MDFF 9 December 2017

Vison Splendid

Hola amigos,

Eduardo Galeano’s ‘Upside Down: A Primer for the Looking-Glass World’ (in Spanish ‘Patas Arriba: la Escuela del Mundo al Revés’) was the source of last Dispatch’s favourite graffiti. Here’s another: “Cuando teniamos todas las respuestas, nos cambiaron las preguntas” (When we had all the answers, they changed the questions)

Makes me think of the Uluru Statement.

A song worth repeating- He’s been up all night Moving the goalposts- Billy Bragg….

At the beginning of Carol Travis and Elliot Aronson’s book ‘Mistakes Were Made (but not by me)- Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts’, Henry Kissinger is quoted responding to charges that he committed war crimes in his role in the United States’ actions in Vietnam, Cambodia and South America in the 1970’s:

“Mistakes were quite possibly made by the administrations in which I served”

It is indeed un mundo al revés… in which we live, in 1973 Henry Kissinger was awarded the Nobel Peace Prize.

Louis armstrong give peace a chance 1969….. (I know… have used this before… but hey! You don’t have to listen….)

After reading this book I vowed to own up to my mistakes and to try and refrain from seeking self justification. I fucked up…. Full stop.

In 1928 Henry Ford tried to convert a large chunk of Amazonian tropical rain forest into a rubber plantation. Henry Ford had a vision splendid. Fordlândia, as it became known was a dream which turned into a nightmare.

Four decades later, a custom-built pulp factory was towed from Japan around Cape Horn and up the Amazon at a cost of millions of dollars. Daniel K. Ludwig’s dream to convert a large chunk of Amazonian tropical forest into paper turned into a nightmare.

I’ll See You In My Dreams ( Django Reinhardt)…

Quite clearly Henry Ford and Daniel K. Ludwig never read Dr. Seuss’ ‘The Lorax’, and if they have, didn’t understand it, nor care.

One of the earlier jobs I was sent to as a geologist, was to supervise a drilling programme in the Fitzroy Trough of the Canning Basin. A company owned by Daniel K. Ludwig was searching for coal. DKL companies controlled an iron ore deposit at Nimingarra near Newman and manganese deposits at Woodie Woodie near Nullagine. The aim was to find an energy source (this pre-dated the discovery of the offshore North West Shelf gas fields) to produce lump iron ore with a high manganese content. Daniel K. Ludwig aimed at shipping this niche product to Europe. We all thought DKW was mad. No one shipped iron ore all the way to Europe.

The largest privately owned fleet of bulk carriers in the world belonged to DKL.

Six years later on our return from Canada whilst visiting a gold mine in Northern Ontario, I met another young geologist who had also worked for a DKL company- doing what? Looking for phosphates in Morocco.

Australian agriculture consumes huge quantities of phosphate fertilizer. The British Phosphate Commission mines on Christmas Is., Nauru and Ocean Is. were being exhausted. Australian phosphate exploration had not yet been successful.

Just picture the scene:

In North West Australia:

A coal mine running at a loss- paying no taxes

An iron ore mine running at a loss- paying no taxes

A manganese mining operation running at a loss- paying no taxes

An industrial operation producing manganese rich lump iron ore at a loss- paying no taxes

Panamanian and Liberian registered bulk carriers fully loaded to Europe, generating tax free profits.

A Moroccan phosphate mine running at a loss- paying no taxes

And the cream on top! Fully loaded bulk carriers back-loading phosphate to Australia, generating yet more tax free profits.

Incidentally DKL had negotiated tax free status (in exchange for 9% of profits) for his Brazilian venture.

So who said DKL was mad? He had a vision splendid.

If DKL were alive today (he died in 1992) it is likely he’d be heavily involved in palm oil production and transportation (converting inter alia, tropical rainforests into palm plantations ).

In Australia he’d be a top contender to finance Adani’s Carmichael coal mine in exchange for getting to carry the products of the world’s largest coal mine (run at a loss and paying no taxes).

Laundries and Textiles are the world’s largest industries. They operate out of places like Luxembourg, the Netherlands, Liechtenstein, Seychelles, Cayman Islands, Panama, and not surprising Bermuda, Guernsey and Jersey. Their main product? Emperor’s clothes, successfully marketed under such labels as “Free Trade”, “Level Playing Field”, “Jobs and Growth” “Trickle Down”, “Closing the Gap” and “Democracy”.

So what has all this to do with Yuendumu?

Companies mining on Aboriginal Land in Central Australia came under pressure from the Land Council to comply with local participation clauses in the agreements they had entered into to obtain access to the land. Then Director of the Central Land Council, Tracker Tilmouth had insisted that as local Indigenous employment efforts had failed dismally, participation in the form of equity should be tried. (Last month Alexis Wright’s book ‘Tracker Tilmouth: the Vision Splendid’ was published, I have yet to read it, but have no doubt that it is a splendid read).

In 2002 Yuendumu Mining Company (YMC) entered into a Joint Venture agreement with a major mining contractor. In return for acting as a local recruiting agency we got 5% equity in a 3-year $40M open cut contract. Assuming not unreasonable profits of 10%, we should have received 5% of $4M i.e. $200,000. What we did receive was $2K.

One of the clauses in the agreement was that the contractor was to retain 5.4% to cover overheads (administration, legal costs etc.). This seemed perfectly reasonable. I’d worked for companies where 10-15% overhead (management) fees were considered fair and normal. So you can imagine our surprise when the contract consistently and coincidentally generated surpluses of 5.3% regardless of production rates. We got 5% of nothing! ……Dire Straits, Money for Nothing…

Thus one of the biggest mistakes I made as the manager of YMC, was to fail to learn from my experiences, and from jokes. I fucked up….full stop!

You know the joke: “Accountant! What is our profit?”… “What would you like it to be?”