Friends at court

The recent convention of the Northwest Mining Association heard some hopeful sounds from the United States government and Congress on the Mining Law.

Kathleen Clarke, director of the U.S. Bureau of Land Management, told the convention that the Bureau is reviewing, and considering overturning, the remainder of the series of opinions, written by former Bureau solicitor John Leshy in 1997. Leshy held that holders of mining claims were entitled to patent only a “mill site claim” of one-quarter the size of their mining claims, and that “ancillary uses” of lands were not permissible on mining claims.

The mill site opinion was overturned in 2003; the “ancillary use” opinion, accepted as policy by former Interior Secretary Bruce Babbitt two days before he left office, still stands.

If Clarke is ready to recommend review of the opinion, it will provide a shot of common sense in what has, up to now, been a wrangle over the letter versus the intent of the law. Even liberals find a place in their hearts for strict construction if it means limiting mines to unworkable land areas.

But that goes only part of the way. In the end, policies have to conform to laws; and if the letter of the law says five acres for every claim, maybe the law needs changing.

So Representative James Gibbons of Nevada had the right idea in suggesting that the Mining Law is ripe for revision, and the current Congress is the place to do it. Mining has more support in Washington than it has had in years, and there is a chance to make the law less onerous to the industry, and less objectionable to the public. For example, a new fee structure could blunt the complaint that the $5-per-acre patenting fee is a sellout, and explicit mine-closure requirements for all mines could defuse the charge that the law allows mining companies to walk away from environmental damage.

It is unlikely to please mining’s die-hard opponents. But it may help settle the public mind about the industry, and put to rest those tales that anti-mining groups spread about the great land giveaway in the western United States.

Oracle works it

Oracles were extremely numerous, and very expensive to those who consulted them. — E.C. Brewer, Dictionary of Phrase and Fable, 1898.

Followers of merger activity in mining can take solace from recent events in another industry. After 18 months — just enough time for Moore’s Law to double processor capacity — database developer Oracle has made a successful takeover offer for software writer Peoplesoft.

Oracle first bid US$16 per share for Peoplesoft in June 2003. There followed the obligatory tug-of-war between the two companies’ boards, lawyers, and financial advisors (these days, you don’t dare make a deal without somebody to float more paper for you), culminating in a series of “best and final” offers.

Cynics will be conscious that “best and final” offers are frequently bettered and not invariably final, and after a “best and final” US$24-per-share deal attracted support from Peoplesoft shareholders holding about 60% of the stock, the showdown came. Peoplesoft was ready with a poison-pill rights issue; Oracle, after some back-channel phone discussions between the rivals, came back with an offer of US$26.50 per share — a US$10.3-billion valuation.

Peoplesoft’s reluctance squeezed 66% more out of Oracle. Good for the shareholders, of course. But the length and cost of the takeover battle need come as no surprise to the people at Oracle. Surely, by now, they are used to seeing things in their business take a lot longer and cost a lot more than originally expected.