≡ Menu

Magma Energy and the second coming on Kastljós

So Ross Beaty, CEO of Magma Energy, which is hoping to acquire a ruling share in HS Orka and exclusive rights to the Reykjanes geothermal fields for the next 130 years, was on current affairs programme Kastljós this evening [right after Lýður Guðmundsson].

Friends: never in my life have I seen a halo shine as brightly above anybody’s head. Seriously, you would be forgiven for thinking that Ross Beaty was the second coming of Christ. Oh, he understands the concerns, he is not here to fight anybody, he is here to create wealth for all, opportunity for all, to work WITH the people. His track record is impeccable, he is so PROUD of his track record: just google it! He fell in love with Iceland the first time he set foot here and has the utmost regard for the Icelandic people and Iceland’s nature and is deeply, deeply committed to sustainability because he is an environmentalist. In short: armed with that uniquely Canadian charm and slightly-naive affability he smooth-talked his way through the interview, finishing off at the very end with an orchestrated smile designed to put the finishing touch on an utterly believable performance.

G’head. Call me a cynic.

On that note, I’d like to call attention to a comment that Erin Harris left below this post – in fact I hope Erin doesn’t mind if I publish it here, because I really think it is vital for this information to be on prominent display:

If you haven’t already seen it, Magma’s investment pitch at https://www.magmaenergycorp.com/s/Presentations.asp is a must-read. This is quite a new operation, little more than a year old, led by a guy who’s formed and sold assorted metal mining ventures. Clearly it’s designed to be a fast money machine for the financial community, rather than a utility company serving customers.

Same is true of one of its major backers, the AltaGas Income Trust (which you can read about at https://www.kciinvesting.com/articles/8544/1/High-Yield-Of-The-Month-AltaGas-Income-Trust/Page1.html). For them, any involvement in natural gas is strictly a means to a much larger end.

Among other major backers are the Saudis.

Right now Magma has a wad of IPO cash for an hurried acquisition spree. Investment is mainly institutional; it’s a place for that sort of huge money to balloon, while there isn’t much else to do with it profitably — and the firm will probably be sold in a few years to a giant capable of harvesting your power and selling it anywhere in the world.

Some of the honchos have high-level ties to US government; one ran the US Navy Geothermal Program for 20 years and another ran the US National Geothermal Program of the Department of Interior. Others have ties to the oil industry.

Alda, this whole thing reeks to heaven. If you guys get into it, Niceland is gonna be SO screwed. The IMF/World Bank wrecking crew always usher in predators like this to grab public utilities and it’s never a pretty piccy. As you know, I strongly suspect that your country was brought down specifically for the purpose of seizing your geothermal energy.

Indeed. According to a RÚV report this evening, our Finance Minister Steingrímur J. Sigfússon [who opposes the deal] said that he has been made privy to plans that were underway to secure complete control of Iceland’s resources [presumably said geothermal fields] as soon as Magma had signed the deal to purchase the ruling share in HS Orka. RÚV speculates that this refers to an alleged merger plan between Magma and Geysir Green Energy, the other [private] shareholder in the company. I think when our own Finance Minister speaks this plainly – and believe me, Steingrímur is no fool and chooses his words carefully – there is something pretty serious afoot.

Apparently, the Ministry of Finance is working overtime to try to find ways to ensure that this valuable resource remains under Icelandic control, but – as everyone knows, particularly the predators – this is no easy task. Iceland right now is in one of the most vulnerable phases in its history. So if you’re religious, please pray; if you’re an atheist, please send us good vibes; if you’re a positive thinker, please say some affirmations for us. We need all the help we can get.

But we’ve still had showers on and off all day. A mild, drizzly kind of rain, mostly. It’s supposed to clear tomorrow and grow cooler, with winds from the north. Hopefully it won’t get too cold – still haven’t been able to get out for any berry picking this season. I’d say this weekend is probably the last opportunity. Right now it is 10°C [50F]. Sunrise 5.51, sunset 9.06.



Comments on this entry are closed.

  • The Other Katherine Harris August 26, 2009, 11:27 pm

    To borrow a hackneyed phrase, JUST SAY NO.

    They can’t yet line us up and kill us over national debt (although they’d love to).

    You owe these freaks nothing, Alda, and Icelanders will do the whole world a favor if you refuse to be beggared by your banksters. We’d all profit from the example, since much the same act is being repeated everywhere now. I firmly believe Niceland is the test case for how much they can get away with doing to a highly educated and homogenous advanced society. If their tricks will play there, they’ll play anywhere — far more easily among the dim and divided.

    Thanks, BTW, for citing my prior post. I really did feel strongly about what I turned up about Magma and am glad the information resounded with you, too.


  • elín August 27, 2009, 1:34 am

    Vapid, corporate psycho-babble came to mind while I was watching Mr. Beaty online today on Kastljós. Astounding use of tired business cliches (Corporate Citizen! Social Responsibility! Win Win!). Chilling.
    Positive thoughts, good vibes, peace and solidarity always flowing to Iceland.

  • idunn August 27, 2009, 6:14 am

    Where is your prime minister, Jóhanna Sigurðardóttir, during all this?

    And, yes, all best wishes to the people of Iceland. Most specifically that they find a way to unite, to focus on the best pragmatic steps forward.

    If not, well, there are always plenty of sharks in the water . . . the IMF, Mr Beaty, take your pick.

  • Ljósmynd DE August 27, 2009, 7:50 am

    A wolf in sheep’s clothing, one might ask. In my perception metal mining is usually an ecologically very harmful business, not quite the stage for an environmentalist. And a commitment to sustainability? He has been building up several mining companies from scratch and selling them at the top of the cycle. What’s sustainable about this?

    It’s very popular to label geothermal energy as green, sustainable and environmentally friendly. But if this energy is used to power aluminium smelters, which are producing aluminium for one-way items like candy wrappers and soft drink cans, then the ecobalance isn’t quite as positive.

    Apparently Magma Energy has collected 87 USD through their IPO. But they don’t seem to invest any of this capital in Iceland. Instead there is this bullet loan from Reykjavik Energy. Possibly due to the currency restrictions? They might see reason to sell their investment before the currency restrictions are suspended. This doesn’t seem to be a commitment to sustainability, it’s more about cashing up.

    And sure, I wish you the very best to keep your valuable resources under Icelandic control.

  • Ljósmynd DE August 27, 2009, 7:59 am

    PS: Just a correction: Magma Energy has collected 87 million USD (CAD 100 million) through their IPO in June, 2009.

  • Bromley86 August 27, 2009, 9:25 am

    I’ve not been following the detail with this one, so I’ll assume for the moment that this particular deal is a poor one for Iceland.

    However, that doesn’t mean that Iceland shouldn’t consider privatisation/securitisation of resources. At the end of the day, if you want to spend X, your income is Y and your savings are zero, you need to find new sources of income when your old sources dry up. It might be that it just doesn’t make it into the English-language news, but I’ve seen no discussion of what Iceland might be expected to look like in the future with the different scenarios.

    Also, even if we accept the (to my mind) incredibly unlikely possibility that Iceland’s current woes were brought to a head by some shadowy consipracy in order to plunder its resources, that doesn’t change the fact that the path taken to get there was littered with choices freely made by Icelandic politicians. So if there was a conspiracy, either it involved the Icelandic elite or it was purely opportunistic.

  • Lissy August 27, 2009, 10:32 am

    My perception is that Icelanders are wondering if capitalism as a whole works or is appropriate here, and thus discussions of paying back loans and such, all construed within a capitalism economic system, come into question.

  • Melvin Godfried August 27, 2009, 10:50 am

    My aunt who has sugar diabetes went into hypoglycemic shock just as the interview was starting but recovered within a few minutes after listening to the responses of this smooth talking Canadian bullshitter.

  • claus August 27, 2009, 11:12 am

    If this has any relevance:

    berlingske.dk, a danish newspaper writes today that the company ALCOA is planning to build an aluminum plant in Greenland, which may have the Greenland CO2 emissions to rise by approx. 75 per cent.

  • Haukur August 27, 2009, 11:41 am

    Aðeins varðandi greinina í Fréttablaðinu, HS orka veitir enga grunnþjónustu á Suðurnesjum. Það gera hins vegar HS veitur, sem engir einkaaðilar hafa áhuga á að eiga í.

  • Nancy August 27, 2009, 12:35 pm

    I hope for the Nicelander’s sakes that this deal does not go through. Once the company is owned privately, it will no longer exist to serve the public. It will exist solely to make money. See the USA’s health care system for a good example, or its national news for that matter. And what’s to stop the purchasers from selling their shares to nefarious nations that also seek to exploit Niceland’s resources for profit? Nothing, that’s what. I hope the Nicelanders are very vocal (write, call, protest) against this deal as it will only serve those who can make a profit. Sending all good wishes Niceland’s way.

  • kristiina August 27, 2009, 2:12 pm

    I just found this excellent blog – thank you for seeing, and thank you for speaking up!

    I am commenting on the whole situation, apologies for not being quite relevant for this particular post.

    I think Iceland is facing something that a lot of people individually and collectively are facing in these times. And what we all are facing is how to deal with something i’ll call narcissistic predators. All kinds of other terms could be used about these people, but everybody (except the people themselves) knows what i mean. Those charming, convincing people who help us to take care of everything in the best possible manner, and when the smoke clears, you see that everything is in ruins. Banks, nations, relationships, nature, human dignity – all will be destroyed in a friendly and smooth way. You only notice what happened afterwards.

    So, there are several challenges. The first is, how to recognise them before they have been able to do their destruction. They will be the smoothest operators, and will polish their act to comply seamlessly with any sort of checks and balances – while undermining them effectively. The only thing i have been able to think out is that it seems the shrillness of denial when forced to face what they are up to may be a giveaway.

    The next question is what to do when one notices having bought into the web of lies narcissistic predators spin around their system (bank, family, company, workplace etc)? You may or may not have voted Hitler and his party into the parliament, but what to do when you notice there’s something going on that you strongly disagree about? Traudl Junge, Hitler’s secretary, says that she has realised, that for her part, youth and ignorance will not do as excuses, because there were people her own age who chose not to be ignorant. They tried to spread news about reality when the media was all spinning lies. This is a tough situation: narcissistic predators will meet dissidence with visciousness – maybe not murder squads, but person and integrity will certainly be attacked. One part of the skilfulness of a narcissistic predator is the skill they use in destroying opposition in such a way that nobody dares to defend the dissenters. So, confronting a narcissistic predator, one risks losing a lot. But going along will make you part of the problem. I do not know any solution to this.

    And then there’s the aftermath: the bank, family, workplace etc. has been destroyed and all the ugliness has been revealed. How to recover? Of course some things are gone forever. And it happens very easily that survivors start fighting among themselves out of sheer anger at what has happened. This will not help. As far as i can see, only truth will help. Truth about what were the lies, and how they were used to mislead, and also how the misled accepted guidance from parties that were up to no good. Truth will make survivors wiser: not so easily misled, not so eager to believe those smooth operators.

    It seems like what is happening right now in a lot of places is acknowledging that something horrible happened, but it was just a nasty coincidence, and we can continue same way as before as soon as the dust settles – and most of it has already settled. The spin on this is that digging out those nasty truths would only hamper recovery and not recover any money. But what is at stake is not money anymore. It is important to understand, that narcissistic predators will not give up or repent. They will continue their activity as long as there exists one single being on the earth willing to buy into their scam. So, only knowledge of truth can help us save ourselves.

    Lately i have thought a lot about the story about Ragnarök: only the female asa-goddesses who do not participate in the final fight will survive. Even in a fight against destructive forces, with an intention to save rather than destroy, one ends up being killed.

  • Ljósmynd DE August 27, 2009, 3:10 pm

    Apparently the banks in Iceland are flooded with money of (Icelandic?) individuals and companies, rotting there on savings accounts and waiting to be invested:


    So, couldn’t everybody with such a problem treat themselves to shares in an Icelandic energy company like HS Orka? If this company is supposed to remain under Icelandic control, some efforts should be made.

  • kevin o'connor waterford Ireland August 27, 2009, 3:12 pm

    Copy and echo all of the above, this foreign privatisation thing has had its day, after all look at the splendid returns for each and every Icelander that you are currently enjoying from your formerly brilliant privatised banks. The trouble with the idea is that profits get enjoyed elsewhere,Monaco,Las vegas etc not even spent in Iceland.

  • JeffC August 28, 2009, 4:56 am

    The Magma Energy share capital structure on page 17 of their presentation is particularly interesting. Founders (Beaty et al) acquired nearly 50% of the share capital (110 Million shares) for a mere C$110,500. They have little risk – no “skin in the game”, in my book (basically free shares).

    I have looked at Magma and would not touch it. I would not invest in the stock of such a company.

  • alda August 28, 2009, 10:21 am

    Thanks for the input, everyone. As ever, good discussions on this topic.

    Erin – it’s unfortunately not as simple as “just say no” because the competition authority has ordered that the share must be sold, and from what I understand there is no other buyer. And sadly, the state treasury does not have a few billion ISK lying around.

    idunn – Where is your prime minister, Jóhanna Sigurðardóttir, during all this? — and well you may ask! Jóhanna seems decidedly absent, not just now, but in general. Steingrímur J. – leader of the other coalition party in power – is doing all the heavy lifting and is, in effect, acting as PM. I suspect Jóhanna has just reached an age where she doesn’t have the strength to deal with these heavy issues.

    Haukur – takk fyrir ábendinguna.

    kristiina – hi and welcome, and thanks for the comment. Very interesting to take the narcissistic angle on all this. NPD is a subject that has hit close to home in the past and I’m always equal parts fascinated and repelled by it. And yes, there are certainly a few players in the Icelandic situation at the present time who are most definitely narcissists in my opinion.

    LDE – an interesting idea and probably not the worst that has been presented here in the last few days. I just don’t know how one would go about organizing such a scheme, or indeed, if there would be enough time. And sadly, there seems to be a lot of apathy around this issue here. Only a few people are being vocal about it, YT included.

    Jeff -not a pretty picture. At all.

  • The Other Katherine Harris August 28, 2009, 11:01 am

    RE: “Erin – it’s unfortunately not as simple as “just say no” because the competition authority has ordered that the share must be sold, and from what I understand there is no other buyer. And sadly, the state treasury does not have a few billion ISK lying around.”

    Hmmm, nobody actually said you could bring down the prior government, either, did they? So who made this “competition authority” king — and why let it reign, if the result is going to be ruin?

    Seriously, once these things start happening, there’s no going back. This is your only chance to stop it.

  • The Other Katherine Harris August 28, 2009, 11:15 am

    Perhaps I should elaborate:

    If you want to retain a genuinely sovereign, democratic nation with its resources more or less intact, please get yourselves some leaders who’ll repudiate the banksters’ debt (except insofar as it their fortunes can be confiscated and turned over to the folks they swindled) — and who’ll kick the bloody IMF out before they give your entire country away to their cronies — and who’ll keep wide of the EU, which is the IMF/World Bank wrecking crew in sheeps’ clothing.

    This is your moment, Alda. Refuse to be Iceslaves and you’ll set an example for honest working people everywhere. We’ve all got to find ways to cease paying endless tribute to those who’re robbing us and who sincerely don’t care if we live or die.

  • alda August 28, 2009, 4:51 pm

    OK – a Facebook group has just been formed to urge the public to buy shares in HS Orka: https://tinyurl.com/n9nazo

  • The Other Katherine Harris August 28, 2009, 7:21 pm

    That is a great idea, Alda! Believe me, I’d jump in if I had any money — but, like you, I mainly write for a living and the field’s been dying here in the US for years.

    On another note, are there no protests against your government’s official assumption of the banksters’ debt? That’s the root of the problem everywhere — they’ve stashed their bubblelicious fortunes and piled their liabilities onto everybody else. Our government has Americans in hock for something like $14 trillion at last count, to pay off demon derivative bets that should have nullified (and illegal, in the first place). Alas, Obama has proved yet another in the long line of corporate shills who’ve given all to the rich and corrupted the media and education since Reagan. We’re a mess, damn near hopeless.

    That you Nicelanders have such a well-schooled, well-intentioned and cohesive society — and that the country is small enough that the popular will can’t be ignored — is your great hope. And the world’s. Show us that these transnational predators can be stopped and that common sense can once again prevail. Save your asses. PLEASE.

    Big hugs of encouragement,

  • Ryan September 3, 2009, 5:54 pm

    Just to draw this to your attention: RE lost 16.4 million ISK in 2008 and lost an additional 10.6 million ISK in 2009. HS Orka in this light doesn’t seem to be the typical public resource gem, since it’s literally costing Iceland millions a year just to own. Comments?

    By the way for those interested, here’s the balance sheet: