Shame about the ‘new face’

The official congress of China’s mining industry, “China Mining 2004,” took place in central Beijing in mid-November, hosted by China’s Ministry of Land and Resources, a “super ministry,” formed in 1998, under which all mining in the country operates.

The conference was organized by a partnership of three groups: the Chinese government’s Beijing Exhibition Centre, Germany’s Mesago Holdings, and the Beijing-based Balloch Group, run by Howard Balloch, who was Canada’s ambassador to China from 1996 to 2001.

While this was the sixth China Mining conference, it was the first that was attended by a large contingent of mining and related companies from Canada, Australia and South Africa.

The Canadian and Australian embassies in Beijing, and the World Bank, were major supporters of the conference, and organizers were assisted by an international advisory committee that included China’s largest metals company, China Minmetals, and some of the West’s top companies: CIBC World Markets, GRD Minproc, Anglo American, Placer Dome, Ivanhoe Mines and MinnovEx Technologies.

Major Chinese sponsors were China Minmetals, Zhaojin Mining Industry, and the CITIC Group, while the list of Western sponsors was even longer: the Prospectors & Developers Association of Canada, CIBC World Markets, Placer Dome, Mundoro Mining, BacTech Mining, AngloGold Ashanti, Sino Gold, the TSX Group, Southwestern Resources, SKN, Oxiana and Gold Fields.

A couple dozen other Canadian companies and governmental bodies also shelled out tens of thousands of dollars for booths and the privilege of giving a talk.

All in all, a lot of shareholders’ and taxpayers’ money from Canada, Australia and South Africa supported China Mining 2004, and the good names of these Western participants lent much-craved credibility to the Chinese Communist Party (CCP), which rules all aspects of the Chinese economy.

In his welcoming remarks, China’s minister of Land and Resources, Sun Wensheng, described the event as a “forum in which we communicate mutually [and] promote co-operation.” He boasted that China Mining was “the premier event for the mining industry in China, perhaps even in Asia, and will impact both the domestic and global mining industry enormously.”

Gosh, it sure sounds as if The Northern Miner needed to be there, doesn’t it?

We thought so, too, and had contacted the organizers earlier in the fall to obtain a press pass to attend.

Imagine our surprise when, while trying to pick up the press pass in person at the conference site (the government-owned Beijing Hotel), we were curtly informed by the conference’s media-liaison officer that the Chinese government had decreed, two weeks earlier, that no foreign media would be receiving their credentials to attend the conference.

Instead, press passes were given only to members of the Chinese media, who are the propaganda arm of the Party. (The Chinese media are today’s version of Imperial China’s eunuchs, having been castrated in order to serve state power.)

China Mining’s Western staff quietly offered us a delegate badge instead of a press badge. The difference is not immaterial: a delegate badge prevents one from participating in scheduled press conferences with top Chinese government officials, and even photographing them.

This, at a time when state-owned China Minmetals is threatening to take over Canada’s leading base metals miner, Noranda, and secure a controlling interest in Falconbridge. If successful, it would be the largest takeover in Canadian mining history.

(Note: The editor of this paper has family ties to Noranda and so has refrained from editorializing on the takeover. This column was written by the assistant editor, who has no such ties.)

Make no mistake: the CCP runs the country with an iron fist, so any offer as large as China Minmetals’ is being directed by the upper levels of the Party.

Realistically, the public questioning of China’s top ministers and Party officials during press conferences was our one chance of obtaining answers to the big questions that Minmetals has never answered with respect to its bid: What are your strategic plans for Noranda and Falco? What employees will stay and who will go? For those who stay, what compromises will they be expected to make? Will you respect the Western-defined human rights of the employees of Noranda and Falco? How will you reconcile China’s typical pay for miners of $70 per month with the average Steelworker’s wage? Will you export China’s abysmal safety record to Noranda’s and Falco’s operations? How and when will you begin conforming your bookkeeping and corporate disclosure to North American standards?

After considering China Mining’s offer to let The Miner in as long as it kept a low profile, we decided we were not about to allow ourselves to be bullied by the butchers of Tiananmen Square. Instead, we boycotted the conference and headed home. After all, our motto is “On the Level,” not “In the Shadows.”

Sacrificed was our plan to produce an extensive review of Western mining companies active in China and an update on China’s evolving regulatory environment.

To all those Western companies and governments who poured time and money into this conference, the bottom line is this: This year, unwittingly or not, you sold out a piece of our Western values — a free press — to the CCP. Our one question to you is: Knowing now whom you’re dealing with, will you do it again next year?

And to the various Western “media partners” who signed on for a China Mining booth, each one complete with a table, two chairs and a muzzle, are you comfortable wearing it, and do your readers know?

And to our federal government: Would Canada have allowed Nazi Germany or the Soviet Union in their heyday to buy Noranda? No? So why the hand’s-off approach when it comes to the CCP acting through its puppet, China Minmetals?

Admittedly, it’s a moderate improvement that China has, in the past couple of decades, moved away from such Maoist insanities as the Great Leap Forward and the Cultural Revolution and toward a relatively more pragmatic approach, which we call “totalitarian consumerism” or “authoritarian free enterprise.”

But there’s no doubt that the CCP is still a bad actor on the world stage: it ruthlessly suppresses the human rights of its own people, including, most famously, Catholics, the Tibetans and the goofy but essentially harmless Falun Gong members; it crushes anyone trying to unionize outside the Party; it sends political dissidents to police-run psychiatric “hospitals” to endure medical horrors; it isolates and threatens with military invasion the free, sovereign state of Taiwan; it sends spies into Western countries; it backs anti-Western rogue states such as North Korea, Iran and the Sudan; it hides epidemics such as AIDS and SARS until they’re exposed by outsiders; and its new president, Hu Jintao, in a speech to the nation, has already ruled out democracy for China.

As Jamyang Norbu eloquently puts it in The Globe and Mail: “There is a dark side to China’s economic boom. The human-rights violations are obvious. Less evident, perhaps, but more disturbing is the new road map that China’s success is offering to other nations: industry without free labour, capitalism without democracy, and uncritical acceptance by the world as long as profits are satisfied.”

We can see that the “new face” China is so keen on showing the world looks a lot like the old face, but with better make-up. Can’t you, Paul Martin?

Shame on Brascan’s managers for lacking patriotism and putting Noranda and Falconbridge’s workforce, and Canada as a whole, into this dire predicament: the very heart of Canadian mining is on the verge of being gobbled up by a brutal, totalitarian government hostile to Western values of personal and economic liberty.

Encouragingly, there have been signs in the past week that the Minmetals bid is faltering.

But if Noranda is to fall into foreigners’ hands, we hope the aborted bid by Brazil’s CVRD is revived. CVRD is led by capable managers who truly believe in the long-term future of the industry (in contrast to
Brascan’s seeming indifference), and we’re also willing to bet that the Christmas parties would be vastly better than anything China Minmetals could muster.