, Asia Energy has gone up market. Barclays Capital is no minnow in the distinctly murky sea of global mine finance. On the contrary - and even compared with big fish like Citigroup, HSBC, and Deutsche Bank - it's a shark. Among Barclay's recent dinners, served up by Mr Holden, has been a hefty steak in Vedanta Resources plc and more than a soufflé of Tiomin's mineral sands mine in Kenya. Holden has been granted options in Asia Energy which, if exercised, could earn him nearly £900,000. Under Holden's stewardship, in August 2004, Barclays Capital itself secured 2.1 million options to subscribe for Asia Energy shares. This was after the bank became the financial adviser to the Phulbari project with the aim of "advancing" the mine towards secure project finance. So, Mr Holden is now putting his mouth where both Barclay's and his own money lie.

Asia Energy obviously needs their new chairperson at this point in time. The company claims that he has "especial" knowledge of the Phulbari Coal project". If so, he'll be well aware that, shifting thousands of resisting people from their land in pursuit of the interests of a UK company, will exercise all the persuasion of which he's capable.

But this isn't the half of it. Holden is also joint chairman of Lonrho Africa Ltd and of Brinkley Mining, which listed on AIM at the beginning of this month. Through its South African subsidiary, Western Uranium, Brinkley has already acquired significant slices of the country's uranium and molybdenum resources in the Karoo region, two hundred or so miles north of Cape Town. Sections of these deposits allegedly contain up to 9,000 parts per million (ppm) of uranium and more than 500 ppm of moly. No mean reserves, however you measure them.

If Britain's prime minister follows these intra-company affairs (which he probably does, given his ire at the demotion by the Kyrgyzstan last year of another AIM mining company, Oxus) he must be rubbing his hands with satisfaction at Holden's ascendancy. Tony Bliar is now converted to nuclear power (and thus uranium), while his "development" department badly requires a front person for Asia Energy who can bring some credibility to the company in the City.

Meanwhile Eager can be permitted to hold onto Monterrico. After all, it's only a copper mine, impacting communities in an isolated valley, opposed by peasants who can't even speak English, while its progenitor far enjoys a complete absence of negative reportage in the British media.

And, for heaven's sake - Peru's not even in the World Cup!