The Bidding War continues , Oct...
 The Bidding War, August 2000
 Contacts for Noranda and Billiton

    Link to: Map of Billiton mining operations
    For analyst comments on the proposed takeover of Rio Algom:
    http://www.noranda.ca/offer/comments.htm
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Gulliver File on Gencor/Billiton http://www.sea-us.org.au/gulliver/gencor.html

 

Letters to Billiton

RE: Nader calls on Billiton to drop Crandon mine

November 1, 2000
From: Gonsalves, Marc (BIS)

Response from Billiton 12th October 2000 Mr Tom Wilson

Headwaters Group of Northern Thunder
PO Box 124
Fairchild, WI 54741 USA

Dear Mr. Wilson,

Thank you for your letter of 1st October regarding the Crandon project in Wisconsin. I have taken careful note of your comments, and also of your concluding advice. You will appreciate that we are now only at the stage of completing the Rio Algom acquisition. Once that has been done, we shall undertake a detailed appraisal of various assets, including the Crandon project. We shall keep in mind your comments, and those made by other interested parties, as we go through that process.

In the meantime, I would like to assure you that Billiton is committed to developing the projects in accordance with legislative requirements, and only after thorough environmental impact studies to the highest international standards. Naturally we wish to develop projects which have strong community support, and therefore we seek to engage with interested parties on the concerns that they may have.

I hope this is helpful, and a useful base for future dialogue.

Yours sincerely,

BRIAN GILBERTSON

Reply from Billiton to Vienna supporter

To: 'M�llner Thomas' muellner@edv1.boku.ac.at
Society for Threatened Peoples, Austria
Crandon mine
October 6, 2000

Dear Mr Muellner

Thank you for your email. I have received numerous similar emails, setting out the same points you have made.

At this stage, Billiton's offer is not yet concluded. Even if it is successful, as you would no doubt expect, Billiton as a responsible company, will take appropriate time to come to decisions on the various assets obtained with Rio Algom.

In the interim, I have forwarded your email to the appropriate personnel in Billiton who will be responsible for any decisions made in respect of Crandon.

Subject: Rio Algom's doomed Wisconsin plans

To: Marc.Gonsalves@bhpbilliton.com
      agentil@billiton.com
      mcampbell@billiton.co.za

Aug. 25, 2000

Dear Billiton,

The takeover rumors surrounding Rio Algom have citizens of Wisconsin very surprised. The company's proposed Crandon zinc-copper sulfide mine has run into a firestorm of protest in our environmentally conscious state. The proposed mine is upstream from the pristine Wolf River and the wild rice beds of the Mole Lake Ojibwe. Opposition to the project has united Native American nations with sportfishing groups, environmentalists with unionists, and local rural residents with urban students.

The state has passed moratorium legislation and met company groundwater models with skepticism; a legislative bill is pendng to prohibit cyanide use. The township of Nashville has also rescinded a Local Agreement with the company, and local tribes Mole Lake and Potawatomi have strengthened their reservation environmental regulations using federal laws. Rio Algom's Crandon mine looks increasingly like a very risky investment. Wisconsin scores the lowest of any U.S. state on the Fraser Institute ranking of openness to mining. Noranda and BHP have already dropped mining plans here; Exxon and Phelps- Dodge already pulled out the Crandon project.

We would suggest that any prospective buyer of Rio Algom not buy the firm's assurances that the Crandon project is a done deal, and do its own independent Web research. Company shareholders can likewise visit www.treatyland.com and www.nocrandonmine.com

RE: Rio Algom's doomed Wisconsin plans
Date: Fri, 25 Aug 2000 20:31:49 +0100
From: "Gonsalves, Marc (BIS)"
Marc.Gonsalves@bhpbilliton.com

Dear Zoltan,

Thank you for your email message, and the points you have raised.

Clearly, this is very early days in respect of the announcement made this morning. However, I have forwarded your message to the various personnel in Billiton who are best placed to look into the issues you discuss.

Regards

Marc

Marc Gonsalves
Senior Manager Corporate Affairs
Billiton Plc
Tel: +44 20 7747-3956, Fax: +44 20 7747-3903
Mobile: +44 7768 264 950, Email: Marc.Gonsalves@bhpbilliton.com
Website: http://www.billiton.com

Subject: Crandon,
Date: Wed, 30 Aug 2000 10:39:50 +0100
From: "Routledge, Eddie (BIS)"
ERoutledge@BILLITON.COM



Dear Zoltan,

Your message has been passed to me by Marc Gonsalves.

I can only re-iterate what has been said at this point -that it is too soon to know what view Billiton will take on the future of the Crandon proposal. I can only give you assurance that any operation we undertake is only after a process involving stakeholder consultation,with relevant views taken into consideration. We have an excellent reputation, and intend to keep it that way. We work to International best practice standards, and are innovators of technological processes aimed at reducing environmental impacts in many stages of production. like yourself I will be following developments very closely,

Regards,

Ed Routledge,
HSE manager, London.

Re: Crandon
Date: Wed, 30 Aug 2000 16:35:09 -0500
From: Zoltan Grossman
To: eroutledge@billiton.com


Dear Mr. Routledge,

Thank you for your prompt reply to our query. I want to clarify, however, the essence of our message. We were not expressing our concern that your company operate the Crandon mine in an environmentally friendly way. We were merely issuing a polite advisory that the mine will not be allowed to proceed in our state, and that you should cut your losses now before you follow the path of other companies before you. Simply look up Crandon mine or Rio Algom on the Web, and you will see the widespread extent of the controversy.

We have heard promises from three companies in the past 25 years--Exxon, Phelps-Dodge, and Rio Algom-- that the mine can be operated safely. But the science showed us years ago that a sulfide mine cannot operate safely in such a sensitive area. One Exxon biologist even admitted that "a more difficult place to mine" could not be found. Even the Department of Natural Resources is challenging Rio Algom's failed groundwater flow model.

The Crandon site is at the headwaters of the Wolf River Class I trout stream, which the Federation of Fly Fishermen recently designated the #1 endangered river in the U.S. It is also adjacent to wetlands and Indian wild rice beds. This is all in a pristine area that is dependent on the state's tourism industry (whichgenerates $8 billion annually). The Crandon controversy does not pit environmentalists against mining, but one industry against another industry. We invite you to take the following factors into account:

*Mining companies have spent millions of dollars so far just to get the Crandon mine permitted. Exxon spent $2 million on lobbying and PR in 1997 alone--unsuccessfully. Phelps-Dodge and later Exxon Minerals gave up on the project. Noranda and BHP have given up on other projects in the same area. The word spreading at international industry conferences is that "Wisconsin is Trouble."

*North American Mining (Aug/Sept 1998) stated: "The increasingly sophisticated political maneuvering by environmental special interest groups have made permitting a mine in Wisconsin an impossibility." Other international mining journals express worry about the contagious spread of anti-mining sentiment from Wisconsin "cyberbarbarians" through the Internet, and place Wisconsin together with Canada, Australia, and West Papua (Indonesia) as the main global battlegrounds for the industry's future.

*A new corporate initiative in Wisconsin would have a terrible sense of timing. The recent anti-corporate protests in Seattle, Philadelphia, Los Angeles and elsewhere have shifted U.S. political thinking. In Wisconsin, the ground is already historically fertile for populist rural movements and Progressive third-party politics. We have recently seen a resurgence of farmers' movements directed against mining, a proposed transmission line, and a Perrier springwater pumping plan. The message of Seattle is quickly reaching our Heartland.

*The federal government has recently been bending to public prerssure and buying mines in environemntally or culturally sensitive locations. Noranda backed out of the mine near Yellowstone in 1995, and just this week a pumice mine in an Arizona sacred area was bought out. The state is also buying up natural areas to protect them, and tribes are buying lands to recover lost territory.

*In 1996, an indigenous warrior group blockaded train tracks across the Bad River Reservation to stop acid shipments to the White Pine mine in Michigan. Not only did the nonviolent blockade stop the acid solution project, but Inmet was forced to abandon the mine for good. This was an obscure mine that did not directly affect the reservation or the state, but the Wisconsin movement shut it down anyway. We can only imagine what would happen if the famous Crandon mine is permitted; perhaps Wolf Blitzer of CNN will be paying us a visit......

If you choose to ignore our friendly advisory, well, that's your business! See you on CNN.

Cheers,

Zoltan

The Wisconsin movement for a sulfide mining moratorium and against the proposed Crandon mine may appear to have come out of nowhere, but it has actually been growing in northern Wisconsin for over two decades. In 1975, Exxon discovered the large Crandon zinc-copper sulfide deposit in Forest County, one mile upstream from the Mole Lake Chippewa Reservation, five miles upstream from the Wolf River (which flows through the Menominee Reservation), and five miles downwind from the Potawatomi Reservation. A local movement slowly grew against the metallic sulfide mine proposal, which local resort owners and tribal members felt would eventually release sulfuric acids into the trout-rich Wolf River. Citing low metal prices, Exxon withdrew in 1986, only to return in 1992.

In the meantime, between 1986 and 1992, several dramatic changes took place in northern Wisconsin. First, a large movement against Chippewa treaty rights used harassment and violence to try and stop the Chippewa from spearfishing. Anti-treaty groups appealed to many white sportfishermen by portraying themselves as environmentalists, but were gradually exposed as simply racist, and not truly concerned with protecting the fish from real environmental threats. Second, local environmentalists and the Lac du Flambeau Chippewa managed to stop the Canadian firm Noranda from opening the Lynne zinc-silver mine near the Willow Flowage in Oneida County. Third, the Kennecott Corporation fought successfully to operate the Ladysmith copper-gold mine in Rusk County, next to the Flambeau River, in 1993-97--after 25 years of delays. Fourth, the Mole Lake Chippewa, Menominee, Potawatomi, Oneida, Mohican (Stockbridge-Munsee) and other Wisconsin tribes opened casinos, generating income that enabled them to better fight mining companies in the courts, and in the arena of public opinion.

Our group, the Midwest Treaty Network, was founded in 1989 as an alliance of Indian and non-Indian associations supporting Native American sovereignty (see the web site below). As the anti-treaty groups declined, we saw new opportunities to build bridges between Native nations, grassroots environmental groups, and sportfishing groups. We helped organize people to attend gatherings against the Lynne and Ladysmith mines in 1991, and in 1992-94 helped set up a series of meetings-- in Tomahawk, Lac du Flambeau, Ladysmith, and Mole Lake--to help build an alliance against mining companies on the frontlines. It was during this time that Rusk County activist Evelyn Churchill started proposing a moratorium on sulfide mining. In 1994, we sponsored a large rally in Madison, and co-sponsored (with the Indigenous Environmental Network) a Protect The Earth Gathering that drew 1,000 people to Mole Lake.

In 1995, the Network initiated the Wolf Watershed Educational Project (WWEP), which quickly mushroomed into a grassroots alliance of about 30 Native American, environmental, and sportfishing groups, and held monthly strategy meetings around the north. Out of those meetings came a Spring 1996 speaking tour up the Wolf River, and also the Wisconsin River, where Exxon was then proposing to dump its liquid mine wastes. The tour reached 22 communities and 1,100 people, and culminated with a rally of 1,000 in front of the company headquarters in Rhinelander. A 1997 tour around other parts of the state increased support for the Moratorium bill by then introduced into the Legislature.

Like the other tour, it stimulated the formation of local groups, local government resolutions, media coverage, and ties between established groups via the Internet. On the tours, many local citizens heard from Native American representatives for the first time in their lives. In 1999-2000, we sponsored a Schools Speaking Tour that culminated in a large Capitol rally uniting opponents of corporate mine, water and power projects. Opposition to the Crandon project alone has united American Indian nations with sportfishing groups, environmentalists with unionists, and local rural residents with urban students.

The mining companies responded to this and other grassroots campaigns with newspaper ads, radio ads, a $1 million blitz of TV ads, and a $1 million lobbying effort. Nevertheless, in March 1998, the Legislature passed the moratorium bill after initially successful attempts to weaken it, and pro-mining Republican Governor Tommy Thompson was forced to sign the bill to ensure his re-election. By then, Exxon (like Phelps-Dodge did in 1992) had withdrawn from the project, which it turned over to its Toronto-based partner Rio Algom, Ltd. Noranda and BHP had pulled the plug on their Wisconsin mining plans as well. The moratorium did not stop the Crandon mine, but requires companies to show one example of a North American metallic sulfide mine (open for ten years and closed for ten years) that did not pollute the environment.

What happened? How did such a small grassroots movement using old- fashioned education and organizing manage to slow down the corporate Goliath?

*Part of the answer lies in Wisconsin's history of environmental ethics, as the home of John Muir, Aldo Leopold, and the Menominee Chief Oshkosh--environmentalism that is espoused by farmers, hunters, fishers, and other rural people.

*Part of the answer lies in the state's tradition of populist and progressive politics, with a healthy dose of mistrust of corporations and their collaborators in government.

*Part of the reason is in the determination of Wisconsin Native American nations to safeguard their treaty rights and sovereignty, including "Treaatment-As-State" (TAS) status under the federal Clean Air Act and Clean Water Act.

*Part of the answer also lies in a regional rebellion (regardless of race) by people in northern Wisconsin, which has been historically poorer than the south, and neglected by the state government in Madison.

Resource corporations are used dealing with a certain type of environmental movement. The stereotype of an environmental group is one made up largely of white, urban, upper middle class, and younger people--who go to protest harmful projects that are backed by rural communities for the jobs. The companies and its Wise Use front groups were able to portray such groups as hippies and yuppies who do not care about rural people, and urban-based environmental groups would often reinforce the stereotype by not being inclusive or supportive of people besides themselves.

What the companies faced in northern Wisconsin was something new -- an environmental movement that was multiracial, rural-based, middle - class and working-class, and made up of many older people. The movement did not just address the environmental aspects of mining, but the economic and cultural impacts, including threats to the local tourism industry and Native American ways of life, and the economic disruption caused by mines that mainly give jobs to skilled outsiders. The companies slowly found out that they could not successfully use the same divide-and-conquer tactics that had worked so well elsewhere in the country. Public relations experts were very experienced in these tactics, and very good at them, but the tactics simply did not work against a broad-based, grassroots movement like they did against professionally staffed environmental groups.

First, they tried to split northerners by RACE. Some of the mining companies may have felt that, because of the treaty rights conflicts, white sportfishing groups would not join hands with the Chippewa or Menominee. Yet the groups slowly realized that if sulfide mines were allowed to open, there might not be fish in some waterways to argue about. Governor Thompson also threatened to close the casinos if the tribes did not back off on their federally backed environmental regulations. Not only did these tactics not work, but many non-Indian communities dependent on the casinos backed the tribes, and Nashville township voters next to the mine even elected a Mole Lake Chippewa to their board.

Second, the companies tried to split RURAL against URBAN people, by portraying anti-mining forces in their ads as "well-funded," and coming out of Madison. Yet the moratorium concept had emerged from rural groups, and rural legislators quickly learned that their constituents strongly supported it. Hundreds of signs sprouted up on northern roads, and the theme of regional pride was claimed by anti-mining groups before the Wise Use groups could get their hands on it. Several town boards were voted out after they made deals with mining companies.

Third, the companies tried to split people by CLASS. In one of its TV ads, Exxon displayed a Milwaukee Steelworkers union local president, who backed mining because many Wisconsin plants manufacture mining equipment. Yet Rio Algom's uranium mines in Ontario had killed dozens of Steelworker members in the 1970s, and Wisconsin union members formed the Committee of Labor Against Sulfide Pollution (CLASP) to expose the companies' health and safety track records. Over a dozen union locals and labor councils (many of whose members enjoy fishing in the north) passed resolutions for a moratorium. In a 1995 report, the Wisconsin Review Commission condemned the health and safety track records of both Exxon and Rio Algom.

Try as they might, the corporations and their supporters could not divide the people of Wisconsin by race, by region, or by class. Already stung by its the Valdez disaster in Alaska, Exxon did not want to face another public relations loss. Any company participating in the Crandon project had its track record clsely scrutinized and publicized in the media. After viewing the 1996 train blockade by Bad River Chippewa that stopped an Inmet mine operation in nearby Michigan, the companies also realize that the tribes and their allies will never back down even if a Crandon mine permit is granted.

The movement is not stopping, because the moratorium is only one step toward the goal of forcing the companies to withdraw. Many people are working in legal, technical, political, and spiritual areas not only to stop the Crandon mine, but the planned metallic sulfide mining district. One step is to follow the lead of Montana and the Czech Republic in banning the use of cyanide in mining; the Crandon project is projected to use up to 20 tons a month of cyanide. A bill to ban cyanide in mining will be introduced in the next legislative session.

The companies are not only worried about the spread of the moratorium concept to other states and countries, but the spread of the concept of a different kind of environmental movement--one that is not as easily divided and conquered. The Wisconsin anti-mining movement has provided a model not only to environmental alliances, but to grassroots educational and organizing campaigns that operate not on large staffs and funding proposals, but on imagination and community support that enables them to outfox the world's largest multinational corporations.

September 27, 2000

To Billiton :

As Director of Noranda Inc, you have a critical responsibility to your shareholders to make the most astute economic decisions regarding the use of their capital. You are now making a most critical investment decision that will shape the future of your company for decades to come: the proposed purchase of Rio Algom.

There are many factors that you must consider in this decision and it is not my intention to dissuade you from the best course for your investors. You should be aware however, that one of Rio Algom�s key "assets" could indeed prove to be a major liability for your investors; namely the Crandon Mining Project.

For most of the people in our state, the general feeling is that we were caught with our hands down on the Flambeau Mining Project but we will not be fooled again.

You may remember that extensive local and state-wide opposition to the original project plan resulted in a greatly scaled back project where no on-site processing was allowed and all ore was shipped off site to processing plants in Ontario. And even though this project proved to be quite lucrative for Rio Tinto, virtually none of the promised "economic miracle" promised to the people of Rusk County materialized and there is a great deal of resentment in that community as a result. The failure of the groundwater flow model to accurately predict the outflow from the reclaimed mine site has also inflamed the ire of many who once felt they could trust predictions of Flambeau�s "science."

Bolstered by their quick profits from the Flambeau mine, Kennecott/Rio Tinto began an intensive lease/purchase drive in West/central Wisconsin where they hoped to make their next big strike. Those of us in that community, having seen what occurred in Rusk County, rose up in a concerted effort and said in no uncertain terms to "Say NO to Sulfide Mining." This region of the state gave strong support to drive to pass the Mining Moratorium Law, instituted numerous local and county-level metallic mining permitting and zoning laws and instituted a comprehensive counter offensive to a blatant public relations campaign forged by both Kennecott and Exxon/Rio Algom.

As part of this campaign we produced the enclosed alert messages (reproduced here at 1/2 scale) which ran on a weekly basis for over a year in several area newspapers and later distributed throughout the state. The message was straightforward: the mining companies and their supporters were making a variety of false claims and promises about the proposed mining projects. It was our attempt to set the record straight. Every one of our messages were shared with government and mining company officials with the request that any misstatements or inaccuracies be corrected.

We took these messages all the way to the top�to our Governor, to our Federal legislators, to the various project heads of the Crandon Project and to Robert Wilson, CEO of Rio Tinto, the other board members and the shareholders themselves at the annual shareholder�s meeting in London in 1998.

Rio Tinto, soon thereafter, cancelled their lease contracts and essentially pulled out of the state except for the on-going liability of their reclamation work at Flambeau (which we are continuing to monitor and assure complete compliance with both the letter and spirit of the law).

The bottom line is that we, the people of Wisconsin, drove out the world�s largest mining company with all their resources. We have not rested on our laurels and we have not given up the fight. We shall continue to challenge the owners of the proposed Crandon mining Project�whoever they may be�to speak the truth about the environmental, economic and social implications of sulfide mining in our state. If you feel you can successfully answer the challenges posted in these alert messages to any proposed mining activity that you might chose to undertake in this state, then we will listen. But we will also respond to both our own constituents and legislators and regulators� and also to your own shareholders. We will not be lied to, and we will continue to challenge anyone who attempts to do so. That is a promise.

The opposition to the Crandon Project is a state-wide and has even gained the full support of numerous national organizations as Trout Unlimited and American Rivers. We cannot be bought and we will use every legal means at our disposal to see that this project will not go forward. I suggest you cut your losses while you can.

            Tom Wilson