Sarah-Jane Tasker | September 28, 2009 Article from: The Australian BRIAN Gilbertson describes his top role at his investment vehicle as "grandfatherly" -- but don't interpret that as a hint towards retirement.
Gilbertson is a man who needs no introduction in the global world of mining.
He remains best known for his short stint at the top of the giant BHP Billiton, after the merger of South Africa's Billiton and Australia's BHP, but his extensive history in the industry goes far beyond that frequently rehashed tale.
The mining identity, who divides his time between London and South Africa, headed back to Australia last week to talk up the steel feed division of his investment vehicle Pallinghurst Resources, with the support of Sun Moon Woo, the Australian head of South Korean steel giant Posco.
The two mining heavyweights were lending their high-level support to junior explorer Jupiter Mines, boasting that the company would be used as a vehicle to drive iron ore consolidation in Western Australia's Yilgarn region to complement other steelmaking projects in Pallinghurst's suite of interests. Posco this week received shareholder approval to take a 13 per cent stake in Jupiter, which is already 25 per cent owned by Pallinghurst.
Jupiter, which also has interests in manganese exploration, may seem like a small fish for such big players. But if Gilbertson is getting involved, it is almost guaranteed the junior won't be swimming in small ponds for much longer.
It takes more than a quick glance to look over Gilbertson's career. His rap sheet is impressive, from his schooling through to his rapid climb up the corporate ladder.
The 66-year-old, who grew up in South Africa, didn't start out with a natural interest in resources.
What surprises many is that he has a scientific background, with his CV even listing a stint at NASA.
It was his scientific background that led him on the path to mining, prompted by his work at the National Institute for Defence Research -- a division of South Africa's Council for Scientific and Industrial Research. His research involved applying multispectral pattern recognition to missile guidance and proximity detection. It was the opportunity to test the technique in mineral exploration that led him into the mining world in 1970, when he joined one of South Africa's major mining houses, the Johannesburg Consolidated Investment Co.
Gilbertson's business style came to the fore in 1998 when he joined Gencor, a large South African conglomerate.
One of his first roles was to resurrect the company's ailing coal arm, Trans-Natal, which evolved into the world's premier steaming coal exporter.
As executive chairman of Gencor he pushed the group into the international arena through the $US1.2bn purchase of the international mining interests of the Royal Dutch Shell group -- the Billiton assets -- in 1994.
Billiton was listed in London in July 1997. Gilbertson took on the role of executive chairman and was instrumental in the high-profile merger with Australia's BHP to create a mining giant in July 2001.
Gilbertson became the second chief executive of BHP Billiton in July 2002, but he stepped down six months later, with the company blaming "irreconcilable differences" for his departure.
It is a subject Gilbertson doesn't like to comment on, but it was widely accepted at the time that the "differences" were mainly between him and chairman Don Argus.
It was not to be his last controversial exit, or the only time massive payouts and packages were questioned.
Gilbertson's next big role after leaving BHP was to lead mining group Vedanta Resources to the first primary listing of an Indian company on the London Stock Exchange. He remained as chairman until July 2004 before joining Russian aluminium producer Sual.
Always pushing for bigger and better, Gilbertson merged the company with Russia's largest aluminium producer, Rusal, and the Glencore alumina arm, creating an aluminium giant.
These successes still drive Gilbertson today, and they are the reason his investment vehicle was established in 2006 -- to give him the control and the capital to start building something big.
"The things that have given me most fun in this long career have been getting involved with projects and management teams where the full potential has not been recognised soon enough," he tells The Australian.
"These are unloved assets, where potentially you have something very good underneath, but it is out of favour for some reason, or it doesn't have the vision, or the management team don't have the funding to do what they want to do."
It was Royal Dutch Shell's lack of vision for its mining assets that planted the seeds for the creation of the world's largest miner. "What became Billiton was a grouping of assets in the Royal Dutch Shell group, which was essentially oil and gas focused, so the mining business in their empire was rather neglected," Gilbertson says. "When Shell decided to sell that, at Gencor we were trying to grow our business in mining and ultimately bought those assets.
"The idea behind Pallinghurst is to try and find these opportunities which have perhaps not been fully recognised by others, and see if we can develop them into very successful projects."
Pallinghurst has five partners, and Gilbertson has placed each of them at the head of one of the divisions. Apart from the steel feed, it also focuses on platinum group metals and coloured gem stones. Gilbertson also managed to acquire Faberge in 2007 to add to his interests.
The company founder might not head any division but he enjoys keeping a close watch on each and often describes them as "remarkable" and "fun".
"I've reached the age where I cast a grandfatherly eye over what the younger guys are up to," Gilbertson says.
The "younger guys" might be running the show day to day but none of the projects would have been possible without financial backing and it is clearly the Gilbertson name that got investors on board.
"When I started Pallinghurst, I set out to have the kind of funds at my disposal that I do have now, to get a foothold, and the projects we have now fit the mandate that we set out to achieve," he says. "In our industry it is not an immediate payoff but the payoffs are quite substantial if you are prepared to sit it out for a year or two. Our projects are very compelling in commercial logic, so we were able to raise the funds that we wanted."
The resources sector was forced to take a breather by the downturn in commodity and credit activity, but it is slowly starting to pick up and there is cautious optimism filtering through mining halls. But don't ask Gilbertson to glance into his crystal ball for a sign of what's to come.
"I have seen it a number of times before, and the one lesson I have learned is not to try to make forecasts for what prices and demand will do.
"But I'm a long-term bull."
JMS Price at posting:
20.2¢ Sentiment: Buy Disclosure: Held
(20min delay)