London Calling July 20 2002

London Calling July 20 2002

Bloody Englishmen!

Mark Moody-Stuart has been appointed the new chair of Anglo-American - just a month before the World Summit for Sustainable Development (WSSD) SD in Johannesburg. No coincidence surely, since AAC, though registered in London, remains the mining company with the strongest interests in South Africa.

Moody-Stuart arrives at AAC hotfoot from Royal Dutch Shell, where he was chair of the directors committee. He's also a director of HSBC - the London based banking group which is a rising star in the firmament of mine finance. (Last week HSBC was appointed co-ordinator and book-runner for a US$32.5 million share offering for Randgold).

But most important, Moody-Stuart is the chair of Business Action for Sustainable Development (BASD) which will lead the business cohorts in Johannesburg - just as Lord Richard Holme, his buddy, BASD vice chair and advisor to Rio TInto, did in Bali during WSSD Prepcom IV.

Commented the Financial Times (July 17 2002): "Sir Mark is credited with the recovery of Shell's image in the aftermath of its mid-1990's difficulties [Brent Spar and Nigeria]. ..[He] is regarded as highly credible by environmental and social groups"

That may be rubbish. What isn't is that we now not only have two Englishmen acting as the most powerful advocates of so-called Type Two partnerships at WSSD, but they are both primarily committed to promoting the mining industry.

Take Aim - and fire!

The London Stock Exchange's Aim (Alternative Investment Market) is making great strides to raise mine finance for a host of dubious new projects.
Possibly the biggest stride was taken this March when 120 mining sector representatives met - though with little fanfare - to set up Aim's Jumex, under the auspices of London -based auditor, accountant and financial advisor, Grant Thornton, which has already acted for several mining companies listed on Aim.

Jumex is principally designed to find new funds for junior mining and exploration outfits. Whether it will come to overshadow the same role played by Canadian and Australian stock exchanges remains to be seen. Brian Moritz, chair of Grant Thornton Capital Markets wants Jumex to become a forum for "mining companies, financiers, intermediaries...public relations companies, analysts, media etc." (indeed Uncle Tom Cobbly and all), to meet "in a relaxed environment" .

Jumex might of course go the way of all flash, but watch this space!

[Mining Journal March 29 2001]

Russian Roulette

Newly-registered London companies seem especially interested in exploiting the CIS. Last year, Trans-Siberian Gold signed two agreements to acquire three gold deposits at Asacha in Kamchatka, and a few months later Aim-listed Oxus Mining plc arranged a US$ 31 milikon finance package with Societe General, for the Amantaytau gold project in Uzbekistan. Earlier this year, Peter Hambro Mining plc, an outfit formed with a number of Russian investors, said it would seek listing on Aim, to get the Joint-Stock Company Pokrovskoye gold mine off the ground (or rather into it) in the Amur region of the Far East Russia .

Mining majors have tended to shy away from Russia mining investment (though not the "stans") over the past few years, as various mafias and ruthless trading conglomerates have had a field day benefiting from corrupt privatisation. This does not appear to have deterred the juniors: on the contrary.

Perhaps as Christopher Granville commented in the Financial Times [Letters, July 12 2002] "...the [Russian] privatisation scandals are now a sunk cost and the returns are beginning to flow as the adventurers who grabbed natural resource assets have moved from looting them to investing in them"

Do these companies care a shit that the Indigenous Peoples of the Russian Far East have first claim on these resources? Do we?

[Mining Magazine May 2001, Mining Journal September 26 2001, Mining Journal March 28 2002]

Mercenary outcomes

American Mineral Fields (AMF), linked in the late nineties to Laurent Kabila's faction in the Democratic Republic of Congo [DRC] and to the use of mercenaries, was recently registered on the London Stock Exchange (it's also registered on the Toronto SE). Earlier this month AMF announced it is also planning to list next year on Aim, in order to raise funds for its newly-acquired 100% interest in the Kolwezi copper-cobalt tailings "recovery" scheme in the DRC [Financial Times 11/7/02]