PONDERING HOW SHE might help Wicha Promyong introduce Doi Chaang Coffee to the rest of the world, Sandra Bunmusik thought of her old friend John Darch, whom she had met in 1997 when she worked at the Thai insurance agency. Darch, a former banker who had become a Canadian mining entrepreneur, had been coming to Thailand for years as part of exploration efforts that discovered a huge potash deposit in the northeastern part of the country. His company, Asia Pacific Resources, had tried in vain to get a green light from the Thai bureaucracy to begin operations. In June 2006, control of the Asia Pacific potash concession was bought by Italian-Thai Development, a huge Thai construction company, for over $80 million.
Sandra had kept up her friendship with John Darch over the years, and now it occurred to her that, as an internationally savvy businessman, he might be able to advise Wicha. Shortly before the sale of Asia Pacific, she called to see if he was at his Bangkok office. He was. “Khun John,” she started, using the common Thai honorific that goes beyond “Mister,” implying far more respect. “Khun John, there’s someone I would like you to meet here in Bangkok. Wicha is this wonderful man who is helping a hill tribe to produce really great coffee. He isn’t looking for funding, just international contacts. Could you meet with him?”
Darch listened politely, and just as politely agreed to meet Wicha. He knew nothing about the coffee business and suspected that Wicha was indeed fishing for money, but he trusted Sandra, who was an intelligent, self-assured woman, behind the shy courtesy required in Thai women. Besides, when a friend asked something like this of you in Thailand, you agreed, but that didn’t mean anything had to come of it. He would probably give this man a small donation, and that would be it.
Sandra brought Darch to Wicha’s small Bangkok office, hardly bigger than a closet, where a small, wiry man sat cross-legged on a pile of cushions. He wore loose-fitting clothes with a sash around his waist and had a raggedy beard, earrings, and a shaved head, other than the multiple little pigtails held by colored ribbons. “Khun John,” Sandra said, “I am pleased to introduce you to Khun Wicha.” After indicating that her friend should take a seat in a chair opposite the little man, Sandra sat to one side on the floor.
As John Darch seated himself, he thought, This guy looks like a cross between a monk and a hippy. He half expected to be offered a joint, but Wicha disarmed him by asking, “Would you like some of my special green tea?”
“I thought you would offer me coffee,” Darch said.
“I don’t actually like coffee that much,” Wicha admitted, “but it’s good for my people. I drink many cups a day anyway, just to make sure of the quality. But let me tell you about the Akha and their coffee.”
Over the next several hours and more tea, Wicha told the story of the Akha. As Darch listened, he thought about his own limited encounter with hill tribes. When he had first come to Thailand, he had taken part in all of the expected tourist activities, joining other farangs in temple tours, shopping for jade and clothes at the floating market—and visiting a Hmong hill tribe village near Chiang Mai. Such forays to carefully staged hill tribe villages were the second-largest tourist attraction in the country. “They took us on buses,” Darch recalled, “so we could see these quaint people living in grass huts with naked children running wild with pigs and chickens. The tourists could take snapshots of smiling village women with elongated necks, their teeth blackened from betel-chewing.” He had been mildly embarrassed, uncomfortable at the zoo-like atmosphere, but he gave a few coins to the children, as did many other tourists. Now he was hearing a riveting story about a particular tribe and place.
Wicha went on to explain how Adel had come to ask for his help, how he, Wicha, had spent many years roaming through the mountains, getting to know the hill tribes, and becoming increasingly outraged by the way they were treated. Young people were leaving their home villages because there was no future for them there other than grinding poverty. In the cities, lured by promises of a better life, they found themselves a despised minority, forced to take the most menial jobs. The girls frequently ended up as prostitutes. When they were mistreated, they had no one to turn to, not even the police, who were often bribed by Thai brothel owners.
Finally, Wicha told the story of the last few years and the remarkable success of Doi Chaang Coffee. Young people were beginning to return to the village, now that coffee might provide some kind of future for them there. “We grow the best beans in the world,” Wicha said. “We need to find a way to export them for what they are worth. We are not asking for gifts. We don’t want charity. The Akha are not beggars. Sandra said that you might have connections or suggestions.” He explained that organizations from Korea, Japan, and North America had come to Doi Chang and offered to invest, but they all wanted at least 51 percent, a controlling interest. “The Akha came out of 200 years of slavery,” Wicha said, “and I am not going to put them back into it.”
Darch was impressed. Wicha had not asked him for money after all. He was not trying to sell him anything, either. He portrayed the Akha as dignified, hardworking people who just needed an opportunity. Darch was relatively wealthy, having done well in the stock market, selling shares of Asia Pacific Resources and other enterprises he had promoted and managed. He had promised his wife, Louise, that he would retire, but no one who knew John Darch believed that for a minute. He had come to love Thailand and its diverse peoples and environments. Maybe this was a new opportunity for him to use his business skills as well as his interest in making the world a slightly better place.
In the same way that Wicha’s life could be seen as preparing him for the moment Adel asked for his help, John Darch’s life might be seen as a similar preparation for his meeting with Wicha. The two men couldn’t have looked less similar. Wicha, the slightly built Thai Muslim, had lived a vagabond existence. Darch, three years older than Wicha, was much taller, solidly built, and slightly overweight, and he had pursued a career as a banker and mining venture capitalist.
Yet there were uncanny similarities between Wicha Promyong and John Darch, and the two men who had grown up in such different cultures on opposite sides of the world seemed destined to form a close friendship akin to a brotherly bond and a partnership that would pioneer an alternative form of capitalism. This kind of enterprise would make sure that the profits flowed in an equitable way back to those who did the most important work.
AS HE LISTENED to the story of the Akha, John Darch thought back to something his mother had told him when he was growing up in a solid middle-class household in Weymouth, England. His parents owned, lived in, and worked in an old converted four-story hotel. On the first floor, Francis and Elizabeth Darch, his parents, presided over F. Darch Cycles and Motorcycles. His father worked in the back, repairing bicycles and motorcycles and making toys and clocks. His mother ran the front of the shop, kept the books, and served customers. “Mum was the real business lady, the driving force who dealt with salesmen and bankers,” Darch recalled. “Dad was a gentle soul who would have been happy to drink tea and talk with his brothers all day if not for Mum.”
His parents raised their five children to value honesty, hard work, and compassion. “One day I was playing with the toys and bicycles in the store, and my mother noticed some little kids staring in the shop window.” They were obviously hungry for the goods that their parents could not afford for them. “John,” his mother said, “you must never forget that the only difference between you and those children is an accident of birth. You didn’t do anything special to deserve to be on this side of the window, playing with these toys. It doesn’t make you any better or them any less deserving.”
Elizabeth was also something of a risk taker. She liked to tell the story of how, during World War II, an unexploded German bomb was wedged in the floorboards, and she was about to hammer to dislodge it when horrified soldiers stopped her. Her son apparently inherited her appetite for risk, as his career would eventually demonstrate.
At the age of eighteen, Darch married his girlfriend Dorothy. “I knew it was a mistake,” he recalled, “but I did not have the courage to back out.” The couple had four children—John Alexander, born in 1966, Robert, in 1968, Katharine, 1970, and Sophie, 1972. Darch joined the Weymouth branch of National Westminster Bank in July 1965, four months before his wedding. Banking might appear a rather staid occupation, but for Darch it held the promise of change and possible adventure. “I knew the bank would move me every few years. The thought of walking down the same path to the same job for the next forty years was like going to prison.” Still, joining a bank was akin to a career in the armed forces—it was regarded as a lifetime commitment, with a slow, steady progression up the ladder until retirement.
Darch became a loan officer in 1973, and although some parts of banking were mundane, he enjoyed the challenge of qualifying applicants, combining number crunching with character reading. At age twenty-seven, he was transferred as assistant manager to the bank’s area office in Bournemouth. His new boss took every opportunity to belittle him, but fortunately he soon retired. He was replaced by David Giddings, who encouraged Darch’s creativity and initiative. If a loan had been turned down at the branch level, Giddings suggested that Darch should look for a way to turn it around and make a deal after all. Giddings treated his staff well. He became an important mentor for the aspiring young banker, and when Darch applied for a job at the Royal Bank of Canada, Giddings congratulated him on his sense of adventure.
Though Darch didn’t get that job—he was seen as overqualified for the position—six months later the Canadian bank offered him a better job at the head office in Ottawa at a salary four times what he was making in England. When Darch told the branch chief that he would be departing for Canada, the chief reacted badly. “How could you do this after all the bank has done for you? You’re burning your bridges, young man. Don’t think you can ever come crawling back here.” Undeterred, Darch sold his home and all his possessions and left for Canada with his wife and children in January 1977. He was twenty-nine years old.
PART OF THE reason John Darch decided to try life in a new country across the Atlantic was to save his marriage. “I kept thinking, If only I do this or that, if only I move to a new place, if only I make more money, things might get better,” he recalled. “But it never was better, regardless of what I bought or did.” Because of his failing marriage, Darch focused his love and passion on his children and his work.
After serving a probationary period in Ottawa, he was assigned to the Peterborough branch of the Royal Bank of Canada, four hours to the southwest, as an assistant manager. He stayed in a motel during the week, driving home to Ottawa on weekends. He missed his children. Relations with his wife were volatile. He hated the frigid weather. He had been thrust unprepared into a position of authority over his seniors, who resented him, regarding him as an immigrant who had displaced a more deserving Canadian. Maybe this had been a huge mistake. One cold November day, he found himself overwhelmed, sitting in the bank parking lot, crying uncontrollably.
His weeping proved to be a pivotal catharsis. “It was like flipping a switch. After I dried my eyes, all my apprehension was gone.” His family moved to Peterborough soon afterward, where they stayed for two years, but Darch never got used to the cold or to driving in blizzards. He told the bank executives that he had to be transferred to the coast or he would return to England. They finally obliged him.
In April 1979, Darch moved his family to Vancouver, British Columbia, where it was far more likely to rain than snow, and where the rugged mountains swept down to the sea. “I thought it was heaven.” He quickly settled into his job at the Vancouver branch of the Royal Bank of Canada as a senior commercial loan manager, supervising a staff of fifty. Vancouver was the world headquarters for start-up mines and risk-taking entrepreneurs, who made and lost millions, apparently without batting an eye. Darch didn’t get along with his immediate boss, but he took to the high-rolling scene, quickly getting to know clients who referred other hopeful borrowers to him. He enjoyed putting likely bank clients together to work on projects. “I just liked networking, looking for opportunities,” he recalled.
Darch particularly appreciated getting to know on a personal level some of the characters he had for clients. One, Gerry Wright, a hard-drinking Irish engineer for whom he arranged a car loan, would feature strongly in his life. “Gerry was great fun and kept me in fits with his jokes at our lunches.”
In 1980, one of Darch’s bank clients introduced him to Gary Crawford, an Australian gold miner. Crawford wanted to restart placer mining operations in the Yukon area of Bear Creek and Fraser, to look for gold in the alluvial (sand) deposits. Darch authorized a $50,000 loan, and at Crawford’s invitation, flew up for a few days that July to take a look. He invited Wright to come along. Wright, who had a doctorate in water resources, had been working on drainage for a mine in Jakarta, so it seemed logical that he should help with the placer operation, which was all about controlling water flow while separating gold nuggets from sand and dirt.
Darch loved the romance of the wild Yukon, much preferring its rugged vistas, adventure, and miners’ bars to his coat-and-tie bank office and conservative boss. He pondered how he might continue to have such exhilarating experiences periodically, while being his own boss.
OVER BEERS, DARCH and Wright talked about all the money they saw thrown around in the mining world. “Many of these guys were successful despite themselves,” Darch observed, “so we figured we could do better.” What if they combined their talents and struck out on their own as consultants to snag some of those dollars for themselves? Darch, with his British accent, well-researched sales pitch, and banking background, paired well with Dr. Gerald Wright, the engineer who could charm clients with his Irish jokes while explaining the nitty-gritty of the geological exploration. Their long-time mutual lawyer, George Brazier, explained: “John was gentle and could get things done without causing too much disturbance. Gerry was more hit-you-between-the-eyes to get his point across. He’s Irish, you know. They were a good team; they complemented one another.” Or as Paul Royce, their accountant, observed, “John was the ideas man, Gerry more the front man.”
As they were discussing what to call their new enterprises, Wright looked out the window and saw a sign for Cypress Street. He became Cypress Consulting. Darch settled on Western Investments, since they were located on the west coast of Canada.
With great hopes and bravado, Darch resigned from the bank in the summer of 1981, but he soon found that many of his great friendships were really client relationships that cooled when he no longer had the bank’s money to lend. He did get a lead through his association with Gary Crawford, though. Gold Sciences, an American corporation, was looking for mining projects to serve as assets behind their gold bond portfolio, and they had struck a deal with Crawford to buy Bear Creek and Fraser, along with another nearby property. Gold Sciences wanted Darch to monitor the books, pay the bills, and file reports.
They didn’t need Wright, so Darch spent the summer of 1982 in the Yukon, where he got a good dose of local life during the long days and nights when the sun never set. Miners blew all their pay once a month in Dawson City on women and booze. Once, when Gold Sciences failed to send money, a miner threatened to kill him. Darch became friendly with the local police.
The gold operation was “so basic and fundamental,” Darch recalled, as he observed the water from roaring creeks being diverted in channels to wash out the gold. At one spot, he and a miner saw a worker attempting to steal gold by placing a chain across a river. Darch had to prevent the miner from shooting the worker.
At that point, the price of gold had dropped to $300 an ounce from its high of around $800 two years earlier, but it was still profitable if you could find the nuggets without too many expenses. In this case, the profits couldn’t justify the expense, and on Darch’s advice, Gold Sciences closed down. When the season ended, Gold Sciences was unable to settle its bills, so Darch borrowed money from the bank to do so, using a large Caterpillar bulldozer as collateral.
In December, Darch and Wright heard of a promising project in Atlin, in northern British Columbia, on Otter Creek. It had produced very large nuggets but was difficult to mine because it lay beneath 200 feet of dirt. The partners agreed to pay $100,000 for the prospecting rights to the two owners, Ken O’Connor and Ken Watson.
For seed capital, John Darch called his old boss, David Giddings. “Have you got any money, Dave? I need some,” Darch began. “Well, don’t we all?” Giddings laughed. “I’ve left the bank,” Darch continued. “Gerry and I are going up to the Yukon to work on a placer deposit, and we need some seed corn.” Giddings sent him £4,000 to help him get started. “I thought they would do well,” Giddings said. “John was a good talker, quite a charmer, and he understood money.”
They came up with a $50,000 down payment for the Atlin claim, agreeing to pay the balance in three months. “We got along with O’Connor,” Darch recalled, “but Watson saw us as suckers who would never come up with the rest of the money.” So Darch struck an ingenious deal with O’Connor. “Ken, you lend us the $50,000, and we’ll pay off the debt. You’ll get $25,000 back immediately, with the other half going to Watson, and we’ll still owe you the full $50,000. Plus, you’ll be out of your partnership with Watson.” O’Connor agreed, and he also agreed to take the Caterpillar, worth $40,000, plus $10,000 in cash to pay off the debt.
That winter, Darch and Wright hired Leo, a former mine manager, to drive his big truck with them up to Dawson City to retrieve the Caterpillar. Once there, Leo went off with his buddies, leaving Wright and Darch with the truck. They had a few drinks with Darch’s police officer pals, then drove for dinner and more drinks with friends up the hill. By the time they left, they were quite drunk. As they drove around town, they decided it would be a great lark to knock down all of the stop signs. Amazingly, though the police caught them, they got away with only a fine, and they paid Leo for the damage to his truck.
In retrospect, it’s astonishing that Darch and Wright eventually became millionaires, because in the early 1980s they lurched from one unsuccessful venture to another, albeit still somehow making money. “That’s the nature of venture capitalism, though,” Darch observed, “where the odds of success are a million to one.”
They acquired the Atlin claim but needed to raise money to develop it, so they hired a geologist to review their leases and write a report, which showed that the mine did have real potential. It also revealed that there was a 3-meter gap between the two leased properties, so Wright went up and staked that sliver of land as well. After failing to raise sufficient development money, they ended up selling the Atlin rights back to Ken O’Connor, including $80,000 for the new “spoiler” claim. O’Connor went on to develop the placer mine profitably.
During that same period, a friend introduced Darch to Orville Gillespie, the president and majority shareholder of Caroline Mines, once known as the “princess of Canadian gold mines.” The share price having dropped from $50 to $8, operations had ceased, and Gillespie needed money for redevelopment. Agreeing to work on a contingency fee basis, with Gillespie covering their expenses, Darch and Wright flew to London, where they knew no one, but as Canadians (albeit with English and Irish accents), they had the advantage of being seen as swashbuckling entrepreneurs. Through Lions Mining, a fledgling British company, Darch and Wright were introduced to James Hamilton, who worked for an Australian brokerage firm, and other London brokers who pledged $20 million to Caroline Mines, with the condition that Orville Gillespie step down as president. Gillespie refused, but since the partners had secured the money, they were still paid their fee of $50,000, even though the deal fell through.
And so it went. Darch and Wright fell into one complex international deal after another, creating a network of useful contacts, and as their reputation for fund-raising grew, people sought them out. “By the mid-eighties,” Darch recalled, “we were the flavor of the week.” It was at this point that Darch, looking back, compared the growth of his multiple enterprises to branches beginning to sprout off the trunk of a tree.
For their joint ventures, Darch and Wright created Canadian Crew Energy (later renamed Crew Development) in 1985. That same year, James Hamilton called from London. “I have a client in Australia buying a mine in Aurora, Nevada, looking for a Canadian shell company and investors. Can you help out?” Darch knew that there were innumerable “shell companies”— the remains of failed public ventures that still retained a legal status as businesses—available for a song, since Vancouver mining ventures suffered a huge casualty rate. He and Wright found such a shell, renamed it Nevada Goldfields Corporation, and became directors and officers in October 1985, holding 10 percent of the shares from the shell corporation. A prospectus featuring a youthful-looking Darch as vice president and Wright as a director boasted: “With three precious metals projects on the verge of production—all in the heart of America’s historic gold mine country—Nevada Goldfields Corporation has, in less than a year, succeeded in fulfilling its plan to become a significant contributor to the world’s gold reserves.” Investors pledged over $20 million.
Also in 1985, Darch and Wright were approached by employees of BC Hydro about a geothermal project in northern British Columbia called Meager Creek. During the oil crisis of the 1970s, BC Hydro had drilled several deep test wells that found temperatures of up to 275°F. But with declining oil prices in the mid-1980s, BC Hydro abandoned the project and planned to plug the hole. Darch thought, This is the way the world will go, with alternative energy like geothermal power.
As part of the deal, Canadian Crew Energy owned half of the shares and persuaded the Canadian government to grant a thirty-year renewable geothermal lease in 1987. New development began in 1991, but was suspended in 1995, then resumed in 2001, with drilling on three more test wells in 2004 and 2005. Darch’s company sold the South Meager lease to Ram Power Corporation in 2010. Although the geothermal resource had yet to be successfully developed, he made money on the venture by judiciously selling shares along the way, as he did with many other enterprises.
Darch’s personal life was also evolving at this time. He divorced Dorothy in 1986, and in February 1987, married Louise. The day the couple closed on their new home, the stock market collapsed. It was October 19, 1987, which came to be known as Black Monday. By the end of October, stock markets in North America had fallen by a fifth of their value. “I was lucky I had to sell a lot of my shares in Nevada Goldfields in order to buy that house, just before the crash,” Darch said. “God must have been looking after me.”
The consulting partners’ next adventure took them to Texas, where an investor and gas operator named Michael Gustin persuaded them to help raise venture capital for an oil and gas project. Darch and Wright pulled in Brian Johnson, an Australian billionaire who agreed to help fund the Texas project.
The investment failed to flourish. The gas and oil never flowed, Gustin couldn’t account for much of the money, and Brian Johnson’s other projects went belly up at the same time. He went from being a billionaire to bankruptcy in three short years, but the two Canadian partners survived without much damage. “It’s always better to do business with other people’s money, I’ve found,” Darch’s banking mentor David Giddings wryly observed. Darch and Wright specialized in “junior” mining operations that were in the exploratory or development stages, and as one of their documents for potential investors warned, “Few properties which are explored are ultimately developed into producing mines… Mining operations generally involve a high degree of risk.”
Anyone who invests in penny stocks has to understand that start-up mining companies have a high casualty rate. “Generally, there is a one in a thousand chance of going from a discovery to taking it to exploration,” Darch observed, “and then one in another thousand to become operational. You could call it legalized gambling, if you look at the odds. All such young companies will disappear—either because nothing will come of them, or because they will be taken over by a larger corporation. My investors hung in with me because they knew that if I fell over, I’d get up and continue with something else. So you may have invested in Crew and it didn’t work, but the shares were not just wallpaper. I’d be looking for something else.” Also, share prices would go up as well as down, and wise investors who sold at the right time could make a handsome profit.
Fortunately, Darch and Wright had been careful to insulate themselves from personal risk. They had also invested in a shell company called Asia Pacific Resources that Brian Johnson had begun and put $5 million into because he was interested in the region and wanted to explore possibilities there. “We did a deal with the receiver for Brian Johnson’s company to buy their controlling shares of Asia Pacific in 1988,” Darch said, “and now we were not just consultants but majority shareholders of a shell company.”
But what could they do with it? The year before, Robert Anderson, a geologist, had approached Darch and Wright, looking for a job. Having once worked for Broken Hill Proprietary Company (BHP), one of the world’s largest mining enterprises, Anderson knew that there was potash potential in Thailand. “You fellows need a world-class project,” he said, “not these piddly bits you’ve been dealing with.” Now, with Asia Pacific Resources, they had an appropriate name for an operation in Thailand.
MINED POTASH IS the primary source for the potassium in chemical fertilizer, the “K” in NPK (nitrogen, phosphorous, potassium). Before the industrial mining era, potash was made by soaking wood ashes in water, which explains why it was called “pot ash” (and it’s the source of the word “potassium”). Until the late nineteenth century, much of the world’s potash came from Canadian ash-leaching processes, but then German mining of mineral salts containing potassium chloride superseded the ash process. In the 1950s, a major potash deposit was discovered in Saskatchewan, putting the Canadians back into competition.
Most of the world’s potassium was deposited when seawater in ancient inland oceans evaporated, leaving a mixture of sodium chloride (table salt) and potassium chloride (potash ore). As the millennia passed, these deposits were covered with dirt, so that many deposits are far below ground level. Consequently, most potash mines feature shafts going down thousands of feet.
Potash deposits have been found around the globe, most notably in countries such as Canada, Russia, Belarus, Germany, China, Chile, and Brazil. With China’s economy and population growing, it was clear that there was a market for Asian potash. While China had some deposits of its own, it had to import most of its potash, primarily from Canada, Belarus, and Russia. A cheaper source in nearby Thailand would find a ready market.
Darch, Wright, and Anderson flew to Thailand for the first time in 1987 and met Dr. Anant Suwanapal, who had been working to develop potash and other rock salts in Thailand for ten years. Dr. Anant suggested that they talk with the principal executives of the Metro Group, a conglomerate of 200 prestigious Thai companies. The group was active in numerous areas, including steel, flour, agro-chemicals, and fertilizer, and was part of a partnership that had secured the only concession from the Thai government for a potash mine. In 1992, Darch and Wright finally acquired a 62.5 percent interest in the project in return for raising the necessary money.
“By 1996 we had raised $70 million,” Darch said, “but of course it didn’t all happen at once.” First, they had to prove that there were indeed major potash deposits in Thailand. They conducted a test drilling program in the Udon Thani province of northeastern Thailand, with some hundred drill holes proving that there was a continuous bed of potash deposited there. Not only that, it wasn’t several thousand feet below ground but a mere 300 meters, about 1,000 feet, and it had a billion ton potential. At the beginning of the project in 1992, Asia Pacific was a typical penny stock, selling for 15 cents a share. As the test drilling proceeded, the price climbed to $4 in 1994, shooting up to $11 by the spring of 1996.
As the stock price rose, Darch and Wright prudently sold what Darch called “bits and pieces” of their shares, building their cash portfolios. That turned out to be a good thing. In early December 1996, the bottom fell out of the Asian stock market, starting in Thailand. The value of the Thai baht collapsed when it was unpegged from the US dollar. The Metro Group, with its 25 percent interest in Asia Pacific Resources, held $500 million in international debt—due in baht. Consequently, the Metro directors were eager to liquidate their assets. Darch and Wright saw an opportunity to improve their holdings from 62.5 percent to 90 percent of Asia Pacific, with the Thai government holding the other 10 percent, as arranged by Dr. Anant. He also instigated changes to Thai laws, which took effect three years later, so that mines 100 meters or more below the surface were not required to purchase surface land, only to pay compensation in the event of damage on the surface.
Darch and Wright could have raised the necessary $40 million to buy out Metro in 1997 by issuing more shares of stock, but that would have diluted the value of their own shares. Instead, they took a convertible debt loan from the Olympus Group, based in Hong Kong, which meant that Olympus retained the right to purchase Asia Pacific shares for a set price, even if the share prices declined. But Darch and Wright were sure that wouldn’t happen. Besides, they were negotiating with Norsk Hydro, a huge Norwegian conglomerate, to acquire an equity position in order to get the Thai potash for its fertilizer.
A senior executive for Norsk Hydro signed a contract with Asia Pacific to purchase equity in the joint venture, subject to board approval. Then, to everyone’s shock, in March 2001, after more than two years of discussion and planning, the Norsk board members nixed the deal, saying that they did not want to be involved in potash mine development in Asia after all. They thought it was too risky.
In the midst of this tumult, six of the eight board members of Asia Pacific, on which both Darch and Wright served, approached Darch and demanded that Wright resign because his behavior had become erratic and he had become “impossible to deal with,” as one board director said. Reluctantly, Darch agreed, and on March 21, 2001, Gerry Wright resigned. The previous year, Wright had also resigned as cochairman of Crew Development, as part of the deteriorating partnership/friendship between Darch and Wright.
In 2002, when the Olympus Group took over management of Asia Pacific, Darch resigned from the board but retained 2.5 percent of the shares.
DURING 1992–2002, JOHN Darch had been busy with other mining and energy ventures around the world, in addition to Thai potash. In 1997 the partners changed the name of Canadian Crew Energy to Crew Development, because the focus was changing to include exploration, development, and income properties, which would lead to investments in gold in Greenland, tin in the United Kingdom, nickel in the Philippines, and diamonds in Botswana and South Africa, among other ventures. “It was the period when my former partner Gerry and I were most active,” Darch recalled. “For me it was a very exciting, challenging, and rewarding time. When people asked me why and how I did all these things, my honest reaction was that I never thought I could not.” Although it may be hard to believe, he asserted that his primary motivation wasn’t money. “I truly believed in the projects and what they could be. I could visualize them up and running.”
Sometimes his visualizations came true, but often they did not. There were moments of controversy and one horrific tragedy. In 1993, Darch and Wright became involved in diamond exploration in Botswana with geologist Norman Lock, who had grown up in Botswana and had previously worked for De Beers, the venerable diamond firm. Together, Darch, Wright, and Lock formed a new entity called Botswana Diamondfields. But exploratory drilling failed to find diamonds. Consequently, in 1996 they acquired the Rovic mine in South Africa, which had begun as an open pit operation in the early 1900s, then became an underground mine. With Lock’s advice and leadership, they engaged Metorex, a South African mining company, to manage Rovic, with the intention of upgrading the mine to increase production. Initial results were encouraging. By summer’s end, a large 17-carat diamond had been found.
Darch and his wife, Louise, flew to South Africa in early November 1996 to examine the Rovic mine and meet with Norman Lock and the Metorex executives. Darch remained aboveground to talk to the mining manager, while Louise donned coveralls, boots, gloves, and a hardhat to go down 200 meters into the mine. “I wasn’t afraid,” she recalled, “but the enclosure we were in rattled all the way down.” She and other visitors were escorted by miners, who wore helmets but no shirts, down a ladder from which she could make out huge holes leading to offshoots.
Two weeks later, a main beam in the Rovic mine collapsed, flooding the mine with an avalanche of water and mud. Twenty miners were trapped inside. Only four of the bodies could be recovered. The other sixteen victims remained entombed in the mine, which was sealed and never reopened. Darch’s company agreed to a million dollar settlement. “Those deaths haunted me for years and years,” Darch said. “Metorex, our subsidiary, had fine people who had intended to improve the mine. So it had nothing to do with reckless exploitation of the workers. Of course, I would never have allowed Louise or anyone else to go down there if I had had any idea of the danger.” The experience did not put him off mining, however. “It didn’t make me think that mining was a terrible thing. It just made me aware of how fragile life is, and how little control you have over it.”
Darch was not involved in any other such mining disasters. In early 1997, Crew Development acquired half-ownership of Metorex, which went on to develop several other successful, money-making mining ventures in copper, coal, zinc, fluorite, gold, antimony, and cobalt, all in southern Africa. In 2002, Crew Development sold some of its Metorex shares for $12.6 million, while retaining 21 percent of the mining company.
Darch and Wright also invested in South Crofty, the last tin mine in Cornwall, England, in August 1994, hoping to make it a profitable venture and keep much-needed jobs there. They were hailed as saviors. The worldwide price of tin had collapsed in 1985, when the International Tin Agreement lapsed, and it had never fully recovered. In mid-1995, the price of tin rose sharply, inspiring hope, but then fell again. Drilling to find more tin in the South Crofty mine uncovered ore of a lower grade than anticipated.
Darch asked David Giddings, his old bank mentor, to go to Cornwall to assess the situation. Giddings had retired from banking and was then a “company doctor,” specializing in turning around troubled businesses. “I was horrified by the whole thing,” Giddings said. “A third of their expenses were for overtime.” To keep the half-mile-deep mine dry, 2 million gallons of water a day had to be pumped out of it. The ore contained 1.4 percent tin, which had to be crushed and separated. At the same time, the British pound strengthened in relation to the US dollar. Having to pay expenses in pounds, while taking income in dollars, was crippling them. “The operation was losing two million pounds a year,” Giddings reported, and the mine had to be closed down. “It was very sad.”
Fortunately, Darch and Wright also made a successful investment, assuming majority ownership of Nalunaq, the first gold mine in Greenland, discovered in 1993 and located on the southern tip of the island. The Greenland gold venture came about in 1999, when Crew Development merged with Mindex, a Norwegian company that also held mining interests in the Philippines and West Africa. By that time, Darch and Wright had raised a total of $170 million for various potential projects, and Crew Development was internationally known. The Norwegians approached Darch and Wright, who saw the merger as a way to increase their holdings and gain access to wealthy investors in Norway. The merger contract contained some fine print, however, saying that once the deal was 94 percent financed, the balance had to be paid.
“I received a short e-mail,” Darch recalled, “saying that we had reached that minimum and that $4 million was now due in cash. I flew to London, drove to Capital Group, and explained the situation, asking for half of the money. I told them that I had someone else putting up $2 million.” After receiving a stern lecture, Darch got their pledge. Then he went to Equitable Life, where he explained that Capital Group had put up half of the required cash, and he got the balance a few days before Christmas 1999. “So you see, I never told a lie,” Darch explained, “but at times I shaded the truth a bit.”
The deal left the Mindex investors with 75 percent control of Crew Development, but Darch wasn’t worried. “We were in a glorious situation, with projects all over the world. The Norwegians were hungry for our company, with exciting prospects. We were making acquisitions. If we needed $10 million, it could be done within days.”
As the gold mine in Greenland prospered, the plans for mining in the Philippines ran into trouble. Despite having obtained a mining license from the Philippine government and having spent a great deal of money and time planning the project, the mining venture was halted before it really began by protests from a coalition of environmental groups, church organizations, politicians, and local activists.
Plans had called for nickel and cobalt mining in the central mountains of Mindoro Island, where eight indigenous tribes, collectively called the Mangyans, lived. Like the hill tribes of Thailand, they practiced subsistence agriculture and hunting, and until recently they had had little contact with lowland civilization. In 1997, Mindex received an exploration permit; two years later, the company agreed to pay a royalty of 2 percent of sales to the Mangyan community. Striving for environmental and social acceptability, the company also paid for a free local medical clinic, road maintenance, and the construction of culverts, bridges, and schools. Crew/Mindex paid for plant nurseries to cultivate 10,000 seedlings of hardwood and fruit-bearing trees and bamboo, while supporting local cultural and sporting activities. Nonetheless, protests led the government to cancel the company’s mining license in July 2001.
Soon afterward, John Darch went to the Philippines. He and the Canadian ambassador to the Philippines were flown by helicopter to a mountaintop village, in hopes of explaining the benefits of the mine. Promising to mine only 10 hectares at any given time, Crew also planned to replace topsoil, replant trees, supply cheap fertilizer and power, and dispose of the tailings far off, deep in the ocean.
Inside the jam-packed assembly hall, the moderator told Darch, “Just explain your position to the people.” For ten minutes, Darch tried to do just that, but the crowd shouted over him in various languages, including English, “Give us back our land! We don’t want you here!” The ambassador whispered to Darch, “Let’s leave. Don’t stop walking.” The crowd parted, and they were able to depart safely, but it had been a tense and hopeless meeting. Back in Manila, Darch met with Philippine president Gloria Macapagal-Arroyo, who was sympathetic but said she could not reissue the mining license, since she would be accused (unjustly) of corruption.
At the next annual general meeting of Crew Development, a group of Norwegian shareholders tried to oust Darch and move the company to Norway. In 2002, he bowed to the inevitable and stepped down from the Crew Development board, though he continued to run a subsidiary, North Pacific Geopower, which held the South Meager geothermal project. He sold his shares in Crew over the next few years, but he continued to pursue other, unrelated projects.
“From 1997, when we first started Crew Development, to 2001, Crew was massively successful,” Darch said in retrospect. The company had projects on which the sun never set, and they were diversified. “We had raised $44.3 million, had $40 million cash in the bank, and an income stream from South African subsidiaries. That’s not bad for a four-year-old concept.” Years later, it still pained him that the new management dismantled much of what he had accomplished.
The thought of what might have been in the Philippines was particularly galling to Darch. “That nickel mine would have helped the Mangyans, the indigenous people. We would have created wealth, employment, and given them new opportunities to elevate their lives. The project would have brought much-needed infrastructure, health, and education. It’s a myth to think that poor people in those remote areas enjoy their poverty, ill health, and early death. They do want improvements. Our goal was the opposite of exploiting the local people.”
BY THE TIME he drank green tea with Wicha Promyong in Bangkok in 2006, John Darch was fifty-nine years old and had lived a full life, but he still had more to give. Before she gave up keeping a calendar, Louise documented that he had once traveled for 300 days in one year. She may have missed him when she wasn’t traveling with him, but she had nothing but admiration for him. “John is the most compassionate, gentle, positive, honest, intelligent, caring individual I have ever known,” she said. Her only complaint: “I wish I could get him to retire.”
The Akha are not beggars. What Wicha said to Darch that day stuck with him. “That tied in with my idea that charity, while absolutely necessary in an emergency, doesn’t really help anybody in the long run.” The Akha were not begging for money. They wanted an investment. It was similar to mining in a way, Darch thought. They had a promising idea, but until someone spent the money to explore and develop the idea and bring the product to a broader market, it would remain just a promising idea. He told Wicha that the next time he was in Thailand, he would go up to Doi Chang and have a look.