392 MIM (Mount Isa Mines) One of the giants among Australian mining companies, MIM was initially formed to take over the Mount Isa lead-zinc-copper complex in Queensland. Mount Isa is itself the world's largest exploited silver-lead deposit (1) and MIM is Australia's largest copper producer delivering some 2.5% of total western world production in 1985 (2), and promising even more by the 1990s (3).
Through numerous subsidiaries and Joint Ventures (JVs) the company also participates in nickel, gold, lead, zinc, coal and stevedoring (4).
Together with Seltrust (60%), MIM had an important and profitable stake in the Agnew nickel project in Western Australia until this was sold to Western Mining in 1988 (39). Although it has recently sold its 20% share in the Mount Goldsworthy iron ore project to CGF (5), disposed of its other iron ore interests, and ditched its 50% interest in the Lady Loretta silver-lead-zinc project in Queensland (G), its Hilton silver-lead-zinc deposit (also in Queensland, close to Mount Isa itself) has promised to be the "world's greatest" (7). Commercial mining of this deposit was scheduled to start in 1986 (3), but did not commence until May 1990 (41,53,75).
In 1982, Australian federal government approval was given MIM to proceed with the Oaky Creek open pit coal mine in Queensland, after the company's participation in the project was raised to 49% (8). This promised to make MIM "a major Australian coal producer and exporter" in the near future (9). Approval followed MIM's announcement of huge (E1.4 billion) contracts to supply steaming coal to Korea, Taiwan, Hong Kong, Europe, and the Pacific Basin (10). Mining of coal in Queensland's Bowen Basin also started in 1984 (6).
MIM explores throughout Australia, New Zealand, and Papua New Guinea. Through its subsidiary, Carpentaria Exploration Company Pty Ltd (100%), it has put forward a major proposal to dredge the Mikonui River in New Zealand for ilmenite beach sands. Plans announced in the early 1980s, according to the New Zealand public interest group CAFCINZ (now CAFCA), suggested that the venture would begin before "enormous problems" associated with land restoration had been solved (11).
In Papua New Guinea, MIM acquired a 30.5% interest (Nord Resources of the USA holding the remainder) in the Ramu River chrome-cobalt-nickel deposit (12), which looked promising by 1984 (13). It also holds 33% of the Porgera project in PNG, with Placer as operator, and Renison Goldfields (6). It has a 33.33% later increased to 42.8% (52) - interest in the Frieda River prospect, a mountainous jungle covered area of very rich mineralisation, especially gold (14), and which is currently being assessed (15). Both Sumitomo of Japan and CRA have been involved in exploring this region along the Sepik river - a favourite haunt of anthropologists for decades (16).
Oil and gas exploration in the Bass Strait, Gippsland Basin, the Ottway Basin and Queensland's Adadale and Exmouth Plateau prospects, continues (6), while gold exploration in the Aboriginal Pilbara and Leonora regions of Western Australia has been under way for a few years (17). There is also gold exploration in the Lachlan Ford belt of New South Wales (6). Aboriginal land claims have been adversely affected by MIM's operations in several areas.
At McArthur River in Australia's Northern Territory (NT), the company claimed potentially the world's largest lead-zinc deposit in 1977, and prevented the return of ancestral land to local Aborigines (18) . Within five years, MIM had effectively "coralled" the Aboriginal community, purchasing not only McArthur River, but also Tawallah and Bing Bong cattle stations, the latter apparently over the heads of the Aboriginal Land Fund Commission (19). In 1982, Land Rights News described the plight of the Borroloola community brought on by MIM's activities, and by the collusion of local white interests:
"The 400 traditional Aboriginal residents of Borroloola have a dream. They want to run their own town. But as the area gains importance their vision is clouded by the overshadowing power of a group of 40 - the white minority."Borroloola is, by white standards, a growth area. The Borroloola Common is surrounded almost completely by MIM Holdings. The area has become important as a focus for mining and fishing ventures. Tourism is developing and it is an important link in the vast communications network that now grids the country.
"In 1972, the Department of Aboriginal Affairs fostered the establishment of a village council in Borroloola. Soon after, the Borroloola Town Council was formed, and of which the village council was a part, but for reasons that remain unclear the Town Council was never incorporated.
"The Borroloola Land Claim was lodged July 27, 1977, and the application was heard September to December. It was only partially granted in 1978.
"On September 30, 1977, the Government enhanced their vision of the area as a progressive mining, fishing and tourist centre when it drew up a new town plan and financed a subdivision. The new town plan alienated some of the Land Claim but, in spite of objections from the Borroloola community, it went ahead.
"Of the 30 new allotments in the new subdivision only six were allocated to Aboriginals. "When the services were connected to the new subdivision they bypassed an Aboriginal community of some 120 people. Although it can be argued that this community might be able to 'make do' without lighting and sewerage facilities, the need for refrigeration at all levels of the community is common. The dominantly white community in the town centre is connected to all services.
"The Town Council is all Aboriginal, but the NT Government, determined to secure European participation in local affairs, developed the articles of incorporation for a Progress Association.
"In the interim a steering committee has been meeting. This consists of five Europeans to represent the 40 white townspeople and seven Aboriginals to represent the 400 Aboriginals. At least two of the Europeans on the steering committee are Territory public servants....
"Although they have many reservations about the ability of both Europeans and Aboriginals to work together, the Community agreed to a trial period of trying to do so without the steering committee.
"In the first week in June 1982, the Aboriginal members of the steering committee were presented with a final copy of articles of the new constitution, drawn up, they were advised, by someone from Community Development. They had not seen the document before and were unaware that it was being drawn up.
"One of the articles states that the Progress Association will take over all activities and responsibilities of the Borroloola Town Council" (20).
MIM's intention to mine the McArthur River. deposit at Borroloola, potentially the world's largest of its kind, moved closer in mid-1990, when the company started shaft drilling (72). A few months later, the Australian Mining Industry Council (AMIC) published a document clearly inspired by MIM, which sought to maximise the benefits the McArthur project would sustain for Australia (and in particular the Northern Territory government), emphasise the problems MIM had already had in getting the 35-year old project on-stream, and downplay, or discredit, Aboriginal and environmentalist opposition to the mine (73). By this time, a potential competitor in international markets to MIM at Borroloola had appeared in the shape of CRA, with its plans to plumb what it also claimed as a "wonderlode" replete with lead and zinc. The Century deposit near Lawn Hill, NT, on the Queensland border, could also be held up by Aboriginal land claims on CRA's preferred deepwater port site, in the Gulf of Carpentaria (74).
MIM's major uranium interest in recent years has been its 49% interest (through Carpentaria) in Honeymoon, South Australia. Federal approval was given for the mine in October 1981 (21), state government approval having been granted nearly a year before (22). Both go-aheads were given without sanction of the Legislative Select Committee on Uranium, whose report (including submissions by both pro- and anti-nuclear groups) had not been released beforehand (21), and in the face of opposition by Aboriginal land owners.
Thanks to a concerted campaign by CANE (Campaign Against Nuclear Energy), based in Adelaide - aimed specifically at the potentially lethal effects of in situ uranium mining (23) both Honeymoon and Beverley mines were vetoed by the South Australian government in early 1983. ("A clear victor,v for the left wing of the [Australian] Labor Party", an opponent MP put it at the time) (24). Later, MIM and its partners-in-leach demanded compensation from the government (25), since, they protested, the ban meant they were unable "legally ... even to continue evaluation of solution mining at the site" (26).
MIM's other yellowcake interests - all effectively stymied as a result of current ALP government policy- include East Kalkaroo (Yarramba) project near Broken Hill, South Australia, in which Carpentaria maintained an interest with a consortium including Minad/Mines Administration; and the Angela deposit south of Alice Springs, NT, in which MIM has a 50% interest with Uranen Australia, and on which only limited work had been carried out by 1983 (23).
By 1972 MIM had entered a JV with CRA to investigate the Red Hill uranium deposit, adjacent to that at Westmoreland, Queensland (see Queensland Mines). Although interest in this deposit was rekindled in the early 1980s, Red Hill is - effectively - dead hill (23). Once again, in mid- 1984, MIM demonstrated its "hard edge" on Aboriginal and conservation issues when it opposed a proposal to extend the Kakadu National Park in the NT (see Denison and Noranda) by a further 6,000 square kilometres. The Gimbat and Goodparla pastoral leases are part of the same geological formation as the uranium region, and are likely to contain other minerals as well (27).
After a 30% fall in revenues in 1984 (28), MIM returned to profit a year later (29) after considerable cost-cutting (30). The group reported a doubling of profits over a three-year period (31), despite strikes, including one at its Townsville, Queensland, copper refinery in early 1985 (32).
As the Financial Times commented during this lean period, "the hardpressed MIM Holdings ... knows how it feels to have to sell the family silver", commenting in particular on MIM's decision to sell its 50% stake in the Lady Loretta zinc-lead-silver prospect ("a very desirable property") to Pancontinental (33).
The group at this time also felt compelled to pay out US$ 140 million to save itself from the wily grasp of Robert Holmes a Court - specifically his company, Weeks Petroleum. In March 1985, Weeks Petroleum snatched just under 10% of Asarco, MIM's US partner which then owned 44% of MIM. MIM was in a poor position to rescue Asarco - and Holmes a Court was clearly after MIM as a "lucrative second prize" (34) . By the year end, Holmes a Court had 12% of Asarco (29) and, despite denials (35), seemed set for a bid for the US company.
After litigation commenced between the three parties to this affair, Holmes a Court finally sold his (by then) 13.3% stake in Asarco to MIM, making himself a tidy profit of some A$7 million (36).
MIM therefore ended up with a more than 32% stake in an ailing US giant, while Asarco started reducing its stake in MIM. MIM defended the purchase as a "good counter-cyclical investment" (meaning whatever you want this to mean) - the market was less convinced. After the deal, MIM's shares on the London stock market fell to a year's low (37) (see below).
In 1986, MIM bought into Cominco, along with Teck, Metallgesellschaft, and the AMP. This gives MIM access to the Red Dog deposit in Alaska, and links MIM with Metallgesellschaft's refining capacity in Europe (38).
From 1989 to 1991, MIM's advances into its chosen geographical areas can be summarised as follows:
In Australia it opened up the Hilton lead-zinc mine at Mt Isa in 1990, after many years delay (40). The company confidently predicted that Hilton would increase its production of zinc concentrates by about 25%, and "help Australia overtake Canada as the world's largest ... producer in the next year or two" (41).
Following an accident at MIM's smelter in early 1991, flooding in north Queensland, and poor interim results, the company cut back on the workforce at both Mt Isa and Hilton (42).
A new mine at its Okay creek coal operations in the Bowen Basin of central Queensland was opened in 1990, lifting coking coal production at the site to nearly 4 million, from just under 3 million tonnes (43). Meanwhile its Collinsville mine (also in central Queensland and 75% owned by MIM) was facing closure. The company asked the Queensland government to bale it out (44). Agip (its 25% partner in both the Collinsville and Newlands mines) refused to buy half of the ailing venture (45) unless it was completely restructured. MIM agreed with union delegates on a voluntary redundancy "package" (46).
MIM's Australian gold prospecting moved into the Telfer region (previously "tied up" by BHP and Newmont), as it sealed a JV with Mount Burgess Gold Mining Co NL (47). The Tom Gully gold mine ground to a halt (48).
MIM purchased a third interest in Granges Exploration in 1989 - with interests in some 80 exploration projects, mainly in Canada (49). Later, its relationship with Teck, Metall Mining (Metalgesellschaft's subsidiary) though the Nunachiaq Inc partnership, was strengthened when the group bought up 54% of Pine Point Mines Ltd (50) which with Cominco's existing share - gave the trio control (51) over one of the most important new sources of zinc.
In 1989 Pine Point was in an exploration JV with parent Cominco, on several "properties" in Ireland (52). This was a region where MIM itself has been searching for both lead and zinc (53). Carpentaria entered a JV agreement with Irish-based Navan Resources plc, to search the Midlands region (one which already contains Europe's largest lead-zinc mine, Tara and the highly polluting, derelict, Tynagh minesite) (54). This was MIM's first exploration initiative in Europe (55). And it has not stopped there. A year later, MIM holdings UK Ltd, together with Agipcoal SPA, took over prospecting rights on the lignite deposits in Crumlin and East Tyrone, with a view to supplying fuel for the Kilroot power station (56). The Lignite Action Group (LAG) was set up in March 1985 to oppose development of the deposits on grounds of likely destruction of the local community of Moortown (through forced resettlement), the ecological impact of open-pit mining methods, and the penetration of multinational enterprises in a predominantly rural and fishing region. "[T]he very notion of swopping a thriving and sustainable community for short-term gains of an individual company has neither logic nor justice", commented The Ecologist magazine in 1989. One Sunday night in February 1988, BP's operations were halted when one of LAG's members stopped the moving of heavy equipment. In response (and somewhat to its credit) BP coal flew in its executives from London to meet with LAG, and give an assurance that "there would be no prospecting in the area without prior consultations with LAG and the community" (57) (It is, of course, possible that the strength of local opposition was one of the factors in persuading BP to sell out the Crumlin project).
Meanwhile Navan Resources had entered into a JV with MIM to develop its Highland prospects (58) on five areas in the Strathclyde, Grampian and Tayside regions of Scotland.
MIM's "downstream" industries have proved to be remarkably expansive and, by and large, successful. In late 1989, the company's German subsidiary, MIM Beteiligungs-Gesellschaft, and Metallges Austria, each took 25.5% of Montanwerke Brixlegg, a major refiner of copper and precious metals from scrap. (By this time Metallges had secured just over 10% of MIM itself) (59). At roughly the same time, MIM purchased the Chloride Group's scrap business in Britain, providing the company with some 30% of the country's lead recycling market (60). In 1988, MIM had linked up with Norddeutsche Affinerie AG, and its patented ISAA refining process was sold to the German concern (61). Two years later, MIM Holdings purchased a 50% stake in an Imperial Smelting Process zinc plant and refinery at Duisberg, thus bringing it into even closer partnership with Metallges, the Duisberg operator (62).
As a recycler of lead, MIM has few equals in Europe: in 1989 it decided to spend L11M on a new "high tech" smelter at its Britannia refinery in Kent, England (63), although this plant experienced drastic shortage in 1991 (due to the problems at Mount Isa), and had to close twice in five months (64). The same year, MIM announced that it was considering a JV with Asarco whose President and CEO, Richard De J Osborn (sic) declared that his company was "...aware of concerns by government and environmental groups that recycling be assured and conducted in an environmentally sound manner" (66).
MIM's participation as one JV partner (with Placer Development and Renison Goldfields) in the large Porgera gold project in Papua New Guinea gave rise to controversy in 1987. The company planned a public flotation of shares in its Highlands Gold subsidiary. However, not long before, Placer had been at the centre of a scandal, when its floated PNG shares were bought up by political figures, including the deputy Prime Minister, Sir Julius Chan (67). There followed a debate in the country over which proportion of shares should be reserved for Papua New Guineans. Initially the government demanded 20%, and MIM offered only 4% (68). During the following months, the difference between the company and the PNG government narrowed while MIM delayed its flotation (69). Finally, in late 1989, Highlands Gold was officially launched (70). The following year, apart from participating in Porgera's rapid development, Highlands Gold started exploring on a number of targets on both the PNG mainland (Garaina in Morobe Province, Makham, Mt Wasis and Mt Damien) and East Britain, as well as continuing its prospecting along the Freida River in East and West Sepik provinces (71).
Further Reading: A summary of MlM's Mount Isa operations is in Engineering and Mining Journal, November 1983.
SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.
Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.
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