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HARRIMAN HOUSE LTD
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First published in Great Britain in 2012
Copyright © Michael Coulson
The right of Michael Coulson to be identified as the Author has been asserted in accordance with the Copyright, Design and Patents Act 1988.
ISBN: 978-0-85719-266-0
British Library Cataloguing in Publication Data
A CIP catalogue record for this book can be obtained from the British Library.
All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior written consent of the Publisher.
No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, or by the employer(s) of the Author.
This book is dedicated to my grandmother, Alice, and my mother, Vera, whose enthusiasm as private investors for the mining share market was the spur that led ultimately to the writing of this history.
About the author
Born in 1945 Michael Coulson has been associated with the mining sector for over 30 years, although his university background is in economics where he holds a BSc from the University of London. He first worked as a graduate trainee on the legendary mining desk at James Capel in 1970, for many years the leading mining stockbroker in the City. After that he became a mining salesman at Sterling & Co and also developed the firm’s research coverage of the sector. In 1973 he joined Fielding Newson-Smith (later to become NatWest Markets) as a gold mining analyst where he began a long association with the South African gold mining industry. Two years later he became senior mining analyst at L Messel (latterly Lehman Bros) where he started to produce an annual gold review which he published every year until 1991. In 1979 he moved to Panmure Gordon and in 1982 he left and joined Phillips & Drew (UBS) with the task of establishing the firm in the mining market.
After a successful four years there, where two years running he was voted No 2 gold analyst in the Extel Analysts Survey, he moved to Kitcat & Aitken where he set up a highly regarded integrated mining desk. In 1990 K&A’s Canadian owners closed the firm and he was briefly with County NatWest. The following year he set up a small mining team at Durlacher, but in 1992 was back in the mainstream at Credit Lyonnais Laing where he was a salesman/analyst on the firm’s specialist mining team and established an expertise in African shares. He was then approached by South African bank, Nedcor, to join a start-up broking operation the bank was establishing in London. This operation was closed in 1997 and the following year he joined Paribas to head its Global Mining Team.
He left Paribas in 2000 following the completion of the merger with BNP. Since then he has been doing independent research, mainly on a commissioned basis, primarily for small UK brokers lacking mining expertise. He also wrote An Insider’s Guide to the Mining Sector for Harriman House, which has run to two editions and has been translated into Chinese. He is currently a non-executive director of City Natural Resources High Yield Trust.
Michael lives in Wandsworth with his wife and has three daughters and two granddaughters. He has a lifelong passion for cricket and football and as befits a veteran miner, albeit of the armchair variety, also enjoys a glass or two of wine as he contemplates strategies and projects for the future.
Foreword
If men could learn from history, the English poet and philosopher Coleridge exclaimed, what lessons it might teach us. There is certainly much in Michael Coulson’s magisterial history of mining that will be of inestimable value to anyone with an interest in this industry that touches all our lives. Equally importantly, by charting mining’s crucial role in the rise of civilisation and economic growth, it stands as a salutary corrective to those who would portray miners as rapacious plunderers of the earth and exploiters of its people.
Not that the industry’s conduct has always or universally been impeccable, of course: over the centuries it has hosted perhaps more than its fair share of rogues and charlatans, drawn by the prospect of instant riches. As Michael explains in this book, however, mining has been responsive to societal change, and I think there is now a widespread acceptance within the industry that heedless self-interest is not only morally wrong but bad for business. This is particularly true in those developing regions where so much of the world’s remaining resources are stored.
I first met Michael some 25 years ago when I was still working in the platinum industry in South Africa. Since then I have come to know him as an especially astute analyst, incisive in investigation, energetic in action and forthright in holding managements to account when he deemed this necessary. As the two books he has published to date attest, he is also a gifted scholar, and this combination of qualities makes him one of a rare breed which the industry sadly no longer produces.
The History of Mining appears at a time when the world is a turbulent place, rocked by conflicts, the resurgence of a nuclear threat, the near-collapse of the global banking system and the staggering debt burdens on its once key economies. Meanwhile, the rise of powerful new emerging-market economies has driven a decade-long bull run in commodities. Amid this confusion, we look to the past for lessons and signs of what the future might hold. After all, if you don’t know where you’ve come from, how will you know where you should be going? Michael’s timely book answers the first part of that conundrum and points the way for the road ahead.
Mark Bristow, Chief Executive, Randgold Resources
London, September 2012
Acknowledgements
Writing a history of mining is tantamount to trying to judge the length of a piece of string. What does one include; what does one leave out; has one said enough about this or too much about that? And what sources does one use? Does one concentrate on familiar, conventional sources or try to root out more original material? In the end the internet as a source has provided a number of gems, which I hope both enliven and enrich the narrative, and it is only right, at the outset, that I should acknowledge the help I received from this powerful tool.
It is at this stage that the author thanks all those who have given direct assistance in the writing of the book, and my thanks to those who provided invaluable help are below. From the mining industry I am particularly grateful to Mary Magafakis at BHP Billiton and to BHP Billiton itself for their help and for permission to use images from BHP’s extensive photo archive, and to Claire Carr on behalf of Randgold Resources for her assistance, and particularly to Randgold’s CEO, Mark Bristow, for agreeing to write a most generous foreword.
I must also thank my wife, Hilary, for her sterling work in preparing the photos used in the book and also for the use of a couple of her own photos; my daughter, Lisa, made a valuable contribution here as well. I also want to thank Stephen Eckett at Harriman House for his encouragement in getting the project off the ground and to his colleague Craig Pearce who laboured on the text and suggested many improvements which have contributed to making the narrative both tighter and more readable. Also thanks are due to Nick Read at Harriman for his work on the photos. Unfortunately I was unable to call on