A Melman Minute By: Leonard Melman   NOTE: In order to complete Mr. Melman's forthcoming book on the essential fundamentals of the developing international financial crisis and its relationship to gold and silver, new "Melman Minutes" will be posted only three times per week, each Monday, Wednesday and Friday. Since the work has been expanded to include potential solutions to the growing list of seemingly insoluble dilemmas, the working title of the book has been revised to 'REVERSING THE WAY IN!"   MELMAN MINUTE - May 3, 2010 NOTE:  I will be flying to central Mexico on Monday and will be unable to offer comment on market activities for that date.  In place of a regular "Melman Minute" we are presenting the following discussion on the subject of "ENVIRONMENTALISM." - - - - - Every so often, events work in combination to exacerbate an already-difficult situation.  In terms of mining's relationship with the environmental community, two events in particular have united in their effects to advance the potential for even more environmental regulations, even larger environmental bureaucracies and even more difficult public relations problems for the industry to overcome.  The two events to which we refer are the death of about 500 ducks in a toxic pond related to oil sands recovery operations in Northern Alberta last year and, of course, the huge oil spill which began in late April, generated by the collapse of an oil development rig and now affecting both the waters and the shorelines of the Gulf of Mexico. To say the media is obsessed with publicizing the potential damage to the region would be a vast understatement and the Obama Administration is clearly using this 'crisis' to demonstrate that it will be neither slow nor lacking in vigor in reacting to this calamity, as opposed to the supposed lethargy of the Bush Administration to Hurricane Katrina in 2005.  We believe this thrust will enhance the likelihood of additional and more restrictive environmental regulations.  And, as we have pointed our previously, regulations adopted in America have a strong likelihood of quickly becoming law in other nations. During our research for this article, it was impossible not to be stunned by the magnitude and powers of the environmental movement as well as the differing manners in which they influence both the media and the political systems in America, in Canada and around the world.  Here are several of their techniques. * - Petition governments for funds - Rather than relying upon the voluntary contributions of its members, the Environmental Community (EC) has become adept at petitioning for and receiving grants from governments to finance their public relations activities.  A simple example might be a $50,000 grant recently received from the National Oceanic and Atmospheric Administration to conduct creek research along the American River in California.  The number of agencies involved in handing out government grants is enormous and the amount of money involved can be staggering, particularly in light of the numerous new laws which have been passed or advocated during the past 15 months. * - Exaggerate the possible harm of any pro-mining activities - For example, the "Arizona Mining Reform Coalition, or ARMC,  recently put out a release condemning the Senate Energy and Natural Resources Committee's possible approval of a huge copper mine in Arizona as an attempt to, "...fleece the American taxpayer out of billions of dollars."  The mine does not yet exist, no assessment of the mine's potential net income has been made - yet the organization has gone ahead with what we believe are its totally unsubstantiated scare tactics. * - Work in unison with other organizations of a similar yet different underlying basis - One such alliance which has grown through the years is for the EC to coordinate its activities with aboriginal advocacy groups.  In the above example, we note that the ARMC added the following comment to its press release:  "The Apache, Yavapai, Hopi and O'Odham tribes have also expressed concern over the land exchange and the potential harm that could come to sacred sites such as the Apache Leap if the project is to move forward without the consent of area tribes..."  This comment is typical of yet another EC strategy. * - Open the legal and regulatory doors for legal challenges to resource development from as many directions as possible - Immense political and financial resources have been utilized to continually expand the areas by which environmentalists, aboriginals, community activists and even the public at large can use the court system to put up roadblocks to resource development and, in fact, stop many mining enterprises dead in their tracks while these objections are adjudicated.  The costs to the mining industry of defending such objections is becoming a serious, perhaps even project-threatening problem.  Along the same line, the EC has yet another tactic.  A favored area is finding any fault with highly complex Environmental Impact Statements (EIS). * - Attempt to reverse permits which have already been granted - As a recent example, an environmental organization known as "Green Media Toolshed" put out an information notice in January, 2010 which gratefully acknowledge the fact that, "...A Department of Interior Administrative Law Judge withdrew Peabody Coal Company's Life of Mine permit for operations on Black Mesa, AZ, handing a major victory to tribal and environmental organizations..."  Please note the relevance of this notice to the subject of groups working in concert with each other.  We have also seen the technique of permit reversals used in several foreign nations. * - Place enormous pressure on one form of industry to pressure other forms into obedience to environmental demands - We have seen an example regarding the furor created by Anglo American Plc's plan to develop the Pebble Mine in Alaska.  Environmental groups have mounted vigorous protests against the project and, in addition, they have threatened retail jewelry chains with retaliation if they opt to sell jewelry and other items made from metals recovered from such "dirty" projects.  The threat of massive boycotts and abundant adverse publicity has induced several major jewelry chains to accede to environmentalists' demands. The complexity and growth of the international environmental community is staggering as major environmental organizations now exist in virtually every nation on this planet, and they exist in abundance.  Simply listing (one line each) these organizations takes sixteen printed pages, each one with their own website, media personnel, organization plan and, for most, we suspect active and motivated legal staffs.  In Canada, nineteen separate organizations are listed and for the UK, that number swells to 34.  However, the USA figure dwarfs both of them combined with at least 81!  And, as noted earlier, many of these are 'umbrella' organizations with sub-chapters and sub-sections, always working toward advancing their goals. At "The Melman Report", we believe one such aim is to infiltrate the education system and thereby insure that our children and grandchildren become thoroughly indoctrinated (propagandized?) with the environmental point of view.  Under the category of "Environmental groups and resources serving K-12 schools" we located thirty-seven specific groups whose purpose was to interact with education systems in the USA, Canada and internationally to advocate for environmentalism within their national school systems.  The intent and direction of these organizations is clearly evident in such names as "Alliance for Climate Education", "Classroom Earth", "Climate Change Education", Energy Smart Schools Program", "Green Schools Alliance", "North American Association for Environmental Education", "Sierra Student Coalition" and "Sierra Youth Coalition".  A personal story illustrates just how effective they can be at convincing our youth regarding the harm resource development inflicts on society.  During a recent convention in Spokane, Washington we listed to a resource development advocate describe a recent meeting with a forester friend.  The friend told him that upon returning home one day, his grade school daughter looked up at him with a sad, mournful face and asked him, "Daddy, how many trees did you kill today?"  Not how many homes he helped built, not how much furniture might be manufactured from the wood he helped provide or how much paper would be made available to the publishing world, but only how many trees he had killed. Those young people are growing up and will soon be in the electorate or in the halls of political power or both.  They are not going away and we believe their future ability to interfere with mining, forestry, energy development, fisheries and even agriculture can only get worse. Paul H. Rubin, Professor of Economics at Emory University, recent wrote an op-ed piece for the Wall Street Journal headlined, "Environmentalism as Religion".  The thrust of his article was that for many environmentalists, the movement has become their new religion, replete with holy days such as "Earth Day"; food taboos such as excessive meat consumption; self-sacrificing rituals such as recycling; complete belief systems; and even sacred structures such as a vast number of recycling bins - and woe betide anyone who does not use them!  With some irony, Rubin points out, "...While people have worshipped many things, we may be the first to build shrines to garbage." He also writes that those who do not buy into their entire program are treated, not with respect as people who have simply retained a healthy sense of skepticism, but rather in environmentalists' eyes,  "...They are treated as evil sinners."    This is a powerful, dedicated and some might even say fanatical force which is growing by leaps and bounds, continually gaining political and regulatory powers.  Any mining executive who blinds himself/herself to the possible consequences of environmentalism for the world of precious, base and specialty metals mining could be open for some very unfortunate lessons.  The situation is difficult and growing more perilous for the industry with each generation. Our advice is be prepared, learn as much as possible regarding this threat, and support those organizations which are attempting to educate the public regarding the absolutely essential nature of mining to the continuation of society as we know it. - - - - - All quotes in US$ unless otherwise noted. Due to travel requirements, Melman Minutes will resume on both Thursday, May 6 and Friday, May 7. ◄  Previous Minute                                                                                                        Next Minute  ►
		DISCLAIMER The information presented above is based on data which we believe to be from reliable sources, but the accuracy of which cannot be guaranteed.  Any opinions or predictions contained herein are those of the editor and are likewise offered also for information purposes only. Any investment decisions should be made only following consultation with registered investment professionals.