The extraordinary saga surrounding Christmas Island mining company Phosphate Resources Ltd has taken a surprising new twist, with Perth mining executive Mark Caruso failing to secure a board seat.
The extraordinary saga surrounding Christmas Island mining company Phosphate Resources Ltd has taken a surprising new twist, with Perth mining executive Mark Caruso failing to secure a board seat.
The election of Mr Caruso to the Phosphate board was expected to be a formality after his earlier appointment to the board, but the unusual politics of Christmas Island meant that nothing was predictable.
Mr Caruso and Oh Kim Sun were nominees of listed Perth company CI Resources Ltd, which has a 39 per cent stake in Phosphate.
They were appointed to the Phosphate board in September, with the declared support of the incumbent directors.
Phosphate managing director Lai Ah Hong stated last month that “the appointments are a significant step in the attempt to bring unity and common purpose to the strategies of both companies”.
While Mr Caruso's appointment was not ratified at the AGM, his fellow CI nominee, Mr Oh, was elected by a narrow margin and is now chairman of Phosphate.
The board elections follow two failed attempts by CI to gain control of Phosphate, initially via a cash offer and then via a scheme of arrangement.
At stake in this saga is control of the potentially lucrative mining operation on Christmas Island.
Phosphate generated total sales of $61.7 million in the year to June 2006 and posted a net profit of $1.4 million.
The company has the potential to earn much higher profits. It posted a $3.6 million profit in the first half of the year before one-off factors led to a second-half loss.
Mr Caruso, who is executive chairman of Allied Gold and managing director of Mineral Commodities, believes the shareholder vote was a personal issue, after he was highly critical of the incumbent management.
“The directors that supported my appointment in September should have voted for it,” he said.
In contrast, Union of Christmas Island Workers’ secretary Gordon Thomson said “its not about personality, it’s about CI Resources”.
Mr Thomson wants Phosphate to be a ‘community company’ that invests in tourism and other projects on the island.
He said he voted against both new directors but played down the role of the union.
“We didn’t campaign heavily; we expressed a view and other people shared it,” Mr Thomson said.
The shareholder vote came one year after CI Resources opposed the election of union president Foo Kee Heng to Phophate’s board.
The boardroom fight followed a decision by Malaysian company CCM International, which is one of Phospate’s largest customers, to spend $2.7 million acquiring a 16.5 per cent stake in CI Resources.
