As an investor in mining, can you make money following the trail of western companies flirting with the Chinese & Chinalco? First it was Rio Tinto whose top brass saw the Chinese as a possible saviour from BHP. Now we have Anglo America demurely fluttering eyelids at the Chinese Mining Dragon as a possible saviour from Xstrata. Not to talk of Canadians in Ivanhoe who are having “courtesy visits” with the Chinese ,who after the meeting said they are ” willing to proceed with wide and deep cooperation with Ivanhoe.”
I cannot understand why ailing companies (or are they merely mis-managed) like Anglo American and Rio Tinto would prefer to be owned by the Chinese than by Australians or Swiss. Is there a compelling reason, other than pride, for seeking a Chinese overlord. Maybe they think the Chinese will be more acquiescent as bosses than those demanding beer-swilling colonials and Alpine Gnomes. Or is it simply that Chinalco has more money and a potentially tougher line with the natives?
I shudder at the thought, but delight at the blogging opportunities inherent in the Chinese or Swiss coming to Alaska to meet with Sarah Palin who will make profound, internationally informed statements about the benefits to Alaska of the Chinese developing the Pebble Mine. Sarah might even get an all-expenses-paid trip for the whole family to Mongolia to see how they welcome the new owners of Oyu Tolgoi. That will flesh out her international credentials for 2012. But I an not sure the ordinary investor will get any richer from her new knowledge.
The folk who will probably be most affected are the 317,000 South African mine workers. This quote on the topic:
South Africa’s National Union of Mineworkers, with 317,000 members, had intervened in the proposed merger saying it would lead to “unacceptable” job losses.
They are probably correct: Why would you want to mine in South Africa in the face of so powerful a trade union when all you have to deal with in Alaska are a few salmon fishermen and Republican hunters. Maybe Ivanhoe could give them some advice on developing mines in the United States. They have lots of experience from the Summitville days.
All these tangential comments aside; is it possible as a mere investor to make money on these rumours of takeovers? Forget about the circus of suitors who make Turandot look like an angel; go for the company that appears most likely to get an infusion of new cash and a new mine. That is where the future profits lie. The glorious days of Rhodes’ dream of a British Empire from the Cape to Cairo is dead and empires now arise in the east from whence surely will come new mining profits.
