CAMPAIGN FINANCIER AND LITHIUM MINING RIGGER: Frank Giustra
People-projects-capital are the three pillars of the mining business, according to Teck Resources founder Norman Bell Keevil. The formula is a simple but effective high-level filter to identify promising early-stage mining opportunities.
I was reminded of the formula with the emergence of Brian Paes-Braga as the CEO of Royce Resources, a new lithium exploration play. At 27, Paes-Braga is one of the youngest CEOs of a publicly traded junior miner.
In his early 20s, Paes-Braga transitioned from a stockbroker’s assistant to vice-president and partner with an independent brokerage house to, most recently, managing director of a venture capital focused investment bank. He has climbed the ranks swiftly while maintaining a reputation as a client-focused professional with strong relationship-building skills.
One such relationship Paes-Braga fostered was with mining magnate Frank Giustra, whom he met at a party last summer and “clicked” with. Giustra, a Tesla fan, and Paes-Braga began to look at opportunities and that led to a partnership in the lithium exploration business.
With the beginnings of a lithium bull market emerging in recent months, Paes-Braga resolved to get a handle on the soft metal’s fundamentals. Shares of Nevada lithium play Pure Energy Minerals had appreciated 4X, Tesla was announcing plans for the Gigafactory, and Benchmark Mineral Intelligence had made a stop in town.
What Paes-Braga and his team discovered was a compelling opportunity driven by supply and demand fundamentals. About 90% of global lithium production is controlled by four players who essentially form a lithium cartel: Albemarle Corporation, FMC Corp, SQM (Sociedad Quimica y Minera de Chile) and Chinese lithium giant Sichuan Tianqi Lithium Industries.
Lithium is a lightweight, versatile metal used in everything from lubricants and medicines to stoves and fireworks. But its highest-profile use is lithium-ion batteries for electronics, electric vehicles, and energy storage. Electric vehicles use 44 pounds of lithium carbonate, compared to just an ounce in iPads and laptops.
According to a recent article by lithium expert Joe Lowry, demand for lithium hydroxide is set to double between now and 2020. The increase will be driven largely by the battery market, and Lowry says the big producers are not positioned to keep pace with demand. Market participants see electric vehicles as a major demand driver, and lithium prices have begun to rise.
While consumers rush to snap up the latest high-tech gadgets powered by lithium-ion batteries, producers are racing to lock up sources of the raw material. Albemarle upped the ante last summer when it paid US$6.2 billion to acquire Rockwood Holdings, one of the world’s largest lithium producers. Lithium companies have only two options to build their portfolios – organically through exploration or through acquisitions involving premium buy-outs.
After a global search, Royce settled on a 1,540-acre lithium brine property in the northern Clayton Valley. Royce is acquiring an option to earn a 100% interest in the NSP Lithium Claims Group properties in Nevada, one of the top-ranked mining jurisdictions in the world. The claims are north of and adjacent to properties held by Albemarle, which operates the nearby Silver Peak mine, the only producing lithium brine operation in North America. Albemarle shares are listed on the NYSE (ALB).
The proximity to Albemarle’s operation – which taps into brine-rich underground aquifers – brings with it infrastructure, power, and even a small community of lithium experts nearby. Royce’s site is also a short 3.5-hour drive from the Tesla Gigafactory, which by 2020 is projected to produce more lithium-ion batteries annually than were produced worldwide in 2013. The Royce team believes that being a low-capex and low-opex company is critical to success and is disciplined in this approach, Paes-Braga noted.
“We are convinced there will be a move in the lithium market and are bullish on spot prices,” Paes-Braga stated. One Chinese producer recently raised its prices to more than US$11,000/tonne, the second increase in a single month, according to research firm Industrial Minerals. Both Albemarle and SQM predict that demand could double over the next decade, with projections for 10% annual growth.
Elon Musk has emerged as a superstar of the lithium space and his sleek Tesla vehicles have brought sex appeal and signature branding to the retail investor. The free PR for Nevada-based lithium projects has been welcomed with open arms. Mr. Paes-Braga does not see any other commodity having that kind of appeal in the resource venture space.
However, the young executive is looking beyond Tesla for demand creation. Paes-Braga sees all major automobile manufacturers releasing electric vehicle lines in the near future. Even technology companies are getting in on the act – Google has announced plans for an EV and Apple has its own secretive electric-vehicle project.
Water restrictions in Nevada limit the use of evaporation ponds, the typical method for producing lithium out of a brine (and the process Albemarle uses). Traditionally, the salty water is brought to surface and settled in large evaporation ponds. Over a 12- to 18-month period, the water naturally evaporates due to the high temperature and dry climate, and the remaining lithium is refined.
But lithium solvent extraction may allow Royce to sidestep the issue of groundwater in Clayton Valley being already allocated if water is not consumed in the production process. Paes-Braga is closely following the new process technology, which is being developed by a metallurgical recovery manufacturer based in Israel. The technology could make evaporation ponds obsolete and reduce the processing time from months to hours. If functional on a large scale, it could dramatically reduce cost and increase tonnage, enhancing project economics.
Royce Resources isn’t the only lithium-focused junior with big plans for Clayton Valley. Pure Energy has an 8,000-acre-plus property that also borders on Albemarle’s land package. The company recently released an inferred resource at Clayton Valley South of 816,000 tonnes of lithium carbonate equivalent. Pure Energy plans to deliver a PEA on the property in the second quarter of 2016.
Another area player is Nevada Sunrise, which recently branched out from gold to lithium with the acquisition of the Neptune property southwest of Albemarle in the Clayton Valley.
Royce management went to the market in October, intending to raise $1.35 million in a private placement at 15 cents. Once that closes, Royce will have approximately $2 million in the treasury. In 2016, the company is expecting to spend $1 million exploring its lithium brine property. The company will have a low share count, with roughly 27 million shares outstanding. Paes-Braga sees Royce becoming a consolidator in the lithium market due to its tight share structure and high-calibre team.
Royce Resources is an early-stage, speculative exploration company, but one I will be adding to my watchlist. Mr. Giustra’s involvement brings credibility and a network of global contacts, while Mr. Paes-Braga’s millennial perspective and ambitious drive should propel the company forward. Giustra and Paes-Braga will each own stakes of more than 10%, and the stock is expected to start trading this month.
Lithium is a hot topic at CEO Chat, the investment conference in your pocket. Join the conversation!
Disclosure: This article is provided for entertainment purposes only and is not intended to be investment or professional advice of any kind. This article discusses a highly speculative security that is not suitable for most investors and could lose its entire value. Author is not a shareholder in Royce Resources however members of the CEO.CA team are long ROY at the time of writing. This may change in the future without notice. Always do your own due diligence and consult an independent investment advisor prior to making any financial decisions. Consult Royce’s profile on http://www.sedar.com for a full description of the risks facing the company.
Fuelling the Future: Lithium X Launches on the TSXV
Experienced Clayton Valley operator GeoXplor named Exploration Manager
Lithium X Land Position Increased by over 180%
Minerals and Environmental Engineer Timothy Oliver appointed VP Project Development
VANCOUVER, Nov. 30, 2015 /CNW/ – Lithium X Energy Corp. (TSX-V: LIX) (“Lithium X”, or the “Company”) Executive Chairman Paul Matysek and Chief Executive Officer Brian Paes-Braga today announced the commencement of trading on the TSXV under the ticker symbol “LIX.”
“I would like to thank everybody at the TSXV, our financial and legal advisors, and our shareholders for contributing to a successful launch,” commented Mr. Matysek.
Lithium X is also pleased to announce the appointment of GeoXplor Corp. (“GeoXplor”) as Exploration Manager for its upcoming work program in Clayton Valley North, Nevada. Lithium X has increased its Clayton Valley land position by over 180% through staking completed on its behalf by GeoXplor. Lithium X now holds approximately 4,360 acres (1,765 hectares) in the Clayton Valley.
“This is just the beginning for Lithium X,” said Mr. Paes-Braga. “In a few short months we have secured a key land position adjacent to North America’s only lithium producer, built a tremendous team, financed the Company with exceptional shareholders and listed on the TSXV. We are very excited about what we can accomplish in 2016.”
The Lithium X claims are contiguous to private lands and placer claims belonging to Albemarle Corp. (NYSE: ALB), which operates North America’s only lithium production facility, in operation since 1967. Historic drill information and a geophysical survey show the Lithium X properties cover basin-fill sediments similar to those currently producing lithium brines for Albemarle.
GeoXplor is managed by prospectors Clive Ashworth and John Rud, who have been active in the Clayton Valley for the past 8 years. GeoXplor operates Pure Energy Minerals’ Clayton Valley South project, where they were instrumental in helping discover and identify an Inferred Resource of 816,000 tonnes of Lithium Carbonate equivalent (July 2015 NI 43-101).
Mr. Rud and Mr. Ashworth also control Clayton Valley Lithium Inc., which optioned the initial Clayton Valley North lithium claims group to Lithium X.
“We view the Clayton Valley North project as equally prospective to anything else in the valley,” commented Mr. Rud. “We are pleased to be working with such a capable and energetic team in Lithium X to advance the development of the project.”
Lithium X has also appointed Tucson-based mining executive Timothy Oliver, P. Eng, as the Company’s Vice-President, Project Development. Mr. Oliver’s role includes project management and oversight of all work programs, development studies and community relations activities.
“Tim joins us at a formative time for our Company as we aim to rapidly advance our Clayton Valley lithium project, which has the potential to fuel future supply for the battery industry,” commented Mr. Matysek. “His 38 years of experience as a specialist in mine project development engineering and environmental permitting is a tremendous asset to Lithium X.”
Mr. Oliver’s experience spans all stages of mine development, from exploration to closure. He holds a BS in Environmental Engineering from the New Mexico Institute of Mining and Technology (1976) and is a registered professional engineer in four U.S. states and in Alberta, Canada. Mr. Oliver spent over 15 years with producing companies including Magma Copper Company, Exxon Minerals and Phelps Dodge. Before joining the Lithium X team, Mr. Oliver practiced engineering both independently and with firms such as M3 Engineering and Technology and Tetra Tech. Mr. Oliver is an NI 43-101 Qualified Person (QP) and has lead or contributed to dozens of NI 43-101 studies for mine projects in North and South America.
Mr. Matysek is a mining entrepreneur, professional geochemist and geologist with over 30 years of experience in the mining industry. Mr. Matysek was President and CEO of Lithium One Inc., which developed a high quality lithium project in northern Argentina. In July 2012, Lithium One merged with Galaxy Resources of Australia in a $112 million plan of arrangement to create an integrated lithium company. Prior to Lithium One, Mr. Matysek was the President and CEO of Potash One Inc. where he was the architect of the $434 million friendly takeover of Potash One by K+S Ag, which closed in early 2011. Prior to founding Potash One, Mr. Matysek was the Founder, President and CEO of Energy Metals Corporation (“EMC”), a uranium company traded on the New York and Toronto Stock Exchanges. Mr. Matysek led EMC as one of the fastest growing Canadian companies in recent years, increasing its market capitalization from $10 million in 2004 to approximately $1.8 billion when acquired by a larger uranium producer in 2007. Mr. Matysek is currently CEO of Goldrock Mines Corp.
Mr. Paes-Braga commented, “When we entered the lithium business we thought of who would be the best executive to join our management team. Paul Matysek’s track record as a mining company builder and shareholder wealth creator put him at the top of our list. I am excited to learn from him and work closely with him in growing this venture. Lithium X co-founder Frank Giustra and I are incredibly pleased he has agreed to join the founding team.”
Lithium X is finalizing plans for its 2016 first quarter exploration program at the Clayton Valley North project, and is actively evaluating potential technology and processing partners.
The Company has 28,125,732 common shares issued and outstanding and 2,805,000 options with exercises prices ranging from $0.11 to $0.15. Lithium X has approximately $2,473,250 in working capital.
The technical content of this news release has been reviewed and approved by Timothy Oliver, P. Eng, a qualified person as defined by NI 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, including the business of the Company and the commencement of trading in the Company’s shares. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.
SOURCE Lithium X Energy Corp.
For further information: Brian Paes-Braga, President and CEO, Director, Tel: 604-609-5137, Email: firstname.lastname@example.org; Investor Relations, Mario Vetro, Tel: 604-687-7130 ext. 105, email@example.com
Clinton Foundation took massive payoffs, promised Hammond Ranch and other publicly owned lands to Russian’s along with one-fifth of our uranium ore
Whore of Babylon shreds Constitution, exposed as ultimate backer of massive U.S. land grab
By Shepard Ambellas
Related: Rancher Dwight Hammond threatened with “bullet”: Exclusive Interview
PRINCETON, Ore. (INTELLIHUB) — As it turns out there’s a lot more to the story behind the Malheur Wildlife Refuge–a whole lot more–and this article is just the tip of the proverbial iceberg.
As you may or may not know, Intellihub reported on Jan. 4, that the Hammond’s ranch and other ranch-lands surrounding the refuge sit atop a vast swath of precious metals, minerals, and uranium that’s heavily desired by not only the federal government, but foreign entities as well.
However, at the time of the article’s publication the federal government’s full motive to seize the land was not yet known other than the fact that these elements do exist in the vicinity and are invaluable.
Now, after further investigation, more pieces of the puzzle have been put in place and you’re not going to believe what characters are involved.
I’ll give you a hint–one of them is currently being investigated by the FBI and is also running on the Democratic ticket in hopes of becoming the next President of the United States. That’s right, you guessed it–none other than Hillary Rodham Clinton of the notorious Clinton crime family.
Hillary and her foundation are implicated in the dastardly scheme along with the Russian State Nuclear Energy Corporation, Rosatom, and a few dubious Canadian elite, which is where the news gets really bad.
Rosatom is ranked #2 globally in uranium reserves and #1 globally for annual uranium extraction. The sheer power, strength, and size of the corporation is undeniable. Rostom is a major power-player in today’s world and didn’t become that way for no reason.
You see, Rosatom wanted to expand their operations into America and needed a way in. So, in 2013, Rosatom acquired a Canadian company named Uranium One as part of a sinister side deal which involved multiple parties. Ultimately the deal opened a typically secure and closed-door, thus allowing the Russian’s to salt their way into Continental United States as part of a vast and extensive plan to mine Uranium ore out of states like Wyoming and Oregon.
The deal was essentially brokered by Hillary and was ran through the Clinton Foundation using Canadian-backed contributions as a cover. With one swoop of a pen the bitch sold out the American people and one-fifth of America’s uranium resources to the Russian’s.
In April of 2015, two reporters for the New York Times boldly reported how the plan worked:
At the heart of the tale are several men, leaders of the Canadian mining industry, who have been major donors to the charitable endeavors of former President Bill Clinton and his family. Members of that group built, financed and eventually sold off to the Russians a company that would become known as Uranium One.
Beyond mines in Kazakhstan that are among the most lucrative in the world, the sale gave the Russians control of one-fifth of all uranium production capacity in the United States. Since uranium is considered a strategic asset, with implications for national security, the deal had to be approved by a committee composed of representatives from a number of United States government agencies. Among the agencies that eventually signed off was the State Department, then headed by Mr. Clinton’s wife, Hillary Rodham Clinton.
As the Russians gradually assumed control of Uranium One in three separate transactions from 2009 to 2013, Canadian records show, a flow of cash made its way to the Clinton Foundation. Uranium One’s chairman used his family foundation to make four donations totaling $2.35 million. Those contributions were not publicly disclosed by the Clintons, despite an agreement Mrs. Clinton had struck with the Obama White House to publicly identify all donors. Other people with ties to the company made donations as well.
And shortly after the Russians announced their intention to acquire a majority stake in Uranium One, Mr. Clinton received $500,000 for a Moscow speech from a Russian investment bank with links to the Kremlin that was promoting Uranium One stock.
At the time, both Rosatom and the United States government made promises intended to ease concerns about ceding control of the company’s assets to the Russians. Those promises have been repeatedly broken, records show.
Soon, Uranium One began to snap up companies with assets in the United States. In April 2007, it announced the purchase of a uranium mill in Utah and more than 38,000 acres of uranium exploration properties in four Western states, followed quickly by the acquisition of the Energy Metals Corporation and its uranium holdings in Wyoming, Texas and Utah.
That deal made clear that Uranium One was intent on becoming “a powerhouse in the United States uranium sector with the potential to become the domestic supplier of choice for U.S. utilities,” the company declared.
While the United States gets one-fifth of its electrical power from nuclear plants, it produces only around 20 percent of the uranium it needs, and most plants have only 18 to 36 months of reserves, according to Marin Katusa, author of “The Colder War: How the Global Energy Trade Slipped From America’s Grasp.”
“The Russians are easily winning the uranium war, and nobody’s talking about it,” said Mr. Katusa, who explores the implications of the Uranium One deal in his book. “It’s not just a domestic issue but a foreign policy issue, too.”
Yes, the Russians are winning the “uranium war,” thanks to Hillary.
Additionally BLM documentation shows:
In September 2011, a representative from Oregon Energy, L.L.C. (formally Uranium One), met with local citizens, and county and state officials, to discuss the possibility of opening a uranium oxide (“yellowcake”) mine in southern Malheur County in southeastern Oregon. Oregon Energy is interested in developing a 17-Claim parcel of land known as the Aurora Project through an open pit mining method. Besides the mine, there would be a mill for processing. The claim area occupies about 450 acres and is also referred to as the “New U” uranium claims.
On May 7, 2012, Oregon Energy LLC made a presentation to the BLM outlining its plans for development for the mine.
The Vale District has agreed to work with Oregon Department of Fish and Wildlife on mitigation for the “New U” uranium claims, which are located in core sage grouse habitat. Although the lands encompassing the claims have been designated core, the area is frequented by rockhounds and hunters, and has a crisscrossing of off-highway vehicle (OHV) roads and other significant land disturbance from the defunct Bretz Mercury Mine, abandoned in the 1960s.
However, by the fall of 2012 the company said that it was putting its plans for the mine on hold until the uncertainty surrounding sage grouse issues was resolved.
Once again the Whore of Babylon, Hillary Clinton, her foundation, and other members of government, have literally been caught conducting illicit, illegal, and treasonous, activities right underneath the noses of the American people and are in no way being held accountable. Moreover she has the nerve to run for president! Are you kidding me?
Now Oregon Governor Kate Brown has stepped in, calling for a ‘swift’ resolution to the armed occupation of the Malheur Wildlife Refuge, clearly shilling for the Dems, criminally assisting them with their master plan to sellout every last bit of America’s public lands to foreign entities like Uranium One, fully eviscerating whats left of the U.S. Constitution.
So there you have it–rogue criminal factions of government are operating at all levels and are actually conspiring together to allow foreign corporations to invade and mine rich American resources, including uranium, from lands owned by the people.
Uranium One’s slogan is:
“Success through aggressive mine and land acquisition.”
Additionally, President Obama has signed executive orders allowing the Department of the Interior to grab publicly owned lands.
Update 1:29 p.m.: World Net daily published an article back in 1998 titled “Federal Land Grab Called ‘Political’.” In the article he author points out how Utah Republican Jame Hansen authored a bill at the time known as the “Utah Schools and Lands Exchange Act of 1998.”
According to the report, this bill passed in June of 1998, and gave “Utah 139,000 acres of federally held land, certain mineral rights, and $50 million in exchange for all of Utah’s claims to lands within national parks, monuments, forests and federal areas” under then U.S. President Bill Clinton’s orders, further demonstration how the Clinton Crime Family has been using their vast political influence to loot some of the best assets from the Corporation of the United States, selling them for pennies on the dollar to private foreign corporations and one world bodies like the United Nations.
Additionally we find this whole animal goes back the the Ronald Regan era–and possibly further.
HCN.org reported back in 2004:
[…] President Ronald Reagan and his advisors looked across the West’s public lands and saw dollar signs. Money was something they desperately needed in 1982, as the national deficit hit $128 billion. So James Watt, then U.S. secretary of the Interior, and John R. Block, the secretary of Agriculture, earmarked 35 million acres, or 5 percent of the nation’s public lands (excluding Alaska), for the auction block.
The plan to privatize public lands was met with outrage and skepticism, not only from Western liberals such as Arizona Gov. Bruce Babbitt, but also from conservatives like Sen. James McClure, R-Idaho, who objected because the states were cut out of the deal. Watt eventually withdrew Interior lands from the sale; shortly thereafter, the Forest Service’s sale lost steam, too.
However unpopular the proposed sales were, they weren’t illegal. And the idea didn’t go away. The framework for selling public lands has inched forward since the Clinton administration, and now the Interior Department wants to give it a higher priority.
The 1976 Federal Land Policy and Management Act (FLPMA) required the Bureau of Land Management to identify lands that were “uneconomical to manage,” or that stood in the way of a community’s development. But the BLM lacked a strong incentive to identify such sellable lands: Under FLPMA, any money received from their sale would go directly into the U.S. Treasury, rather than into the agency’s own coffers.
Then, in 2000, Congress and the Clinton administration passed the Federal Land Transaction Facilitation Act (FLTFA), which changed how profits from BLM land sales were distributed. Twenty percent of any land-sale revenue would go toward the BLM’s administration costs, while the other 80 percent had to be used to buy private inholdings within BLM lands that contained “exceptional resources.” The act was based on a land disposal and acquisition mechanism in the Southern Nevada Public Land Management Act of 1998, which was crafted to accommodate Las Vegas’ rapid expansion onto neighboring public lands. But FLTFA’s profit scheme applied only to sellable lands identified before July 25, 2000. At that time, the BLM estimated it had 3.3 million acres of sellable land, but thanks to better inventories, its estimate has since shrunk to as low as 330,000 acres. From 2001 to 2003, the BLM sold almost 11,000 acres under FLTFA.
Note: We know some of the land acquired by Uranium One is in Oregon and we know there are precious metals on and near the Hammond Ranch. Put two and two together. Stay tuned for more updates and confirmation as it is becoming increasingly clear that other companies and government entities are most likely also involved.
The government, alongside private companies (including foreign-owned), are in the middle of a massive criminal land grab which the mainstream media is largely ignoring, instead opting to paint those in Oregon as crazy anti-government extremists. In other words, members of the mainstream media are directly responsible for helping to allow this takeover to happen.
Uranium prospecting in Oregon, 1956 — State of Oregon
What is that I spy east of I-17? BLM acquires more land for monument, prevents development — Daily Courier
From Russia with no love for Colorado uranium mining climate — Colorado Independent
All Oregon Dockets — USGS
Presidential Memorandum — America’s Great Outdoors — WhiteHouse.gov
Public Versus Private Property Rights — BLM.gov
About Uranium One — Uranium1.com
What was the Whitewater scandal? — Investopedia
The billionaire linked to the ‘Clinton Cash’ scandals once said something amazing about doing business with Bill Clinton
Billionaire Canadian mining executive Frank Giustra is at the center of a blockbuster series of New York Times reports that raise troubling questions about the finances of the Bill, Hillary, & Chelsea Clinton Foundation.
One of the stories detailed how a company Giustra was involved with secured the rights to uranium deposits in Kazakhstan days after a September 2005 meeting between the billionaire, former President Bill Clinton, and Kazakh President Nursultan Nazarbayev. Giustra donated over $30 million to the Clinton Foundation after the Kazakhstan trip.
In 2006, Giustra appeared in the New Yorker where he was quoted making a comment about his dealings with Clinton that’s extremely interesting in light of the various allegations:
“All of my chips, almost, are on Bill Clinton,” Giustra reportedly said. “He’s a brand, a worldwide brand, and he can do things and ask for things that no one else can.”
This brash remark is far different than statements Giustra made after his relationship with Clinton first came under scrutiny.
When the Times initially reported on this in 2008, representatives for both Clinton and Giustra denied the ex-president did anything to help the billionaire with his deal-making during their time together in Kazakhstan.
“A spokesman for Mr. Clinton said the former president knew that Mr. Giustra had mining interests in Kazakhstan but was unaware of ‘any particular efforts’ and did nothing to help,” wrote Times reporters Jo Becker and Don Van Natta. “Mr. Giustra said [the president] was there as an ‘observer only’ and there was ‘no discussion’ of the deal with Mr. Nazarbayev or Mr. Clinton.”
Giustra’s comment about Clinton being able to “do things and ask for things” came in a New Yorker article by David Remnick that was published the week of September 18, 2006. Giustra reportedly made the remark about Clinton while they were on a charitable trip to Africa together.
According to Remnick, the pair made the journey on board Giustra’s jet. Remnick wrote that he encountered Giustra at an event in South Africa that Clinton also attended.
Here is how Remnick described some of his conversation with Giustra.
“Giustra told me that he was still heavily involved in business — he travels frequently to Kazakhstan, to check on mining interests he has there — but that his wife had been pushing him to give away more of his money,” Remnick wrote.
The New Yorker article included no further mention of Giustra.
REUTERS/Shamil Zhumatov SZH/DH
On Thursday, the Times followed its 2008 story with another report that noted Giustra’s company, which became Uranium One, was eventually acquired by Russia’s state-owned nuclear corporation.
This process began when Hillary Clinton led the State Department, which had to approve the deal along with other government entities. In addition to Giustra, the Times said other executives linked to Uranium One gave millions to the Clinton Foundation.
The story about Uranium One’s Russian deal included information from the upcoming book “Clinton Cash,” which investigates the Clinton family’s finances. It was one of several reports based on the book that came out on Thursday.
These articles have cast a shadow over Hillary Clinton’s 2016 presidential campaign, which launched earlier this month. Clinton’s team and its allies have released multiple statements about the various issues detailed in “Clinton Cash.”
They have pointed out that the book’s author, Peter Schweizer, has worked with conservative groups and characterized “Clinton Cash” as a partisan smear. A Clinton campaign spokesperson also responded to Thursday’s Times article with a post on the website Medium that claimed Clinton played no part in the Uranium One deal and that the State Department was one of many agencies that approved it.
Giustra also released a statement on Thursday wherein he said he sold his interest in Uranium One before Clinton led the State Department. He also reiterated his past comments that President Clinton did not conduct business with him when they were in Kazakhstan together.
“In late 2005, I went to Kazakhstan to finish the negotiations of the sale. Bill Clinton flew to Almaty a few days after I arrived in the country on another person’s plane, not on my plane,” Giustra said. “Bill Clinton had nothing to do with the purchase of private mining stakes by a Canadian company.”
Spokespeople for Giustra and the Clinton Foundation did not respond to requests for comment on this story. President Clinton and Giustra cofounded the Clinton Giustra Enterprise Partnership, an initiative of the Clinton Foundation, in 2007.
Frank Giustra made billions of dollars for himself and his associates in the world of junior mining finance. Then he met Bill Clinton. Suddenly, they were the best of friends—and Giustra found himself at the centre of a media firestorm
From Friday’s Globe and Mail
August 27, 2008 at 11:59 PM EDT
It’s closing in on 2 a.m., and Frank Giustra is standing in a crowded penthouse suite on Toronto’s waterfront, a full bottle of beer dangling at his side. A steady stream of well-wishers stops to shake his hand, say thank you or even lean in for an awkward hug. At times, Giustra’s smile is noticeably forced.
The mining mogul has been at this for hours, first at a $300,000-a-table fundraiser for his new poverty-relief charity—a glitzy event that drew a crowd of 1,200, including A-list celebs like Tom Cruise, John Travolta and Robin Williams—and now here, at the after-party.
The March 1 fundraiser has been a coming-out of sorts for the obsessively private Giustra. For a quarter-century, he has worked behind the scenes on a string of deals in the world of junior mining finance, finding money for companies hoping to extract gold in Mexico, cobalt in Cameroon, uranium in Kazakhstan, platinum in South Africa or oil in Colombia. In the process, he has made billions for himself and a cadre of loyal associates through a Byzantine system of shell companies, furtive share purchases and elaborate compensation schemes.
So how did he end up here, glad-handing with the glamorous elite?
The answer can be found in an oil painting propped up on a table in the middle of the penthouse. The picture (a gift from friends) features two men standing side by side, their arms draped around each other’s shoulders, in front of a dusty outpost in Lesotho, a tiny enclave in the middle of South Africa. One of the men—the shorter one, with the silver, Caesar-style haircut—is Giustra, dressed casually in a T-shirt and bomber jacket. The other, in rolled-up shirtsleeves and tie, is the 42nd president of the United States, William Jefferson Clinton.
The painting captures a scene from a seven-country tour the pair made to Africa in July, 2006, to oversee the work of the William J. Clinton Foundation, the ex-president’s charitable organization. It’s just one of the trips he and Giustra have taken together on board the opulently appointed MD-87 jet, replete with leather furniture and a boardroom, that serves as Giustra’s office in the sky.
Until a few years ago, the financier had only dabbled in philanthropy, funnelling money to local charities in Vancouver and organizing the occasional fundraiser at his $20-million, Parisian-themed mansion. Then he met Clinton, whose own charity efforts (which have, among other things, slashed the cost of HIV/AIDS medicines for 750,000 people in developing countries) inspired him to do what he calls “a complete one-eighty”—to stop hoarding the millions of dollars he’s earned from mining deals and instead give much of it away. “When you are creating wealth, and the only purpose is to create more wealth than you already have, it is totally meaningless,” says Giustra, who turned 50 last August. “It’s empty. It’s completely empty.”
Since 2005, Giustra has pledged $31 million (U.S.) of his own cash to Clinton’s foundation. Together, he and Clinton have also formed the Clinton Giustra Sustainable Growth Initiative (CGSGI), a charitable vehicle that will help create programs and distribute funds in areas of the developing world where mining takes place. Giustra has pledged another $100 million to this initiative and promised to donate half of his future earnings to the charity.
Clinton brings with him a well-oiled philanthropic organization and considerable star power. Giustra, meanwhile, has a Rolodex full of mining contacts with fat wallets—thanks in large part to the deal-making prowess of Giustra himself—and a hankering to put a positive face on the much maligned mining industry. “My money is more effective backing Clinton than any other person I can think of on this planet,” he says.
With his new-found generosity, this hitherto unknown financier—an outsider even within the relatively small Canadian business community—has gained entree into the world of high-stakes philanthropy: charity events with U2 front man Bono, fundraisers co-hosted with jazz diva Diana Krall, face time with supermodel Petra Nemcova in the name of tsunami relief. And, of course, he has been welcomed into Clinton’s inner circle as a bona fide Friend of Bill, or FOB.
But a funny thing happened on Giustra’s journey from mining-deal king to munificent benefactor: At the same time he thrust himself into the media spotlight as the CGSGI’s public face, Hillary Clinton’s bid for the White House ratcheted up the scrutiny on her husband’s business and charitable dealings, as well as those of his large network of associates. And it just so happens that Bill Clinton keeps popping up in places where Giustra is buying resource assets, leading to allegations that Giustra is using his powerful new friend to secure business for himself and his mining cohorts.
Giustra seems genuinely wounded by the implication that his donations are buying favours. “There’s a perfect balance in this world,” he says. “The more you put yourself out there, the more they are going to throw darts at you. Now, I’m seeing how that all works.”
After nearly 30 years in the mining industry, Giustra has a vast network of loyal colleagues who have profited handsomely from his various projects. Call them the Friends of Frank, or FOFs.
FOF investment bankers get lucrative fees for consulting on his deals and underwriting share offerings. Bankers and brokers are invited to personally buy into Giustra’s shell companies before he rolls in a new set of mining assets and the stock (usually) soars. FOF mining execs get board appointments, along with generous stock-option packages and so-called founder’s shares, another form of cheap stock.
“Why is that bad?” Giustra asks rather defensively. He’s seated at the head of the boardroom table in his Vancouver office a few weeks after the CGSGI benefit, casually dressed in a colourful striped dress shirt, dark jeans and brown loafers—he’s due to serve lunch at his kids’ school today, so no suit. (He recently separated from their mother, his second wife, former Internet venture capitalist and documentary filmmaker Alison Lawton.) “It’s a good thing—people you know and you trust,” he says. “People that you’ve been through good times and bad times with—especially bad times, because then you know what they are really made of.”
For Giustra, the times have been mostly good. Certainly the mining industry has been better to him than it was to his father, Joe, who immigrated to Canada from Italy and worked as a blaster and driller. When Frank was a baby, Joe sent his wife and four kids to live with relatives back in Italy and, later, Argentina, while he moved from mine to mine in search of better wages. “While he was working to make the money to provide a home for us, he wanted us to be with family,” says Giustra, who spoke no English when he moved back to Canada at age nine. “He was travelling all over the country, and he didn’t want us living in mining camps.”
Eventually, the family settled in Aldergrove, 50 kilometres southwest of Vancouver. Young Frank took up the trumpet—and jazz—and, at 18, he enrolled in the music program at a local college. But after paying a visit to his dad’s stockbroker (Joe liked to play the penny stock market, with little success), he switched to business. “It was the energy,” Giustra says of the brokerage. “There was just something about it—that people made a living doing this. I decided that was it, I was going to be a stockbroker.”
Though he had a $14-an-hour union gig stocking shelves on the midnight shift at a Vancouver supermarket, Giustra began pestering local brokerages for a job. In 1978, he scored an interview at Merrill Lynch, known for its top-notch broker-training program. His interview lasted just 10 minutes. But on his way out the door, the 20-year-old made a ballsy promise: “If you hire me, I’ll be the best broker you’ve ever had.”
He got the job, and spent two years “trading the market blindly” before moving to Yorkton Securities, a small, Toronto-based brokerage with a handful of employees in Vancouver. The firm dealt with the top mining promoters on the wild and woolly Vancouver Stock Exchange, including Murray Pezim, who once controlled more than a quarter of the trading on the VSE and whose name was synonymous with the era’s loose ethics. “The whole concept of compliance and due diligence, things we take for granted these days, didn’t really exist back then,” says Giustra. “It was pretty much the Wild West.”
A key element of Yorkton’s early success was its ability to tap investment funds in Europe. So in 1983, Giustra’s bosses sent him to London to open the firm’s first overseas outpost. He hated London at first. The food was awful, he says, and the business culture was ultraconservative—nothing like the VSE. “You couldn’t even wear a brown suit in those days. You certainly couldn’t wear brown shoes,” he says. “If you wore brown shoes in the City, you were deemed someone not worthy of doing business with.”
Giustra put together a unique team of analysts, traders, corporate financiers and institutional sales staff dedicated solely to mining, and the London office thrived. When Giustra returned to Canada in 1990—as Yorkton’s president—he brought the model with him, and soon the firm was a leader in the mining sector, with a list of deep-pocketed institutional clients willing to invest in hundreds of junior miners looking for exploration and development funds.
Under Giustra, Yorkton also devised creative ways to help clients and colleagues win the rights to lucrative mineral deposits overseas. The Soviet Union had just fallen, and many former Soviet states began opening their borders to foreign investors. Giustra had the bright idea of hiring an ex-finance minister from Chile to help these nascent countries draft new mining codes. Among the nations Yorkton worked with was Kazakhstan. “We advised them on what they needed to do to change their mining laws,” says Giustra, who met with the Kazakh prime minister, Akezhan Kazhegeldin, in 1995. “We did that in Africa; we did that in South America. It was a great way to look credible. It was a great way to look serious about what our intentions were, in terms of being able to do business in a fair way. It worked really well.” It also demonstrated the inherently political nature of nearly all mining deals: Without government support, you’re unlikely to get far in the quest for mineral rights. Sending in experts to help draft mining code is just one way to get a leg up.
Nearly everyone at Yorkton got rich during those days, the peak of junior mining finance. Million-dollar-a-year pay packages were the norm, and Giustra made several times that. He and his colleagues were often given so-called seed shares or allowed to buy in on private placements in the companies they financed. Yorkton was awarded broker warrants on financings that proved particularly profitable if the company’s shares rose. “He always made his clients and the people around him money,” says Paul Reynolds, who got his start at Yorkton in the 1980s and is now CEO of Vancouver-based Canaccord Capital Inc. “I think that’s paramount to Frank: He likes to make people money.”
Or, as Giustra says: “The one thing that always worked for me is generosity. Generosity can be very profitable.”
In 1995, the same year Scott Paterson joined Yorkton as executive VP, Giustra was promoted to chairman. A year later—around the time the firm’s Calgary office became mired in a scandal involving salted drill samples by a high flier called Timbuktu Gold—Giustra quit. He was just shy of his 40th birthday. A few months later, the Timbuktu scandal was eclipsed by Bre-X, which brought the go-go days of junior mining to a definitive end. (Under Paterson, Yorkton jumped into high tech and eventually became the subject of an OSC investigation.)
By then, Giustra was far away from the world of Howe Street—figuratively, at least. With $60 million raised from FOFs, a $60-million IPO and $18 million of his own cash, he started Lions Gate Entertainment, Canada’s answer to the Hollywood studio. Giustra was used to quick returns on the VSE. But Lions Gate’s film projects took years to turn a profit (if at all), and the company, which went public in 1998, was soon strapped for cash. Things got so bad that Giustra was occasionally forced to cover the payroll himself. The stock flat-lined.
Then came a costly deal with Peter Guber, the former head of Sony Pictures, that almost killed the company. Giustra—renowned in mining circles as a fierce negotiator—agreed to pay Guber $50 million (U.S.) for a 45% stake in his production company, Mandalay Pictures. Guber was expected to make 20 movies over five years for Lions Gate. He turned out just five before the company sold its Mandalay stake back to Guber for $10 million in 2002. “It was a dumb deal for us,” Giustra concedes. “Did he get the better of us on the negotiation? Yes, absolutely.”
Within a year, giustra had sold off his stake in the studio and returned full-time to the world of mining. Back in 2001, he had become convinced that gold, then trading below $300 (U.S.) an ounce, was poised for a run, in part because low interest rates would erode the value of the U.S. dollar—a stunningly accurate prediction. Along with Ian Telfer, a gregarious veteran mining executive who’d taken a wrong turn in the dot-com world, he bought a controlling stake in Wheaton River Minerals, a dormant mining company then valued at $20 million.
Wheaton’s first major acquisition was the Luisman mine in Mexico. The seller, Antonio Madero, the scion of a powerful Mexican family, was skeptical that the Canadians could afford the mine’s $100-million price tag. After all, they had just $25 million in capital. Giustra, however, was certain his FOFs in the brokerage community could raise the cash—but only if there was a sale agreement in place. Over dinner at Club 21 in New York in late 2001, Giustra, Telfer and a group of advisers set about trying to persuade Madero to give them a chance. The meeting was going nowhere until someone mentioned that Madero was chairman of the Mexican National Art Museum. Giustra sprang into action, talking up several pieces of Latin American art in his personal collection. Madero decided to let the Canadians make a bid. “That’s what tipped the scales,” says Telfer.
The team went on to raise more than $125 million from investors (through a syndicate of underwriters led by GMP Securities, Canaccord and BMO Nesbitt Burns) to finance the acquisition. Four years later, Wheaton merged with Goldcorp to create what is now the world’s second most valuable gold producer, with a market cap of more than $28 billion. “It was certainly the greatest success in terms of a business story,” says Giustra. “All the stars aligned. I don’t think that’s going to be repeated in a while.”
But the Wheaton deal was almost the undoing of a long-time FOF, Egizio Bianchini, BMO’s global head of metals and mining. And it was a reminder to Giustra’s other pals that the perks of FOFdom come with strings attached.
Before hooking up with Goldcorp, Wheaton had tried to orchestrate a merger with Toronto’s Iamgold, which quickly drew a rival bid from U.S. gold miner Golden Star Resources. Giustra was livid, particularly because BMO had agreed to represent Golden Star. Bianchini bore the brunt of Giustra’s rage. “You are a real fucking Einstein,” Giustra wrote Bianchini in a terse e-mail.
“He felt betrayed,” Bianchini says now. “I didn’t think he was going to take it like that. I thought he would say, ‘This is business.’ But no, he took it quite personally.” Wheaton’s bid eventually failed; so did Golden Star’s. Giustra couldn’t resist sending Bianchini another missive. “There you go, fucking Einstein,” it said.
The two men didn’t speak for more than a year. “Those weren’t jokes when he sent those e-mails,” Bianchini says. “That was hatred. That was pure hatred.” Eventually, however, BMO and its mining boss made their way back into Giustra’s good books. Bianchini is once again an FOF. “I have a lot of time and admiration for Frank,” he says. “He’s a good, solid business guy. He’s made a lot of people money. He can be tough, but he can be extremely charming as well.”
BMO won a minor role in Giustra’s next big score: a uranium play in Kazakhstan that turned a $450-million investment into a $3-billion buyout in less than two years. That same deal is at the heart of the bad press dogging Giustra and his good friend Bill Clinton.
A diminutive bundle of intensity, Giustra bristles at questions about his family. “I have a private life, and all that stuff is private,” he says icily. “I want to keep it that way.” (He won’t confirm that since splitting from Lawton, he’s vacated his Vancouver mansion and moved into a condo.) He’s particularly touchy about his private jet. Even Gordon Keep, a 20-year FOF and Giustra’s right-hand man, has only taken two trips aboard Air Giustra. Yet if it weren’t for the plane, Giustra never would have met President Clinton, and it’s where they’ve spent the majority of their time together. So, will Frank give me a glimpse of the MD-87?
“Let me explain something,” he says. “The plane is a business tool. No more, no less. It ain’t Lifestyles of the Rich and Famous. That’s not my place. To me, that’s not the story.” Giustra is getting more and more worked up. “This is not about me flying around on a plane. I keep it for business reasons. It works well. It gets the job done. It’s not champagne and caviar.”
Those who’ve seen it, however, say Giustra’s ride is stunning. Phillip Shirvington, a uranium industry veteran who’s been on plenty of private jets in his time, says Frank’s plane tops them all. “His is the best I’ve been on by a long shot,” he says. “It’s just beautifully done out.”
It was June, 2005, when Giustra and Clinton took their first trip aboard the MD-87. Earlier that year, Giustra had hosted a tsunami-relief fundraiser that featured a videotaped thank-you address from Clinton. Afterward, he told the ex-president’s handlers he was looking for other ways to support Clinton’s charitable work. They came back with a request: The foundation needed a plane for a planned tour of Latin America. Could the President borrow Giustra’s jet? He was thrilled to oblige, and even more thrilled when he was invited to tag along.
Giustra says he and Clinton hit it off immediately. They’re both voracious readers and can talk for hours about geopolitics, history and, of course, philanthropy, he says. (Giustra admits to hoovering up all the information he can gather on any subject that piques his interest. “Any time I get into a project, whether it is for profit or non-profit, I take it seriously,” he says. “I think about it carefully and it becomes my entire focus.”) They’re also both nighthawks, getting just three or four hours of sleep. In the wee hours, he and Clinton sometimes play cards—Clinton’s favourite game is Oh, Hell, a complicated variant of bridge.
Giustra sees himself as a problem solver, and he says Clinton is the ultimate fixer. “If you were with a person for weeks on end, day and night, and there was any sense of BS in that person, there is no doubt you’d see it,” says Giustra. “I’m telling you, he is who he is. He is a tireless worker who really cares about fixing things. That’s his whole MO. All he wants to talk about is fixing problems—the more creative, the better—and he generally wants to fight for the underdog. That’s the makeup of President Clinton.”
Indeed, no former president has raised more money for charity than Bill Clinton: well over half a billion dollars. At the same time, no other president has personally earned so much, so quickly since leaving office. Bill and Hillary have taken in $109 million (U.S.) since they left the White House in 2001. He has made $51.9 million (U.S.) from speeches, and another $29.6 million (U.S.) from advances and royalties on his books, including Giving: How Each of Us Can Change the World.
Like many former heads of state (Brian Mulroney and Jean Chrétien come to mind), Clinton has also earned millions from his personal business dealings. Since 2002, Clinton has collected more than $12.5 million (U.S.) as a rainmaker, consultant and investment partner with Yucaipa Cos., a Los Angeles investment firm headed by his friend, billionaire playboy Ron Burkle. He received another $400,000 (U.S.) last year from InfoUSA, the Nebraska-based marketing firm headed by Vinod Gupta, a friend and political supporter. As Gupta explained last year to a Nebraska newspaper: “He helps us meet some of the right people.”
In September, 2005, Giustra and Clinton reunited for another trip aboard the jet. This time, it was a three-country tour in support of the Clinton Foundation’s fight against HIV/AIDS. The first stop was Kazakhstan, which holds more than 20% of the world’s uranium reserves. It just so happened that Giustra was looking for a uranium play. He had a hunch that, thanks to years of under-investment and a looming supply crunch as nuclear power returned to favour, the price would soon skyrocket. A year earlier, he’d put together a reputable management team, including mining veterans Phillip Shirvington as CEO of a yet-to-be-named company and Ian Telfer as chairman, and started shopping for assets. They zeroed in on Kazakhstan, where, 10 years before, Giustra had met with the PM. The state-run mining company, Kazatomprom, wanted to boost the country’s uranium production and was looking for foreign investors to buy out some of its joint-venture partners. If Giustra and his team wanted to bid, they’d need Kazatomprom’s blessing. With help from Canaccord, which had extensive experience in the country, as well as from Russian mining executive Sergey Kurzin, another FOF who’d done business there, Giustra and his team set out to win a meeting with Kazatomprom president Moukhtar Dzhakishev.
Once again, Giustra’s jet came in handy. After months of lobbying, and a short ride in the MD-87, Dzhakishev agreed to work with Giustra’s syndicate. They honed in on three uranium deposits partly controlled by two private holders. One of them—the chairman of a Kazakh bank and a former minister of energy, industry and trade—was proving a reluctant seller.
As the negotiations reached their final stretch, Giustra and Clinton landed in Kazakhstan with a sizable entourage. They were treated to a midnight supper with President Nursultan Nazarbayev, a onetime steel worker who has controlled the country for nearly two decades. For Nazarbayev, the visit from Clinton was a major triumph. The dictator had been lobbying to lead the Organization for Security and Co-operation in Europe, a pro-democracy group that monitors elections and promotes humanitarian, environmental and economic initiatives in the developing world. Most U.S. politicians, including Senator Hillary Clinton, had publicly opposed his bid. But during that visit to Kazakhstan, Bill Clinton expressed his support for Nazarbayev’s application.
At dinner that night, Giustra engaged in “small talk” with Nazarbayev. “I can’t remember if it was a talk about uranium mining or my interests in Kazakhstan overall,” Giustra says. “It was a general chit-chat about mining and the fact that I had done business in Kazakhstan. If we talked about the uranium stuff, it would have been just in passing.”
Three days later, on Sept. 9, the holdout agreed to sell his stake to Giustra’s group for $450 million (U.S.). The price was hefty, considering uranium was then going for less than $40 (U.S.) a pound (it would soon run to more than $130). Giustra is adamant that neither Nazarbayev nor Clinton had anything to do with the transaction. “The facts are the facts,” he says. “We bought these assets from private individuals, and we paid full price. It had nothing to do with Bill Clinton.”
The deal paved the way for the creation of UrAsia. Its stock market debut (a reverse takeover of a Giustra shell company) in November, 2005, was the largest ever on the TSX Venture Exchange, giving the company a value of more than $500 million. Just over a year later, UrAsia accepted an all-stock takeover bid from Toronto-based SXR Uranium One (now called Uranium One) worth more than $3.5 billion. UrAsia’s directors, including Telfer, Bob Cross (a former colleague of Giustra’s in the brokerage business) and Douglas Holtby, the ex-chairman of Wheaton, each had stock options valued at over $4 million when the bid was announced. Giustra’s personal stake in UrAsia was valued at more than $45 million at the time.
he relationship between Giustra and Clinton has provoked a firestorm of interest from the U.S. media. The New York Times first broke the story of their trip to Kazakhstan this past January. Shortly after that, The Wall Street Journal reported that Clinton also introduced Giustra to the president of Colombia, Alvaro Uribe. Last year, a Giustra-connected shell company, now called Pacific Rubiales Energy, paid $250 million for control of a Colombian oil-field operation. As part of the deal, Pacific Rubiales, which now trades on the TSX, became a partner of Ecopetrol SA, Colombia’s state oil company.
Although these cozy deals may be unseemly to some, there’s nothing illegal—or even particularly unusual—going on here. Plenty of former heads of state mix business, politics and philanthropy on a regular basis, and both Giustra and Clinton have strongly denied that their relationship crosses the line. For Clinton, who declined to be interviewed for this story, the whole thing is a minor nuisance—one of many he’s encountered during his political career and, more recently, during his wife’s long (and ultimately unsuccessful) run at the White House. For Giustra, even a hint of impropriety could have a lasting impact on the legacy he’s trying to build. He’s already struggling with a credibility problem. To start with, he comes from the wrong side of the tracks—a Howe Street promoter rather than a Bay Street blueblood. His career has been highlighted by schemes and structures that quietly enriched him and his tight circle of friends. Constructing deals for mining concessions in war-torn and developing nations is rarely a squeaky-clean enterprise; though Giustra has never broken the rules, he has pushed them to their limit.
To some, his massive donations to the Clinton Foundation suggest a kind of quid pro quo: Clinton has gained access to hitherto untapped sources of donations for his charity, plus unfettered use of the Giustra plane, not only for his foundation work but also to jet to Hillary’s nationwide campaign events and to lucrative speaking engagements. Giustra has gained one seriously powerful pal with friends in just about every country on the planet.
The financier insists his aim is true. He’s not going to stop doing mining deals—”I still love doing deals. I absolutely love doing deals,” he says. But his sole raison d’être now is to put the profits toward aiding those who need it most—with or without Clinton’s help. “I don’t need Bill Clinton,” says Giustra. “I created my wealth long before I met Bill Clinton. I was successful long before I met Bill Clinton. I was meeting heads of government long before I met Bill Clinton. I have no interest in using him to enhance my wealth. I told him right at the beginning, my only interest was seeing if there was a way we could work together philanthropically, and that is what we’ve done.”
The whiff of controversy hasn’t stopped more than 1,200 people from packing the ballroom of the Westin Harbour Castle Conference Centre in support of the Clinton Giustra Sustainable Growth Initiative. A towering John Travolta weaves his way among the tables, greeting fans as they dig into their beef tenderloin and dainty organic greens. Eugene Levy, the evening’s MC, cracks wise about Giustra’s jet. His post-meal face towel on the flight, he deadpans, was “slightly tepid.”
Travolta, Tom Cruise and Robin Williams each take turns at the podium, imploring the crowd to dig deep and give. Elton John, Shakira, Norah Jones, Burton Cummings and Wyclef Jean each perform a few songs on the ballroom’s stage. “There’s lots of money in this room. I’m trying to get into the mining business myself,” Jean says during one number.
Giustra has Clinton to thank for bringing in the big names. But the tables are packed with star-struck FOFs, and they’re ready to back up Giustra with their chequebooks. After all, if it weren’t for him, their bank accounts would be considerably less stuffed. Cross donates $500,000. So does Neil Woodyer, the CEO of Endeavour Financial, where Giustra was chairman until June, 2007, and where he is still an adviser. From a table that includes GMP Securities’ superstar trader Mike Wekerle comes $1 million. Paul Reynolds personally pledges another million, while Frank Holmes, the Canadian head of a Texas-based resource fund and the chairman of Endeavour Mining Capital (Endeavour Financial’s parent firm), adds $100,000 to the cause (bringing his total contribution to $2 million). Sergey Kurzin, a crucial player in the UrAsia deal, chips in another $1 million. Finally, Telfer, who has been inextricably linked to Giustra for the past decade, signs a personal cheque for $3 million. “This is a good time for our industry. It’s time for us to give back,” Telfer tells the crowd. By the end of the night, Giustra’s guests would pledge more than $16 million to the CGSGI. And Telfer would privately acknowledge that his very public display of support was driven in part to declare his commitment to his old friend, who has had to suffer the media’s slings and arrows: “If there was ever a time to stand by Frank, this is it.”
Clinton is also standing by his new best man—now one of the Clinton Foundation’s top three backers. As he tells the crowd, he’s seen firsthand the good that Giustra’s cash has done in the places that need it most. “I’d look around, and I could actually count the number of children who were alive in the world because of the money he’d given me,” Clinton says in his familiar southern lilt. “None of this would have been possible if Frank Giustra didn’t have a remarkable combination of caring and modesty, of vision and energy and iron determination.
“And lately, a little bit of rhinoceros hide too—to take the incoming fire occasioned only because his partner was inadvertently dragged back into American politics,” Clinton drawls. “I love this guy, and you should too.”
Clinton and Giustra embrace. The hug is strong and sincere. There’s nothing awkward about it.
During Giustra’s turn at the podium, he says, “People ask what our motivations are. Well, it’s morally the right thing to do. And of course it is smart business. Of course it is. But as President Clinton noted in the last paragraph of his book Giving, it makes us feel happy.”
Giustra, it seems, is warming to his role as the face of philanthropy in the mining sector—though he insists it’s a role he accepted reluctantly, knowing all the attention his association with Clinton would bring. Others in the mining industry aren’t so sure. They say he loves the limelight and works keenly to ensure the notice he does receive is positive. The day before the Journal story ran, for instance, Giustra sent an e-mail to friends and donors. Both the Times and the Journal stories, he wrote, were an “amalgam of half-truths and innuendo…driven by the upcoming U.S. presidential elections. Nevertheless, as friends and supporters of the work we are doing with the CGSGI, I wanted to give you a heads up.”
Either way, Giustra’s enthusiasm for philanthropy now verges on fundamentalism. Clinton’s foundation, he says, stands to gain millions—even billions—more in donations from his mining colleagues to help eliminate poverty in the very countries where those same miners do business. So far, the CGSGI has allocated only $20 million of more than $300 million it has received in pledges, announcing a handful of social development and anti-poverty programs in Colombia and Peru. Africa could be next, following a $100-million commitment from the family charity of long-time FOF and mining mogul Lukas Lundin, Lundin for Africa.
Back in his Vancouver office, with its million-dollar view of the harbour and mountains, Giustra struggles to explain his transformation. It sounds, at times, like he’s trying to close a deal. “We live in a cynical world. It’s hard not to be a cynic. The sure cure for being a cynic is to go see up close and personal what goes on on the ground in all these countries—the suffering, the death. Talk to the people, see the joy that you’re bringing,” he says. “I don’t care how hard of a businessman you are or how hard of a journalist you are, seeing this stuff up close and personal will make any hardened heart all squishy again. Okay?”
Giustra’s voice gets louder. “If more people did that, we wouldn’t have all this cynicism about what the motivation is for Bill Clinton setting up his foundation. He’s helped literally hundreds of thousands of people. He’s saved literally hundreds of thousands of lives, and it will probably end up being millions of lives. CGSGI on its own, with the hundreds of millions we’ve raised, and the probably billions we’re going to raise, we’ll probably improve the lives of millions of people around the world. Give people hope, get kids through school, create jobs, create opportunities. That’s what this is all about.”
Telfer, Giustra deny they tried to influence Russian uranium deal with donations to Clinton Foundation
A pair of Canadian mining magnates are denying suggestions that they donated to the charitable foundation of former President Bill Clinton and his family to help win U.S. approval to sell a uranium company to Russia.
Frank Giustra said the allegations have nothing to do with him, and are merely an attempt to “tear down” presidential candidate Hillary Clinton and her election campaign. Ian Telfer, meanwhile, said he committed the funds before he ever realized he would do the deal with the Russians.
The New York Times reported on the donations in an explosive article this week. The story involves a former Canadian mining company called Uranium One Inc., in which Giustra and Telfer were two of the key principals.
In 2010, Uranium One began a process to sell itself to Rosatom, a state-controlled nuclear giant in Russia. Uranium One had assets in Kazakhstan and the United States, and multiple U.S. government departments had to sign off on the deal. One of them is the State Department, which was led at the time by Hillary Clinton.
Uranium is considered a strategic resource, and it would be unthinkable today for the U.S. government to consider selling the country’s uranium reserves to Russia. But the Uranium One sale happened prior to Russia’s incursions into Ukraine last year, and Telfer said in an interview that getting it approved did not require lobbying.
“There was no lobbying,” he said.
The Times story noted that between 2009 and 2013, Telfer donated US$2.35 million to Clinton’s foundation. This coincided directly with the period in which Rosatom gradually took control of Uranium One. Telfer was Uranium One’s chairman at the time.
In the interview, Telfer said he agreed to contribute US$3 million to the Clinton Foundation back in March 2008, shortly after Giustra and Clinton set up their sustainable growth initiative for the natural resource sector. That was before Uranium One had any negotiations with the Russians, and the donations he has made since then were part of that initial pledge, he said. He denied they had anything to do with influencing U.S. government officials around Uranium One.
“There were no plans for us (in March 2008) to ever have Rosatom as a majority shareholder of the company,” he said. “So therefore, there was never any thought of influencing anyone because there was nothing to influence.”
Giustra’s direct involvement with Uranium One ended back in 2007, when he sold his company UrAsia Energy Ltd. to Uranium One for about US$3 billion. UrAsia held the key Kazakhstan assets that formed the backbone of Uranium One, and there have been prior allegations that Giustra used his friendship with Bill Clinton to help secure those assets when the two men were in Kazakhstan together in 2005.
Giustra has subsequently contributed US$31.3 million to the Clinton Foundation and pledged US$100 million more, according to the Times.
In a statement on Thursday, Giustra said there “is not one shred of evidence” to back up claims that he tried to influence the U.S. government to approve the Uranium One sale to Rosatom. He called the Times piece a “wildly speculative, innuendo-laced article.” He also said that he sold all his Uranium One shares in 2007.
“I would note that those (shares) were sold at least 18 months before Hillary Clinton became the secretary of state. No one was speculating at that time that she would become the secretary of state,” he said.
In addition to Giustra and Telfer, the Times noted that other people with ties to Uranium One made contributions to the Clinton Foundation: Neil Woodyer, Frank Holmes, Paul Reynolds (who recently died in a triathalon incident) and GMP Securities Ltd.
Many of the details in the Times article come from an upcoming book called Clinton Cash, written by Peter Schweizer, which will be released on May 5th. The book examines how Bill and Hillary Clinton allegedly made millions through relationships with businesses and foreign governments.
Is Panasonic The Most Unethical Company in Tech?
Elon Musk will do anything for dirty tech deal’s to increase his wealth and self-promotion via taxpayer pig troughs. He loves to partner with the dirtiest name in electronics: Panasonic.
Apparently, twisted minds think alike. When will the FBI finally shut both of these bad actors down?
Panasonic kills workers. Lies, runs corruption operations, dumps goods, builds toxic factories and well, just take a look:
Panasonic charged with price-fixing on car components
A federal grand jury in Detroit indicted another Japanese automotive executive on Tuesday for involvement in an international pricing-fixing conspiracy.
According to the charges filed in U.S. District Court, Shinichi Kotani, an executive for Panasonic Corp., participated in fixing prices on switches and steering angles sensors for Toyota Motor Corp. vehicles sold in the U.S.
The indictment alleges Kotani and co-conspirators participated in big-rigging meetings in the U.S. and Japan from January 2004 until at least February 2010.
Besides various executive roles in Japan, Kotani served as vice president of automotive systems for Panasonic Automotive Systems Co. of America in Peachtree, Ga., from April 2008 until July 2009.
Panasonic also has an automotive technical center in suburban Detroit. Attempts to reach a company official for comment were unsuccessful. Efforts to locate an attorney for Kotani also were unsuccessful.
Kotani faces a maximum penalty of 10 years in prison and $1 million in fines for violating the Sherman Act.
The indictment — part of a broad ongoing U.S. investigation into supplier price fixing — is the second coming out of Detroit in the past week. Regulators in Europe and Japan have been conducting similar investigations.
On Sept. 19, Ryoji Fukudome and Toshihiko Nagashima, executives for Tokyo-based Fujikura Ltd., were indicted for allegedly fixing prices on wire harnesses sold to Fuji Heavy Industries. The parts were allegedly used in Fuji’s Subaru vehicle line sold in the U.S.
Earlier this month, Shingo Okuda, an executive at G.S. Electech Inc., was indicted by a federal grand jury in the Eastern District of Kentucky for bid-rigging on wire assemblies sold to Toyota.
In July, Panasonic pleaded guilty to its role in the conspiracy and was sentenced to pay a $45.8 million criminal fine.
The investigation has led to 11 companies and 19 executives, including Kotani, charged in the price-fixing conspiracy.
More than $874 million in criminal fines have been imposed on the companies, and 14 executives have been sentenced to prison ranging from a year to two years each.
The list of companies that have pleaded guilty include Panasonic, Sanyo Electric Co., Diamond Electric Manufacturing Co., Tokai Rika, Autoliv, TRW Deutschland Holding GmbH, Nippon Seiki Co., Fujikura, Furukawa Electric Co., Denso Corp., Yazaki Corp. and G.S. Electech.
Panasonic will spend up to $1.6 billion on Tesla gigafactory
Panasonic has been involved with Tesla’s Gigafactory from the beginning of the project, but until now, it hasn’t said exactly how much it plans to invest.
Now Panasonic President Kazuhiro Tsuga has told Marketwatch that the company will invest up to $1.6 billion, hoping to secure its future in automotive electronics.
Sales to carmakers represented about 15 percent of Panasonic’s revenue in 2015, but the company aims to double that over the next four years. That objective is highly dependent on Tesla’s ability to meet its goal of selling 500,000 cars a year by 2020, as batteries are expected to provide the lion’s share of Panasonic’s automotive-market sales.
“We are sort of waiting on the demand from Tesla,” Mr. Tsuga said. “If Tesla succeeds and the electric vehicle becomes mainstream, the world will be changed and we will have lots of opportunity to grow.”
Tesla and Panasonic plan to build the factory in eight phases, and are currently in the first phase. So far, the Japanese company’s investment has been small, but by the time the Gig is fully up to speed, Panasonic will have provided between 1.5 and 1.6 billion dollars, out of a total price tag of 4 to 5 billion, Mr. Tsuga said.
Panasonic employees were expected to arrive in Nevada at the end of 2015 to prepare for the start of cell production. The factory will begin producing batteries this year for Tesla’s Powerwall energy storage business.
Panasonic and Its Subsidiary Sanyo Agree to Plead Guilty in Separate Price-Fixing Conspiracies Involving Automotive Parts and Battery Cells
Lg Chem Ltd. Agrees to Plead Guilty to Price-fixing Conspiracy Involving Battery Cells, First Charges Filed in Battery Cell Investigation
Panasonic Corp. and its subsidiary, SANYO Electric Co. Ltd., have agreed to plead guilty and to pay a total of $56.5 million in criminal fines for their roles in separate price-fixing conspiracies involving automotive parts and battery cells, the Department of Justice announced today. LG Chem Ltd., a leading manufacturer of secondary batteries, has agreed to plead guilty and to pay a $1.056 million criminal fine for price fixing involving battery cells.
Osaka, Japan-based Panasonic agreed to pay a $45.8 million criminal fine for its role in the automotive parts conspiracy. SANYO agreed to pay a $10.731 million criminal fine for its role in the battery cells conspiracy. The guilty pleas against SANYO and LG Chem are the first in the department’s ongoing investigation into anticompetitive conduct in the cylindrical lithium ion battery cell industry.
The three-count felony charge against Panasonic was filed in U.S. District Court for the Eastern District of Michigan. Separate one-count felony charges were filed against SANYO and LG Chem in U.S. District Court for the Northern District of California. As part of the plea agreements, which are subject to court approval, the charged companies have agreed to cooperate in the department’s ongoing antitrust investigations.
Panasonic has agreed to plead guilty for its role in a conspiracy to fix prices of switches, steering angle sensors and automotive high intensity discharge (HID) ballasts installed in cars sold in the United States and elsewhere. SANYO and LG Chem Ltd. have agreed to plead guilty for their roles in a conspiracy to fix the prices of cylindrical lithium ion battery cells sold worldwide for use in notebook computer battery packs.
“Panasonic is charged with participating in separate price-fixing conspiracies affecting numerous parts used in cars made and sold in the United States while its subsidiary was also fixing prices on battery cells used by consumers of notebook computers,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Pleading guilty and cooperating with the division’s ongoing investigations is a necessary step in changing a corporate culture that turned customers into price-fixing victims.”
According to the first count of a three-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Panasonic participated in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of steering wheel switches, turn switches, wiper switches, combination switches and door courtesy switches sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc. in the United States and elsewhere. According to the court document, Panasonic and its co-conspirators carried out the conspiracy from at least as early as September 2003 until at least February 2010.
The second count charges that Panasonic, during this same time period, participated in a conspiracy to rig bids for, and to fix, stabilize, and maintain the prices of steering angle sensors sold to Toyota in the United States and elsewhere. The department said that Panasonic and its co-conspirators agreed, during meetings and conversations, to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize, and maintain the prices of steering angle sensors sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc. in the United States and elsewhere.
According to the third count of the charge, from at least as early as July 1998 and continuing until at least February 2010, Panasonic and its co-conspirators participated in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing, during meetings and conversations, to rig bids for, and to fix, stabilize, and maintain the prices of automotive HID ballasts sold to Honda Motor Co. Ltd. and American Honda Motor Co. Inc., Mazda Motor Corp. and Mazda Motor of America Inc., and Nissan Motor Co. Ltd. and Nissan North America Inc. in the United States and elsewhere.
I ncluding Panasonic, 11 companies and 15 executives have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $874 million in criminal fines as a result of the auto parts investigation. Additionally, 12 of the individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. The three additional executives have agreed to serve time in prison and are currently awaiting sentencing.
“The FBI remains committed to protecting American consumers and businesses from corporate corruption. The conduct of Panasonic, SANYO, and LG Chem resulted in inflated production costs for notebook computers and cars purchased by U.S. consumers,” said Joseph S. Campbell, FBI Criminal Investigative Division Deputy Assistant Director. “These investigations illustrate our efforts to ensure market fairness for U.S. businesses by bringing corporations to justice when their commercial activity violates antitrust laws.”
According to the one-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco, SANYO and LG Chem engaged in a conspiracy to fix the price of the cylindrical lithium ion battery cells used in notebook computer battery packs from about April 2007 until about September 2008. Cylindrical lithium ion battery cells are rechargeable batteries that are often incorporated in groups into more powerful battery packs commonly used to power electronic devices.
According to the charges, SANYO, LG Chem and their co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and conversations to price cylindrical lithium ion battery cells for use in notebook computer battery packs to customers at predetermined levels and issuing price quotations to customers in accordance with those agreements. The department also said that SANYO, LG Chem and their co-conspirators collected and exchanged information for the purpose of monitoring and enforcing adherence to the agreed-upon prices and took steps to conceal the conspiracy.
Panasonic, SANYO and LG Chem are each charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine for the company may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
Today’s charges arose from an ongoing investigation in the cylindrical lithium ion battery cells industry being conducted by the Antitrust Division’s San Francisco Office and the FBI in San Francisco as well as an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s automotive parts charges were brought by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323. Anyone with information concerning illegal or anticompetitive conduct in the battery industry is urged to call the Antitrust Division’s San Francisco Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.
Panasonic Execs Charged In Price-Fixing Sting
By Kaitlin Ugolik
Law360, New York — A grand jury in Michigan on Tuesday indicted former executives of Panasonic Corp., Whirlpool Corp. and Tecumseh Products Co. for their alleged participation in an international refrigerant compressor price-fixing scheme.
The indictment is the first in an ongoing investigation by the U .S. Department of Justice into price-fixing and other anti-competitive practices in the worldwide refrigerant compressor market.
“Cracking down on international price-fixing cartels has been, and will continue to be, among the most significant priorities for the Antitrust Division,” Sharis Pozen, Special Investigator, said.
FBI Probing Kickbacks By Panasonic Supplier
The FBI said this week federal prosecutors charged William McMahon, CEO and co-owner of Trustin Technology, and Sean Volin, who was a manager for Pansonic Corp. of North America at its Secaucus, N.J., office, with wire fraud. McMahon paid kickbacks to Volin to ensure his company would continue to receive contracts from Panasonic that brought tens of millions of dollars to the company, the FBI said in a statement.
Tell Sony and Panasonic: Stop Poisoning Tijuana’s Workers!
I am writing to address the manufacturing practices of international corporations in Mexico, especially Tijuana. The workers in their plants are treated inhumanely, and they are destroying the communities around their factories. They are able to escape fair treatment of their workers and responsible chemical use by moving their manufacturing to Mexico – out of sight and out of mind of their customers. The fact that any company would be so deliberately manipulative is disgusting and unbelievable.
The chemicals the workers are constantly exposed to are killing them – they are inhaling lead, burning their skin with chemical adhesives and giving birth to children with defects. They have sores and infections in their lungs and organs. They are going to die young – their children are living in the company waste and filth.
They are offered no rights, no protection, and no fair treatment. To make matters worse, they do not get a reprieve at home. The worker communities surrounding the plants are wastelands of corporate footprints. The rivers run with chemicals – the rivers that serve as drinking, cooking and washing water for the inhabitants. The ground is saturated with dangerous and harmful substances used in their factories. When the rains run, the polluted rivers overrun into people’s homes and they must cross them on foot simply to get to work, where they are exposed to even more chemicals.
They are not responsible for the workers’ living conditions. They are not responsible for downed power lines, education issues or lack of proper homes. However, nothing I have mentioned in this petition is beyond their control. They can stop the use of dangerous and deadly chemicals in factories. They can clean up their act. They can stop letting their chemicals run off into the workers’ water supplies, homes and bodies. They can hire an environmental task force to clean up the communities that they have ruined, which would create legitimate jobs. They can hire engineers to figure out solutions to replace the deadly chemicals with harmless ones that still enable them to produce a high-quality product.
Sony and Panasonic are committed to serving their customers with dignity and respect – but their employees deserve to be treated in the same way. Until Sony and Panasonic change their production practices and clean up the communities they have ruined, I am instituting a boycott of their products. This is unacceptable and will not be allowed to continue – as free Americans we vote with our dollars and we cannot choose to vote for their companies until change happens.
So when you buy a piece of electronic equipment, whether it is a television or a camera cable, to a microwave or a toaster, LOOK FOR THE SONY/PANASONIC LABEL. Sony brands many of its products clearly, but you may have to look carefully for the Panasonic name. Don’t allow this to continue. If the profit margins aren’t working, Panasonic and Sony will have to change their manufacturing practices, and we have to make it hurt where it counts for them to listen. Aim high! Invite your friends! Sign away! We want as many thousands of signatures as possible!
We are writing to you to address your manufacturing practices in Mexico, especially Tijuana. The workers in your plants are treated inhumanely, and you are destroying the communities around your factories. You are able to escape fair treatment of your workers and responsible chemical use by moving your manufacturing to Mexico – out
Panasonic’s Toxic Factories Take Toll On China’s Labor Force
Jane Spencer and
Over the holidays, millions of American children received Chinese-made toys powered by cadmium batteries.
Cadmium batteries are safe to use. They are also cheap, saving American parents about $1.50 on the average toy, compared with pricier batteries.
But cadmium batteries can be hazardous to make. In southern China, Wang Fengping worked for years in plants that produced cadmium batteries for the likes of Mattel Inc., Toys “R” Us Inc. and Wal-Mart Stores Inc. Like hundreds of her colleagues, Ms. Wang regularly inhaled the toxic red cadmium dust that filled the air in the plant.
Now, at 45, Ms. Wang is often too weak to walk. Her kidneys have failed, and her doctors have identified cadmium poisoning as the likely culprit. About 400 other workers at her former employer, Hong Kong-based GP Batteries International Ltd., have been found to harbor unsafe levels of cadmium, a toxic metal like mercury and lead that can cause kidney failure, lung cancer and bone disease.
In recent months, Americans have discovered the dark side of their reliance on cheap Chinese goods. From lead-tainted toys to contaminated pet food, the safety of Chinese products is suddenly an American obsession.
But in China, workers making goods for American consumers have long borne the brunt of a global manufacturing system that puts cost cutting ahead of safety. The search for cheaper production means dirty industries are migrating to countries with few worker protections and lenient regulatory environments.
The nickel-cadmium battery illustrates this trend. Once widely manufactured in the West, the batteries are now largely made in China, where the industry is sickening workers and poisoning the soil and water.
Now, some regulators and companies are taking action. This year, the European Union is banning the sale of nearly all cadmium batteries. A few companies, including Hasbro Inc., are eschewing the battery.
Yet cadmium batteries, a technology dating back to 1899, continue to represent 3% of total battery sales, and are still widely used in toys, power tools, cordless phones and other gadgets sold in the U.S. Besides being inexpensive, they can provide a quick surge of power.
The near-disappearance of the American cadmium-battery industry can be understood from a visit to an overgrown field in Cold Spring, N.Y. Here, the Marathon Battery factory churned out nickel-cadmium batteries for the U.S. military for three decades. After the plant was shuttered in 1979, the cadmium-laden ground became one of the nation’s highest-profile superfund sites, sparking a $130 million clean-up and a class-action lawsuit by nearby residents that was settled for millions of dollars in 1998.
Edited excerpts from Ms. Wang’s blog, written in Chinese and translated by The Wall Street Journal. Click on the image to go to the blog itself.
- From the blog’s undated introduction
Hello friends! Do you want to know how Gold Peak Battery treats its cadmium-poisoned employees? Would you like to hear a personal account from a victim of workplace cadmium poisoning? Panasonic Battery and past and present battery factory workers, would you like to know more specific facts? Then please read my blog, and let’s unite in concern for cadmium poisoning!
- Nov. 20, 2007 — Global warming, colder heart
It was hard to get up to eat a bit of breakfast, my head hurt and my whole body felt discomfort, but finally I decided to go outside. Everyone is talking about global warming, temperatures are rising, but today I felt the wind was pretty strong and the temperature colder than yesterday. I felt as if I was sleepwalking through unfamiliar streets. After a while, I gathered my thoughts and returned home.
- Nov. 11, 2007 — The visible and the invisible
Our society is full of love; if a person gets into trouble, others will help. But when it comes to occupational diseases — a hidden killer — that cannot be seen, I’m afraid that it’s very difficult for those without personal experience to understand. Most workers have limited knowledge, ultimately you don’t know how many hidden killers are in your workplace. The boss knows, but he won’t tell you!
- Nov. 11, 2007 — First application for an occupational illness diagnosis
My name is Wang Fengping. I am an engineer in the engineering department of the Gold Peak Battery Factory in Huizhou city, Guandong province. I was born in May 1962 and began work at Gold Peak on August 1, 1995. From that date until December 2005, I was continuously engaged in the production and follow-up design of manufacturing equipment and machinery. This entry includes an account of all of Ms. Wang’s jobs, workplaces, names of co-workers, and whether those employees had symptoms similar to Ms. Wang’s.
- Nov, 7, 2007 — Poem, in Chinese and English
“It is my prayer, it is my longing, that we may pass from this life together / a longing which shall never perish from the earth, / but shall have place in the heart of every wife that loves, / until the end of the time; and it shall be called by my name.”
As the U.S. and other Western nations tightened their regulation of cadmium, production of nickel-cadmium batteries moved to less-developed countries, most of it eventually winding up in China. “Everything was transferred to China because no one wanted to deal with the waste from cadmium,” says Josef Daniel-Ivad, vice president for research and development at Pure Energy Visions, an Ontario battery company.
Today, only two American companies still make cadmium batteries, and they specialize in high-end batteries for use in equipment such as aircraft engines. U.S. laws require them to follow strict guidelines on worker safety and environmental protection.
In China, government standards on cadmium exposure are in line with those endorsed by the World Health Organization. And without question, there are safe cadmium plants in China.
But having rules and enforcing them are two different things. China has dozens of so-called “hot spots” where the cadmium contamination is similar to levels at U.S. superfund sites. More that 10% of China’s arable land is contaminated with heavy metals such as cadmium, according to the State Environmental Protection Agency, and the metals are entering China’s food supply. At least a dozen academic studies in the past two years have found unsafe levels of cadmium in fruit and vegetables grown in Chinese soil. In a study published last year, researchers at the Guangdong Institute of Ecology found excessive levels of cadmium in Chinese cabbage grown in Foshan. The battery industry isn’t the only source of environmental cadmium contamination in China, but it is a major contributor.
Often, these risks extend to workers. Last year, at least 20 workers at a Panasonic Corp. cadmium-battery plant in Wuxi were found to have elevated levels of the toxin, and two were diagnosed as poisoned. In 2005, 1,000 workers at Huanyu Power Source Co., based in Xinxiang, Henan, were also found with cadmium exposure. Both Panasonic and Huanyu say they have taken care of the affected workers, providing health care and compensation exceeding the requirements of Chinese law.
Yet these findings didn’t necessarily result from corporate or government vigilance. The Panasonic-plant contamination, for instance, came to light after some workers watched a television show about cadmium poisoning — and got themselves tested.
Protest about contamination at the GP plants has persisted in part because of the determination of Ms. Wang, a GP engineer, to publicize the matter.
Born into a relatively well-off family, Ms. Wang attended university and obtained an engineering degree before hiring on at a newly opened GP factory in the southern Chinese city of Huizhou, a fast-growing center of China’s electronics industry. The year was 1995, and GP Batteries, a Singapore-listed unit of Hong Kong-listed Gold Peak Industries (Holdings) Ltd. Huizhou, was a prestigious employer, eventually becoming one of the largest makers of nickel-cadmium batteries in China.
As a machine designer, Ms. Wang worked in the management offices of a walled compound of pink-tiled buildings where some 1,500 women in matching blue smocks worked 12-hour days assembling nickel-cadmium battery packs for toys and other products. GP’s clients eventually came to include dozens of U.S. companies including Energizer Battery Co., Proctor & Gamble Co.’s Duracell, Spectrum Brands Inc.’s Ray-O-Vac, Hasbro, Mattel, Wal-Mart and Toys “R” Us.
For years, factory workers complained about illnesses — nausea, hair loss and exhaustion, for instance. But GP management says it wasn’t aware of the extent of the cadmium danger. “We knew it was dangerous, but we thought that if it was handled in a reasonable manner you should be OK,” says Henry Leung, chief operating officer of GP Batteries. “This is all new for China.”
At the factory, Ms. Wang spent the bulk of her time in an office, quietly sketching machine designs. But between 2002 and 2004, she spent long hours in production areas, inhaling cadmium dust, according to a lawsuit filed by Ms. Wang against the factory.
In 2003, some sick workers paid for their own tests at an occupational-disease hospital and learned they had elevated cadmium levels. The news touched off panic on the factory floor, and workers demanded the company pay for cadmium tests. Hundreds of workers eventually went on strike.
GP says it began paying for cadmium checkups in mid-2004, as soon as the region set up facilities that could handle large volumes of cadmium testing. In the initial tests, 177 workers showed levels of cadmium above China’s safe-exposure limit, and two qualified as poisoned. Dozens were immediately hospitalized.
Cadmium affects people in radically different ways, so many GP workers with elevated levels aren’t sick, but may become so in the years ahead.
Roughly 900 workers quit their jobs, and GP offered cadmium-affected workers one-time exit compensation starting at about $500. GP says the average package was $2,100. Many workers say the compensation failed to cover their medical bills.
GP says it has paid out more than $1 million in compensation and medical care for affected workers and has exceeded the legal requirements. “We want to take care of workers,” says GP’s Mr. Leung, but he says some workers are feigning sickness to obtain money. “They want to be recorded as poisoned, so people will keep giving them compensation,” he says.
Ms. Wang watched on the sidelines as the bitter saga unfolded at her factory. During her nine years at the factory, she rarely had contact with rank-and-file workers, and her $540 weekly salary was nearly triple what they earned. While other workers ate in a cafeteria, Ms. Wang sat in a manager’s dining room with table cloths and porcelain dishes.
But in October of 2004, when GP first paid for companywide cadmium tests, Ms. Wang’s result came back showing cadmium levels above the safe-exposure limit set by the Chinese government. However, to qualify for continuing monitoring, China’s occupational-disease laws require two consecutive positive tests. A second test showed Ms. Wang’s cadmium level in the normal range, disqualifying her for assistance.
Three occupational-medicine doctors — in London, Sweden and the U.S. — who reviewed Ms. Wang’s medical records for The Wall Street Journal say her initial test showed clear indications of kidney damage, a marker of possible cadmium poisoning.
“There’s no doubt that in 2004, she had smoking-gun-type indicators of kidney damage, and in a person who works with cadmium, that should not be ignored,” says Dr. Arch Carson, an expert in occupational medicine and environmental sciences at the University of Texas School of Public Health.
GP says it relies on medical experts at government-run occupational-disease hospitals in the nearby city of Guangzhou to determine if workers required monitoring.
Having no symptoms, Ms. Wang continued playing badminton and jogging. But in early 2006, she began to feel extremely weak, and suffered headaches. Her skin began to age rapidly, and her eyes became sunken hollows. In November 2006, Ms. Wang was diagnosed at a local hospital with chronic renal failure that doctors said would likely shorten her life.
On Dec. 25, 2006, Ms. Wang approached GP management with news of her diagnosis. She requested that GP send her to the occupational-disease hospital in Guangzhou, which has facilities for treating cadmium exposure.
A stalemate ensued. The company says it was willing to help, but that Ms. Wang refused to follow local legal procedures. Local laws required that Ms. Wang visit a local hospital first, in order to be referred to the main occupational-disease hospital in Guangzhou. The company says Ms. Wang demanded they send her directly to the Guangzhou hospital, in violation of regulations.
In May, Ms. Wang sued the factory for $400,000 in compensation and medical care. To build her case, Ms. Wang used her access to company computers to download files that showed other workers in her department were exposed to cadmium. GP says there is no evidence that Ms. Wang’s illness is related to cadmium, and doctors at the Guangzhou Occupational Disease Hospital say her kidney failure doesn’t meet the criteria for occupational disease.
By last summer, Ms. Wang’s health was failing. According to medical records from a hospital in Nanjing, she was admitted with a fever and a respiratory infection. Doctors there treated her for chronic renal failure, and listed “long-term exposure to cadmium-containing substances” as a possible cause, according to her medical records.
As workers, including Ms. Wang, sought to bring attention to the issue, a public-relations battle erupted. In 2005, GP filed a lawsuit against labor-rights groups representing the workers, charging libel. The case is moving through Hong Kong courts.
On their way to an interview with a Wall Street Journal reporter in August, Ms. Wang and several colleagues were pulled over by police and detained for nearly 13 hours in a Huizhou police station, according to several sources familiar with the incident. A person present at the Huizhou police station says the workers were told they would be charged with treason if they spoke to the media again. The Huizhou government says its police detained no battery workers.
Ms. Wang stopped answering her cellphone after the incident with the Huizhou police. But she began writing a blog to advise victims of cadmium poisoning. A recent post, in Chinese, said, “Basically, occupational disease could be prevented but it costs money. Money is the gold of bosses. And for them, the lives of workers are worthless.”
After revelations of its cadmium-battery problems arose, GP quit making them at its plants, and now outsources that production to independent factories in China.
In America, five years after Hasbro stopped using nickel-cadmium batteries, Mattel and Toys “R” Us are yet to follow suit, but say they are exploring alternatives. Wal-Mart no longer purchases cadmium batteries from GP but declined to comment on whether it still uses them in its products.
Mattel says cadmium batteries have some performance advantages over alternatives, such as a better ability to retain a charge when not used for long periods.
—Sky Canaves in Hong Kong contributed to this article.
Panasonic ‘covered up’ poisoning at battery factory, report claims
By Texyt Staff – Sat, 04/28/2007 – 11:51.
Panasonic hid evidence that workers were poisoned at a battery factory, a report in a Chinese newspaper claims. Even pregnant women were not warned they might have been exposed to high levels of Cadmium, a potentially lethal heavy metal, the report alleges, quoting a manager who says he was laid off when he threatened to turn whistleblower.
The allegations are being made by a former human resources manager according to an article in the 21st Century Economic Report, a newspaper published by China’s respected Southern Daily Group (Linked sites are in Chinese).
Panasonic has not yet responded to a request for comment on the case, which is claimed to have taken place over the past three years at a factory (photo) manufacturing rechargeable Nickel-Cadmium batteries in Wuxi, north of Shanghai.
Exposure to even tiny amounts of Cadmium is known to increase the risk of cancer and can lead to a variety of crippling and potentially-fatal health conditions.
‘Health reports buried’, claim
The newspaper’s source, named as ex-human resources manager, Pan Wei, claims he was hired by the company in October 2006. Later that same month, he told reporters, the company doctor gave him safety reports on Cadmium exposure to sign.
The original health tests showed that ten staff had Cadmium levels above safety limits, Mr. Pan said. However, an overall safety report stated that no staff had any such problem.
The doctor told Pan that this was normal procedure, and staff with dangerous Cadmium exposure were rotated to different work until their health reports improved, the ex-manager alleges.
Continued for three years?
According to the newspaper article: “Pan realized that since 2003, the company has handled the staff health examination every year, and every year the examination says all the staff have no problem, so none of the staff have been notified of the real poisonous Cadmium level”
The story continues: “The doctor said, this is our normal procedure. The director of the factory has signed his name, and higher people above have signed their names too. So you sign your name and there will be no problem”
Pregnant workers affected, report claims
Some workers had left the factory to work at other jobs where they might be exposed to Cadmium poisoning, without realizing they already had dangerous levels of Cadmium in their bodies, Pan alleges. In addition, he says, some of those affected were pregnant.
Pan claims he was laid off after he demanded executives warn these workers of the risk. Panasonic informed him he had not performed satisfactorily during his probationary employment period, he says.
Panasonic is a trading name of Japan’s giant Matsushita Electric Industrial group. The company has not yet responded to a request for comment on this case.
Leading Japanese firms such as Matsushita are major investors in Chinese manufacturing. However, Chinese people have mixed perceptions about Japan. While they admire the country’s advanced economy and culture, they also tend to believe that Japan has abused China in the past, particularly during the Second World War, and has failed to apologize adequately.
This negative perception has been fed by a heavy diet of official anti-Japanese propaganda, including school text books which harp upon Japan’s historical misdeeds.
In this environment, Japanese firms operating in China are highly sensitive to negative publicity which might combine with smouldering anti-Japanese sentiment to ignite a firestorm of criticism.
Update April 29: ‘ The website of the Wuxi battery factory was taken offline yesterday’ – removed this line as the website was only taken offline temporarily and is currently accessible with no obvious changes from the previous version – thanks to anonymous commenter below.
Red Dust – documentary on cadmium poisoning in Chinese women battery workers for Tesla Cars
Aug 06, 2010
Red Dust, a documentary directed by Karin Mak, chronicles the struggle for justice by women workers in China who have been poisoned by cadmium while manufacturing nickel-cadmium batteries.
Click here to view the trailer.
Cadmium has been in the international and USA news lately as found in jewellery and McDonald’s Shrek glasses. However, the majority of cadmium is used for production of nickel-cadmium batteries, a type of rechargeable battery.
Cadmium is a very toxic heavy metal and the brave women in the film live with its debilitating effects in addition to risking their safety in their fight for justice. It covers themes of workers’ rights, globalization, occupational safety and health, China’s economic development and women’s rights.
Red cadmium dust drifted freely in China’s nickel-cadmium battery factories owned and operated by GP BATTERIES (GP), one of the world’s top battery manufacturers. Ren, a migrant worker originally from Sichuan, suffers from frequent headaches and breathing difficulties. If untreated, the cadmium poisoning can lead to kidney failure, cancer, and even death.
Red Dust tells an unexamined side of China’s economic development: the resistance, courage, and hope of workers battling occupational disease, demanding justice from the local government and global capital. Chinese migrant workers are deemed disposable by factory owners and are stereotypically viewed as quiet and passive victims. However, Ren and other GP workers (Min, Fu, and Wu) fight back. Labor issues are very sensitive in China, and workers who publicly discuss their struggles do so at great risk. The audience discovers along with the filmmaker, a Chinese American, the horrors of the global assembly line.
This documentary is about women who are the engine of the global economy. Although the film takes place in China, the characters’ experiences are universal to workers on the margins around the world, where poverty, migration, and workplace hazards are common realities.
The film is 20 minutes, in Mandarin and Sichuanhua, with English subtitles.
What is Cadmium Poisoning?
Cadmium (cd) is a heavy metal used primarily in the production of nickel-cadmium batteries. Workers exposed to cadmium can suffer symptoms such as memory loss, dizziness, headaches, lack of strength, and pain in the back and limbs. In 2006, the European Union banned cadmium in electronics due to its extremely toxic properties.
Workers who suffer from cadmium poisoning may not look sick, and serious health issues may take several years to arise. Once cadmium enters the body, it takes between seven to thirty years for the body to flush it out, which is particularly harmful for the kidneys. Cadmium poisoning has also been linked to kidney failure and cancer. The effects of cadmium poisoning can be fatal. In 2006, Fu Hong Qin, a co-worker of the women featured in RED DUST, died from kidney failure. She had worked at a GP BATTERIES factory for 2 years.
Unsafe workplaces are not uncommon in China. According to the country’s State Administration for Work Safety (SAWS) 2004 report, China has the world’s highest number of occupational disease victims and deaths resulting from occupational diseases.
Click here to read more.
Karin T Mak was born and raised in St. Louis, Missouri, USA to immigrants originally from Hong Kong. She spent several years on immigrant and workers’ rights campaigns in California. In 2003, she received the prestigious New Voices Fellowship to work with Sweatshop Watch, a Los Angeles-based non-profit educating the public about globalization. Mak is winner of the 2008 Roy W. Dean LA Film Grant.
Panasonic also face issue like hiding evidence that workers were poisoned at a battery factory in China . During that time, Panasonic are manufacturing rechargeable Nickel-Cadmium batteries in Wuxi, north of Shanghai. The worker were not warned when they have been exposed to high level of Cadmium, a potentially lethal heavy metal that can lead to a variety of crippling and potentially-fatal health conditions thus increasing the risk of death
There are thousands of news articles disclosing severe crimes, lies and corruption by Panasonic. Check it our for yourself…