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Australian-born Singaporean Graeme Robertson on historic coal-mining deal with Tanzanian government

Mr Robertson says Asian mining has already been exploited while in Africa, it is the total opposite.
Mr Robertson says Asian mining has already been exploited while in Africa, it is the total opposite. ST PHOTO: CHEW SENG KIM

Resourcefulness and pluck come in useful for this intrepid 'developer' who has learnt to seize the day

The first time Mr Graeme Robertson tried to go to Africa, he was a sociology student at the University of New South Wales specialising in revolutionary movements.

A colonial war was raging in the Portuguese-ruled Mozambique, and he wrote to the Mozambique Liberation Front (Frelimo) for permission to visit as a freelance journalist and report on how they were "breaking the yoke of colonialism".

Frelimo agreed, but with a condition, Mr Robertson recalled: "They said please send $10,000 because you may be killed and we will have to send you back in a body bag."

Mr Robertson's father refused to sponsor him, but suggested that he go instead to Indonesia, which was also in transition following the 1965 coup. So he did.

At the age of 20, Mr Robertson hitch-hiked from Bali to Aceh. At 22, he took up a job as a lecturer at the University of Indonesia in Jakarta because no one would employ him as a sociologist. It was the 1970s, and his monthly pay was US$25 and 25kg of rice.

  • Venturing abroad to seek growth can be risky business. But some Singaporeans have made it work. In the first of a three-part series on growing overseas, Mr Graeme Robertson, executive chairman of Intra Energy, tells Marissa Lee about the unlikely path he took into East Africa and how he became the first man to cut a coal-mining deal with the Tanzanian government.

Hungry for opportunities, the Australian-born Mr Robertson, who is now a Singaporean, set up his own consulting company, eventually landing a market research project for an Australian coal miner that wanted to export coal to Indonesia.

Through his work, Mr Robertson became good friends with the local coal authorities, and learnt that there was a huge amount of coal to be mined in Indonesia.

He joined the Australian company, and was later recruited as chief executive of a smaller miner, New Hope Corporation, which he led into Indonesia through a joint venture in 1985. Then in 2000, he decided to move.

"I looked at a map on the wall. I'd had some investments in South America, and I thought to myself - Africa... Africa is the place everyone is nervous about," he said.

In 2005, after selling off everything he owned in Indonesia, he flew to Madagascar.

Q In 2011, you started mining at the Tancoal Mine. How did you end up in Tanzania?

A I was developing rice - Vita Rice, a health food. And I tried to get land in Madagascar to grow the rice, but then the government made the decision that you couldn't export rice.

So I went to Tanzania to look at growing rice in the Rufiji river, just south of Dar es Salaam. That project was too difficult to put together, but I saw a reference to a company exploring uranium.

They hadn't found uranium, but they'd found coal. And it looked like very high-quality coal.

They were almost bankrupt, they were listed on the Australian Securities Exchange. So I did a deal and I recapitalised them, became the chairman.

Q Was it difficult getting a mining licence from the government?

A No one had ever applied for a mining licence for coal. There were no coal mines in Tanzania.

So I said, look, I can supply your cement companies, industries, with your own coal, I can employ Tanzanians to do it - it's coal for Tanzania.

It took seven or eight months to get the licence, and as soon as we got the licence that same day we started mining.

Q: Right now, you're the only coal producer in Tanzania. Do you worry about losing that advantage?

A My policy is I always employ locally. I raided the gold mining industry and I got a Tanzanian workforce, about 90 at the mine site.

You couldn't close the mine - Tanzanians would lose their jobs. And if you import South African coal - all these Indian traders are trying to import it all the time - even with trucking costs, we're still competitive within US$5 a tonne of South African coal.

Q In total, how many Tanzanians do you employ?

A The spin-off is hundreds. We set up the Mbalawala Women's Group, there're probably a further 80 locals involved in that.

We put back the topsoil in the mined area and got the women to grow tomatoes, onions, cabbages. We taught them to cook, and they formed a catering group to cook for our mine workers.

They were so successful that they were able to build themselves a nice office. We also built a school for the local schoolkids. This is what responsible development should be.

Q Do you export the coal?

A No. You export, you die. The major cost in Africa is logistics. Transport cost is huge.

I coined the phrase "Tanzanian coal for Tanzanian development" because I didn't want to export.

It costs us between US$25 and US$30 per tonne to mine, open cut. And then it costs us US$10 per tonne to truck the coal to a stockpile. We sell it at, say, US$45 - US$50 per tonne.

Q Is corruption a problem for you in Tanzania?

A Because we're 30 per cent owned by the government, we can't make any payouts and officials can't ask us because they'll get reported.

We're the best example in Tanzania of a PPP (public-private partnership). Tancoal is 30 per cent owned by the National Development Corporation and 70 per cent owned by Intra Energy.

Q How do you deal with corruption in developing countries?

A In Indonesia, when we were successful, I was going to the minister and saying: "Oh, Pak! We are doing really well, thanks to you. This is your mine!"

And I went to (then) President Suharto and I said: "Pak Suharto, this is yours!" And he was very supportive. Because the President was supporting it, no one wanted to touch us. When you are generating a profitable business, people get jealous. Some of these people have ministers in their pockets; presidents in their pockets - things like that.

But if you are smart, then you also have the minister in your pocket in a different way, because you make him proud of what you are doing.

Q Why go to Africa?

A Asian mining is becoming more mature. The large deposits have already been found, so now you're looking at smaller and lower- grade deposits as a rule. In Africa, it's the total opposite. Today, except for South Africa, only 15 per cent of Africa is explored.

A version of this article appeared in the print edition of The Straits Times on April 18, 2016, with the headline 'There are opportunities to be mined'. Print Edition | Subscribe