Monday, June 8, 2015

Mining the Tarkine Part 3 Extra. Stop the Presses!

These things happen; your story has just gone to the press and something earth-shakingly relevant comes on the screen.  This time it's ex Tasmanian Premier Paul Lennon appearing on the Queen's Birthday Honours list.

 My father had an old army saying that I heard many times in my childhood, more rarely as I grew older and  had come to understand that stamping a foot and yelling how I damn well knew something didn't make a good argument.   His stock riposte was always; "You wouldn't know if your arse was punched, bored, tapped or reamed out with a big stick."
He had me there and got the last word in every time; something so simple and yet I could never figure out an  answer.  But it wasn't a bad antidote to intellectual vanity.  Maybe it might help sort out the queen.

Paul's ten second sound-grab was that his reign had been controversial "but I gave people hope." 

Hope along with faith is something we all need, especially if we are determined to be taken down by persons of low character.  But as for making any real improvement to a community's prospects there are those laws of unintended consequences by which hope will most certainly put us ever deeper in the sh*t.  If the previous story of the little town of Stewart, B.C. and its top-notch mining experience that generated so much development; new homes, expanding businesses and private indebtedness to bankers and the cruelly drawn-out and painful crash that took them back to square one has been unconvincing perhaps we might look closer at the Lennon era.

There was such a swag of memorable plans!  An oceanside residential canal development, the doomed-from- the-beginning Dismal Swamp, and of course there was the Tamar Pulp Mill, wherein  he in concert with that fearsome little hillbilly John Gay (from whom a tongue-lashing was rumoured to bring grown men to tears) were going to leverage themselves into our hearts and the boardroom of a world-class industrial behemoth with billions of borrowed, kamikaze investor and public dollars and the rest of us gratefully tagging along for the ride.  But the one I liked best was a mining story in my own backyard and so over-the-top you could sit back and chortle if you had no pity for a gaggle of local hopefuls; investors and the usual legion of the damned that naturally included most of our bright-eyed, born-and-bred small-business local government officials at the time.

Golden Triangle Mining was going to transform the magnesite karst at Takone into a giant open-pit with hundreds of jobs and a river of cash, and there would be another huge Comalco- type electric smelter in our own little Burnie and somehow it all came together almost overnight (it seems in retrospect) in a major fireworks display where everything was happening at once.  Time was of the essence- I knew that because as a Normandy shareholder I had received a prospectus for Australian Magnesium, in which a star consortium that included Ford Australia, Normandy, and the Queensland government were colluding to put together a similar package at Gladstone, and it was similarly big enough to supply all the magnesium for the Asia Pacific at least.  So there could only be one or none, and the credit worthiness, expertise, resource and government backing were already in place but somewhere else.  The Queensland government was going to do much more than facilitate; they guaranteed a dividend to all investors for the first three years.  Which they gamely paid out in full even though the project failed upon which the share price fell to reflect the remaining dividends owed.  But back to Tasmania.

The climax here happened with the drillers; uncertain whether to laugh or cry as their rods punched into the mud-filled voids that would let the Flowerdale River straight into proposed pit while mining industry people who actually knew how things are done looked on at the roadshow in horror.  Paul Lennon took a helicopter ride over the  proposed railway route which surveyors were busily marking out through Colleen Dibley's chestnut orchard.  The CEO Peter Salter was off on a whirlwind tour of the world at investor expense to line up the billions of dollars that  would be required; giant financial corporations were thought to be out there somewhere just waiting for people like him to knock on their doors and put all that unwanted cash to work.  It was at this time that the share price peaked and this is also the time when clairvoyant friends, touts, children, wives, relatives and associates of company directors dump their cheaply- acquired shareholdings on the market; and didn't he return empty- handed.  Years later there was a small item about him in a mining newsletter, some purported misdeeds had seen him thrown off the board of some gold explorer but where he is concerned all seems quiet now on the western front; where all you need is a Perth shop-front, chutzpah, a dog and a pick-up truck.

So how do these ridiculous loss-making machines actually benefit political people?  It pertains to something called 'moral hazard'.  They don't put their own money on the line - that would be corrupt and a violation of their oath of office if not the criminal code.  Rather it is YOUR money that gets thrown down ratholes and there is an unintended consequence here; a conflict of interest by which a rational market analysis and studied economics of a project are not a necessary consideration of the person doing the investing.  His being seen to be battling for your future prosperity, however hopeless the odds and unlikely the prize; confers electoral advantage.  If he simply banged your money straight into his own account it would be fraudulent, but it would be a bargain against the squandered millions that it takes to be re-elected and don't you know it comes right back as the pay and perks of public office; all perfectly legal and in order.

So he gave a lot of people hope, and took it away from a lot of others.  I hoped that democracy and education might occasionally deliver enlightened leadership.  That maybe our species can cut a balance with the world and survive with everything else for the long term, possibly even as a civilization.  Or are we just an insensate cancer or unschooled tribe of Polynesians,  setting out in the dim hope of making one more killing; another breast or liver or bejeweled string of tiki-scattered islands in the sun where naive birds and fish will fatten another aristocracy and feed another vulgate for a few more generations before they have to eat each other or move on.

No comments:

Post a Comment