SA swoons for R13bn platinum mine promoter Robert Friedland; Steve Jobs warned he’s a con man, charlatan

Mining entrepreneur Robert Friedland is, well, interesting. Listed by Forbes magazine as a billionaire with $1.15bn net worth, Ivanhoe Mining’s founder attracts controversy like horses do flies. A brief Google search uncovers a two year jail sentence for drug dealing; an early US project still ranked the country’s worst contaminator; and, more recently, news of his high ranking executives arrested for corruption in Mongolia. After getting kicked out of his Mongolian operation, Turquoise Hill Resources, by Rio Tinto, Friedland is now focusing on Africa. He has been warmly embraced in the DRC and in South Africa, judging by the reception he received at last week’s Joburg Mining Indaba. But before he passed away, Apple’s creator Steve Jobs warned against listening to Friedland, nce a fellow student at Reed University, now the world’s premier promoter of mining projects. Fascinating material for this week’s UNDICTATED column written weekly for the Business Day newspaper. – AH    

By Alec Hogg*

Steve book
The Steve Jobs biography by Walter Isaacson – a masterpiece, but not Robert Friedland’s favourite book.

Back in mid-2006 just ahead of a hedge fund conference on the French Riviera, I found myself in a full day workshop. The sponsor had figured, correctly, some pre-event education would help.

A slightly overweight, foul-mouthed, opinionated man dressed all in black hosted the workshop. A New Yorker, he swung verbal roundhouses at every economist of any repute. Especially Nobel Prize winners. He was fascinating. More so because his arguments seemed to make sense.

During the tea break, I suggested to another work-shopper our presenter was pretty good. His face contorted in horror. Pretty good, he spat. You imbecile. We’re in the presence of greatness? You’ve never heard of Nassim Taleb? Who let you in?

Oops.

Unbeknown to this naïve South African, Taleb’s best-selling Fooled by Randomness had given him guru status among “hedgies”. Two years later The Black Swan accurately predicted the Global Financial Crisis. Shooting Taleb to international fame.

Last week delivered another Taleb moment.

During a briefing ahead of the Joburg Mining Indaba, the organisers chatted about how best to use their star attraction, billionaire Canadian mining entrepreneur Robert Friedland. They eventually decided he’d talk at lunch on the opening day. That would guarantee the biggest audience and probably sell some extra tickets.

The lesson from Cannes was well learnt. Having never heard of Friedland, I shut up. But, intrigued, arrived early, found a good seat and waited.

About an hour later Friedland had explained how his Ivanhoe Mining had uncovered two of the greatest minerals deposits on earth. We heard, too, the only way to make proper money in mining was to actually find something. Like he had. That the flatter the reef, the better. And how only an idiot thinks the commodity super-cycle is over.

Most of all, we were told by Friedland that his third great discovery is right here in the good old RSA. The mighty Platreef Project, only 280km north east of where we were sitting. A massive mine-in-waiting destined to become the biggest platinum producer on earth.

But wait, there was more.


This will be mining 21st century style. No more rock drill operators sweating through purgatory. Platreef employees will be comfortably housed, properly paid, highly trained and work in air-conditioned cabins.

Local communities will be well rewarded for the good fortune of living above the reef. They will own 26% of the project, spread among 300 000 people in 17 local communities. A gift from Friedland’s Ivanhoe Mining worth billions as a Japanese consortium had already paid $300m for its 10%.

Those wily Japanese, the mine’s promoter shared, did so because they see what’s coming. They know demand for platinum is about to skyrocket. Toyota will soon launch the world’s first fuel cell cars and the Japanese Government is introduce new high-speed trains. Both need plenty of platinum. Open Sesame.

How do the rest of us participate in this opportunity of a lifetime? Friedland sensed the question before anyone asked. So told us Ivanhoe Mining would soon secure a secondary listing on the JSE.

The audience applauded. Smiles everywhere, even from the media. The next day Johannesburg was emblazoned with newspaper banners proclaiming, “New platinum listing for JSE” and “Mechanised mining arrives in SA”.

But something niggled.

During the introduction, the investment banker afforded that honour mentioned that when they were at Reed University together, Robert Friedland mentored the late Steve Jobs. Apple’s founder. Creator of the world’s most valuable company, give or take a few dollars in the oil price. And the subject of a fine biography by Walter Isaacson.

So I went home, pulled down my tome and checked. And, yes, Robert Friedland certainly appears. Starting on page 37 with how Jobs walked into the room of a student who’d offered to buy his IBM typewriter. On discovering his buyer was having sex with a girlfriend, Jobs turned to leave. But Friedland, for it was he, said sit down, wait for us to finish.  “I thought it was kind of far out,” Jobs told his biographer. So he did.

Isaacson writes: “And thus began his relationship with Robert Friedland, one of the few people in Jobs’ life that were able to mesmerise him. He adopted some of Freidland’s characteristic traits and for a few years treated him like a guru – until he began to see him as a charlatan.”

A charlatan. Our Robert?

Isaacson tells us after meeting Friedland for drinks, he dropped Jobs an email mentioning the encounter. Jobs “telephoned me from California within an hour and warned me against listening to Friedland.”

The book continues: “He said that when Friedland was in trouble because of environmental damage caused by some of his mines, he had tried to contact Jobs to intervene with Bill Clinton, but Jobs had not responded.

“Robert always portrayed himself as a spiritual person, but he crossed the line from being charismatic to being a con man,” Jobs said. “It was a strange thing to have one of the spiritual people in your young life turn out to be, symbolically and in reality, a gold miner.” There it is. In bold print, on page 40.

Double oops. Friedland a mesmerising con artist?

Surely not the guy so respected among South Africans that, for a decade, the country’s likely future President, Cyril Ramaphosa served on Ivanhoe’s directorate. And former GoldFields CEO Ian Cockerill still does.

Why should we bother that Jobs warned not to believe what Friedland says? OK, so Jobs gave us iTunes, the iPhone, iPod, iPad and revolutionised personal computing. And while perhaps not loved, was respected by all. But Jobs never visited Joburg. Not publicly anyway. And certainly never promised us untold platinum riches, did he?

  • Alec Hogg is a writer and broadcaster. He founded Moneyweb and currently runs biznewz.com. This article appeared first in Hogg’s weekly column in Business Day. 
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