General Calls On Miners To Do Battle Says Clinton “Waging War” On Resource Industries
A four-star U.S. Air Force general and former NATO chief of staff gave marching orders Thursday to a coalition of resource industries.
Retired Gen. Richard L. Lawson, president and CEO of the National Mining Association, told representatives of mining, agriculture and timber the Clinton administration has waged war on them through federal regulatory agencies, bypassing Congress along the way.
His luncheon talk came during the fourth day of the Northwest Mining Association annual meeting in Spokane.
“The battle is not insignificant,” said Lawson, a veteran of more than 70 combat missions in Vietnam. “It is a battle about the United States of America as we know it, as we knew it, and, hopefully, as it will be.
“I don’t know how much we agree,” he added, urging the audience to create a united front, “but we shouldn’t stab each other accidentally.”
As the former deputy commander-in-chief of allied forces in Europe, Lawson has experience running a coalition. He has used that background to pull together the National Coal Association and the American Mining Congress to form a single group under the National Mining Association umbrella.
“We now represent all of the miners,” Lawson said prior to his speech. “We produce something in 397 of the 435 political districts in the U.S. That’s political power.”
Lawson said the mining industry has a rollover effect that accounts for 5 million jobs and pays $59 billion in federal taxes and $29 billion in state and local taxes.
“We’re beginning to get an idea of the real size of mining in this country,” he said, adding that one-third of the nation’s $7 trillion economy is “touched by mining.”
Lawson joined other speakers - including former Idaho Gov. Cecil Andrus and Idaho Sen. Larry Craig - in telling convention-goers that the current administration wants to restrain economic activity in favor of environmental regulation.
“I call it the wigwam and loincloth syndrome,” Lawson said. “It’s based on the concept that the outdoors won’t be the outdoors if we continue to live here.”
More regulation, he added, will first be aimed at mining concerns, then at agriculture and forestry.
That approach will drive American business offshore, Lawson predicted.
“We have mined one-tenth of 1 percent of this country,” he said. “We must not create a situation where industry must leave this country in order to operate.”
Thursday morning, about 300 people gathered in the Ag Trade Center theater for an object lesson on the hazards of offshore investment in a session titled, “What Lessons Can We Learn From Bre-X?”
“Who benefited from Bre-X?” asked Douglas Silver, president of Balfour Holdings, a Colorado-based consulting firm. “Let’s start with the obvious people.”
Silver drew laughs with a slide listing the names of Bre-X directors, which showed vice chairs John Felderhof and David Walsh had earned $42.4 million and $34.9 million respectively.
The stock market also had a good run before the rumor of a massive gold find in Indonesia went bust and senior geologist Michael deGuzman reportedly fell out of a helicopter near the proposed mine site. More than 771 million shares totaling $8.9 billion traded hands between the time the “find” was announced in early 1996 and May 1997, when the company filed for bankruptcy.
“The mineral companies also benefited,” Silver said. “The speculative investors came back in droves and, as a consequence, billions were raised for exploration-stage projects.”
Just as quickly, the fallout from Bre-X put those same projects in jeopardy.
Basically, cynicism has replaced optimism,” Silver said. “There’s a general loss of confidence in minerals.” Silver listed the losses:
Canadian mining lost $5 billion in that country’s dollars because of the scandal. Reputations of well-respected brokerage firms were tarnished. Analysts’ professional judgment was called into question and scores of small investors who borrowed against homes and businesses to buy shares of Bre-X had major losses. Traditionally safe financial vehicles were also damaged. The Ontario Teachers Pension Plan lost $100 million when Bre-X collapsed.
On the plus side, mining firms increased due diligence on speculative projects, in part to insulate themselves from shareholder suits.
Mining consultants, meanwhile, emerged with more business than ever, according to Silver. “I know I’ve benefitted from it,” he said. “I’m looking for the next Bre-X.”
, DataTimes