mining industry information sheet: company profile on climax mining ltd, mineral policy institute,...
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MINING INDUSTRY INFORMATION SHEET:
Company profile of
CLIMAX MINING LTD
Report prepared for the Mineral Policy Institute, NSW,
by Andria Durney, Macquarie University, Sydney, 1996
1
INTRODUCTION
This report outlines the international financial, operational, political, environmental and social
profile of Climax Mining Ltd. Weaknesses in the available information are identified and further
research and contacts suggested.
COMPANY BACKGROUND
Australian-owned Climax mining Ltd (CML) has gold exploration, mining and development projects in
Australia, Fiji, Ecuador, Argentina and the Philippines (office addresses given in Table 1). It was
incorporated in NSW in 1984, acquiring the mineral interests of Petroleum Securities Australia Ltd
(ASE, 1996).
Table 1: Australian and International Office Addresses of Climax Mining Ltd
Head Office Climax Mining Ltd Level 13 1 Alfred Street SYDNEY NSW 2000 AUSTRALIA
Philippines Office Climax-Arimco Mining Corporation Ground Floor, Smith Bell Building 2294 Pasong Tamo Extension MAKATI METRO MANILA PHILIPPINES
Argentina Office Argentina Mineral Development SA Emilio Civit 576 Ciudad MENDOZA ARGENTINA
Ecuador Office Climax Mining Ecuador Apartment 1 344 Finlandia y Suecia QUITO ECUADOR
At 30/06/95 the company had 175 employees; net assets of $48,199,000; total operating revenue of
$10,657,000; and initial retained profits of $4,840,000 (CML, 1995b and ASE, 1996). It had the
second-best performing Australian stock in 1994 due to its Philippines (Didipio) prospects (ASE,
1996).
COMPANY MANAGEMENT
Adrian J. Fletcher (Chairperson)
Also Chairperson of Petroleum Securities Australia Ltd; a director of Pacific Infrastructure
Corporation Pty Ltd; and previously was an Executive Committee Member and Chief Financial Officer
of Westpac Banking Corporation.
Terence N. Fern (Managing Director)
Also Managing Director of Petroleum Securities Australia Ltd.
Peter W. Clarke (Director)
Also a Director of Canning Energy Ltd and of Solomon Pacific Resources N.L.
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Geoffrey H. Fulcher (Alternate Director and Company Secretary)
Christopher J. Stephenson (Alternate Director)
General Manager Commercial Development of Climax Mining Ltd; member of the Institute of
Chartered Accountants in Australia; a former Director in the Tax Division of Arthur Anderson.
(PR Manager – none, and no official PR firm used)
Heath Sandercock (General Manager Operations, also Environmental Manager)
COMPANY OWNERSHIP
Table 2 lists the major shareholders of Climax Mining Ltd.
Table 2: Major shareholders of Climax Mining Ltd (CML, 1995a,b and ASE, 1996)
SHAREHOLDER NUMBER OF SHARES* % OF ISSUED CAPITAL
20 Largest shareholders Petroleum Securities Australia Ltd Group Mercury Asset Management Terence N. Fern Adrian J. Fletcher Christopher J. Stephenson Geoffrey H. Fulcher TOTAL
76,668,985 39,067,785 8,791,251 1,503,900 104,900 60,000 10,000 87,912,508
87.2 44.4 10.0 1.7
* Ordinary shares of 20c each, held by 1430 shareholders, at 4 September 1995
COMPANY INTERESTS
Tables 3-4 details CML’s controlled entities and associated companies.
Table 3: Controlled entities of Climax Mining Ltd (CML, 1995b:13)
ENTITY PLACE OF INCORPORATION
% OWNED BY CML
Petroleum Securities Mining Company Pty Ltd Climax Management Pty Ltd Trimdean Pty Ltd Climax Mining Share Plan Pty Ltd Prolink Pty Ltd S.E.A. Holdings Ltd Truehall Pty Ltd Climax Mining (Fiji) Pty Ltd Arimco Mining Corporation Climax of Australia (Philippines) Inc.
Australia Australia Australia Australia Australia Australia Australia Fiji Philippines Philippines
100 100 100 100 100 76.64 76.64 100 76.64 100
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Table 4: Associated companies of Climax Mining Ltd (CML, 1995b:21)
NAME MAIN ACTIVITIES PLACE OF INCORPORATION
INTEREST (%) (1995, Ordinary shares)
Osglen Pty Ltd Millpet Property Trust Samaral Resource Corporation Great Southern Resource Company Royal Northern Resource Corporation Occidental Resource Corporation Aurum Peak Resource Corporation Argentina Mineral Development S.A. AMD Holdings Ltd Minera Climax
Investment Property Ownership Minerals Exploration Minerals Exploration Minerals Exploration Minerals Exploration Minerals Exploration Minerals Exploration Minerals Exploration, Holdings Company Minerals Exploration
NSW NSW Philippines Philippines Philippines Philippines Philippines Argentina Cayman Islands Ecuador
33.30 50.00 (unit interest) 30.66 40.00 40.00 40.00 40.00 47.31 47.31 47.50
CML previously controlled Solomon Pacific Resources N.L. (now 18.9% interest), Solomon Pacific
(Holdings) Pty Ltd, Solpac Holdings (Vanuatu) Ltd, Solpac (Fiji) Pty Ltd, Pacminex Pty Ltd, and
Lamorna Gold Trust. Chesire Investments Pty Ltd, a CML subsidiary company in PNG, was wound up
in 1994.
COMPANY OPERATIONS
CML’s major exploration operations (current or proposed) are in Junction Reefs, the Philippines,
Argentina, Ecuador and Fiji (see Figures 1-4). Tables 5-6 describe CML’s current exploration
operations.
Figure 1: General location of Climax Mining Ltd operations (CML, 1995:1)
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Table 5: Exploration operations of Climax Mining Ltd in Australia
PROJECT NAME LOCATION CLIMAX EQUITY
OPERATOR COMMODITY EXPLORATION BEGAN
Junction Reefs1 Orange, NSW 49% Homestake Australia
Ltd (HAL), earning 51% Gold 1984
Deepwater Glenn Innes, NSW
100% HAL, 51% Tin, Tungsten, Bi, Ag, Mo
<1990
Wyanga-Tomingley Peak Hill, NSW 100% HAL, 51% Gold 1990 Gallymont Orange, NSW 49% HAL, 51% Gold 1991 Taroona Forbes, NSW 100% North Exploration,
earning 65% Gold 1993
Red Hill Chillaggoe, QLD 100% Farminee being sought
Gold, Base Metals
1988
Admiral Hill2 Laverton, WA Royalty Sons of Swalia Ltd, owner
Gold 1990
Bell Chambers Sandstone, WA Royalty Eastmet Ltd, owner Gold 1990 1 Includes Panuara and Forest Reefs projects 2 Includes Laverton Project
Table 6: Exploration operations of Climax Mining Ltd in Fiji, Philippines, Argentina, Ecuador
PROJECT NAME LOCATION CLIMAX EQUITY
OTHER INTEREST
COMMODITY EXPLORATION BEGAN
Mistry 16km SW of Nadi, FIJI
66.2% (operator)
Not specified Gold <1990
Didipio Didipio, Nueva Vizcaya, Luzon, PHILIPPINES
57.47% Arimco Mining Corporation1 (AMC) 75%
Copper, Gold 1991
(4 FTAA applications)
Surigao Peninsula, Mindanao, PHILIPPINES
100% - Gold <1994
(1 FTAA application)
Zamboanga Peninsula, Mindanao, PHILIPPINES
100% - Gold <1994
(2 FTAA applications)
Surrounding Didipio FTAA, Luzon, PHILIPPINES
100% - Copper, Gold <1994
Uspallata Graben ARGENTINA 47.3%2 Puma Minerals
Corporation3
(PMC)
Copper, Gold 1992
Malargue ARGENTINA 47.3%2 (PMC) Gold 1992
Bajo de Alumbrera Norte
ARGENTINA 47.3%2 (PMC) Copper, Gold 1992
San Juan ARGENTINA 47.3%2 (PMC) Gold 1992 Chubut ARGENTINA 47.3%2 (PMC) Gold 1992 Pumahuasi ARGENTINA 47.3%
2 (PMC) Silver, Lead,
Zinc 1992
La Tigrera ECUADOR 47.3%2 Not specified Gold 1995 1 76.6% subsidiary of CML 2 As Argentina Mineral Development (AMD), 50% subsidiary of CML 3 Subsidiary of Canada’s BEMA Gold Corporation
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Table 7 outlines the mining history of Climax Mining Ltd. Comparing Tables 5-7, it appears that CML
operations are now focused more overseas than in Australia.
Table 7: Mining operations of Climax Mining Ltd in Australia
PROJECT NAME
LOCATION CLIMAX EQUITY
COMMODITY EXPLORATION BEGAN
MINING BEGAN
MINING ENDED
Sheahan-Grants
1
Orange, NSW
49% Gold 1984 1987 1992
Frenchmans1 Orange,
NSW 49% Gold <1990 1991 1993
Cornishmens1 Orange, NSW
49% Gold <1990 1992 1995
Glendale1 Orange,
NSW 49% Gold <1990 1993 -
Norton2 Gladstone, QLD
50% Gold, Base Metals
1984 <1990 -
Cheritons3 Marvel Loch,
WA 50% (operator)
Gold 1991 1992 -
Beaufort Ballarat, VIC 95% Gold 1984 <1990 - 1 Homestake Australia Ltd confirming 51%
2 Operator: Australian Resources Ltd (formerly Arimco)
3 Joint venture with Andax-Nevoria
POLITICAL RELATIONSHIPS
One staff member belongs to an official Filipino association which controls small-scale mining (no
names given) (Sandercock, 1996).
Figure 2: CML Philippines
exploration locations
(CML, 1995a:5)
Figure 3: CML Argentina
exploration locations
(CML, 1995a:9)
Figure 4: CML Ecuador
exploration locations
(CML, 1995a:11)
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CML had 50% interest in a Pyrmont property, which it let to a commonwealth government
department (CML, 1992:6).
Foreign investment and mining are being encouraged in Ecuador with “new administrative rules”
(CML, 1995:3), and in the Philippines with the March 1995 Mining Act and Financial and Technical
Assistant Agreements (FTAAs) (Burton, 1996). The Philippines Bureau of Mining and Geosciences
sought advice from CML and others in preparing the new regulations (Murphy, 1995).
FINANCING AND AID
CML has not used international aid to fund their projects (Sandercock, 1996). The company banker is
Westpac Banking Corporation. Previously the Asian Development Bank, International Finance
Corporation of expoert-import banks financed CML projects, but since the Didipio FTAA grant, CML is
also finding support from commercial banks (Murphy, 1995). Gold loans may help fund the Didipio
project (Smith, 1994), which requires $US200 million (Murphy, 1995).
ENVIRONMENTAL RECORD
Virtually no information is available on CML’s environmental record. See the references for
information services on environmental impacts of gold exploration and development.
CML claims that the Dinkidi (Didipio) project has no groundwater, acid mine drainage or run-off
problems; and no significant environmental or social issues (Sandercock, 1996 and CML, 1995:8).
Environmental impacts are allegedly minimised by rehabilitation after mining. Frenchman’s
rehabilitation used local native species and involved Blayney High School (SMAC, 1995).
CML’s international projects allegedly “satisfy Australian standards” (Sandercock, 1996), but
Jamieson and Harris (1996) point out that there is no Australian code of conduct for mining.
CML uses BHP Engineering to write Enviromental Impact Studies (CML, 1994:4 and Sandercock,
1996).
SOCIAL RECORD
Little information is available on the social and labour record of CML. It is possible that there were
social conflicts over landowner compensation at Deepwater (CML, 1990:8); over operations within
the Jibadgi Nature Reserve at Cheritons (ibid, 1992:5); between local tribal mineral holders, “illegal
highgraders” and CML at Didipio (ibid, 1994:6); and between small-scale highgraders and CML at
Zamboanga (ibid, 1994:6).
Climax Mining Ltd in the Philippines – Didipio project case
CML uses Gaia South Inc. to deal with Philippines social issues (Sandercock, 1996), run by Mr
Faktoran – former Secretary for Department of Environmental and Natural Resources (DENR),
Philippines, and legal counsel for Arimco-Climax (Boyle, 1996).
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Sandercock (1996) believes CML operations will “improve”1 the lifestyles of the local people by
providing schools, hospitals, infrastructure and employment (30% of CML workforce from the local
people). Boyle (1996) claims that 250 families (Sandercock 800-1400 people) will be forcible
relocated and the entire valley open-pit mined (beginning in 2000). The local people were initially
overwhelmingly against mining. The Catholic Bayanbong diocese social action centre is also critical,
but receives funding for its Medical Centre from Arimco-Climax (ibid, 1996).
Most locals are ignorant of many aspects of mining and CLM uses Australian Mining Industry Council
information to explain mining to them (Sandercock, 1996). Boyle (1996) claims that the people are
not adequately consulted nor informed about CMl operations. For instance, the Didipio Barangay
(council) was not informed nor consulted about the relocations (Boyle, 1996). CML and Gaia South
Inc. may organise a “foundational committee” to by-pass the Barangay council and to appear to
represent local communities (ibid, 1996).
RECOMMENDATIONS
Further research is needed to obtain an adequate political, environmental and social profile of
Climax Mining Ltd. Contacts and useful literature are suggested in the references.
1 Sandercock (1996) says Didipio is “one of the most primitive parts of the Philippines” and “to be honest I
don’t know why they (the local people) stay there – there’s nothing there”, revealing his ethnocentricity and ‘terra nullius’ viewpoint and the assumption that subsistence lifestyles are inferior.
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REFERENCES
Australian Stock Exchange (ASE) (1996). Information of Climax Mining Ltd as requested, and 1995
Stock Exchange Financial and Profitability Study, March, 1996.
Ballesteros, A. (1996). Personal communication with André Ballesteros of the Legal Rights and
Natural Resources Centre, Inc, Philippines, March, 1996.
Boyle, M. (1996). Personal communication with Mick Boyle of the Australian Philippines Solidarity
Movement, Melbourne, March, 1996.
Burton, B. (ed.) (1996). “Philippines mining law reform” in Mining Monitor 1(1), Feb 1996:14,
Mineral Policy Institute, Bondi.
Climax Mining Ltd (CML) (1990). Annual Report 1990, CML, Sydney.
_______ (1991). Annual Report 1991, CML, Sydney.
_______ (1992). Annual Report 1992, CML, Sydney.
_______ (1993). Annual Report 1993, CML, Sydney.
_______ (1994). Annual Report 1994, CML, Sydney.
_______ (1995a). Annual Report 1995, CML, Sydney.
_______ (1995b). Financial Statements and Reports: 30 June 1995, CML, Sydney.
_______ (1995c). Quarterly Report for Period Ended 31 December 1995, CML, Sydney.
Community Aid Abroad (CAA) (1995). Australian Mining Industries in the Asia-Pacific Region, CAA,
Sydney.
Denoon, D., Ballard, C., Banks, G., Hancock, P. (eds) (1995). Mining and Mineral Resource Policy
Issues in Asia-Pacific – Prospects for the 21st Century, proceedings of the conference at the
Australian National Umiversity, 1-3 November, 1995.
Dixon, M (1996). “Miners move offshore in droves” in Australian Financial Review (AFR), 22/2/96,
p.29.
Forday, G. (1994). “Production a record for Ausres” in AFR, 26/08/94, p.35.
Harris, C. and Jamieson, M. (1996). Personal communication with Chris Harris and Matthew
Jamieson, Mineral Policy Institute, March, 1996, Bondi.
Hextall, B. (1995). “The drum” in The Sydney Morning Herald (SMH), 24/06/95, p.41.
________ (1996). “WMC leads miners’ rush to invest in Pghilippines” in SMH, 30/3/96, p.37.
Murphy, K. (1996). “Philippines gets dinkum on mining” in Business Review Weekly (BRW), 16/10/96,
p.57.
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Rennie, P. (1995). “PetSec Soars on a winning double sharemarket” in BRW, 16/01/95, p.24.
Sandercock, H. (1996). Interview with Heath Sandercock, CML General Operations Manager and
Environmental Manager, 25/3/96, CML, Sydney.
Smith, M. (1994). “Climax to spend $US 100M in Manila” in AFR, 2/03/94, p.20.
State Minerals Advisory Council (SMAC) (1995). Environmental Excellence in the NSW Minerals
Industry, 1995 Finalists, Minerals and Energy House, St Leonards.
Tabakoff, N. (1994). “New mines dangle the best carats” in AFR, 3/03/94, p.31.
Further recommended contacts
As well as the contacts listed on the following page, it is recommended to contact relevant state
Environmental Protection Authorities, National Parks and Wildlife, and Indigenous Internet
organisations to obtain more information on CML’s environmental and social record, at a regional,
state and national level.
It is possible to subscribe to two Indigenous Internet organisations by typing:
“subscribe indknow <yourfirstname yourlastname>” to listserv@uwavm(Bitnet) or
[email protected](Internet)
or “subscribe native-L <yourfirstname yourlastname>” to listserv@tamvm(Bitnet) or
Minproc Engineers Ltd and Potter Warburg Asset Management Ltd can provide more details on
CML’s environmental, social and financial profile after three weeks (minimum). Contacts details are
given below:
Minproc Engineers Ltd, Sydney – Lana (CML feasibility studies)
Tel: 02 776 2888 Fax: 02 776 2999
Level 3, 9 Castelreigh St SYDNEY NSW 2000
Potter Warburg Asset Management Ltd (mining company associations)
Tel: 02 324 3000 Level 2, Chifley Square, SYDNEY NSW 2000
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Useful contacts
GROUP & CONTACT TELEPHONE OR FAX EMAIL OR POSTAL ADDRESS
Aboriginal Land Councils NSW LC Cape York LC Gurang LCA Corp Central LC Northern LC Kimberley LC Western Desert LC Sthn Headland Pilbara ALC Wamba-Wamba Local ALC Tasmanian ALC
Tel: 02 689 4494 Tel: 070 519 077 Tel: 071 533 800 Tel: 089 516 211 Tel: 089 205 100 Tel: 091 931 118 Tel: 091 723 692 Tel: 091 732 398 Tel: 050 323 113 Tel: 002 240 939
Parramatta, NSW Cairns, QLD Bundeburg, QLD Central NT Northern NT Kimberleys, WA Western Desert, WA Southern Headland, WA VIC TAS
Aboriginal Resource Centre, UNSW, Sydney
Tel: 02 385 2336 UNSW, Kensington
AidWatch, Sydney – Aviva Imhoff (Philippines mining)
Tel: 02 264 6090 or 02 385 2850
Australian Philippines Solidarity Movement (APSM), Melbourne – Mick Boyle (Philippines, mining)
Fax: 03 9482 5998 APSM PO Box 1590 Preston South, VIC 3072
APSM, Melbourne – Anna Maria Antonio (Philippines, mining)
Community Aid Abroad (CAA), Sydney – Alison Cleary (PNG, mining)
Tel: 02 264 1399 [email protected]
CAA, Melbourne – Jeff Atkinson (WMC, Philippines)
Tel: 039 289 9444 [email protected]
Mineral Policy Institute – Chris Harris, Matthew Jamieson (Australian mining industry issues)
Tel: 02 387 5540 Fax: 02 386 1497
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Further literary references for international environmental, social and legislative aspects of
relevant operations
Barnett, J. (1988). “Underground mining: a better way to go?” in Parkwatch 152, March
1988:22.
Danielson, L.J. and White, C. (1994). “Environmental policy and the mining industry in Latin
America” in Rocky Mountain Miner Law Found/ et al International Oil, Gas and
Mining Development in Latin America (conf. paper), Houston, TX, Apr 18-19,
1995(5):13B-1(69).
Hall, D. (1988). “Effect of eductor dredging of gold tailings on aquatic environments in
Victoria’ in Proceedings of the Royal Society of Victoria 100 (1-7), Oct 1988:53-59.
Malm, O. (1990). “Mercury pollution due to gold mining in the Madeira River Basin, Brazil”
in Ambio 19(1) Feb 1990:11-15.
McAndrew, J.P. (1994). Mining Industry Report: The impact of corporate mining on local
Philippines communities, ARC publication.
Pardini, J.F. (1994). “Mining investment regimes in Latin America” in Rocky Mountain Miner
Law Found/ et al International Oil, Gas and Mining Development in Latin America
(conf. paper), Houston, TX, Apr 18-19, 1995(5):11-1 (28).
Paulsen, K.R., Amax, Env services, Pecache, G.A., Koponen, M., Paliwal, H.V., Songhe, H.,
Matsui, N. and Jackson, R.T. (1985). “Environmental aspects of mining and ore-
dressing of non-ferrous metals” in Industrial Environment 8(1) Jan-Mar 85:1(34).
Ross, W. (1994). “Environmental impact assessment in the Philippines: progress, problems
and directions for the future”, in Environmental Impact Assessment Review 14(4)
July 1994:217-232.
Sheehan, O. (1992). “Fool’s gold in Ecuador” in WWF News 75 Jan-Feb 92:2.
Tan, B.K. (1985). “Urban construction problems in mining land” in Inst Mining Metall
(UK)/Philippines Asian Mining (conf.paper), Manila, Feb 11-14, 1985:147(6).
UN Development Programme Report (UNDPR) (1994). Environmental Legislation for the
Mining and Metals Industries in Asia, UNCTAD/COM/40, Mar 8, 94 (82), non-US
govt report.