Friedland sets out to slay more dragons
MINING and Mongolia evangelist Robert Friedland yesterday smote not only his usual targets - politicians and the media - but did his best to slay the hysteria surrounding Europe's teetering economies.
Preaching to an audience of the converted, the Melbourne Mining Club, Friedland dismissed Europe as ''Disneyland''; cataclysm or not, Europe is irrelevant to the future of the mining industry and Australia because it is ''already built''.
His Ivanhoe Mines, and shareholder partner Rio Tinto, are now into the final phase of a $4 billion construction program to bring the copper/gold/molybdenum mine Oyu Tolgoi in Mongolia on stream.
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Comforted by the knowledge that, once running, it ought to last for a century, it is easier to have a longer time horizon than flighty financial markets.
The wit and wisdom of Friedland were on full display: ''I thought it was a really great idea to have a revolving Mongolian and Chinese restaurant on top of the [31-storey mine] shaft, but it fell on deaf ears at Rio.''
So keen are the Chinese for Oyu Tolgoi's output that they have put ''a couple of billion dollars'' into infrastructure, chiefly highways and power supplies.
When you are taking the long view like Friedland, it is easy (and perhaps preferable) to gloss over some of the detail. Insider is not talking here about the mistakes that any of us could make: like confusing the fictional Vulcan, Mr Spock, with the paediatrician Dr Spock.
Or referring to the intervention on Wednesday night by central banks as swapping US dollars for Spanish pesetas and Italian lire - given that it is almost a decade since both currencies were replaced by the euro.
Or even his suggesting that because the North Pole was a tropical venue in the Eocene of 50 million years ago, climate change will always happen.
The things that damage the credibility of a man credited with calling the China boom earlier than most were things like saying he preferred the surety of a Mongolian government's guaranteed 50 years licence to Australia's ''redhead'' changing the rules.
Insider seems to recall that only a few months ago Friedland and Rio were massaging the Mongolians back into shape after murmurs from their Parliament that they might want a bigger bite of Oyu Tolgoi than the 34 per cent direct stake that they agreed to hold for the next few decades.
Clearly Mongolia does not have a mortgage on certainty for business, even when the head of government, Sukhbaataryn Batbold, is quite probably also the country's richest businessman in his spare time.
Questioned on recent reports of a delay in completing a Chinese-built power station needed to get the mine into full production, Friedland chose to belittle the journalist questioner (''this is typical of a question from the press'') before asserting that ''the reason that will be built on time is the Chinese are our major buyer''.
More quietly, he added that ''there's a very, very small probability of a delay'' but that was of no significance in a project expected to last 100 years.
Spotless changes tack
SPOTLESS Group investors could be forgiven for asking ''what's changed?'' after their directors shifted gear to allow private equity suitor Pacific Equity Partners a look at their books on the sniff of a mere 5¢-a-share higher bid.
What has changed is that Spotless has now had long enough to sound out its major shareholders - and been told that unless it is more accommodating to offers for the company, there will be either a revolution or a desertion of its share register.
Spotless chairman Peter Smedley has now done what he should have in the first place, agreed to talk with PEP to see if they can come to a deal. Neither side is committed.
Refreshingly for investors, Spotless has said that rather than taking the usual course of providing a secret data room for bidders to do a due diligence examination of the company, it will instead make its own presentation to PEP (and pretty much anyone else who puts up their hands).
Even better, it will then make that presentation public some time before Christmas so that shareholders can also make their own assessments of what the company is worth. Such transparency is all too rare.
Insider will be interested to see whether Spotless, or one of its potential buyers, takes the opportunity to pep up its bottom line by capitalising the cost of bidding for major contracts, rather than expensing them at the time the money is spent.
Accounting rules that require Spotless to write those costs off each year, rather than amortising them against cash flow once the big deals - like its public private partnership of services at Melbourne's new Royal Children's Hospital - are up and running.
Plans go south
STRATEGIC Pooled Development's reinvention of itself from financial services to coal exploration has fallen in a dusty heap after failing to get sufficient support for a $20 million capital raising.
In spite of Rob Friedland's views on the ''lucky country'' and its immunity to economic malaise, the reality is that even after central bank paramedics have injected capital markets with a massive dose of adrenalin, the appetite for anything much beyond low-risk is at a low ebb.
Earlier this week the mining industry fly in, fly out specialist Alliance Aviation Services pulled plans for what would have been a $120 million float, albeit mostly because of concerns that founder shareholders were getting too much cash.
At least one other exploration offering, the re-creation of the absurdly named C@ Ltd as Draig Resources (ironically in search of Mongolian coal), cut back from $28 million to $14 million the amount of money it was trying to raise via lead managers Canaccord BGF and Renaissance Capital.
SPD's deal had been to sell its Fisher Graham Wealth business and free up the listed shell for Queensland-based Gordon Saul's Resolve Geo. The deal was announced in June and the market overall has lost more than 10 per cent since then.
insider@fairfaxmedia.com.au
Preaching to an audience of the converted, the Melbourne Mining Club, Friedland dismissed Europe as ''Disneyland''; cataclysm or not, Europe is irrelevant to the future of the mining industry and Australia because it is ''already built''.
His Ivanhoe Mines, and shareholder partner Rio Tinto, are now into the final phase of a $4 billion construction program to bring the copper/gold/molybdenum mine Oyu Tolgoi in Mongolia on stream.
Advertisement: Story continues below
Comforted by the knowledge that, once running, it ought to last for a century, it is easier to have a longer time horizon than flighty financial markets.
The wit and wisdom of Friedland were on full display: ''I thought it was a really great idea to have a revolving Mongolian and Chinese restaurant on top of the [31-storey mine] shaft, but it fell on deaf ears at Rio.''
So keen are the Chinese for Oyu Tolgoi's output that they have put ''a couple of billion dollars'' into infrastructure, chiefly highways and power supplies.
When you are taking the long view like Friedland, it is easy (and perhaps preferable) to gloss over some of the detail. Insider is not talking here about the mistakes that any of us could make: like confusing the fictional Vulcan, Mr Spock, with the paediatrician Dr Spock.
Or referring to the intervention on Wednesday night by central banks as swapping US dollars for Spanish pesetas and Italian lire - given that it is almost a decade since both currencies were replaced by the euro.
Or even his suggesting that because the North Pole was a tropical venue in the Eocene of 50 million years ago, climate change will always happen.
The things that damage the credibility of a man credited with calling the China boom earlier than most were things like saying he preferred the surety of a Mongolian government's guaranteed 50 years licence to Australia's ''redhead'' changing the rules.
Insider seems to recall that only a few months ago Friedland and Rio were massaging the Mongolians back into shape after murmurs from their Parliament that they might want a bigger bite of Oyu Tolgoi than the 34 per cent direct stake that they agreed to hold for the next few decades.
Clearly Mongolia does not have a mortgage on certainty for business, even when the head of government, Sukhbaataryn Batbold, is quite probably also the country's richest businessman in his spare time.
Questioned on recent reports of a delay in completing a Chinese-built power station needed to get the mine into full production, Friedland chose to belittle the journalist questioner (''this is typical of a question from the press'') before asserting that ''the reason that will be built on time is the Chinese are our major buyer''.
More quietly, he added that ''there's a very, very small probability of a delay'' but that was of no significance in a project expected to last 100 years.
Spotless changes tack
SPOTLESS Group investors could be forgiven for asking ''what's changed?'' after their directors shifted gear to allow private equity suitor Pacific Equity Partners a look at their books on the sniff of a mere 5¢-a-share higher bid.
What has changed is that Spotless has now had long enough to sound out its major shareholders - and been told that unless it is more accommodating to offers for the company, there will be either a revolution or a desertion of its share register.
Spotless chairman Peter Smedley has now done what he should have in the first place, agreed to talk with PEP to see if they can come to a deal. Neither side is committed.
Refreshingly for investors, Spotless has said that rather than taking the usual course of providing a secret data room for bidders to do a due diligence examination of the company, it will instead make its own presentation to PEP (and pretty much anyone else who puts up their hands).
Even better, it will then make that presentation public some time before Christmas so that shareholders can also make their own assessments of what the company is worth. Such transparency is all too rare.
Insider will be interested to see whether Spotless, or one of its potential buyers, takes the opportunity to pep up its bottom line by capitalising the cost of bidding for major contracts, rather than expensing them at the time the money is spent.
Accounting rules that require Spotless to write those costs off each year, rather than amortising them against cash flow once the big deals - like its public private partnership of services at Melbourne's new Royal Children's Hospital - are up and running.
Plans go south
STRATEGIC Pooled Development's reinvention of itself from financial services to coal exploration has fallen in a dusty heap after failing to get sufficient support for a $20 million capital raising.
In spite of Rob Friedland's views on the ''lucky country'' and its immunity to economic malaise, the reality is that even after central bank paramedics have injected capital markets with a massive dose of adrenalin, the appetite for anything much beyond low-risk is at a low ebb.
Earlier this week the mining industry fly in, fly out specialist Alliance Aviation Services pulled plans for what would have been a $120 million float, albeit mostly because of concerns that founder shareholders were getting too much cash.
At least one other exploration offering, the re-creation of the absurdly named C@ Ltd as Draig Resources (ironically in search of Mongolian coal), cut back from $28 million to $14 million the amount of money it was trying to raise via lead managers Canaccord BGF and Renaissance Capital.
SPD's deal had been to sell its Fisher Graham Wealth business and free up the listed shell for Queensland-based Gordon Saul's Resolve Geo. The deal was announced in June and the market overall has lost more than 10 per cent since then.
insider@fairfaxmedia.com.au
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