SA Mines and Energy Journal : November-December 2011
OCTOBER/NOVEMBER 2011 SA MINES & ENERGY JOURNAL PROFILE "I was doing a University of Adelaide degree and needed another subject. I chose geology. I ended up majoring in the subject and won a position at Broken Hill South, where I was mentored by Basil Lewis, " he said. He spent the next 50 years in the industry, witnessing major events along the way. The SA company Samin, formed with his former boss and associates from Broken Hill South, was performing technical work for the nickel company Poseidon during what became known as "the Poseidon bubble" -- a mining boom that remains the most memorable of his life. Mr Roberts directed drilling of the nickel deposit and was responsible for determining its size. Poseidon shares rocketed to $280, fuelled by a long-running strike in the world's major nickel- producing mines of Canada, huge global demand and "imaginative" brokers in London talking up the company's nickel find in Windarra, in WA's shire of Laverton. Investors were caught up in a mood of euphoria which swept the world. "It was an era of unbelievable goings-on. You only had to be somewhere near the Poseidon find for your shares to take off. " Poseidon crashed in February 1970 and eventually delisted in 1976. In 1974 the Rae Committee handed down its report on the Poseidon bubble, in which it documented numerous cases of improper trade practices. It recommended changes to the regulation of stockmarkets, leading to Australia's national companies and securities legislation While booms have come and gone since, it is the memory of the Poseidon bubble that lingers. "I've seen many ups and downs but when you're talking a real crazy, runaway boom the Poseidon one still takes the cake. "It was a unique set of circumstances that are much less likely to happen these days because there are different rules and regulations in place. " In 1977, Mr Roberts was made the Australian manager of Homestake Australia Limited, the Australian arm of Homestake Mining Company, the oldest listed company on the New York Stock Exchange. At the time, Homestake had gold interests in Kalgoorlie and the NT and John was charged with extending its interests in Australia and New Zealand. During his 16 years at the helm of its Australian subsidiary, Homestake discovered gold at Fortnum near Meekatharra Iin WA and the Macraes gold deposit in New Zealand. He shifted the company's headquarters to Adelaide and took its gold production from less than 40,000 ounces a year to more than 360,000 ounces a year during his reign. In 1987, he was charged with organizing the selling of 20 per cent of Homestake's Australian interests via a capital raising of 100 million $2.30 shares. The market crashed two days before it listed in October. "It was one of the more interesting days of my life; standing on the stock exchange floor with the Premier and others, knowing your shares were going to list below their issue price, " Mr Roberts said. "It really is just paper money because we got the shares back to $2.30 within a year. " Mr Roberts said the most rewarding episode in his long career was overseeing the consolidation of gold interests at Kalgoorlie. "The most satisfying was the unification of various operations at Kalgoorlie in the 1980s to form Kalgoorlie Consolidated Gold Mines which facilitated development of the Superpit. " The process of negotiating the agreements to facilitate the consolidation under one management took about six months. Companies involved in the negotiations included Alan Bond's Bond International Gold, and Normandy's Kalgoorlie gold interests. But it is making discoveries that Mr Roberts says remains the most exciting aspect of mining, although bringing them to production is more difficult these days. "Mining is probably the toughest business on earth. It's extremely high risk. "When I started in the business the hardest part of the job was finding an ore body. In many respects, now that's the easiest part. It's putting it into production that is difficult because of all the permits required -- not that I would suggest we should not have them, dealing with the vagaries of commodity markets that go up and down and of the ore deposit itself. All of that is why commodities are valuable: they're hard to find and expensive to develop. " Mr Roberts is no stranger to company boards, having chaired Nord Pacific, Ballarat Gold and Australian Resources. He currently chairs two boards. Rum Jungle Resources -- which has made phosphate and potash discoveries in the NT -- and the other, Adelaide- based Mithril Resources, has made a significant low-grade copper discovery, also in the NT. These days Mr Roberts also contributes to mining industry bodies including the Resources Industry Development Board, RESA (Resources and Energy Skills Alliance), RESIC (Resources and Energy Sector Infrastructure Council) and SAMPEG (SA Mining and Petroleum Expert Group). He is chair of the Industry Liaison Committee of the Adelaide University's geology and geophysics faculty, which liaises between the worlds of academia and industry, contributing to such things as curricula and helping raise funds for field trips. Mr Roberts has always been involved in promoting the industry and has high praise for the SA government's PACE program, introduced in 2004. "It is extremely innovative and one of the best investments I've ever seen -- it's been more successful than I ever dreamt it could have been, " he said. An avid reader, he plays bridge weekly, getting tips from his 'Grand Master' wife, Judith. "I retired in 1993 and, while I work every day, now there's a big difference. When you're in management you're close to being a slave. What I do now is set my own timetable -- or at least I kid myself I do. " Over the years, John has seen the steady growth of resources - now the State's main export earner, representing 36 per cent of total exports in 2010. "Mining is an industry that creates new money. A discovery in the bush, to all intents and purposes, didn't exist until it was discovered so it's an industry that creates new wealth and value that otherwise wasn't there. "When you find something like Olympic Dam - that's suddenly billions of dollars worth of value that you didn't have yesterday. " John says there are plenty of mineral discoveries still to be made in SA, albeit deeper underground, and there is an impressive crop of students coming through to make them. "The kids these days are just so bright. If anybody's concerned about the kids of today not being leaders of tomorrow - forget it. We're in good hands, " he says. It is making discoveries that Mr Roberts says remains the most exciting aspect of mining, although bringing them to production is more di cult these days.