Jubilee Mines founder Kerry Harmanis believes it would take him at least twice as long to develop the nickel miner’s cornerstone project, the Cosmos mine, if he were to embark on the project under the current regulatory environment.
Jubilee Mines founder Kerry Harmanis believes it would take him at least twice as long to develop the nickel miner’s cornerstone project, the Cosmos mine, if he were to embark on the project under the current regulatory environment.
It took Mr Harmanis and his team about two and a half years to turn the Cosmos discovery into a mine in the late 1990s.
Mr Harmanis estimated that if he was aiming to develop the project in the current environment it could take him around five years.
“There’s nowhere in the world you could have brought a mine into production in two and a half years because there is so much red tape, but now that red tape is increasing and it is slowing things down,” Mr Harmanis told a 400-strong audience this week at a WA Business News Success & Leadership breakfast.
Speaking after the event, Mr Harmanis said he did not want to be a “crusader” on regulation and was reluctant to specifically point out the current flaws in the system.
But he did reveal that areas like the environment and native title were chewing up more and more time for resources companies.
“You have to protect the environment, there’s no doubt about that. But it is an issue and there has to be a better way of doing native title,” said Mr Harmanis, who had revealed to the audience that he had a deeply spiritual side to him and was a changed person from the tempestuous character of his early business days.
He said Jubilee had a good relationship with the aboriginal communities in which it operated, but when it came to native title issues there was a clash between the indigenous aural culture and the Anglo-Saxon written culture, which often meant the process became drawn out.
“It’s a whacky situation,” Mr Harmanis said.
“It doesn’t mean that the culture should not be preserved, and there are some of those aspects that we can bring to our own culture, but there has to be a different way of doing it.”
Mr Harmanis said that there was not enough cooperation between government depa-rtments.
“We need to have one department that everyone reports to and they (the department) should have to adhere to certain timelines,” he said.
“So few people have so much power; these people need to be accountable.”
Mr Harmanis said current regulations hindered business in WA, which was very different from his wheeling and dealing days of the 1980s when he went from being a fish van operator at Leighton Beach to entering the mining world.
“We spend so much time and energy filling out reports, answering queries, filling out more reports,” Mr Harmanis said.
“The massive control that the corporate governance industry have…the amount of pressure they put on management to second-guess every business decision is way out of balance and is, in my view, counterproductive to good business and shareholder wealth,” he said. “People should leave boards and management to get on with things.”
Mr Harmanis said Jubilee managed growing government bureaucracy by trying to reduce its internal bureaucracy.
“We try and minimise the bureaucracy and formality and have an open-door policy and we keep the management tight and we keep communicating with each other,” he said.
Jubilee has found 400,000 tonnes of nickel, which Mr Harmanis said was valued at $15 billion based on the current record high nickel price.
“We have grown and grown and we have got some high grades and we now have a sensational record high nickel price,” Mr Harmanis said.
“With Cosmos we think we have only tip of the iceberg, we haven’t hit the big one yet. The best is yet to come,” he said said.
Mr Harmanis owns about 15 per cent of Jubilee with the current value of his shareholding sitting at around $345 million.
He was recently ranked fourth on WA Business News’ recent wealth creators list behind WorelyParson’s Peter Meurs, the Roberts Family and Fortescue Metal Group’s Andrew Forrest.
Mr Harmanis said it was important for public companies to reward shareholders with dividends.
“The philosophy I have always had is that public companies are about shareholders and it is about making profits, maintaining margins and giving profits back to shareholders while you are going, not when you hit the jackpot at the end of the rainbow,” Mr Harmanis said.
“I have always bemoaned the fact that mining companies do not pay dividends, they just dig another hole, dig another hole.”
Mr Harmanis is Jubilee’s executive chairman and believed the controversial dual-role was a benefit to the company.
“I think if you look at statistics from Europe, companies led by executive chairmen that have an interest in the company are more profitable than the ones that don’t,” he said.
Mr Harmanis predicted Chinese and Indian demand for WA resources would continue for “years to come”.
“I’m not worried about China or India. It is almost half of the world’s population and they are really going for it. They want to have what we have,” he said.
“Australia is a very important breadbasket for them and their domestic market will pull on our materials for years to come irrespective of a lot of what goes on outside China.
But he said increasing financial, political and technical issues in China would create more volatility in the market.
“But these two economies will become the biggest economies in the world, which they were before the industrial revolution.
“What we need to do is stay competitive and not get bogged down in unrealistic bureaucratic red tape.”
