In the case of ConsMin, there are plenty of words being tossed around extolling the virtues of a merger, which it is alleged will catapult the company into the big league of global mining. But there is no real substance to the formal statements.
In the case of Fortescue, there are too few words from the company about the deaths of workers at a rail construction camp and whether other damage was suffered at its iron ore project during cyclone George.
Losing workers, whether direct employees or contractors, is never easy for any business, and everyone at Fortescue is no doubt now in grief.
But even while the grieving takes place over personal loss, there are other duties to fulfil, such as informing the owners of the business, the shareholders, about what is happening at their project.
All that Dryblower has seen from FMG is a 10-line statement lodged at the stock exchange last Friday confirming damage and injuries. That was followed by a passing reference today (Monday) in a newspaper report that the company’s chief executive, Andrew Forrest, was travelling and unavailable to comment.
Over time, there might be reasonable explanations for what’s happened. It is likely that Forrest was in Canada at the PDAC conference, and communication was difficult, though most businessmen do carry mobile telephones when they travel these days and are rarely out of touch with their office for long.
There is also the problem for FMG in assessing exactly what has happened to a project spread over a wide area. But three days after the event and someone at FMG must know more than the trickle of information reaching the media.
Dryblower’ interpretation of what he’s seeing at FMG is that the public relations practitioners have taken a firm grip on decision making at the company and they are advising that nothing be said until the heat goes out of the issue and FMG disappears from the front page.
In PR terms that’s not a bad tactic. But when you have police crawling all over the place, a CEO unavailable to comment, and threats of legal action from the family of a dead worker, then it really is time to say a bit more – and quickly.
At ConsMin, it’s a totally different case study in communication. Vast amounts of paper and words are being tossed around without actually saying anything.
Dryblower’ interpretation is that management at ConsMin either doesn’t know the full extent of the plans of its “merger” partner, or is waiting for its partner to take the lead and tell the world what’s afoot.
For non-followers of the ConsMin situation, a London-based private equity firm called Pallinghurst Resources is proposing a merger after which it would control 60% of ConsMin, with the new company then embarking on a growth strategy, which is claimed will lead to the creation of a business modelled on Billiton, Vedanta and Xstrata – and replace a void left in the Australian market by the takeovers of North, MIM, Normandy and WMC.
Fine sentiments and big names, but precisely what will be injected into ConsMin to achieve this remarkable transformation?
More importantly, what assets are proposed to be acquired, from whom, at what price, and when?
These are not minor matters, and the lack of clarity in what’s being proposed perhaps goes some way to explaining why investors are standing clear of the stock until more information is made available.
