Ken Talbot’s different take

Ken Talbot liked to do things differently.

When visiting executives from Japanese and Chinese steel and investment companies would come to Brisbane for business, Talbot skipped the city’s posh restaurants and headed for a pub he owned at Moreton Bay. After showing the executives behind the bar, he would serve up the house special: a one kilogram T-bone steak so big that those who finished it would earn a commemorative t-shirt.

While many in the mining sector perpetuate the image of the hard-as-nails mine worker, Talbot earned himself the nickname of “swami” after offering mine works free yoga classes to improve their alertness and flexibility.

Where other mining companies wanted their staff to multi-skill, Talbot’s rule was one worker to one machine, reasoning that a worker would take better care of a piece of equipment that they had some ownership over.

And when other junior miners concentrated on making themselves just big enough to be taken over by one of the industry giants, Talbot was determined to keep Macarthur Coal independent for as long as possible.

Talbot’s willingness to take a different approach to life and business didn’t always win him admirers in the mining world, with some considering him to be a risk taker with a big ego.

But this maverick streak is one reason that his death in a plane crash in Western Africa is a sad day for Australia’s mining sector and particularly Queensland’s business community. With a fortune of $965 million, Talbot was the one of the state’s richest entrepreneurs, and arguably it’s most engaging.

Certainly for the last few years, Talbot’s name has rarely been far from the headlines.

In late 2006, with the resources boom in full swing and Macarthur’s operations humming, Talbot was rocked by news that the Queensland Crime and Misconduct Commission in late 2006 had charged him with making corrupt payments to former state government minister Gordon Nuttall.

Talbot stood down from the chief executive’s role, and eventually from the board, before selling out of Macarthur in 2008 for about $680 million.

Since then Talbot tried to keep a low profile, concentrating on investing in junior mining companies in Australia and around the world. But his success as a stock picker made him a closely watched figure, as his wealth headed ever closer to the billion dollar mark.

Talbot, the son of a truck driver, entered the mining industry in 1968 as a chemist at BHP’s Port Kembla plant, before becoming a mining cadet at Kemble Coal and Coke. He worked in a variety of roles for companies including Utah Development, before spending two years running the mining operations of Alan Bond.

Talbot told me in an interview in June 2004 that he had little contact with Bond, although the entrepreneur’s use of debt-funding and joint ventures – “Because Alan Bond never put up any money,” Talbot says – taught him plenty about funding and financing and mining operation.

In 1988, at the age of 37, Talbot made the brave decision to jump from mine management to mine ownership with the development of a new mine called Jellinbah East.

While the mine had its share of setbacks – including the liquidation of the company’s main backer on the eve of its first shipments – Talbot eventually got the operation up and running, and remained chief executive of the mine until 1995, when an acrimonious split with the mine’s other shareholders ended up in arbitration, with Talbot eventually selling out.

Determined to build a bigger mine than Jellinbah East – and perhaps determined to show up his former shareholders – Talbot named his new venture Macarthur Coal, after General Douglas Macarthur, who famously promised “I will return”.

Talbot would float the company for $1 a share in 2001, and eventually sell out for almost $20 a share seven years later.

But perhaps his biggest achievement during the time was to play a leading role in the creation of the market for pulverised coal (known as PCI), a form of coking coal that provided steel mills with a cheaper alternative to traditional coking coal. By helping to convince the mills of the merits of PCI, Talbot helped to cement Macarthur’s long-term future and boost with wider Queensland coal sector.

Talbot did not appear to embrace the mainstream mining sector and in recent weeks he even hit out at what he saw as short-term thinking and a “greedy culture” within the industry.

Personally, he was friendly, engaging and very down-to-earth. While he owned luxury property around the world, he seemed most at home in the front bar of one of his pubs (which he eventually sold) or at his box at the Brisbane Broncos.

He was generous with his donations to philanthropic causes and seemed to genuinely like helping people out – he once gave former Brisbane Broncos coach Wayne Bennett $1 million to assist with the care of his disabled son.

Yet Talbot also appears to have been naive, particularly in his dealings with Gordon Nuttall. Talbot always said that the money was paid as a loan to assist Nuttall provide for his children after a marriage break-up, but regardless of his intentions, he clearly should have thought more about how the payments would be perceived.

Talbot was due to face trial over the corruption charges in late August, and told The Australian he had prepared for the possibility of a jail term.

But Talbot, who is survived by his wife Amanda and four children, was also preparing for a return to direct mine ownership and had sold out of several investments in recent months to build up a war chest.

Perhaps Talbot was preparing for his second General Macarthur moment, returning triumphantly to build a big new mine after putting his legal woes behind him.

Unfortunately, we will never know.