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Robert Friedland's Man Down Under

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    Working on the family dairy farm in Victoria taught Sam Riggall lessons which have propelled his career in corporate advisory. Picture: Stuart McEvoy

    SAM Riggall is equally at home in the executive offices of the world’s biggest mining companies as he is on his family’s dairy farm in Victoria’s Gippsland region.

    Last year Riggall, 43, best known in the mining industry as billionaire Canadian mining entrepreneur Robert Friedland’s man “Down Under”, returned to the farm where he grew up to take a breather in a career that has taken him across the globe.

    For years he worked in London as second-in-command in the project generation group at Rio Tinto under Sam Walsh and then Andrew Mackenzie, who now respectively run Rio Tinto and BHP Billiton.

    But back at the Riggall family’s cheese farm at Maffra outside Sale, his mother, in her 70s, still rises at 4.30am as she has done for the past 30 years at the property. Instead of milking cows she operates hi-tech machinery that has helped make the Maffra Cheese Company one of Victoria’s most decorated boutique producers.

    "It is a great business. It taught me a lot about value chains — from agriculture all the way to processing through to marketing,” Riggall tells The Weekend Australian. “It is a highly profitable business. We learnt our lesson from the drought. If all you are relying on is a milk cheque from a Murray Goulburn, you are stuffed.”

    Riggall spent up to three days a week with Maffra Cheese last year after ending a four-year stint with Friedland’s Ivanhoe Mines where he was executive vice-president and one of the billionaire’s key advisers. He led the four-year negotiation with the Mongolian government to secure an investment agreement for the giant Oyu Tolgoi Project, one of Friedland’s greatest discoveries alongside the giant Voisey’s Bay nickel deposit in Canada.

    Ivanhoe Australia was acquired by Rio in 2012 when it acquired Ivanhoe Mines, and Oyu Tolgoi remains one of the mining giant’s greatest future prospects.

    Rio renamed Ivanhoe Turquoise Hill Resources and the Canadian-listed company owns 66 per cent of Oyu Tolgoi, which Riggall simply calls “OT”. The mine development has been stalled for 18 months because of a dispute over investment terms and Mongolia’s concern about cost overruns on the $US6 billion ($7.7bn) open-pit operation that started last year.

    Recently Mongolian Prime Minister Saikhanbileg Chimediin reportedly flagged plans to sell some or all of its 34 per cent stake in OT. But Riggall doesn’t believe it, noting there is a big difference between political “puffery” and reality in Mongolia.

    “There is a strong willingness from the Mongolian government to make this work. I am still in touch with a number of people in Mongolia,” he says. “Ever since there has been a dispute identified, the investment agreement has governed how it was resolved. So that agreement is fundamentally important. They know they have to make it work. The Mongolians understand this is too great a prize to walk away from.”

    It is a negotiation in which Friedland himself still takes a great interest. “It will be the world’s largest, most profitable copper mine one day. It will surpass Escondida,” Riggall says, which would be a fulfilment of his bosses’ dream.

    Which points to one of the key criticisms of Friedland. Yes he has made some big discoveries. But these days some see him as more of a promoter and a spruiker. He has relaunched his Toronto-listed Ivanplats, which is focused on new projects in Africa. It is a label Riggall disputes.

    “He is a gifted communicator and can paint a picture of a story from what he sees that a lot of other people can’t see. Some people might call that promotion and hyping. But if you look at his record now, he does very little that doesn’t involve having to build something. He is a mine builder, not a stock promoter. People often lose sight of that fact,” he says. “He is a risk taker but he takes quite measured risks. He will never bet the farm. And he has a very good technical background. While he wasn’t a trained geologist, he knows mining inside out.”

    So was Riggall ever prepared to tell Friedland what he didn’t want to hear? “I would give my opinion if I thought it was a bad idea. He is exceptionally good at listening to opinions. People think he just talks but he is actually a very good listener,” he says. “I am probably the antithesis of Robert Friedland. I am not entrepreneurial and am not a risk taker. But you need balance in organisations.”

    These days Friedland is based in Singapore. But he and Riggall speak weekly. The billionaire’s latest passion in Australia is a listed company with a market capitalisation of $40 million called Clean-TeQ, which is working on technology to take minerals out of water. It has applications in both water purification and minerals processing. Friedland owns 6 per cent of the shares with rights to take his stake to 18 per cent through convertible notes, while Japan’s Nippon Gas owns 10 per cent. Riggall is chairman and CEO.

    One of the biggest hopes for its technology is in China, where it has struck an agreement with the Shanghai Investigation, Design and Research Institute (SIDRI) for the deployment of Clean TeQ’s water treatment technologies in China.

    SIDRI is majority-owned by China Three Gorges Corporation, the state-owned Chinese power company responsible for the Three Gorges Dam Project — the world largest hydro-electric power plant — and one of the world’s largest energy companies.

    Clean TeQ other great hopes are in coal-seam gas water treatment and scandium recovery technologies. This week it completed the purchase of the Systerson scandium project in Western Australia from Ivanhoe, while a pilot plant in Queensland has shown the viability of converting coal-seam gas produced water to agricultural-grade water.

    Riggall is also on the board of graphite and vanadium junior Syrah Resources and is the commercial adviser at Friedland’s High Powered Exploration (HPX), which is looking to transform itself into a tier-one global exploration and development company.

    HPX deploys proprietary geophysical technology to rapidly evaluate buried geological targets that are as far as 2km deep, well beyond the range of current surveillance technology and well beneath the lake sediment overburden that characterises most Australian mining tenements. It has done several deals with Australian junior explorers to bankroll fresh exploration projects, at the same time as the industry is slashing expenditure — a phenomenon Riggall laments.

    “It is no good wanting to take high risk and be in exploration but when there is the first sign of difficulties you want management to batten down the hatches and stop doing exploration,” he says.

    “It’s really hard to raise money today but if you are an exploration company, you need to find sources of capital to keep investing in what you are doing.”

    And he warns that Australians may lose out to foreign backers, who are prepared to invest when times are tough. “There is a lot of private equity interest in this space. They realise this is a depressed market and that assets can be picked up relatively cheaply. I have no shortage of people from Europe and North America wanting to put money into the Australian market,” he says.

    Rio Tinto remains an exception to the rule with an ongoing exploration program, he says. And the mining giant taught him a valuable lesson he will never forget. Nor will his billionaire boss. “We used to have a saying at Rio that 90 per cent of the value is in the act of discovery. The other 10 per cent is just good engineering.”
 
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