End of the beginning

“This is not the end. It is not even the beginning of the end. But it is perhaps, the end of the beginning.” – Winston Churchill
End of the beginning End of the beginning End of the beginning End of the beginning End of the beginning

Staff reporter

Hmm, well that didn’t go entirely to plan, in as much as there actually was a plan.

I preferred to think of it as more of a loosely formed notion, that if enough of us stomped our feet the EU might take notice and start a much-needed reformation process and stop trying to force absolute homogenisation upon people who rather like being a bit different.

We were, however, meant to lose, with dignity, something the British have a knack for. This would have allowed us to continue to slag off the EU at polite dinner parties, but still holiday in France. A win-win for all.

Alas it seems a few too many of us had the same idea – in hindsight we really should have coordinated this a bit better.

But ah well, what’s done is done, so let’s ‘Keep calm and carry on’ as the old poster tells us. The sun rose in the east the morning after, and we did make the front page of pretty much every paper on the planet, so it was nice to be noticed.

For the moment, however, the world is wallowing in a frenzy of panic and recrimination as, despite a bit of advanced warning, no one had actually considered the Brexit camp might win. The fact more than half of the country actually did what they said they were going to do seems to have taken everyone by surprise and will keep pollsters happy for years figuring out where it all went wrong. 

Apparently we Brexiteers are little more than ill-informed, provincial, xenophobes whose opinions are so ludicrous we should never have been given the vote in the first place. 

I have pointed out to a few frothing Europhiles that these comments sort of prove the point we have been making all along about the EU, but apparently now is not the time for irony. People need to vent, and as with all complex events that unintelligent people get hysterical about, it is best to sit back and let them get it out of their system.

What I do then point out, however, is being purely advisory, the vote has no more legal weight than an opinion poll (albeit a very expensive one) and so it is more about the process than the outcome.  

Politically of course, it is very different, but as long as Boris doesn’t accidently press the ‘Article 50 button’ thinking he is dialling for a takeaway Vindaloo, then things will settle. The point of the whole exercise was to be taken seriously, and that has certainly worked a treat.

The Brussels elite have now suddenly realised they are not as important or as popular as they thought. Long bottled-up fury at their moral superiority has now erupted all over the continent and the little dears are quickly arriving at the appalling awareness that Britain is the least of their worries.  

Britain has said what everyone else is thinking, and having thrown its hissy fit, can to some degree now sit back as Europe takes a long hard look at itself down the barrel of its own gun. If there is sufficient change, then the UK might hold another referendum and decide to stay, or just save some money and ignore the first one altogether. Or it can still leave.

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"Rio Tinto would no doubt love a mulligan on its Alcan purchase"

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And in the meantime, the Labour Party rips itself to shreds, making it all sound like some James Bond plot for world domination with Boris as the arch villain – and he does look the part.

In the meantime, yes the markets have tanked, but that’s just froth and bubble stemming from uncertainty and from much covering of arses by those who bet on the wrong outcome. Back in the real world however, life goes on. 

The world is an interconnected place and cannot suddenly stop trading. Gangsters, Oligarchs and Asian Billionaires the world over will still want black Range Rovers and as Britain is by far Europe’s largest market, continental purveyors of stuff will still be knocking the door down to sell it.  

But Britain can buy and sell things elsewhere as it has always done – yes we like BMWs and Volkswagens, but French and Italian cars are rubbish so no loss there. French food and wine is okay, but the UK makes a half-decent domestic bubbly these days, and no doubt Australia will be loyal to the Mother Country and send emergency supplies of beef and decent claret to tide us through winter.

The result then, was not so much a decision to leave, as a decision to start talking seriously about leaving. It does seem a rather long-winded way to go about it, but then that’s politics, and given the more direct alternative is a good war, I can understand the concern. 

But politicians hate commitment, and so like all good political deals, the back door is always left open just a bit in case things don’t turn out the way we thought. There is something in that.

As far as our dear mining industry is concerned however, I can’t see much immediate impact. They will all still buy metals in US dollars, and BHP, Rio Tinto, Glencore, or indeed any London-listed miner of any significance won’t be moving themselves or their listing to Frankfurt any time soon – there is simply too much entrenched history in London.  

Even the juniors, while not as strong as they once were, have no compelling reason to shift. At its roots, mining is still largely an Anglo activity. 

But it does provide a nice alternative view of how big deals should be made – slowly, carefully and with lots of options.

Wouldn’t the world be a different place if the miners always left an out? Rio Tinto would no doubt love a mulligan on its Alcan purchase, BHP on its gas and phosphate deals, Anglo on its silly Brazilian iron ore frolic and Vale on just about every deal it has ever done outside of its home country.

As much as I hate to say it, politicians are better at this and could teach us a few things.

The difference here is that between the event, and the consequences.

In the real world, in politics as is mining, it is the consequences that are important – what happens a few years down the line in whether or not we descend into war, or make money from our mine.  

And yet, in industry, we seem to focus only on the deal – because that’s what the markets demand.

Markets only care about the event – that defined moment in time around which trades can be made. What happens later is of no interest as the smart money has since skipped off leaving it to other schmucks to deal with.

And so it does make me wonder then, why we insist on letting the markets dictate? I can’t think of any major mining transaction or project ever, where any of the parties had the faintest idea of the outcome and yet we dance to their tune.  

We produce lots of detailed spreadsheets, but these are just made up, confusing precision with accuracy, and we then just hope there is enough slop in the numbers to make up for the inevitable stuff-ups.

I don’t expect a change, but maybe with Boris in charge, we might see a few more back doors left open.

*View from the West End can be seen each week, exclusively, on www.mining-journal.com