Temasek: MM Lee being ignored?

In GIC, Temasek on 05/04/2010 at 6:04 am

Bit strange this. Last week, two mining deals involving Temasek were annced*.

Strange because MM Lee said several years back that GIC would not invest in mining entures, because he didn’t understand mining. OK I know he is chairman of GIC but has no post in Temasek but remember Deng Xiao Ping had no official post in the CCP or government when many of the reforms were carried out.

So is Temasek ignoring MM’s sagacity at its, and our peril? Remember a few yrs back, he said SIA shld divest itself of SIA Engr. SIA told the world that SIA Engr and SATS were core to its strategy. Last yr, it divested its stake in SATS via a dividend-in-specie.

Things can go badly wrong, when MM’s sagacity is ignored. Juz like when Temasek divested itself of its BoA stake just as market was turning. Remember MM had defended Temasek’s purchase of Merrill Lynch as one for 30 years. Who was the wiser? MM or the pros at Temasek?

Anyway, don’t the instances where MM is ignored by Temasek and its TLCs show the lie that Dr Chee, his SDP and their local new media and foreign media allies are propogating: that MM is still the puppet master and that the PM and his cabinet his toys.

If Temasek and TLCs don’t listen to him, why shld the cabinet? Why indeed shld anyone?


— It will invest US$100 million in Platmin, a South Africa-based platinum miner. This will be in the form of convertible debt in the company. Temasek can convert all the debt into common shares at US$1.215 or about S$1.70 a piece when it matures on December 31 this year. It will then hold less than 20 percent of shares in Platmin.


— Temasek will buy about US$490 million ($685 million) of subscription receipts from Inmet Mining.The Toronto-based diversified miner said Temasek’s Ellington Investments unit will buy some 9.2 million subscription receipts, which will each be bought at about C$54 ($75). Proceeds will be held in escrow pending exchange of the receipts for Inmet common shares. The receipts will be exchanged for the 9.2 million shares, representing a 14.16 per cent stake in Inmet on a non-diluted basis. Inmet will use the money from the deal to develop the Cobre Panama copper project and for general corporate purposes.

  1. correction, it should be SATS that was distributed as dividend-in-specie.

    i wonder if it is a gd or bad thing whether LKY has control over GIC/TH. Both one-man-show (but his field of competence is not investing) or groupthink are bad.

    Temasek’s mining ventures will end up badly when china growth slows eventually. they came in too late into the commodity game.

  2. Cobre Panama was formerly Petaquilla unable to get into development stage for 2 decades at least. Mine construction costs globally in recent times have escalated through the roof. TH should have taken equity in Inmet and let the banks takes the financing risks. If Cobre Panama is NON-bankable feasibility proposition, they should not get in. Mining stocks have gone up by a few hundred percent from 2009 bottom. TH is late of entry. CY is right. China is not a sure thing of sustainable development but copper is good bet though.

  3. CY is right of call, TH came too late in the commodity game, right near the peak of this metal price cycle. Just look at how the tighening of monetary policies in China sent the Shanghai Stock Exchange on the downward spiral since April ( the time TH got into Cobre Panama). EU market in a turmoil threatening to derail the global economic recovery. Euro is at 12 months low against US dollar and last night scare on Wall Street of another free-fall with ominious economic consequences. And of course, metal prices have fallen 10% to 15% from their recent highs. Shares in Inmet Mining (IMN.TO), the operator of Cobre Panama has also fallen 15% from its double-top 2-year high. TH looks caught out badly again – this time in its mining investments.

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