In an ideal world IRJ would have published our thoroughly enjoyable interview with Julian Malnic, founder of the Sydney Mining Club and Executive Chairman at Direct Nickel, in its full and glorious entirety, but we simply haven’t the pages. Malnic speaks passionately, eloquently and thoughtfully on many issues—ranging from ideal gifts to give mining magnates who have everything, to the real requirements in bringing together Australia’s mining industry—and the success enjoyed by the Sydney Mining Club since 1997 speaks volumes too. Make no mistake, founding and building this now world-recognised chain of mining clubs was not easy, but as Malnic says, “you get a premium story when you come to the Sydney Mining Club.”
Nuala Gallagher: The creation of the Sydney Mining Club is clearly a great story in itself—we’ve been reading up on the disagreement that sparked this. Can you tell us briefly about what happened back then in 1997?
Julian Malnic: Originally I was involved in a professional institute in Sydney that everyone was fed up with, and I was the fall guy who stood up and actually wrote a blueprint for the reform of this institute. Everyone agreed that it had to change, and it was really the only body that represented mining people. We created the blueprint. But instead of giving it to the institution I gave it to The Australian newspaper which ran a big story with the headline “Institute Gets Dinosaur Warning,” so I became very unpopular with the institute. That was a fight that triggered a search for the great values that have held the mining club in good stead and given it growth. We have five of them now. Brisbane and Melbourne have been running for quite some time; the Brisbane Mining Club and Melbourne Mining Club. We have three in a row on the Eastern Seaboard here, then there are two relatively young clubs based on our formula; one in Beijing called the Oriental Mining Club and one in Hong Kong which was launched just a couple of months ago called the Asia Mining Club.
NG: So it looks like the formula for the club has proved extremely effective, but have things changed over the years? It must have had its difficult times along the way.
JM: We came up with a formula that’s very different. How it works is that there’s no membership fee, and as we used to say ‘if you come once, you’re a member for life’. The whole basis of the clubs is that they’re inclusive clubs, not exclusive clubs. In the old days, the formula for a club was that being exclusive made it desirable. Today, the revolutionary aspect of these clubs, that keeps them going, is that they’re inclusive and once you’ve been you’re always a member. The club is financed from sponsorship so it’s about the desire for blue chip companies to be in front of these fairly erudite audiences that are the cream of the mining industries. In the early days when we were just getting going, we used to not only beg people to speak; we used to beg people to come. The earliest meetings had around 60—70 people there so it was quite difficult and we used to take anyone from a company—anyone we thought had a half chance of being interesting. Nowadays, about three-quarters of the speakers approach us and we do a process called ‘throwing the hat in the ring’ and then, without any pressure, we just set about finding them a spot. Even with the big speakers like Robert Friedland they don’t ask, but they ring up and tell us when to ask. There’s a little bit of a pep talk that goes with it and we like people to tell a little bit of a more human story about the journey. We like them to give us something beyond the story that you would hear in a typical analyst briefing somewhere. You can hear that down the road, but you get a premium story when you come to the Sydney Mining Club.
NG: Let’s look at how a typical event might go today. When do people turn up, how many, and how is it all kept under control?
JM: It’s pretty intense. The room starts filling up at mid-day, and we have a fairly large holding room where people are usually having a beer or glass of wine, all shoulder-to-shoulder until about 10 or later. Then they get released into the big room. We only seat 350 and we’ve been selling out—six of the last eight [events] have been sell-out’s. We’ve had some big speakers where we could have literally sold twice the number, and we meet every month. The other mining clubs go bi-monthly so we’re well serviced. Everyone charges into the big space to find their seat and because there’s such a strong level of ownership with the Sydney Mining Club. There’s a great energy about the room and they can take quite a lot of chairing to get them to settle. Sometimes I have to be quite forceful to get the gang to sit down and shut up. At the last one we started with a minute’s silence for Ken Talbot [from the] board of Sundance Minerals. There’s often important tribal news that needs to be dealt with, and I use that time [for that]. I’m absent because of my work from time to time, but I must have chaired about 120 of the events. The opening is to bring people’s heads into the room, settle them down and wind up the moment for the speaker. The presentation is project focused and straight from the horse’s mouth. Then everyone’s basically free to get back to the office for a normal day’s work at around 2pm. It’s a pretty intense event!
NG: Are there any particularly memorable moments from past events which you can share with us?
JM: (*Laughter*) One time we had Robert Friedland speaking. We give [speakers] a gift at the end and everyone wondered what you give a man that’s got everything. We said [to him and his assistant] “you guys live shacked up in the back of a Gulfstream jet; we’ve bought you a chamois for the windows because they must get pretty fogged up.” It’s always pretty familiar and good fun. One of the things that someone observed is that in a single year 10 of the 11 stocks that presented at the Sydney Mining Club went up so it’s generally a very good place to promote stock if you’re invited. It’s a great atmosphere for making deals and a huge amount of business gets transacted in all of these clubs through people getting together. If there’s one thing I’m really proud of—and I do this out of charity if you like, not for commercial gain but for community contribution—it’s the fact that there’s a real commercial benefit and it makes a difference to the industry. Last month there was a filmed section of the pitch that we ran against very heavy opposition to the mining tax [MRRT], so we do get in and chew at the most serious things. As the years go by, we’re increasingly a de facto and actual lobby.
NG: On the subject of Australia’s new tax [MRRT], what sorts of opinions and discussion are making their way around the Sydney Mining Club today? Clearly you will be privy to all sorts of views and exposed to all kinds of different information around this.
JM: There is an absolute time bomb in here because the agreement was struck with the three major companies who represented only their own selfish interests. They went into that negotiation, closed the door and negotiated with the Prime Minister on behalf of the entire Australian mining industry. There is a time bomb of discontent, resentment and anger within the smaller companies and that is now marshalling into fight stage two. In the rest of the industry a very large part of it believes we should have linked arms and done nothing to help Kevin Rudd’s successor [new Prime Minister Julia Gillard].
The view is that they lost their nerve and snatched defeat from the jaws of victory. Either that or the big three have cleverly worked through the new tax mix–which is still quite obscure as to how it works—they can pretty much avoid paying anything significant. They are a lot smarter than our Treasury people. The Australian mining industry gave the Australian economy buoyancy through the GFC. The big shock was that as a sort of Vietnam homecoming we got the Treasurer taking the credit for this economic strength, and on top of that we got the awarded the tax. The current ‘boom’ took us nearly 23 years to assemble in the wake of the Crash of 87. It goes a long way to trashing the reputation of Australia as a stable and reliable sovereign state. Investment has even stopped dead in for example in some areas of commercial property investment from overseas parties. It has very far-reaching implications as to the extent investors can now trust Australia. The Opposition is pledged to rescind the MRRT it wins the coming election and that really is the only hope for restoring our reputation. Our members are angry on one hand, and flummoxed on the other because the PM and those three big miners have announced the issue as resolved. Watch this space.
NG: And what do you have planned for the Club’s 147th event coming up? Perhaps there are some exciting speakers planned for the rest of this year too?
JM: Next up we have Terry Burgess from OZ Minerals. Coming up we have a 150th [event] with a chap called Nathan Tinkler of Aston Resources; a very young tycoon who swears a lot and he’s going to tell us the story of how he built this incredible fortune. He’s going to do the 150th and I think for the Christmas one we have Clive Palmer from Queensland.