London Calling follows the cash

London Calling follows the cash

12th January 2007

It’s the money, stupid

In November last year, the Mining Journal (MJ) held its much-publicised Mines and Money conference in London to "celebrate the highest achievements in the international mining industry during the 12 months to end-September 2006"

From the many culprits (sorry, candidates) on offer, the MJ panels selected a number of winners which, to say the least, were dubious – if not grotesque.:

The “COUNTRY AWARD” went to MEXICO for the election of free-marketeer Felipe Calderon as president, and because "the country's mining regulations have been relaxed recently and exploration concessions are now granted for six years and mining concessions for 50 years (sic) and are freely tradeable". No mention that Calderon’s election was regarded by many as fraudulent and that he has largely continued his predecessor, Vicente Fox’s, confrontational politics towards the civil populace of Oaxaca.

The DE BEERS GROUP secured the MJ “ PIONEERING AWARD”, earmarked for the company which has "shown the greatest originality in the search for minerals." The world’s largest diamond trader was specifically congratulated for its innovative exploration technology in Botswana. Of course there was no reference to the decision by Botswana’s High Court last December that the San and Gwi peoples (Bushmen) have a right to territory where De Beers has been exploring for some years.

TIOMIN RESOURCES of Canada walked off with the “DEVELOPMENT FUNDING AWARD”, thanks to its securing the go-ahead for its Kwale mineral sands mine in Kenya – the most heavily criticised extractive project in the country’s history. T iomin now benefits from the release of C$60 million from Standard Chartered Bank, WestLB (an Equator Principles bank) and Caterpillar finance. (Yes, this is the same Caterpillar that supplies bulldozers to the Israeli government in the demolition of Palestinian homes.. Tiomin was also congratulated for securing "subordinated debt" from the Jinchuan Group of China and a cost-overrun facility from Netherlands Development Finance.

The “MINING OPERATION OF THE YEAR” was singled out as OXIANA's Sepon copper mine in Laos. Even the IFC withdrew support for this project in 2003, because it did not comply with its safeguards for Indigenous Peoples (a grave deficiency the company has never addressed). Undeterred the MJ says the mine has accomplished "the most effective operating improvement during the past year".

Unhappy Christmas

The biggest copper miner in the US, PHELPS DODGE, got the “SUSTAINABLE DEVELOPMENT” award for its US400 million trust fund designed to finance environmental clean-up programmes at two mines in the US. So, once again (as we noted in 2003 when making our own "Dirty Diggers" awards) the real meaning of "sustainable development" has been travestied (or at least degraded) by lauding a company for doing what it should have done in the first place as matter of course. Three years ago Phelps Dodge was fined $105,000 for discharging polluted water containing copper and sulfide from the Christmas Mine to a tributary of the Gila River, and failing to notify the Environmental Protection Agency (EPA) of discharges endangering the environment and of facility changes that caused the permit violations.

INDOPHIL RESOURCES NL was considered to merit the “PERSEVERANCE AWARD”. Tenuous - if not spurious - as it may seem, the MJ panel is now giving gongs to companies that evince "the type of determination (over an extended period of time) that is necessary in the exploration sector." Indophil got this pat on the back for its persistence in the Philippines over bringing the much-opposed Tampakan project to the market along with its partner Xstrata plc.

Talking of which - XSTRATA PLC itself received the MJ award for “DEAL OF THE YEAR”. The UK-Swiss company's takeover of Canada's Falconbridge was greeted as a triumph by the kind of investors whose sights are fixed on nothing but making money. Otherwise, why would they be cock-a-hoop that such a secretive, dangerous and ruthless enterprise as Xstrata should grab it for them by any means possible?

All in all, then, the great and ghastly in the minerals industry have demonstrated once more that their protestations about promoting sustainable development, transparency and accountability are as valueless as a Bre-X drill bit - and as hollow as the gouged-out Grasberg mountain in West Papua?

Sources: For summaries of all the Mines and Money Awards 2006, see Mining Journal 8 December 2006; for the latest on the popular uprising in Oaxaca: see Economist Intelligence Unit report 6 January 2007; Botswana high court decision on Bushmen rights: http://www.minesandcommunities.org/Action/press1306.htm Caterpillar in Israeli occupied Palestine: http://www.minesandcommunities.org/Company/caterpillar.htm). Withdrawal of IFC funding from Sepon: Roger Moody, “The Risks we Run”, International Books, 2005 page 89; Phelps Dodge fine: ENS news service report, February 23 2003.

[London Calling is published by Nostromo Research, London. Views expressed in this column do not necessarily represent those of any other organisation or individual, including editors of the MAC website. Reproduction, with full acknowledgment to the source(s), is welcomed.]