At the time, it seemed unremarkable. In December, ASX-listed Champion Iron paid C$11m ($8m) for the Bloom Lake mine in Canada. Champion's chairman, Michael O'Keeffe, had been prowling for assets for over a year. Bloom Lake had been idled and written off by its unhappy owner, Cliffs, which was seeking bankruptcy relief in Canada. Iron ore meanwhile fell to $38 per tonne the week the deal was announced, but prices had been crashing through successive lows for several years.
Five months later and it is increasingly clear that O'Keeffe has pulled off one of the deftest deals of the downturn. China has turned on the money taps, Rio and BHP have both surprised the market by slowing output expansion, mining shares have rallied and iron ore has nearly doubled to $66 per tonne. As if by magic, Champion's purchase of Bloom Lake was announced the very week of the absolute low.
O'Keeffe, it turns out, has some form. He was head of Glencore Australia (former colleagues at the trading giant declined to go on the record), before founding Riversdale Mining, a coal miner in Mozambique, sold to Rio Tinto for $3.9bn at the end of 2010, in a deal that pushed the Stowe Global Coal Index to an all-time high. $1m invested in Riversdale when O'Keeffe founded the company would have jumped to over $70m.
Since then, O'Keeffe has sat out of the market. He became chairman of Mamba Minerals, with concessions in eastern Canada, before folding the company into Toronto-based Champion in an all-paper deal. Then he bought Bloom Lake, largely funding the deal himself, putting in A$3.5m, lifting his stake in Champion to 8.6 per cent. Cliffs had paid a thumping $4.9bn for the mine at the very top of the market, just as Riversdale was being sold to Rio.
O'Keeffe cannot have timed the deal; negotiations took far longer than a week. But some transactions only go through at market extremes. And O'Keeffe, it seems, is good at finding the right side of the table.