03/09/2020 - 08:00

Manners made for mining

03/09/2020 - 08:00

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Mining icon Ron Manners has much to celebrate this year, including the 125th anniversary of his family business and a spot on the Queen’s Birthday honours list.

Manners made for mining
Ron Manners says there’s a creative edge to WA’s emerging business leaders. Photo: Gabriel Oliveira

Ron Manners has seen a lot during his years as an entrepreneur, mining luminary and philanthropist, and believes there’s good reason to be optimistic about Western Australia’s future leaders.

His Mannkal Economic Education Foundation has awarded more than 2,000 scholarships to students, funding travel to conferences and institutes for them to learn about free markets.

Mr Manners told Business News there had been a notable change in the attitude of these young leaders.

“What encourages me [is that] 10 years ago, 80 per cent of the students wanted to go into politics, nobody wanted to start a business,” Mr Manners said.

“Last year we asked the same questions, [there was a] complete reversal.

“They were motivated by making their own way, making their own decisions.

“There’s a creativity popping up that wasn’t there 10 years ago.”

Technology had unlocked opportunities, he said, while there was a growing number of young people eager to spend a day a week working on their own ideas.

Mr Manners said it was rewarding to see students, who had travelled as far as Calgary or London, come back to realise their potential.

“We open their minds to opportunities, to possibilities,” he said.

Mannkal is a key part of Mr Manners’ philanthropic endeavours, with operations maintained by income from a fund designed to retain its initial capital, with additional annual contributions.

The board includes Squire Patton Boggs special counsel Neil Fearis and former Synergy chairman Lyndon Rowe.

Mr Manners’ philanthropic pursuits, and his service to the mining sector, earned him an appointment as an Officer in the General Division of the Order of Australia in the recent Queen’s Birthday Honours List.

His family has a long connection to mining in WA, particularly in the Goldfields.

WG Manners & Company was a mining engineering business founded by Mr Manners’ grandfather in 1895; it is now part of the Mannwest Group.

Mr Manners took over the business in 1955.

It has since diversified, with interests in property, consulting, and resources developments as far afield as Brazil.

Mr Manners was a patron of the Australian Prospectors & Miners’ Hall of Fame, and was inducted as a living legend in 2011.

Maybe his best-known move was Croesus Mining, which floated in 1986.

Croesus had annual output of about 300,000oz a year when Mr Manners sold his stake, and produced nearly 1.3 million ounces of gold during its lifetime.

Mr Manners said that, in the business’s early days, he needed a letter of credit to tender for gold mines owned by Rio Tinto predecessor CRA.

That was a high-pressure play.

He organised a letter from Westpac for one day, which was enough to get on the tender list (Croesus was eventually successful).

The loans taken to finance the purchase were repaid in nine months, he said.

Mr Manners exited the business in 2005 and it entered administration in 2006, after production at its Norseman mine could not meet hedging commitments.

Croesus later lived on as Sirius Resources, which discovered the significant Nova deposit in 2012.

From the Mannkal archive

Kalgoorlie drought

Kalgoorlie and the Goldfields have vibrant gold and nickel industries, but that was not always the case.

Only one major gold mine was in operation in 1978, according to the Eastern Goldfields Historical Society.

“Very few people realise we had no gold mining industry,” Mr Manners said, referring to the 1970s.

“Until the Kambalda nickel discovery by Western Mining Corporation ... we had no nickel industry.”

He said the gold industry had not been allowed to realise its full potential, however.

“[Government] fixed the price of gold … that’s a surefire recipe to kill industry, fixing the price of a product below production cost,” Mr Manners said.

Regulations around trading of gold in a time before floating exchange rates had also affected the sector, he added.

Mr Manners said Mannwest had supplied Western Mining with new equipment bought from Sweden, which had helped make otherwise uneconomic pits profitable.

This was a big change for the industry, as the knowledge base of the region at the time was centred on smaller orebodies in the ‘golden mile’.

From the Mannkal archive

Free markets

Mr Manners has been an ardent promoter of free market values, including in 1974 when he was involved in setting up the Workers Party, led by advertising entrepreneur John Singleton.

He said this passion started when he was in high school, aged 16.

“I used to go working for the old man after school, unpacking great big crates of mining equipment,” Mr Manners said.

Rather than foam, those crates were packed with magazines from the US-based Foundation for Economic Education, a pro-freedom thinktank.

Mr Manners became an avid reader.

“I used to think: ‘Wow this is good ... individual responsibility’,” he said.

When studying at the School of Mines, Mr Manners said he had edited the school magazine with a healthy dose of these views.

That attracted horror from many colleagues who believed everyone should be a member of a trade union.

The toughest economic period Mr Manners remembers was in 1961 and 1962, when the Menzies government squeezed credit to reduce inflation.

Business overdrafts were halved.

“Well, did that stop the economy,” Mr Manners said.

“There was no such thing as hire purchase available. If you were a delicatessen, you couldn’t buy a fridge.

“Two big chains of retail stores closed in a month.

“It’s reminiscent of what’s happening today.

“We spent half our time collecting debts instead of doing productive stuff.”

Mr Manners said he was often surprised many students were unaware of crises such as the 1987 stock market crash or the dot.com bust of 2000.

His own investment experience had also taught valuable lessons.

“I’ve got a real fear of debt; debt terrifies me,” he said.

“I had a really nasty experience in my first dabble in property development.”

Many people had invested into townhouses in South Perth in the 1980s, leading to an oversupply of property.

That, combined with 22 per cent interest rates, led to many sales and a very uncomfortable feeling, he said.

On this front, he had some advice from his dad, too.

“Never borrow money to go look for gold or go to the horse races,” Mr Manners said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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