In 1987, Peko-Wallsend and North Broken Hill Holdings (NBH) announced that, after each company had mounted a hostile bid for the other (1), the two would merge to form North Broken Hill Peko (NBH). Not only would the new company now be one of Australia's fifteen largest corporations, it would also be one of the country's half-dozen most significant owners of zinc, lead, copper, gold, silver, coal, petrol, iron ore, mineral sands, and uranium (2).

"Now identified as a champion of the New Right" (3), Peko-Wallsend was, in 1980, the putative king of uranium mines (4), whose ruthlessness in dealing with trade unionists, Aboriginal land claims, and environmentalists, is matched by its mistrust of government and public ownership (5).

Peko-Wallsend was formed in 1958 (6), as a merger between Peko Mines Ltd - whose activities focused on the multi-mineral region of Tennant Creek, 315 miles north of Alice Springs in the Northern Territory - and a coal mining company called Wallsend Holding and Investment Company Ltd (7).

Despite its attacks on foreign take-overs of Australian resources (notably in 1980 when 25% of the newly-floated ERA was being offered to overseas companies) (4), Peko has long depended for much of its capital on external sources. For example, in 1972, a A$15 million expansion programme depended on funds laundered by Schroders Ltd, British merchant bankers (8), and in 1971-74, finance and a complicated lease-back arrangement at Tennant Creek were arranged with the Bank of America (9).

When, in 1985, the company was the subject of take-over rumours, it placed nearly 8 million of its ordinary shares with Australian Mutual Provident (AMP) and an un-named financial institution, thus consigning 10% of its ordinary capital (10). In the last decade, significant minority interests in Peko have been held, not only by AMP, but also ANZ nominees, CTB nominees, CML Assurance Society, and the Bank of NSW Nominees: by the late 1970s nearly half of the company's issued shares were held by some twenty shareholders (7). (The holdings were compatible, though reduced, in the case of Peko's long-standing fellow-exploiter, and erstwhile ERA partner, EZ Industries.)

In 1976, Peko owned some 31 subsidiary companies (7). During the next decade, as it encountered setbacks to profitability at Tennant Creek (11), and needed to reduce its debt, it sold its 12.6% holding in Gove Alumina Ltd (see Alusuisse) (12), and, a little later, its significant investment in Beach Petroleum NL after it had raised its stake (13).

However, it acquired 53% of Weeks Petroleum in 1985 (14), thus giving it access to important oil and gas fields in Australia (especially the Jabiru field off northern Australia) and in the USA (15).

Its recycling subsidiary, Sims Consolidated (Simsmetal), acquired in a diversification move in 1979 (16), has become Australia's largest such operation (17). And Warman International (known in Britain as Simon-Warman Ltd) is renowned for its engineering services and pumps. These two companies, according to the Engineering and Mining Journal (18), were, in 1983, Peko's "two most important subsidiaries" (19).

In 1980, Peko also acquired 75% of Harrington Metallurgists (a precious metals dealer and refiner) (20) and, the same year, entered a JV with Marubeni and Silver Valley Minerals, to study the feasibility of a new mine at Wallamine in New South Wales (21).

Gold, along with copper and bismuth, continues to yield significant output from Tennant Creek (24), notably at the Warrego mine (22); the Gecko mine, which was the site of a significant find in 1979 (23), was put on a care-and-maintenance basis in 1986 (24). But a new gold mine was opened at Argo in the same area (25). More recently, the company embarked on two open-pit gold mines in Western Australia, at Perth Hill and Kanowna, and another two near Parkes in New South Wales (NSW) (26) - in the latter of which, Chevron of Australia had a 39% interest (27). The Mount Morgan smelter treats copper from Tennant Creek and extracts gold from tailings, in a JV with Anglo-American through Australian Anglo-American Gold Pty Ltd (Peko 60%, AAC 40%) (22, 24).

As well as operating three collieries in the Hunter Valley, NSW, Peko, in 1987, had another JV with Marubeni to develop a coal mine in the same state (26).

Mineral sands are also an important concern of Peko. Its subsidiary Rutile and Zircon Mines (Newcastle) Ltd - RZM - has long had a JV (50/50) with Coffs Harbour Rutile NL (28) involving two dredging plants at Tomago, Newcastle, NSW: in 1985, the scheme produced more than 30,000 tonnes of rutile, more than 40,000 tonnes of zircon, and smaller quantities of ilmenite and monazite (24).

It is at Robe River that the company's industrial practices have raised controversy around the world. Peko took over Robe River Ltd in 1983, after a prolonged battle with Pancontinental and thanks to the support of Robe River's parent company Redesdale (itself owned 51% by Burns Philp Ltd and 49% by Engelhard Minerals Chemicals (which is associated with AAC) (29) - at a cost of A$ 114 million (30, 17). It assumed full control in 1986 (31).

Robe River's main asset is its 35% share of the Robe River iron ore JV (Cliffs Robe River Iron Associates) in the Aboriginal Pilbara region of Western Australia (Cleveland Cliffs 30%, Mitsui 30%, Cape Lambert Iron Associates 5%) (29).

Peko bought control of Robe River using internal cash and by borrowing within the country (32). It also inherited a split ownership (between US, Japanese and Australian interests) and what it claimed were restrictive work practices (33). Peko learned the lesson of CRA and North Broken Hill Holdings - which had suffered from prolonged strikes the same year at Broken Hill (31). It claimed that the project could run at no more than 60% capacity, and attempted to introduce changes, declaring itself no longer bound by previous agreements (34). This was met with union opposition, and Peko promptly sacked the entire 1160-strong workforce (31, 35). The unions indicated a willingness to negotiate and asked for a moratorium, which the company refused. In the face of Peko's refusal, the Industrial Relations Commission ordered the company to comply with its ruling. Peko rejected the ruling and closed down Robe River (36). Peko was rapidly supported by many Australian businessmen, condemned by the Western Australian Premier Brian Burke, and the federal Prime Minister, Bob Hawke, and lost its appeal in early 1986 before the state Supreme Court (36). It was then compelled to reinstate the sacked workers. A little later, Peko found support from the Commission for its bid to "curb restrictive practices" (31), and, after making minor concessions, re-employed a majority of the workforce. It not only won its "right to manage" (36), but also the support of right-wingers throughout the industrial world.

The Robe River confrontation was seen as significant because it came at a time of polarisation in Australian politics. But Peko had already taken a tilt over the years at unions at Tennant Creek and the Ranger uranium mine (34), as well as at its coal division (26).

As with EZ, it is the company's earnings from ERA, and its participation in the Ranger uranium project in the last decade (37), which turned a significant loss in 1981 (38) into profits over the following years (39), when dividends were paid from its "A" shares in Ranger (40): no less than 66% of Peko's profit derived from the mine in the second half of 1983 (41). Peko and EZ discovered the Ranger uranium deposit in the Alligator River region of the Northern Territory and set up the Ranger JV to develop it (28). In 1974, Geopeko, the company's exploration subsidiary, applied for six further leases outside the main Ranger deposit (42).

Two years after the go-ahead was given for Ranger, and just after the mine's first contract was signed with South Korea (43), Peko successfully bid A$125 million for the AAEC's 50% stake - pipping companies like Esso and Denison (who made bigger offers) to the post (44). As Japanese companies (notably Kansai and Kyushu) on the one hand, and North American companies on the other, made a play for the uranium riches of Oenpelli land, it was Peko which promoted the idea of a public flotation of the government's erstwhile holding in Ranger, and which - in the event - bought up some of the shares itself (45). (See ERA for further details of the game-play between the Australian federal government, Peko and EZ, and foreign buyers, before equity participation in ERA was finally worked out.)

It is not only the Ranger deposit itself, in which Peko has been interested over the last decade or more. In the early 1970s, Peko was a member of the Uranium JV (with Newmont Proprietary Ltd, Noranda Australia Ltd, Utah Development Co, EZ, and BHP) which located a uranium deposit at Mumalary, Northern Territory (NT) (28), still the subject of an Aboriginal land claim. During the same period, it also held a uranium lease with Uranium Consolidated NL at Argentine, Queensland (46).

Meanwhile it was exploring into areas situated well within the supposedly protected area of the Kakadu National Park (48) - making 410 applications for leases in early 1978 alone (49).

One of these leases was both in, and near, Stage Two of Kakadu - a very rich deposit located about 20km north-west of the Ranger site itself (50) grading at up to 17 lb a tonne (compared with 6 lb in the case of Ranger) with possibly one million tonnes of contained uranium in all (48). The Northern Land Council immediately lodged objections to the company's plans to exploit the find, situated as it is on the Mudginberri Aboriginal pastoral station (49). The Federal government - using its familiar tactics of running with both hare and hounds promised protection of Aboriginal land claims (providing they were "expedited") (51) and support to the companies (50). In 1983 Peko launched the first of several legal challenges to Aboriginal land rights claims to mining leases (52).

By 1986 Peko had stakes on some 65 square kilometres of the Kakadu National Park Stage Two, which included the rich deposit discovered in 1978 known as Ranger 86, now estimated to be worth around A$500 million (53). The federal government refused to list this area as a World Heritage site - thus failing to protect it from the depradations of Peko (54). Nonetheless, in 1986 - playing a ploy worthy of the company itself- the federal government appeared to have prevented Peko from exploiting this new South Alligator region, at least for the time being. First the government supported Aboriginal land claims in the federal court, while the Northern Territory government (Peko's trojan horse for its re-entry into Kakadu in the 1980s) (55) supported Peko - and the company proceeded with its exploration on Aboriginal land, without government consent. But in October 1986, Clyde Holding, then the Federal Minister for Aboriginal Affairs, apparently revoked his decision to grant an Aboriginal lease (56), lulling Peko into a false sense of security. Eighteen days later, title of some of the Peko land was handed to Big Bill Neijie, as a member of the Jabiluka Land Trust.

In 1978, just after Peko announced its new finds in the South Alligator region, its exploration manager, John Elliston, launched a broadside against government policy and Aboriginal land rights, declaring development of uranium to be a "miserable shambles" and exploitation "for the benefit of all Australians, including the Aborigines" to have been sacrificed to the "domination" of "social and political problems" (47).

Thirteen years later, Peko must consider the situation to be little better, but its prospects especially as part of the NBH conglomerate - to be somewhat improved. So long as there is uranium to be dug in northern Australia, a Peko geologist, backed by company muscle, will not be far away.

"Our story is the land ... it is written in these sacred places. My children will look after these places, that's the law." - Big Bill Neidjie, Kakadu Man.

Kakadu Man, Big Bill Neidjie, with Stephen Davis, Allan Fox, (Mybrood P/L Inc) NSW, Australia, 1985.

Contact:

Northern Land Council, PO Box 3046, Darwin, NT 5794, Australia.

WlSE-Glen Aplin, PO Box 87, Glen Aplin, Queensland 4381, Australia.

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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