ASIA-BUSINESS: Controversial Investor Makes Burma Centrepiece of Asian Plan

By IPS Correspondents Reprint | | Print |

Paul Bailitz

VANCOUVER, Dec 10 1996 (IPS) - Mining investor Robert Friedland, best known for the huge nickel find at Voisey’s Bay, Canada, has made Burma the centrepiece of an ambitious plan to expand into Asia.

Friedland’s firm Indochina Goldfields is developing a major copper-mining project near Monywa, in central Burma, in equal partnership with Mining Enterprise No. 1, owned by the Burmese military government, the State Law and Order Restoration Council (SLORC).

Construction of a mine is expected to begin in the second quarter of 1997, and the first copper will be produced about a year later. Indochina Goldfields officials estimate that the Monywa mine project could eventually produce 125,000 tonnes of copper per year.

“The copper is of great interest to the Japanese, Koreans and Chinese,” the 46-year-old Friedland said in an interview last May.

“Anybody in the mining business knows the end market is the Orient,” added Friedland, who controls a 30-percent share of Indochina Goldfields through his family-owned holding company, Ivanhoe Capital Corporation. “Our big idea is, if the consumption is in Asia and the demand is in Asia, why not engage in mineral exploration and development where the market is?”

In addition to owning the exploration rights to 840,000 hectares in Burma, Indochina Goldfields — major shares of which are also owned by Vancouver-based Teck Mining and Japan’s Sumitomo Metals — owns, or has applied for, the rights to more than three million hectares in Indonesia, 600,000 in Vietnam, and 3,000 in South Korea.

The company’s move into Burma comes during a growing international activist campaign to isolate the SLORC, which is widely criticised for human rights violations and illegally holding onto power, despite losing 1990 elections to opposition leader Aung San Suu Kyi.

The French oil firm Total and its partner, the U.S.-based Unocal Corporation, have come under heavy criticism for their pipeline project in the Yadana region, which represents by far the largest foreign investment in Burma. Two lawsuits filed in the United States allege a variety of human rights abuses stemming from the project

While the two petroleum firms deny that they should be held responsible for the behaviour of the host country, a number of companies have ceased operating in Burma in response to consumer pressure. These include Petro Canada, Levi Strauss, Eddie Bauer, Liz Claiborne, and Heineken.

Like Total and Unocal officials, Indochina Goldfields management argues that the company’s presence has benefited the Burmese people.

Although Friedland was not available to comment, a written statement prepared by his Vancouver public relations representative, Ray Torresan, said, “Indochina Goldfields management and employees feel that their presence in the country is highly beneficial to all concerned.”

“Nobody has ever accused the mining company which is Indochina Goldfields partner of any human rights violations, and Indochina Goldfields has a strong policy in support of human rights,” Torresan stressed.

As evidence of the benefits of Indochina Goldfields’ presence, Torresan cited its commitment to financing educational and medical charities from the profits from the Monywa project, and the contributions it already has made to repairing earthquake-damaged Buddhist monuments in the historic city of Pagan.

Investors seem to agree that the benefits outweigh the cost of human rights concerns and an uncertain political environment. Prior to its initial offering on the Toronto Stock Exchange last June, Indochina Goldfields raised 200 million dollars from institutional investors, even though analysts said its stock was overvalued.

Friedland’s move into Burma was facilitated by Vancouver businessman Reggie Tun Maung, the senior vice president of Ivanhoe Myanmar Holdings, a wholly owned subsidiary of Indochina Goldfields.

Tun Maung, who for more than 30 years has been a business consultant for foreign firms wanting to do business in Burma, has close personal connections to the SLORC. His son is married to the daughter of SLORC deputy prime minister Vice Admiral Maung Maung Khin. Tun Maung is also the president of a Vancouver Buddhist Society, to which Friedland has donated about 75,0000 dollars.

To do business in Asia, “you not only have to have know-how, you have to have know-who,” said Friedland, a dual U.S. and Canadian citi{en, who in 1994 relocated his primary place of business from Vancouver to Singapore, while he, his wife, and their three children moved to Sydney, Australia.

Friedland has applied this business principle throughout Asia. In China, his Shanghai Land Corporation has a deal to produce low- cost, prefabricated housing with the China Fund for the Handicapped, which is directed by Deng Phufang, the son of Chinese leader Deng Xiaoping.

Among the partners the Friedland firm First Dynasty Mines Ltd., has enlisted for a number of energy and mining ventures is Bambang Trihatmodjo, the son of Indonesia President Suharto.

His move into Burma is just the latest in a career marked by controversy.

In 1990, Friedland quit abruptly as chief executive officer of Galactic Resources after the U.S. Environmental Protection Agency announced it would investigate Galactic’s mining operations in Summitville, Colorado, for polluting nearby streams with cyanide- laced waste.

To date, the cost of cleaning up the Summitville mine has totaled more than 150 million dollars. While no charges have been filed against Friedland, other Galactic officers face numerous charges.

U.S. officials sought to recoup the clean-up cost by asking Canadian courts to freeze 152 million dollars of the nearly 450 million dollars Friedland was paid for his 13-percent share of Diamond Fields, which made what is believed to be the world’s largest nickel find in 30 years at Voisey’s Bay. Diamond Fields was sold to Canadian nickel giant Inco for 3.18 billion dollars in July.

Canadian courts initially agreed with the U.S. request, but the decision was overturned last month by a higher Canadian court. The ruling released Friedland’s assets, giving him both the capital and the freedom to pursue his ventures in Asia.