Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
As the industry continues to rake over the coals of Tom Albanese’s tenure at the world’s second largest miner some are finding positives from his five-year reign.
One is that he successfully saved Rio Tinto (LON:RIO) from the clutches of BHP Billiton (LON:BHP). Marius Kloppers launched a bid – it was never going to be anything other than an unfriendly one – in November 2007.
Barely six months later – after Albanese sold of assets to the tune of $30 billion and boosted the company’s dividends to stave off BHP – Rio’s stock reached a record high.
It was downhill from there.
The Sydney Morning Herald spoke to industry insiders who disagree.
They say taking control of Robert Friedland’s Ivanhoe Mines, owners of Oyu Tolgoi in Mongolia, in 2012 following a initial investment spearheaded by Albanese before he become CEO , was a great gift to Rio:
”He had the balls to take on the Oyu Tolgoi deal and internally [at Ivanhoe] we felt that him doing that deal saved his bacon the first time around,” said Peter Reeve, the former chief executive of Ivanhoe’s Australian offshoot.
”A lot of other people wanted it: BHP Billiton wanted it, the Chinese wanted it, loads of other people wanted it because it’s a great project. But he got it, he nailed it.”
After growing up in New Jersey, Albanese studied geology and finance in Alaska, and Reeve – the new boss of explorer Havilah Resources – said the pursuit of Oyu Tolgoi showed just how good Albanese’s grasp of exploration was.
”If you are a good minerals person you understand that the only way to create real wealth is to get the discoveries done – he has a deep understanding of exploration because he came from that as a source,” said Reeve.
”He bought along a very cloistered and dud system – that being the dumb part of the Rio Tinto bureaucracy – he bought that along and made them do that deal with Oyu Tolgoi.
”He was still thinking as an explorationist.
”There was a view within Ivanhoe that Tom did a lot of very good work getting that deal done and I know [Ivanhoe founder Robert Friedland] had the opinion that it was a good effort to get a big systematic company like that over the line.”
Oyu Tolgoi is indeed one of the greatest prizes in mining and is months away from commercial production. And it will be producing for generations.
At northwards of $10 billion it hasn’t come in cheaply, but the gargantuan project is set to produce more than 1.2 billion pounds of copper, 650,000 ounces of gold and 3 million ounces of silver annually at full tilt.
But there is the issue of ownership.
Mongolian politicians have tried twice in the last two years to grab more than the government’s 34% share of Oyu Tolgoi.
So far Rio’s hard line on re-opening negotiations on the 2006 agreement has worked, something Albanese (and of course Friedland) should take credit for.
This approach may not succeed for much longer.
The country’s parliament is considering a radical new mining bill that seeks among a raft of other onerous provisions, a controlling stake in all foreign-owned mines.
In the past cooler heads have prevailed and laws have always ended up with fewer teeth.
But the politicians now in power who campaigned last year on taking a greater share of the country’s vast mineral wealth.
They may not back down again.
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