Another scam, anyone?

THE success of the Whitehaven Coal hoax will probably encourage other pranksters to sharpen their pencils. The Metal Detective has beaten them to the punch with his secret list of upcoming malicious missives. The Metal Detective, By Stephen Bell
Another scam, anyone? Another scam, anyone? Another scam, anyone? Another scam, anyone? Another scam, anyone?

 

Stephen Bell

We shouldn’t be surprised that some media outlets and investors were sucked in by the fake ANZ statement last week that caused a near-10% plunge in Whitehaven Coal’s share price.

“Don’t always believe what you read in a press release” seems too obvious a warning to spell out, but this first lesson of Journalism 101 is often glossed over these days by time-poor hacks harassed by the demands of the 24-hour news cycle.

Thankfully, Whitehaven’s woes were nipped in the bud pretty quickly, albeit after significant embarrassment to the coal company, the bank, and several news organisations.

Sometimes, hoaxes aren’t so easy to debunk.

MD’ ageing mind wanders back to the 1997 Bre-X scandal, in which the late Filipino geologist Michael de Guzman decided to spice up drill core from the company’s Busang gold prospect in Indonesia with shavings from his wedding ring.

The Bre-X hoax ran for years and only started to unravel after de Guzman jumped to his death from a helicopter flying over the Indonesian jungle.

It caused billions of dollars of losses – mostly in Canada, where Bre-X was listed – a share market meltdown and severe embarrassment to the many analysts who swallowed the elaborate salting fraud, hook line and sinker.

As far as pranks go, Bre-X sets the gold standard.

Whitehaven may go down as a footnote in the history of mining scams, being more of a targeted media stunt to garner publicity for a New South Wales anti-coal campaigner.

Nevertheless, it was a salient reminder to all of us to keep out eyes peeled for deception and skulduggery in the rocks universe.

And it got MD thinking about what other press releases might look suspicious if they landed on his desk:

“CITIC Pacific ships magnetite concentrate to China.” This one does sounds half plausible, as CITIC promised in November it would ship its first product early in 2013. But after half-a-decade of missed deadlines, messy contractor disputes, cost blowouts, and a legal stoush with Clive Palmer’s Mineralogy over royalties, MD would like to see a time-stamped video of a fully laden ship leaving Cape Preston before believing this one.

“Wayne Swan revokes mining tax; acknowledges impost was a waste of time for all concerned”. This one has a nice ring to it, but does sound a bit out of character for the Swanster. A second sentence, along the lines of “Treasurer quits to take up consultancy role with either A: Clive Palmer, B: Gina Rinehart, C: FMG”, would definitely consign it to the realms of fiction.

“Gina Rinehart to become peak-time news reader at Channel 10”. Once again, sounds slightly plausible, given Gina’s part-ownership of the network and the chummy Channel 10 interview in November that helped publicise her new book. MD would love this one to be true. Imagine Gina’s first day behind the desk: “There wasn’t much news around today. But let me tell you about a great iron ore project in the Pilbara …

“Fortescue Metals Group sells everything – including chairman”. Looks suspicious, given that FMG’s asset sale program is not as urgent these days after the stunning rebound in spot iron prices over the past month or so. The giveaway would be the second line: “Forrest to replace Kloppers as BHP CEO.”

“Mining and Infrastructure Project Finished Ahead of Time, Under Budget”. This one looks odd. It reads like a headline from 10 years ago when the China boom was just a twinkle in Twiggy’s eye. Mind you, Rio Tinto seems to be hinting that its 353 Pilbara expansion will make this headline come true in 2015. We wait with baited breath.

“BHP says outer harbour to be revived as luxury floating hotel”. Vaguely plausible. Especially if the press release went on to quote Marius Kloppers: “It’s cheaper to build than an iron ore port, has a smaller environmental footprint and neatly fits into our commitment to invest in tier-one tourism assets”

“Paladin chief quits; takes up starring role in Hollywood movie”. Sounds like a suspiciously abrupt career change for the grandfather of Australia’s uranium industry. But you couldn’t entirely rule it out. Borshoff is a consummate showman, as he proved last July when he held an Australian Uranium Conference audience spellbound by comparing the supply cycle to a series of raunchy erotic adventures.

The list of potential hoaxes seems worryingly long, when you think about it.

Most of these read like fairy tales in the cold light of day.

Then again, so does the idea of a bank shouting to the world that it has pulled a $1.2 billion loan from one of its mining clients to protect the environment.

This article first appeared in ILN's sister publication MiningNews.net.

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