The Murrin Murrin Joint Venture is a nickel-cobalt mining operation in the Goldfields-Esperance region of Western Australia, approximately 45 km east of the town of Leonora. Australia has the highest rate of Indigenous suicide in the world. Leonora has one the highest rates of Indigenous suicide in Australia.
A $1 million community fund aimed at supporting Indigenous health and education, hundreds of local jobs and lucrative contracts for Indigenous businesses, once promised by Anaconda founder and CEO Andrew Forrest, never eventuated. Those promises were made during negotiations between Forrest and 18 native title claimants before construction of Murrin Murrin commenced in 1997.
With no access to legal representation, and little understanding of what they were signing away, all 18 claimants agreed to confidential deals in exchange for a $25,000 cheque. Even by the poor industry standards of the 1990s, each of the claimants should have received the equivalent of at least 100 times that amount in royalties, contracts, employment, education and health care.
Today Murrin Murrin is the largest nickel-cobalt mining operation in the world, worth well in excess of $1 billion. Murrin Murrin is a joint venture between Minara Resources Ltd (formerly Anaconda) and Glenmurin Pty Ltd. In 2011 both companies were wholly acquired by Glencore International, a Swiss owned company registered in a Channel Islands tax haven. Between 2011 and 2014 Glencore paid virtually no tax on $15 billion in revenue from Australian mining operations.
In 2003, Andrew Forrest took control of Allied Mining and Processing, renaming it Fortescue Metals Group. In 2008 Fortescue lodged applications for three mining leases in the Solomon Hub area, some 800km north-east of Murrin Murrin, in the Pilbara region, and began negotiations with the native title holders through the Yindjibarndi Aboriginal Corporation (YAC).
Negotiations broke down after six months over the claim by the 700 traditional owners for a 0.5 per cent royalty from the mine, equivalent to around $50 million per annum on current iron ore prices. This figure was based on similar agreements negotiated by other mining companies in the region, such as Rio Tinto. By comparison Gina Rinehart receives 2.5 per cent in mining royalties for the land her father took from Indigenous people in the Pilbara in the 1950s.
Forrest’s offer was, and remains, cash payments capped at $4 million a year and $6.5 million a year in promised housing, jobs, training and business opportunities.
The YAC has been involved in an ongoing legal battle with Fortescue for the past eight years. Appeals to the Native Title Tribunal and the Federal Court failed to prevent the State Government issuing mining licenses for the Solomon Hub. Fortescue still refuses to budge and has helped fund a rival corporation who support Forrest’s offer.
Mining operations began in 2013 and Solomon is currently ranked as the sixth largest iron ore mine in the world. In the last six months of 2016, Fortescue recorded a US$1.2 billion profit – thanks to the export of 86.1 million tonnes of iron ore at $US90 a tonne. Fortescue are currently on target to ship 165-170 million tonnes of iron ore this year.
Today less than one percent of businesses in the Pilbara are owned by Indigenous people. The Indigenous unemployment rate in that region is 50 percent.
Andrew Forrest does not believe in paying royalties in the form of large cash payments to Indigenous communities. He calls this “corporate cash welfare” and “sit down money”. He does not trust Indigenous communities to invest the money wisely:
“…you know you’ve come to the end of the line. Social breakdown is complete. Now I’m not going to encourage with our cash that kind of behaviour.”
Forrest’s paternalism is at odds with other large mining operations in Australia, such as Rio Tinto and BHP. While those companies have still gained access to resources on Indigenous owned land at bargain basement prices, they have treated traditional owners as business partners, not children.
Where this has occurred, some of the money from royalties has been poorly invested – just as Forrest has made bad investments in the past – but much of it has delivered tangible benefits. All of the money has been entrusted to the Indigenous communities it is intended to benefit, rather than modestly doled out by a billionaire mine owner who insists he knows best.
This is not to say that Andrew Forrest cannot be generous with his money, when he can afford to be. Prior to announcing a $400 million donation last week, Forrest and his wife Nicola had donated around $222 million to various organisations and programs since 2001, largely through their philanthropic organisation, the Minderoo Foundation. Some of that money has gone towards causes such as climate change denial and promoting Forrest’s welfare agenda, but much of it has also delivered tangible benefits.
Philanthropy is in itself both a noble and necessary act that should be encouraged and applauded. It is however, a very poor substitute for welfare. Acts of philanthropy are entirely at the discretion of the philanthropist. It is difficult to imagine that anybody would donate money to a cause that has potential to act against one’s own interests. It is impossible to imagine in Andrew Forrest’s case.
Andrew Forrest does not believe in “sit down money”. The fact that that belief has help make him the third richest person in Australia is more than just a happy coincidence. Nor was it coincidence that the Abbott Government chose Forrest to conduct a review into Indigenous employment and welfare. Forrest’s recommendations, which include the cashless welfare card and attempts to control how welfare recipients spend their money, have been largely endorsed in the latest Federal Budget. They have also been roundly condemned by Indigenous and community groups who say they will produce a new economic subclass.
Indigenous communities, where unemployment is endemic, will be further disempowered. Those who find themselves negotiating with Andrew Forrest in future, will do so under the fear of a paternalistic and punitive welfare model. Under such a model, corporations provide the carrot, in the form of voluntary handouts and non-binding promises of employment and business contracts, while government provides the stick.
It is little different to the model that existed when Andrew Forrest’s great-grand-uncle, Sir John Forrest, took possession of 2000 hectares of “Crown land”, offering the Indigenous inhabitants only employment and patronage in return. That land is known as Minderoo, from which the charitable foundation takes its name. It is one of a number of cattle stations owned by Andrew Forrest.
When two small prospectors lodged applications to search for minerals on one of Forrest’s other cattle stations in 2016, Forrest successfully used native title laws designed to protect Indigenous land rights to stop them.
Andrew Forrest has done very well out of native title in the 20 years since he cut 18 cheques of $25,000. Forbes currently estimates his net worth at $5.78 billion.
In that same 20 years, little has changed for Indigenous Australians. Life expectancy remains 10 years behind non-Indigenous Australians. Indigenous children aged under five are now more than twice as likely to die as non-Indigenous children. Indigenous 15-year-olds are still, on average, about two-and-a-third years behind non-Indigenous 15-year-olds in reading and maths.
The resources that have made people like Andrew Forrest billionaires, mostly lie beneath Indigenous land. Indigenous people have felt the impact of mining more than any other Australians, yet they have benefited from it the least. The same tricks, paternalism and political back-scratching that once saw Aboriginal land sold from under them, is being used by Andrew Forrest to sell their resources from under them as well.
In towns like Leonora, people know the cost of having their future sold from under them – $400 million isn’t nearly enough.