Mining man Ross Beaty: Between a rock and a green place

Last fall, Vancouver mining financier Ross Beaty took off on one of his great escapes – a camping trip with his wife along a remote trail on Vancouver Island. To take pressure off his six-decade-old knees, he decided to travel lightly and live off the land, collecting berries, catching fish and taking nourishment from nature.

Trisha Beaty watched as her husband came back empty handed from his days of hunting and gathering. "It was a complete disaster. I caught no food, and found almost no berries," he recalls. "Fortunately, my wife brought enough food for both of us, because she knew what would happen." This surrender to realism suggests a man comfortable with ambiguity, who accepts that the world rarely delivers perfection, and who can, at times, show a blithe disregard for consistency.

After all, Mr. Beaty is one of the world's most successful people at digging minerals out of the ground, and yet he is also a full-throated nature conservationist. He is a free marketer who advocates interfering with the freedom to mine the oil sands; and a gold and silver advocate who really doesn't see the world's financial system falling apart.

"I am a chameleon," Mr. Beaty says happily over lunch at Diva restaurant on Vancouver's Howe Street. "I have ultragreen environmental instincts but I don't want government meddling with my abilities as an entrepreneur. I don't want them getting in my face and telling me what to do. It is a contradiction and I just have to live with it."

And yet there is one contradiction he cannot so easily accept. To the investment world, he is a remarkable creator of shareholder value who, over the past 20 years of building and selling mining companies, has taken $1-billion from shareholders and turned it, by his estimate, into about $5-billion of value.

But he is frustrated by the market's indifference to his next new thing, renewable energy. It has meant a bumpy ride for his Vancouver-based energy company, Alterra Power Corp., which trades on the Toronto Stock Exchange at about 30 cents, half its level of a year ago and a fifth of its value three years ago.

Alterra has found it hard going in a market that values dividend yields over visionary ventures – even when the visionaries have formidable track records. It has invested heavily in geothermal energy but also in wind and river-run hydro properties. Yet its growth story is overshadowed by nationalist indignation in, of all places, Iceland, where it bought a local geothermal-energy company, leading to a showdown with Icelandic musical icon Bjork.

Alterra sold part of its Iceland holdings to local institutions and the issue has slid off the news agenda, for now. Alterra will yet soar, Mr. Beaty maintains, and he is willing to wait for that eventuality. "It is not a great market in renewable energy but, in a few years, it will come back. We want to be ready with a big springboard."

Today, there are no berries or roots being served at Diva, just a few steps from the offices of his motherlode company, Pan American Silver Corp. But we are foraging in delicacies such as grilled Caesar and mushroom tortellini, part of the rotating prix fixe menu that Mr. Beaty orders every time he strolls into Diva for lunch.

If Alterra's market performance is painful, Mr. Beaty remains comfortable with his broad shareholdings in commodities that include copper, nickel, gold, silver, uranium, and a diversified mineral player, Teck Resources Inc. As a mine maker, he is most identified with silver, and somewhat with gold, two metals similar in their investment appeal. Each market is, in his mind, "a bit of a wild animal." That animal behaviour is snarly these days, as stocks are being hammered and gold and silver prices are taking a beating.

He pays little attention to the daily trading noise, or to prophesies that the commodity supercycle is over. Even on a day when gold is nosediving, he remains bullish about the five- to 10-year prospects as long as monetary expansion and currency volatility remain rampant – and China, he feels, has come back nicely. Gold, he insists, has very good legs because "it is the only currency that is not being debased" and it is difficult and costly to bring new supply on-stream.

That said, he scoffs at doomsday predictions of precious-metal bugs who, he says, build their models on an irrational view of the world. For their scenarios to unfold, there would have to be a complete breakdown of the monetary system.

Mr. Beaty has grown older and wiser about making rash predictions. He remembers bringing Pan American to market in 1994 when silver was at $5.20 (U.S.) an ounce. He predicted it would hit $10 by the end of the decade. Yet by January, 2000, it was down to $4.30. The lesson: "The more I learned, the more I knew I didn't know." (Even after Friday's commodity selloff, silver trades at about $27 an ounce.)

He sees himself as part of a new mining generation, different from the old crowd that made "Howe Street" shorthand for shameless stock promotion. In selling his stories to investors, he concedes that he advances the positive aspects ahead of the negative ones, but his endgame is to sell a real company, not to serve as a huckster for a stable of scant-hope shells. "Mining has a reputation as fast and loose and there was more of that in the past. I would qualify myself as professional – which is more boring but no less successful."

"I have a reputation as a builder, not as a BS-er," he maintains.

These days, he is settling into the role of investor, more than active mining developer. So has the mine-making fire burned out? There is some of that, he admits, but he is ready for change after having had a hand in developing 12 companies – and, he adds, "my latest adventure in alternative energy has been a tough sled."

Indeed, the entire island of Iceland turned on him when Alterra's investment in a local company created the image of a foreign opportunist exploiting the collapse of asset values after the country's harsh financial crisis in 2008-2009. Alterra has since sold a third of the geothermal company, HS Orka, to local pension funds and there have been discussions of selling the rest.

He calls the Icelandic episode "goofy." His opponents' characterization of a scavenging Alterra, feeding on a country racked by financial crisis, clearly clashes with his self-image as someone who leaves communities in better shape than he finds them. "The trouble is these people are populists, xenophobes and they don't have a lot of economic logic in their argument," Mr. Beaty says.

He is one of the West Coast's most active philanthropists who supports everything from university buildings to the David Suzuki Foundation. His view is that the money he has made from mining is not all his to keep. "I was paid a salary to work hard and the rest came as an accident. The capital gains are not well earned." And his giving will only intensify now that he has more time on his hands.

So is he one of those mining buccaneers who uses donations to buy a clear conscience? "Anyone who says that is like Bjork – they don't know me or the world I live in," he bristles. In the end, he asks, is his motivation really relevant? What is important is the final result – a lot of money being devoted to a greener Earth.

There are bad mines that scar the countryside, he admits, but a lot of mining is relatively sustainable – not vast pits with huge ecological imprints but projects that leave limited, temporary impact. The kind of mine he most despises can be found in the Alberta oil sands – too big, he says, and developed too quickly, with too little regard for environmental effect.

"You have to, at some point, draw the line on things that have too much impact – and where the environmental and social cost is greater than the reward. "Like many British Columbians, he fiercely opposes Northern Gateway, the controversial pipeline project that would carry bitumen from the Edmonton area to Kitimat on the B.C. coast. He would not prevent the building of all pipelines, but would exclude a project that endangers "the most pristine and the most avalanche- and landslide-prone, seismically active landscape in North America." Given the degree of opposition, "I think the Gateway pipeline is dead and it should be dead."

Mr. Beaty's chameleon colouring becomes most apparent as he talks about the Conservative government of Stephen Harper. As a free marketer, he admires the Prime Minister for running a tight ship, but on the environment, "I am not an admirer." He feels Ottawa has gutted the Fisheries Act, and has failed to acknowledge the devastating effect of carbon emissions on climate change. "Stephen Harper needs an epiphany about the environment," he says.

On this matter, there can be no ambiguity: Any growth model that does not factor in the social and environmental costs is no growth at all, he maintains.

"We're a very rich country, one of the richest in the world. Do we need to be minutely richer if it is at the consequence of greater environmental destruction? I say no."

CURRICULUM VITAE

ROLES

Chairman, Pan American Silver Corp., Vancouver.

Executive chairman, Alterra Power Corp., Vancouver

Other major interests: Lumina Copper; Anfield Nickel.

PERSONAL

Born in Vancouver; 61 years old. His father was a forestry entrepreneur and his mother a teacher.

His wife, Trisha, is a physician. They have four daughters and a son.

Master of science degree, Royal School of Mines, University of London; bachelor of science in geology and LLB, University of British Columbia.

LANDMARKS

1972: At 20, climbed Argentina's Mount Aconcagua, the highest mountain outside the Himalayas.

1980: Formed his own mining consulting company; in 1985, took his first company public.

1994: Founded Pan American Silver.

2008: Founded Magma Energy (now Alterra Power) to focus on geothermal energy, and other renewables.

Last score: In 2011-2012, sold 17 per cent of Ventana gold, as part of ultimate $1.5-billion takeover by Eike Batista.

THE GREEN MAN

Drives a Lexus hybrid, and bicycles as much as he can.

Director of the Nature Trust of British Columbia.

His Sitka Foundation describes itself as "a catalyst in the conservation of the environment and promotion of biodiversity."

Backs the Pacific Salmon Foundation.

Contributes to the David Suzuki Foundation, for projects such as protecting predators, especially grizzly bears, and creating greenbelts and blue belts on B.C. Lower Mainland

OTHER CAUSES

The Beaty Biodiversity Centre and the Beaty Earth Sciences Building at University of British Columbia.

Supports Britannia Mine Museum, on the Sea to Sky Highway between Vancouver and Whistler, B.C.