The Australian: Treasurer slams gate on Chinese raids

This article asks the most basic of questions, “The question here is, is it in Australia’s national interest for a buyer of our resources to control our resource-producing companies?”

That’s not a bad question to ask, and it’s one that is going to shape the debate on how much resources China can buy around the world. It is one thing to want to break up the oligopoly on iron ore to help the little guy ship a bit of ore. But if it is the customers doing the breaking by owning mines and then supplying themselves, that is very scary.

I am not being tongue-in-cheek. As China becomes a bigger consumer, and as its ability to invest in more companies increases, more and more countries are going to face the question of how China’s new role in the world affects them. As for Australia, it has to figure out what is in its best interest, and it is going to have to figure that out quickly.

That being said, today is a day of national pride here in the United States, so Happy 4th of July.

Benjamin

Not much news here, but if it is true, BHP matched Rio Tinto’s price for 2008. Not a huge surprise.

Bloomberg.com: BHP will agree iron ore price in line with Rio Tinto, Financial Times says

Bloomberg.com: ArcelorMittal says Rio Tinto’s IOC unit would be `natural fit’

Dear EU antitrust commission and Santa,

Rio and BHP are going to be very bad this year; you must punish them. So to keep it short, all I want this year is a railroad and a mine, in particular the Iron Ore Company of Canada. Can you please put that on the short-list of assets to divest if the BHP-Rio Tinto merger happens? I know I have been naughty this year, but I promise to be nice if you deliver me this operation.

Merry Xmas in the summer,

Mittal

Telegraph.co.uk: Anglo American to pore over BHP and Rio’s iron ore assets

What makes Anglo or Xstrata think they can outbid the Chinese for decent iron ore assets? If this merger happens on the condition that Rio Tinto is broken up to a degree, we will see what the value of a set of grade A assets is. Expect for the Europeans that Samarco and IOC will both go on the block first as those are the assets that compete in Europe. I do not see EU antitrust wasting time and energy on Australia, and if they do they go after Australian assets, they will go after assets such as Hope Downs, where there is a joint venture partner who can buy out Rio Tinto and truly open up competition. Imagine this: IOC owned by Xstrata, Samarco owned by Anglo, and Hope Downs owned by Gina. Now that is an entertaining set of thoughts.

People keep a careful count when white people die, but they rarely care about anyone else. Being Jewish, I have a keen sense of history and the injustices of history. I clearly understand that the world is not fair, and I do not expect it to be, but I am always amazed by how ugly it really is.

If 100 people die in London, it makes the news for dozens of days at a time. Hundreds of millions can be spent on figuring out why and laying tribute or blame around the event. If 1,000 people die in the Congo, no one even notices. If 1,300 or 13,000 people die in the Philippines or Burma, the attitude is, there are just more of those people over there, so why should we care?

I guess human nature is to give care of duty to the people whom you know, and to the people who might actually need your help, bugger off. We will happily give at the office for the nameless starving masses, but we rarely actually spend any time thinking about and trying to understand why they might be starving and how we affect their world.

I work in an industry that has the ability to destroy or build up nations. Wars are fought over the mines and the products of the mines. You can almost trace political instability by where diamonds or other natural resources are found. The basic reason for this is whoever does not have the wealth from the resources is jealous of the lucky buggers who are making the bucks. In addition, in many places that are resource-rich, there is not excellent rule of law, and even if there were, that is not always a solution.

Zimbabwe was the breadbasket of Africa. It was an amazing country with lots of food, mines, and strength. Now it is a hollow shell thanks to one man, Robert Mugabe, and that man is going to let people starve, die, be mutilated, and completely destroyed, just so he can stay in power.

You cannot just kill him because the risk of that is civil war. His supporters have the guns and those proud few pieces of pond scum would prefer to let the nation descend from a lousy dictatorship to a civil war than to face their crimes. We need him to step aside. We need to find safe passage for 400 really nasty guys. And then we need to go out and get a fair election, a stable currency, and functioning farms.

I am not an Africa expert. I make a point of not going to countries that are reasonably risky. I suppose that I should get more flexible and I probably will with time, but I just have not had enough desire or greed to go find riches in places where a human life is cheaper than 5 grams of platinum.

You see, platinum is what this all comes down to. There is a bloody nice reef that goes across the border of two countries, and it is a license to print money. We cannot have the clean air that we breathe without the platinum from the mines of Zimbabwe and South America. The green left-wing nuts who have been clamoring for tighter vehicle emissions standards are helping support Bobby boy because their cars need platinum to convert the nasties that come out of the tailpipe.

This reef is the single best asset of Anglo American, and control of it is make or break for the company. If the platinum market is further fragmented by the loss of this mine, it will cost Anglo huge money.

Anglo has rights to platinum in Zimbabwe, and it is not going to give them up. They are damned if they walk—Mugabe and his nasty sidekicks can get another company in to mine in 20 minutes—and damned if they do not—the West will tell them what a bunch of horrible people they are.

Robert is, of course, going to play this situation like a fine fiddle, and the nice woman from New Jersey with her nice modern offices 1 block from Trafalger square is just bait for him.

Of course, it’s easy for me to be sarcastic and judgmental because I am not in Anglo’s shoes. They are in a tough spot, and I do not have the answer. But I am sure that there are some smart PR guys in London huddled around their mineral water and watching the hours of billing add up as Anglo figures out how to explain the value of a human life in Zimbabwe. Anglo is going to have to make some tough decisions, and frankly if Bobby boy and his cronies do not fall soon, Anglo is going to yet again have blood on its hands. Just goes to show that history repeats itself.

Anglo’s management is not stupid, so perhaps they can tell me, what is the value, in grams and ounces of platinum, of the rape and murder of innocent people in Zimbabwe? Can you even value such a life at a single ounce on the LME?

If you expect to stand up in the modern world, take a stand and do the right thing. If you must continue to develop in Zimbabwe, then give away a dollar in food aid per dollar spent on exploration for the rest of Africa till Bobby is gone. If you owe your employees jobs there, then understand what is at stake. And if you have to deal with Bobby, pay him in grain. Make it an international gesture—offer to pay him twice what he is asking for in good, clean food. But if you do nothing, your claim to be a new Western caring company will ring false to my ears.