JOHN Spalvins has a message for the doomsayers on resources stocks: it is time to buy. The 77-year-old former managing director of Adsteam, once Australia's biggest corporate empire, remains an active investor in the sharemarket through his private investment company, Galufo.
Fresh from his annual three-month sojourn at his second home at Sun Valley in the US state of Idaho, Mr Spalvins is bullish.
"I believe we are in a bull market, not that you see it from mining shares. But we have a long way to go and the mining stocks are going to run next year, notwithstanding the fact that commodity prices have fallen," he said in an interview with The Australian.
"I don't think they will fall any more. All the bad news is in the prices. I believe it will be a turn for the miners if there is a Coalition victory (in the federal election). The Coalition and mining taxes will be reviewed. The bad news is in the price of the mining shares, and there is a lot better to come. So I am bullish."
...Mr Spalvins has one particular mining stock in his sights: a Perth copper mining company controlled by one of India's most powerful conglomerates.
Mr Spalvins is teaming up with legendary small-cap investor David Paradice to take on the board of Aditya Birla Minerals, which is controlled by Indian industrial conglomerate Hindalco Aditya Birla Group.
Mr Spalvins has form as a shareholder activist. A decade ago he successfully campaigned for five years against Japanese-owned tyre maker Bridgestone to protect minority shareholders.
Yesterday he wrote to the board of Aditya Birla ahead of next Tuesday's annual meeting in Perth -- which he is attending -- demanding action to lift the company's lagging share price.
In May, the copper producer revealed it would report a net loss of $8.3 million for the year ended March 31, a 131 per cent drop from the previous year when the company posted a net profit of $26.6m.
In recent months the share price has fluctuated in the range of 35c to 45c a share, and Spalvins says it reflects a loss of nearly 80 per cent for investors who took part in its 2006 sharemarket float.
He met Paradice in May to discuss their battle plans and together they own nearly 10 per cent of the company: Mr Spalvins with 1.56 per cent and Mr Paradice 7.8 per cent. "I have spoken to David Paradice from Paradice Investments. We met back in May and he shares my point of view," Mr Spalvins says.
Mr Paradice confirmed yesterday that he supported Mr Spalvins but said the former Adsteam boss was "taking the running" on the battle with the board.
In his letter to the board yesterday, Mr Spalvins calls on it to facilitate the appointment of independent directors after he failed with a similar resolution at last year's meeting, which was opposed by Hindalco.
Last year the board stated that his correspondence "would be placed before the board in due course".
The company did not comment yesterday.
Aditya Birla is seeking a buyer its Mount Gordon Copper Project in Queensland, where operations were suspended in April because of the falling copper price. Mr Spalvins wants it sold and there is speculation it could fetch up to $250m.
Adelaide-based Mr Spalvins has rarely been in the spotlight since Adsteam collapsed with debts of $7 billion in 1991.
The Latvian-born economist said yesterday he was confident Tony Abbott would be a good prime minister if elected.
"People have forgotten before (former PM John) Howard was elected, he was seen as an ordinary guy without charisma and little going for him. And once he got elected, history speaks for itself. I think you will find that while Abbott is not especially well received by people, he has sound policies. The Coalition has sound policies. And he may be better than many Australians think he will be," he said.
"I just can't believe the Australian people would be as irrational as to re-elect Rudd. His policies have been a disaster. The policy on boatpeople, the carbon tax, the mining tax fiasco, pink batts, I could keep going. He is even now attacking the freedom of the press. I can't believe the Labor government has done anything positive in the past six years and it would have been far better if they had just done nothing."
ABY Price at posting:
38.0¢ Sentiment: Buy Disclosure: Held
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