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Australia worse than Africa for mining? Yikes!: Clyde

By Clyde Russell
The idea that Australia is a more dangerous place for mining investment than Mali might seem strange to most observers, but that’s exactly the view of the boss of the world’s third-biggest gold producer.
Mark Cutifani, the chief executive officer of AngloGold Ashanti, said last week he was more concerned about government policies toward mining in Australia than about nationalism in Africa.
On the face of it, this is an extraordinary comment that has gone largely unreported by both the Australian and international media.
How can it possibly be that Australia, a stable Western democracy with rule of law, independent courts and a culture of vigorous debate, is a more risky place than countries like Mali, which had a military coup last month and is battling an insurgency by Tuareg separatists?
Of course, it may be that Cutifani, an Australian-born mining engineer who has headed the Johannesburg-based company since October 2007, was ramping up the rhetoric to make a point when he talked to reporters on March 27 in Perth, capital of the resource-rich state of Western Australia.
But this would appear to be at odds with his previous record of speaking sensibly about the gold-mining industry while remaining an advocate of the interests of his global company.
The point Cutifani was probably trying to drive home is that the debate in Australia over its vast mineral resources appears to have veered off-track and descended into political point-scoring.
“The politicians and we as industry leaders are missing each other,” the Australian Associated Press quoted him as saying. “Somehow, we’ve got to land this discussion and stop the class warfare-type conversations and turn the conversations into constructive dialogue about the future of the country and the industry.”
To be fair, Cutifani has also lobbied against proposals for a resource rent tax in South Africa and moves to raise taxes in other African countries where AngloGold operates, such as Ghana and Mali.
But for Australia, the background to his comments is an intensifying war of words between Wayne Swan, the treasurer in the Labor Party-led minority government, and mining magnates over the new Mineral Resource Rent Tax (MRRT) and the carbon tax.
Both these taxes are due to start on July 1 and have raised the ire of many industries and the opposition Liberal Party.

The MRRT will impose a 30 percent levy on so-called super profits of large coal and iron ore, and doesn’t yet include other producers such as gold miners.
The carbon tax will impose a price of A$23 on the emissions of the top 500 polluters, to be phased in, while reducing income taxes for poorer households in order to offset the expected increase in energy costs.
The Labor Party, which has slumped in opinion polls partly over public disquiet over the new taxes and a broken promise not to introduce a carbon tax by Prime Minister Julia Gillard, appears to be following the tactic of stoking the politics of envy as a distraction method.
Since the financial crisis that sparked the global recession in 2008 it has been easy for politicians to attack the rich and blame untrammeled greed for the economic carnage.
In Australia, the target is billionaire mining barons and Swan attacked iron ore magnates Gina Rinehart and Andrew Forrest as well as coal developer Clive Palmer in an essay published last month.
Interestingly enough, Swan didn’t attack BHP Billiton and Rio Tinto, the two global miners that led initial opposition to a stiffer resource tax that was watered down after Gillard deposed former prime minister Kevin Rudd in a party-room coup.
Swan accused the billionaires of trying to use their wealth to “distort public policy,” apparently without any sense of irony, given that he was using his position as the second-most powerful politician in Australia to do the same.
It seems to me that Australia would benefit from a more sensible debate on how to ensure the mineral wealth is developed in a way that rewards the owners of capital that take the risks of developing projects as well the overall economy and citizens in general.
Debate in Australia appears to be driven by short-term political cycles, with federal elections every three years leading politicians to focus more on spin than sound policies.
Is the MRRT the best design that could have been implemented?
Will it raise sufficient revenue without leading to less investment, and will it help ensure the long-term viability of mining?
Should the revenue it raises be used to fund a one percentage point cut in the company tax rate, as Labor proposes, or would it be better put toward building a sovereign wealth fund?
These are all valid points for debate, but aren’t getting a hearing in Australia currently.
Instead, as AngloGold’s Cutifani pointed out, there is an unedifying mud-slinging match that does little to enhance the reputations of either Swan or his targets.

Is Angolan media becoming less biased?

PORTUGAL/It was surprising to see Angola’s media regulator on Thursday accusing the nation’s only state-run newspaper of running a story that distorted a speech by the leader of the main opposition party to make him look favourable towards the government.
 
The National Media Council, a government run body comprised of journalists, seems determined to help Angola’s media sector become less biased towards the government . It urged Jornal de Angola to be more rigorous in its coverage.
 
The newspaper ran a story on March 14 based on a speech by UNITA leader Isaias Samakuva with the title: “Samakuva sees growth in several sectors of the economy,” when his words had instead been highly critical of the government, the regulator said.
 
Jornal de Angola “should avoid arriving at conclusions that may change the meaning of the facts reported even though the story may reflect the opinion of the newspaper or of the journalist who wrote it,” the regulator said in a statement published in Jornal de Angola.
 
UNITA spokesman Alcides Sakala, whose party had lodged the complaint with the regulator about the story, said the regulator’s move was a step in the right direction for a country that is opening up after a three-decade long rule that ended in 2002.
 
But Angola still ranks 119 out of 175 countries in Reporters Without Borders media freedom index.
 
The state owns two national broadcasters, the only radio station with nationwide coverage, and Jornal de Angola, the country’s most influential daily newspaper which often runs headlines praising the ruling MPLA party.
 
This has helped the MPLA secure almost 82 percent of the votes in Angola’s 2008 parliamentary elections – the first to take place after a civil war that ended in 2002.
 
The question now is whether Angola’s ruling MPLA party, which has ruled the oil producing nation for over three decades, is finally ready to loosen its grip on the media before the country holds parliamantary and presidential elections in 2012?

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