Coal, Money and Empire, Redux

The 21st century, at least in Britain, is trying hard to be less about the stuff that made it great over the preceding 200 years. Coal, high finance and expansion have lost their place to wind farms, marketing companies and sustainability. In our heart of hearts it seems a sensible move, but often fails to ignite the imagination. 

But what's this? A last huzzah for the old order has emerged from the tale of one Nathaniel Rothschild, a book of contacts and a few Indonesian coal mines. Indeed, the planned flotation of Bumi Plc on the FTSE 100, has captured the imagination of the financial press, who regulalrly mention Rothschild in the same excited gasp as Napoleon. When it is finally listed, it is likely to attract interest from well beyond the financial community. Indeed, the Bloomberg social media channels have come alive with interest in the venture. It is a story that mixes an interesting blend of history, media and high finance, recalling the former glory days of Empire and commodity rushes.

The reasons for this are varied. Part of the answer lies in continued interest from investors in commodities. Yet one of the main factors is the emergence of the normally reclusive Nathaniel Rothschild. Keen to engage with the press, he has conducted interviews with the Financial Times and Bloomberg amongst others. 

The tale, in which Nathaniel’s financial shell, Vallar, raised £707m on its initial public offering despite no assets, has highlighted how money flows to respected names, brands and images of success. Indeed Rothschild’s acquisition of stakes in Bumi Resources and Berau, two of Indonesia’s biggest coal producers, has a hint of mercantilist daring and adventure about it. Journalists have been quick to draw links between ‘Nat’ and his swashbuckling forebears, who helped finance the downfall of France in the nineteenth-century; stood at the forefront of ‘New World expansion’ and played a key role in the birth of South-East Asian oil exploitation. His network of friends is portrayed as legendary, including the current Chancellor of the Exchequer and Lord Mandelson. 

Rothschild, the man, is presented as in these articles as eccentric, reclusive and visionary. His name in itself carries a mystique. It is an image he is actively fostering. His fund manager, for example, has a ‘metal ear stud and an Elvis-style quiff’, not the usual pin-stripe suit. Rothschild is also bullish in his rhetoric, insisting Bumi will soon be bigger than FTSE 100 miner Xstrata. He is aiming for a new ‘international coal champion’ which can make shareholders three times their investment.

This astonishing effort to publicise Bumi plc through Nathaniel has added a valuable air of excitement and daring to the plan. This will attract investors. More than simply a name, Nathaniel’s willingness to engage and espouse confidence should help the news of the initial offering penetrate into the mainstream media.