Metals and minerals once derided as yesterday’s commodities have once again found an importance application in today’s hi-tech world.
Years ago it was quite fashionable among the chattering classes to deride Australia as a giant quarry, a country that allowed others to pillage our resources without compunction, a country whose dependence on commodities meant we had no future.
We would be overtaken and surpassed by the knowledge nations, Japan, Korea, China, Germany’ and the United States economies with their greater reliance on manufacturing, IT, or very cheap labour.
Latterly China and India are the new threats.
Those nattering nabobs of negativity are still out there. Some have even rediscovered the quarry and are praising it. Robert Gottliebsen of The Australian comes to mind immediately.
There are others in academia, in business, in universities and politics who have failed to do their reading and fully appreciate what the fabulous richness and diversity of our resource base does really mean. Of course The Great China boom has helped changed their mind.
And I can remember one well known columnist when writing the Chanticleer column back in the early 80s pointing out that the copper industry was doomed because copper usage (intensity) per unit of GDP was dropping.
I think the columnist wasn’t alone and from vague memory was among a group of people arguing that companies like MIM were out dated and that BHP’s acquisition of Utah Mining in 1983-84 was all about coal and that a copper deposit bought in the deal at Escondida, would not be of importance. Copper was yesterday’s metal and even coal was starting to find it tough as the impact of the second oil shock was dissipating.
We of course now know that while coal was the main reason, some far-sighted people in boring old BHP had spotted the vastness and potential of Escondida. It is perhaps the most important copper resource in the world. But the latest revisions to Olympic Dam will give it a run for its money.
And then came the personal computer boom and the boom in mobile phones and all things electronic. Cars needed smaller electric motors and other gizmos that consumed copper. Yes, it was the electric motor boom, minaturisation, a specialty of Japanese technology (with some Korean and US help) suddenly meant more could be done with less and on a smaller scale.
More features added to more products; a wider range of products, from stoves, to fridges, lights to cars, planes and computers. All these motors needed copper, and tiny bits of gold and other metals. And humble sand, silicon.
Aerospace and military spending boomed, and still booms, boring steel production took off and the surge in electricity consumption created by more computer power, the rapid rise of the internet, meant that energy coals, uranium and oil and gas were suddenly in greater demand.
All boring, olde worlde commodities. Prices started rising. Now everyone is a resource expert, coal is gold again, oil is king and gas the wonder fuel.
Suddenly the demand for copper and all those other boring base metals starting rising, slowly world surpluses were drained. No one of course has acknowledged their past errors.
But it would pay for all these ‘experts’ to re-read or read (if they have ignored it) probably the best book on the Australian mining industry.
Geoffrey Blainey’s classic, The Rush That Never Ended, puts all this in perspective and is better informed than any of the jottings of today’s experts.
After reading it they will then fully appreciate the importance of the battle for control of WMC Resources, a battle that perhaps Bob Gottliebsen among the newspaper jotters, has been the only one to fully understand all along.
It is a global scale resource and on this basis brings to mind some of the other great resources in this country.
Here’s a quick list, not in order, but as they spring to mind.
Broken Hill – fabulous, the foundation of the great Collins House Group of companies and of course BHP itself and a host of other banks and groups here and overseas.
Kalgoorlie, the Golden Mile. And fortunes and companies galore.
The Ballarat-Bendigo Gold Fields of Central Victoria that really set off The Rush that Never Ended. Companies, personal fortunes still can be traced back to the 1850s and beyond.
Victoria and Melbourne themselves grew on the fabulous finds. The National Australia Bank and the progenitors of the ANZ can be seen in the flow of gold. The terrible depression of the 1890’s, made worse by a bitter drought. (read the Land Boomers by Michael Cannon).
Then there’s the iron ore province of north western Western Australia.
The coal mines of the NSW Hunter Valley and then the coal deposits of central Queensland. Rich, thick seams that go on for kilometres just under the surface.
Bass Strait oil and gas. It made BHP what it is today.
There are the bauxite deposits of Weipa, which along with the iron ore developed by Hamersley, made into the world giant it is today.
And latterly the North West Shelf, a bit of oil but a fabulous gas resource that is still growing.
And now Olympic Dam, bigger than anyone thought and now under challenge from a bunch of South African-British Swiss sharpies and a mysterious Swiss commodity trader called Glencore.
But then that’s the history of Australian mining. Local finders, foreign developers and owners, who over time slowly go native, like CRA did before the British parent cracked the whip.
Mt Isa Mines was kept going by the visions of Asarco of the US for years otherwise it would have closed.
Bass Strait developed by Esso (now Exxon), with BHP along for a carried ride.
Short term thinkers here, long term players from overseas.
Except for the Collins House companies (North Broken Hill, EZ Industries, BH South, WMC, Alcoa, WMC Resources and others) and one outstanding man, W.S. Robinson.
A legend in business, a behind the scenes hero in World War Two.
Read his good book, If I remember rightly: the memoirs of W. S. Robinson, 1876-1963. The editor, Geoffrey Blainey.
Crikey: Now what we want is for any readers to help us put values to some of these fabulous mines or mining provinces so we can compare their value.
For example, somewhere in Crikey’s mind there’s a figure of $A70 billion in current dollars as the value of production from Broken Hill.