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Sun, Nov 18, 2007 - Page 12 News List

New generation of miners strikes gold in Australia


Australian prospectors used to be grizzled old blokes who went off into the hills with their swag and a bottle of whisky, hoping to find a few nuggets of gold and strike it rich. But the astonishing resources boom in Australia's vast outback, which has turned the once-dowdy western capital of Perth into a glitzy city of millionaires, has changed all that.

Nowadays, miners are tycoons who wear designer suits, live in mansions and travel by helicopter or private plane seeking vast fields of iron ore and other minerals. There are countless members of this new class of entrepreneurs who have profited from the boom, including one who used to sell fish on the beach but recently sold his firm for A$3.1 billion (US$2.76 billion).

Fueled by China's rapid rate of urbanization and demand from other Asian markets, mining companies all across the country are struggling to keep up with orders, expanding at breakneck speed and seeking new deposits.

Last week's A$60 billion bid by the world's largest mining company, BHP Billiton, for its rival, Rio Tinto, has crystalized the sense of urgency as businesses seek to cash in on the good times.

There is considerable expansion in South Australia, Queensland and the Northern Territory, but the most rapid growth continues to be in Western Australia and particularly in the Pilbara region, where the rich, red earth is bursting with minerals.

The Hamersley Range alone has been estimated to contain 30 billion tonnes of iron ore, enough to supply the world's steelmakers for decades.

Both BHP and Rio Tinto have huge presences in the Pilbara and are pouring billions of dollars into upgrading road, railways and ports for their iron-ore concessions.

There are also vast deposits of oil and liquefied natural gas in the region. Although the law of supply and demand will eventually bring the resources boom to an end, or at least to a plateau, it remains a super-charged market for now. Investors are rushing to join in and the Japanese, who have been partnering Australian companies for decades, are now up against the Chinese and others such as the Russian steel billionaire Alisher Usmanov and the Ukrainian billionaire Gennadiy Bogolyubov.

Tony Poli, a former accountant, is a prime example of the emerging breed of miner. Sitting in the boardroom of his company's plush, air-conditioned offices in the south of Perth, he is turning over a large chunk of iron ore in his hands, the source of much of his wealth.

Poli's company, Aquila Resources, has coal and iron ore assets of A$1.2 billion and Poli's 30 percent stake in the company means he is worth about A$365 million.

"It might just be some grazing land or a rocky environment, but then you come back 12 months later and there is a hole in the ground and a huge plant bringing the stuff to the surface. That's the thrill," he says.

Michael Kiernan is another mining entrepreneur riding the crest of the boom. A larger than life character, his office in a western suburb of Perth has an outsized desk, leather chesterfield chairs and a variety of model lorries on display.

"China is a hungry dragon and west Australia is feeding it," he says. Territory Resources, Kiernan's group of six public companies, has a combined market value of A$1.5 billion and mines iron ore, mineral sands, copper and vanadium.

Yet another, Kerry Harmanis, who used to sell fish from a van he operated on a beach in Perth 20 years ago, has just sold his nickel mining company, Jubilee Mines, to Xstrata for A$3.1 billion, netting him A$500 million.

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