by Jim Richards
After a couple of weeks in the office, I flew down to the BHP drill rig site in central Sindh province, on the irrigated floodplain of the Indus River.
It was the dry season, and hot. Even by Australian standards, it was damn hot: 48° Celsius in the shade, and there wasn’t much of that. The local airport was empty: no cars (other than ours) and no planes. Just a piece of unused infrastructure, paid for by a World Bank loan, to be repaid by people with nothing.
We drove through the rural poverty of Sindh – a struggling mass of humanity in a dustbowl. No stunted bush was without some family taking in the stippled shade. There were people everywhere; how on earth did they live?
We drove through a complex of elevated canals, which the British had built a century before. The brown-earth levees seemed to tower above the flat, arid landscape in a most unlikely manner. Each village was surrounded by a thick mud-brick wall – to keep out night-time marauders trying to steal women, I was told.
After about an hour’s drive we arrived at the drill rig site, modernity sitting incongruously in the rural landscape. I observed the usual derrick, mud tanks and lay-down areas that I was used to, except this time they were on land rather than at sea.
I went into the office and was met by the night company man, a cocksure young Australian with a worrying amount of self-confidence – Sean Curnow.
‘Hey, mate, did you fuck anyone on the way here?’ Sean asked unhelpfully.
‘No, mate, couldn’t choose which offer to take up,’ I said.
The Australian company man walked in. He was a good-oldboy and one of the rudest fuckers I have ever met. The safety officer was an ancient bloke from London, whose sole topic of conversation was his scrupulously documented attempt to have sex with every hooker in Asia.
It was going to be a long tour.
Things started looking up when I met the Pakistani crew. The mud-loggers were well led, switched on and keen: a good outfit. The local drill crew was also professional, with a most charismatic leader. They were all diligent and hard working.
My accommodation was in a small sea container right next to the mud-logging unit. It was a good base, with private office, bedroom and ablutions, except someone had parked the rig toilet right next to the air conditioning intake. After two nights of gagging, I managed to get the toilet moved. I shared this space with a back-to-back colleague, also from Australia; he and I worked alternate four-week hitches and so were never there at the same time, apart from during the handover.
We got drilling. The Zamzama gas project produced around 20 per cent of Pakistan’s gas and was an important strategic asset of the country. In terms of return on capital, it was BHP’s most profitable project worldwide: a decent prize.
The project area was well protected and the army was camped out all around us. This sort of worked, except the main pipeline north would get blown up now and again by disaffected tribesmen seeking leverage for pay-offs.
I settled into my rig routine, ensuring the geological data from the well was properly recorded and reported. Once the mud-loggers were up to speed, the job was easy and left me with a fair amount of free time on my hands.
Wellsite geologists often have this dilemma, and you have two choices: you can use the time to self-improve, read useful books and increase your skills, or you can watch DVDs, read trashy magazines and do nothing. I had in the past trodden a line between the two; now I was determined to use the time wisely.
My rotation was four and four (four weeks at the wellsite followed by four weeks out on break), with business-class airfares thrown in. This was luxury after some of the gigs I had been on. I also had a lovely girlfriend in Perth, a West Aussie local, Julie Mackay, so life was good.
After my first four weeks of work and then break in Perth, I flew back into Dadu.
Now the plains of Sindh were like a different country. The monsoon was in full swing and the dust had been replaced by a sea of mud. Our car crawled along washed-out roads, dodging the chaos from various accidents.
Before the rain the people had appeared to be listless and bored, which, given the heat, was understandable. Now there was a madcap rush of endeavour in the fields: ploughing, planting and weeding.
Some BHP surveyor clearly knew his stuff, because when I arrived at the rig it sat on one of the patchwork pieces of higher ground. My back-to-back colleague had left a couple of weeks earlier due to a rig move, and so I prised open the door to our empty unit with some trepidation.
It was like one of those cartoons where a flood of water hits you as you open the door. Except this wasn’t water – it was mice. There were hundreds of them. The unit was totally eaten out. We had made the mistake of storing various food items in there. The mice had even eaten through the rubber seal of the closed fridge. I gagged on the stench.
Even having seen what some of the local people ate, it was still unbelievable what Pakistani mice would eat. Large portions of my personal effects had been digested and excreted: work clothes, boots, books, cables, you name it.
I set up a small Honda generator outside the unit and pumped in the exhaust fumes through a hosepipe. An hour later it was all over. Carbon monoxide had won. With the help of one of the room boys and after two days of clean up, I finally managed to move back in for a mouse-free slumber. Inevitably, some mice remained dead in the roof insulation, and the smell could only be tolerated with a lot of incense.
During the next three days it rained solidly and the surrounding floodwater inexorably rose, but we seemed to be OK on the higher ground. On the third morning, I woke up with a pleasant wet-dream–like sensation. A girl was rubbing my leg: bliss.
Hang on, something really is rubbing my leg.
But it wasn’t a girl – what the hell was that? I leapt out of bed.
Snakes.
I could see at least two of them. I pussyfooted from the bedroom into the office: more snakes. Holy shit, they were absolutely everywhere. I fled in a towel.
Outside the unit I looked at the rig site in amazement. It was like a scene out of a zombie movie, where people rush around like madmen randomly smashing things. A horrible dawning came over me.
The rig was now the only dry area in an inland sea.
Every single wild animal within the flood plain was now on our tiny island. There were frogs, toads and lizards of every size and shape wedged into any nook or cranny they could find. Hundreds of birds were resting on available ledges or cables. Most worrying of all, there were snakes – everywhere. Some of the more enterprising of these reptiles had slithered up the electrical cabling and into my unit.
Two days of non-stop snake hunting at the rig brought some order to the scene, but one poor bugger exiting the mosque – a portable sea container – with bare feet stepped onto a saw-scaled viper, which bit him on the foot.
BHP flew the guy to the Aga Khan hospital in Karachi, which is the best hospital in Pakistan. He died five days later.
If the bite victim had gone to the local hospital in Dadu he almost certainly would have lived. This public hospital was horribly under-resourced, but the doctors there were no mugs. They dealt with around five of these snakebites every single day. They had horses on site to make the anti-venom: a standard technique in which the horse is exposed to the poison and creates the anti-venom, which is extracted from the horse’s blood. The treatment had been finessed through trial and error over many years, resulting in a near-perfect survival rate for snakebites.
After this fatality, BHP began sponsoring and assisting the local hospital. I drew a moral from this story. In the world of medicine, as in other walks of life, all that glistens is not gold.
In commercial geology there are two sides to the coin: ‘hard rock’, which is the minerals and mining industry, and ‘soft rock’, which is the oil and gas industry. Most geologists start and end their careers in one or the other. Out of necessity, I had ended up working in soft rock, but in my heart I was a hard-rock guy. I was not quite a man in a woman’s body, but you get th
e idea.
So I did my paying job on the rig and I dreamt of the day when I could return to prospecting for that gold or diamond mine.
That was my time ‘on’ the rig. But how did I spend each of my months ‘off’ the rig during the two years of flying between Pakistan and Perth?
For the first time in my working career, this BHP job gave me access to a new toy, which radically changed the isolation of remote-area work. The internet was a revelation. I spent my free time on personal study, and as a result became quite knowledgeable about a subject that already fascinated me: diamond exploration geology.
Maybe diamonds, and not gold, were my ticket to a float?
To float a resource company on the ASX, I needed some kind of asset. The cheapest way to get this asset would be to peg tenements prospective for a mineral, preferably a mineral that was currently attracting investment. Then, I would have to convince enough people to part with their hard-earned money to back me and my new mineral project, raising a bundle of cash and floating the company in the process.
Of course, after the float, the hard bit was to find, or ‘prove up,’ a mineral deposit worth mining. This was where the real wealth was created, but at least by this point I would have raised the money to pursue this risky endeavour. I would also have exposure to any increase in the share price through a significant shareholding in the now listed company.
With this rough plan in mind, I signed up to attend a diamond exploration conference that happened to be on in Perth during one of my breaks. This was 2003, when there were the first stirrings of a recovery in the hard-rock mining sector.
As I sat through the sessions of this diamond conference, it reminded me just how captivated I was by diamond geology, and I found myself longing to get involved in the industry again.
After the conference, I went on the associated field trip. This excursion was to the Kimberley region in the north of Western Australia. The Kimberley has a rugged and pristine tropical coastline with an undeveloped, remote interior. The area hosts the only two operating diamond mines in Australia: Ellendale and Argyle, both of which we were to visit.
The diamond-bearing material at Ellendale and Argyle is an unusual rock called lamproite (similar to kimberlite), which formed deep in the earth’s mantle (greater than 150 kilometres), where pressures are so high that the natural state (allotrope) of carbon is diamond.
Millions of years ago, from these great depths, the lamproite magma (semi-liquid rock), with its entrained diamonds, moved upwards. It travelled along deep crustal fractures to eventually erupt and form a series of pipe-like bodies. The diamonds within these pipes then waited for some lucky geologist to come along and find them.
First up on our visit was the Ellendale Diamond Mine. We flew in to the mine site by light aircraft from Broome. The air was hot and humid and we were buffeted by turbulence all the way. Just as I thought I would be seeing my breakfast again, we landed. As we got off the plane, we were greeted by burning sun, drenching humidity and the haze of wood-smoke from various bushfires in the surrounding arid scrub.
We toured the mine in a bus, hopping off to look at the impressively large open pit and various exploration trenches searching for more lamproite or associated gravels with alluvial diamonds. After this we were chaperoned into the diamond recovery area next to the ore processing plant.
Two women were using tweezers to pick diamonds from the final concentrate (this is the end material produced from treating the ore). We looked on, mouths agape. From among the non-descript angular rocks of the concentrate, the women were regularly picking out dazzling, large, clear, yellow diamonds.
The largest was a glorious 4-carat, flawless, yellow stone – that really got the blood going. Of particular interest was that most of the stones appeared to have the same colour and clarity, which is extremely important for making matching jewellery.
The atmosphere among the group was charged by this close encounter with some of the finest diamonds in the world, and the talk was lively as we returned to the mess for some tea.
Some of the geologists on the tour had worked on the original discovery at Ellendale and, together with the current site geologists, talked knowledgeably about the geology of the mine. As I listened, I was struck by how little exploration work had been done on the outlying areas, and I felt there may still be an opportunity to find a new diamond-bearing pipe away from the main Ellendale mining cluster.
When I got back to Perth I would need to go to the Mines Department and check the ground position around Ellendale to see if any area was available to peg.
The following day we flew to the Argyle Diamond Mine, in the East Kimberley. Argyle was for some years the world’s largest producer of diamonds (by weight, not value), with over 50 million carats (10 tonnes!) mined per year. Most of these diamonds were of poor quality, but among such a bounty there were a number of good stones.
What really defines Argyle diamonds is a tiny subset of remarkable, rare and extremely valuable stones: the fabled Argyle Pinks. The most exceptional of these pink diamonds are literally one diamond in a million. Although pink diamonds are (rarely) found elsewhere, at Argyle the pink colour can be the most intense and thus valuable.
The field trip to Argyle was inspiring, especially because also present were a number of well-known diamond geologists. This included Ewan Tyler who had been one of the managers of the program that in 1979 had discovered the Argyle mine. I had also previously met geologist Maureen Muggeridge who had taken the samples in Smoke Creek that had led to the discovery.
Follow-up work upstream from these samples led geologists to a remote valley in which lay the Argyle diatreme itself, recognisable as outcropping lamproite. Incredibly, diamonds could be seen in the overlying termite mounds. To see actual diamonds was extremely unlikely, and led the geologists to believe that the grade of the lamproite must be exceptional. It was, at 6.8 carats per tonne. Argyle subsequently became the highest-grade diamond mine in the world.
At the time, keeping the discovery secret was paramount. There was an agonising wait of two months whilst existing tenements over the area, held by the uranium company Uranerz, were left to expire. When they did, in late October 1979, mining company CRAE (now Rio Tinto Exploration) pegged the Argyle leases and secured the great prize
This was what made mineral exploration so thrilling: discoveries like Argyle that originated from a few creek samples.
We had lunch in the well-appointed mess at Argyle and were shown some of the diamonds by the mine manager. They had a slight metallic lustre, which was characteristic of Argyle stones.
The manager explained that the week before they had found numerous small shards of pink diamonds; these were the result of a single pink diamond – estimated at 4 carats and worth many millions of dollars – being destroyed by the crusher. It was always an economic balancing act as to how fine to crush the ore: too coarse and you would not liberate the numerous smaller diamonds; too fine and you would crush the largest and best stones.
When I got back to Perth, suitably inspired, I went to the Mines Department to look at the ground position around Ellendale. I was pleasantly surprised to see some vacant ground, just south of the known pipes. This was ground that no one currently held under any type of mining lease, and so it was available to be pegged by any individual or company, provided you could prove you had the means to explore the ground. My technical background helped with this latter requirement.
I checked the geological maps and noticed that the area was under transported cover (sand). This sand would hide any (older) diamond-bearing pipes. This was a bonus because if the lamproite pipes stuck out of the ground, they most likely would have been found already.
This was what my hard-earned money was for. It was now or never. With the assistance of a Mines Department officer, I pegged the available ground. Pegging used to be done by driving wooden stakes into the ground; these days it is achieved rather less romantically by computer. I put the two tenements in the name
of my existing 100 per cent–owned private company, Ozwest Holdings Pty Ltd (Ozwest), which I used for the oil consulting jobs. The cost was around A$17,000. I would not have been able to afford this without the good money flowing in from the rig work, so that decision was starting to pay dividends.
I now had exclusive mineral rights over an area of around 300 square kilometres. More importantly, I also had a decent geological concept for discovering a new diamond mine within that area. It was not a bad start.
I now used every break from my work in Pakistan to try and advance my diamond interests in some way. Through this discipline, I regained my focus. The business nitty-gritty of raising money and floating Ozwest would hopefully fall into place if I kept trying.
CHAPTER 16
THE FLOAT
After finishing the Pakistan job, I returned to Perth in January 2004. I was thirty-nine years old, unmarried, no kids and, as of late, no girlfriend either. As an outcomes-based guy, it didn’t look good.
Thirteen years earlier I had left on my gold rush, and I had little to show for it. The expectancy and swagger of youth were fading, and were in danger of being replaced by cynicism and self-doubt.
I looked to the positives, as by personality I am prone to do. I had been hasty on occasion, yet that had also brought with it creativity. And at times I had been too swift to act on a plan not fully thought through, but from that I had gained experience, which had made my judgement better. I could now read people, situations and opportunities more clearly. I had some cash and a project in a company that I fully owned and controlled, so I was moving forward.
However, to keep my diamond project itself moving forward, I needed money. To get that money I had to float my company on the stock market, and with that, and a bit of luck, all might be redeemed.
I still didn’t know how to do this, but the preceding years had taught me that I had yet to find anything that I couldn’t learn.
So I knuckled down to it and made a budget of likely outgoings for a stock market float. It was a WAG (wild-arsed guess) list and included various trips, promotions, accounting costs, legal costs and living expenses; I wisely added a generous contingency of 30 per cent.