They call it the "Beaty factor" - the magic that happens when Vancouver mine-maker Ross Beaty dives into a resources project. But his touch in silver and copper seems elusive so far for Magma Energy Corp., his entry into the nascent geothermal energy industry. Nowhere has it been more challenging than in the geothermal hot spot of Iceland, where Magma bought the local player, HS Orka, setting off a protest that engaged even the island's quirky musical icon Bjork. The Icelandic standoff is a perverse twist to a classic Canadian business theme - "national champion taken out by foreign acquisitor" - and the irony is not lost on Mr. Beaty.
You've talked about the need to put a better face on the mining industry. Do you think it is denigrated?
Everywhere in the world. Mining companies are good at building mines. They're good at developing resources. They're good at feeding minerals to the world. They're not good at public relations … and they shouldn't be. They're not good at promoting their industry. It's just something that very few people are good at, unless they're politicians or in the media.
Isn't public relations important?
Of course. I'm the poster child for doing a terrible job of that, in the context of Magma Energy's project in Iceland. We made a dreadful job of public relations, because clearly the government was against us. It's a leftist government right now, and we just didn't do a good job at promoting our case to the Icelandic people - and we're paying for it.
You now own 98.5 per cent of the Icelandic company. Are there still hurdles?
The ongoing hurdle is convincing the Icelandic people we're a good company, and we're going to do that by actions, not words. … We should have taken a more active role in public relations, in broadcasting a number of facts that were badly misrepresented.
The first misrepresentation was that we were out to buy the energy resources of the country. False. All we have is utilization rights [in geothermal]for a limited period of time. We have no ownership at all in resources.
No. 2, that we were somehow tied up with the International Monetary Fund, and that's fiction - as is the idea all we want is a short-term profit and then we will run away.
The next [misrepresentation]is that those financial Vikings that brought the country down are involved with us, and that they were secretly hiding behind us. That is completely false.
Then you got Bjork against you.
We didn't get Bjork against us - Bjork just decided to go against us. If there was one disappointment, it's that Magma's environmental message wasn't getting across to Icelanders. … The whole essence of Magma's business purpose is to build a clean energy company, to reduce the world's dependence on oil and fossil fuels and get into an alternative clean energy.
For Bjork, the big issue was opposing foreign involvement in resource development. That attitude is very hard to argue against.
Didn't you offer to bring her in as partner?
Engaging with Bjork was a bad idea, and I really regret doing that. I did some colossally stupid things in my interaction with the people who opposed us, but fundamentally I believe we are the right company for Iceland, and we will ultimately be given a seal of approval by the people.
Through what process?
It will happen through time. One hundred per cent of our employees in Iceland are going to maintain their jobs; we're there for the long term; we're going to invest a lot more money before we take any money out. It's the same kind of approach I've taken in Peru, Mexico, Bolivia and Argentina.
Was there the view that, given Iceland's financial crisis, a foreign company is just coming in to strip assets?
Yeah, that it is trying to steal things - and, on the contrary, we paid a very high price. We really paid a premium price, because for us it was a strategic asset, and in hindsight the price was wrong, too. … But it's a core piece of our company now, and it's absolutely perfect for the business plan of Magma Energy.
What is your take on BHP's bid for Potash?
I hate it when we lose head offices in Canada; it's a terrible loss to the Canadian mining industry. But I'm a free-market believer, and it is what it is. We are going to Iceland, and the Icelanders don't want us to buy Icelandic resources but I think it is the right thing to do. We are adding value - money management, horsepower, whatever - and I guess the shareholders should be the ones to decide if they want to own something or sell it. If Potash shareholders don't want to tender into the BHP offer, then it's not going to go to BHP. If they do want to tender, away it goes, and that's the way it should be.
So what is the Ross Beaty factor?
I would rather not talk about it. I would rather go ahead with my business, quietly and peacefully and get it done. I don't choose to be in the media.
But being lucky is one secret, maybe. The other is you have to be out there buying lottery tickets. If you never have lottery tickets, you'll never win the lottery. So being exposed to luck is important.
And it is being long in commodities when the world wants commodities. That was not entirely lucky. I did have a premonition in 2002 that prices of copper and most metals were going to rise. That wasn't incredibly clever but you would be surprised at the number of people who laughed at me when copper was 60 to 70 cents [U.S. a pound, vs. $3.78 now]and we were going to build a big copper resource company.
Was it really a premonition?
I read a really great article in a technical magazine about 50-year commodity price trends and it was truly an epiphany. Building a silver company was another epiphany, and the market got behind this silver play. It's part of knowing what is going on in the world and I travel a lot. I'd been to China and I could see what was going on in 2002. I consciously chose to acquire properties that would benefit from a rise in the metal price driven by increased demand from Asia.
In 2008, I was very lucky because I had sold two companies before the meltdown. I lost a huge amount, but I felt it was just short-term, and this would be the best buying opportunity of anyone's career. That was easy to predict because things were so oversold and there was this fantastic rebound.
But I feel awkward sounding like a guru. I do what anybody can do if they work hard and try to do the right thing. If I learned anything from my dad, that's it.
Are you a natural entrepreneur?
I think I am. I'm a decent salesman. I'm a glass-half-full personality. I hardly ever have a bad day, just every blue moon, although I didn't enjoy this ridiculous interaction with Bjork.
This interview has been edited and condensed.
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