Wednesday, 25 July 2012

Speak Mandarin, Cantonese, Shanghainese ... what about Arabic to negotiate Gulf States money?


I recently said in a post "all is connected".  It is amazing just what is connected. Again, Networkers, please be patient while I ask you to follow this very long and winding piece of string.

Does your waste collection, your water involve Veolia?  A share holder is the Qatar Investment Authority (QIA).  Down at Wonthaggi, the world's fifth largest desalination plant is under construction.  The major water technology player is Suez. A share holder is QIA.  Enjoying, like mois, the professionalism of English language telecaster AlJazeera? Look behind and you will find QIA.  A subsidiary of QIA - Qatar's sovereign wealth fund - is Qatar Holding (QH).  If you have been reading Stephenie Meyer's Twilight series, QH is right thereQH will pop up again in the course of this post.

And now let's take a look at the Land of Oz. If political and corporate players are learning to speak Mandarin, Cantonese or ShanghaineseI can't help wondering what politicians or business executives speak Arabic?  You see, while the Chinese frequently make the news in relation to mining and agricultural investment, the subsidiaries of the Qatar Investment Authority scarcely rate a blip on the national radar.

BTW, you might like to take a look at the Board of Qatar Holding.  If you think women are having trouble getting on Boards in Australia, my guess is that Qatar won't be having any women on any boards any time soon.

Now for what I consider the really important stuff as far as Australia is concerned.

QH is the second largest shareholder in international mining conglomerate Xstrata.  I am embedding below an Xstrata Zinc Sustainability Report from which, Networkers, you will be able to ascertain not only the extent of Xstrata business in Australia, but its international presence as well.  Please note the marvellous picture (somewhat manipulated, methinks) of Mount Isa in north-west Queensland. Please go here and insert "Australia" to find more about Xstrata in Australia.

It seems Asia hasn't made it on to the Xstrata scene yet.  Funny that...!

At the moment, Xstrata is being being courted.  All was a-flutter earlier this year with a Glencore-Xstrata merger looking highly likely. Shareholder meetings to ratify the merger have been postponed but now a meeting looks likely to proceed in September. That was reported on July 12. To-day, it is reported that Qatar is active in the market buying shares. There is a lot at stake in this stoush.  Synergies are being touted as a plus for the merger: Xstrata's mining and Glencore's marketing.  Glencore clearly has ethics problems and seems to be a corporation prepared to do whatever it takes. Clearly, Qatar does not want to be squeezed out even if or, more likely, the proposed merger of Xstrata and Glencore if and when established will rival BHPBilliton for size and reach.  If Qatar is active in the market, it is clear that QH does not wish to be left an also ran in the race.

So, Networkers, keep eyes and ears peeled on this latest saga impacting on Australia's mining boom.

Oh, a political footnote.  Remember back to the mining tax ruckus which resulted in Rudd's resignation (or doing-over depending on your point of view)?  The ruckus, you will recall, was mainly caused by the "junior miners" such as TwiggyGina, Clive and their friends.  The "senior miners"  like Rio and BHPB act a bit differently.  The "senior miners" are the ones who got to the negotiating table and Twiggy, Clive and Gina didn't.  They have been sour about this ever since.  However, the then new Prime Minister Julia Gillard negotiated not only with Rio and BHPB. Xstrata quietly came to the table.  

My view is that Xstrata was not only there because of its size.  It was there because of its relationship with the Australian Workers Union (AWU), particularly in connection with the Mount Isa facility.  The AWU put Gillard where she is so that a pragmatic version of the mining tax could be sorted out and the AWU could have a role without being forced backwards in the deal.  A clever use of this blog's search and label facilities should flesh this idea out for you, Networkers.


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