A Family Affair
Why am I always the last to know?
I’ve worked in the Canadian mining industry since 1975. On and off since 1986 I have reported on the industry in this magazine. But I guess I don’t go to the right cocktail parties: it still comes as a surprise when I learn about another connection in the network that really governs the business.
Major mining corporations are more than just companies. They are like professional sports clubs, with the marquee team plus farm teams and legions of branded ex-employees. Call me a cynic, but now whenever I see a deal, I wonder just how distant the partners are.
A case in point. I was one of a small audience attending the Inmet Mining annual meeting the end of April, happy to be entertained by the best: Inmet chairman Bill James chaired the meeting. As I looked at the suited backs of the company’s directors sitting in the front row of the auditorium, I was pleased to see Oyvind Hushovd, president and CEO of Gabriel Resources and the possessor of a lovely pair of Norwegian blue eyes.
As a tall, balding guy tried to sneak in and grab a seat in the front row, Mr. James growled at him: “Come on in, Warren [Holmes]…. You know, if it hadn’t been for me, you’d be working for Pamour.” (Mr. Holmes is now president and CEO of Nuinsco Resources.) Everyone chuckled except me, because I was too busy trying to put the pieces together. Let’s see. Bill James was the chairman, president and CEO of Falconbridge for most of the 1980s. Oyvind Hushovd was president and CEO at Falconbridge from 1996 until last year. Warren Holmes held senior management positions at Falconbridge from 1992 until last year.
I glanced around, thinking that perhaps everyone there except me was an ex-Falconbridge type. Mr. James then announced that Alf Powis was resigning his seat on the Inmet board to make way for Mr. Holmes. Mssrs. James and Powis were executives together at Noranda before Mr. James went to Falconbridge in 1982. The pieces fit.
An analyst and I were speculating over pastries after the meeting that, for a mid-size producer, the Inmet board was stacked with some very powerful men. Six days later came the news that Inmet and Aur Resources were forming a “merger of equals”: two mid-size, well-run companies started up in the 1980s with a combined stable of seven mines on four continents. The resultant company, Aur Mining Corp., will be a large intermediate (or a small major) producer with a market capitalization of US$1 billion, producing about 380 million lb Cu, 150 million lb Zn and 260,000 oz Au in 2004. It will undoubtedly succeed.
So how about our ex-Falconbridge board members? They will all be gone from the new company. That’s the way networks work. They have no beginning or end; they just continue.
I want to heartily thank Steve Dawson who was interim editor of CMJ for the past nine months, while I was in treatment for breast cancer. His easy good humour and faithful attention to duty was a large part of what made last year not an unpleasant experience for me. Steve is now working in investor relations for Stroud Resources. You can be part of my network any time, Steve.