So, Toronto’s Globe and Mail today publishes an interview with Ross Beaty, CEO of Magma Energy, which focuses [among other things] on the controversy surrounding Magma’s acquisition of HS Orka here in Iceland.
Now, we know this about Ross Beaty: he is a smooth talker. He’s got this slightly self-depreciating manner that instantly invites rapport. He also plays the victim with considerable finesse, just enough to inspire sympathy without being ingratiating.
According to Beaty, he’s misunderstood and misrepresented. He’s in Iceland trying to help the local economy, trying to do his best for the Icelandic people, trying trying trying … and all he gets in return is a chorus of BOOs. It’s so unfair!
Every now and then he will come across as extremely hurt and a handful of times I’ve heard him say publicly that, if the Icelandic people don’t want him here, well then he’ll just leave. Go. Be done with it.
Which would be great, if it wasn’t for the small fact that he’s still here.
As Beaty tells it, his main problem in Iceland is that he “did a terrible job of public relations”.
Ah. It’s a PR matter, then. In other words, the Icelandic people just needed a little more stroking, and they would have abandoned their harsh, boorish attitudes and realized what a benign, beatific individual Ross Beaty really is.
The man insults my intelligence.
By turning this into a PR matter, he is, in fact, implying that the Icelandic people don’t have enough wherewithal to realize just what he is about.
I could write several lengthy essays, taking apart piece-by-piece why Magma Energy and Ross Beaty should not be trusted. [Oh, wait -- I already have.] However, because I prefer to work with what I have in front of me, I’ll stick to Ross Beaty’s statements in the paper today.
Ross Beaty claims that he has been badly misrepresented in Iceland.
The first misrepresentation was that we were out to buy the energy resources of the country. False. All we have is utilization rights [in geothermal] for a limited period of time. We have no ownership at all in resources.
He makes it sound like he’s just leasing the energy fields for a few years before he hands them back to the Icelanders with a smile, curtsy and thankyouverymuch. The fact is that, as matters stand, Magma Energy has exclusive utilization rights for 65 years, with the option of extending those rights for another 65 years. By my calculations that is 130 years — more than a century. As one commenter on our Facebook Page remarked today: “A lease that long is the functional equivalent of the sale.” Furthermore, new scientific evidence suggests that geothermal energy is not a limitless source and that it can be over-exploited. So over the course of that time, Ross Beaty could wipe out that energy source if he so pleases. And what would it matter to him if he did? No doubt he’d just move on to bestow his saintly services elsewhere.
No. 2, that we were somehow tied up with the International Monetary Fund, and that’s fiction – as is the idea all we want is a short-term profit and then we will run away.
I have not heard this one before — however, it is a well known fact that the IMF is pressing for privatization of resources and, well, just about everything that has been in the public sector.
The next [misrepresentation] is that those financial Vikings that brought the country down are involved with us, and that they were secretly hiding behind us. That is completely false.
Misrepresentation? HS Orka was initially privatized through a company called Geysir Green Energy, which was founded in 2007 by a consortium headed by Jón Ásgeir Jóhannesson, Hannes Smárason and Bjarni Ármannsson. All three were major players in the meltdown — and they certainly saw an opportunity in the green energy sector back in the monumental year 2007. The privatization of HS Orka stinks of corruption [including bribery -- I wrote about this here]. I have no idea whether or not the oligarchs are involved with Magma today, but Magma Energy recently bought Geysir Green’s share in HS Orka, despite Ross Beaty’s earlier very public statements that he had no intention of making a bid for a majority share in the company [he now owns 98.5%].
Finally, the interviewer asks Beaty if there is a view in Iceland that his company is coming in to strip assets.
Yeah, that it is trying to steal things – and, on the contrary, we paid a very high price. We really paid a premium price, because for us it was a strategic asset, and in hindsight the price was wrong, too.
Give me a f*cking break! Magma Energy could not have been given a better deal if HS Orka had been served up on a silver platter with a bottle of Dom Pérignon and a side order of caviar. They paid a few bob up front, but the majority of that payment is in the form of a seven-year bullet loan carrying an interest rate of 1.5%. In other words, the seller is lending the buyer the money. And boy, wouldn’t you just love to take out a loan with 1.5% interest? Also, the purchase was made in ISK, not in dollars, and those ISK were purchased on the offshore market, where the exchange rate is double what it is here — which means, in effect, that he was getting about a 50% discount off the retail price. Jeezus! The price was WRONG?? What the fuck did Ross Beaty want? To have it tied up with a red bow and handed to him as a birthday present?
Anyway, I’m sure I could rant about this a lot longer, but I’ll leave you with a video that was taken at the press conference given by Björk, Eva Joly et al last week, in which Eva Joly speaks about Magma Energy, Ross Beaty and Magma’s inability to pay for their acquisition.* Please watch:
Incidentally, I tried repeatedly to create an account at The Globe and Mail in order to write a comment to that interview, but I have not been able to. I know of others who have tried to do the same, but to no avail.
Finally, I’d like to remind anyone with an Icelandic kennitala to sign the petition to keep Iceland’s resources under Icelandic control here. We need 40,000 signatures to press for a national referendum on this important matter.
* Eva Joly also speaks out about Magma Energy in an excellent interview here.