13 July 2010

Slim buys (another) gold mine

The slogan outside this seafood restaurant in the Col. Roma goes by the slogan, "The only one that doesn't belong to Carlos Slim."

Carlos Slim, the world's richest man, bought a gold mine yesterday - literally.

Slim purchased an actual gold mine in the state of Aguascalientes for $25 million from the Canadian company, Goldgroup Mining, Inc. With gold prices hovering above $1,200 per ounce, the mine should handsomely pad his fortune, which Forbes magazine estimated at $53.5 billion in its most recent survey of the world's wealthiest individuals.

Although not a miner, Slim knows plenty about gold mines.

The purchase comes 20 years after Slim purchased the gold mine responsible for generating much of his fortune: Teléfonos de México - better known as Telemex, the national telephone monopoly.

Through Telmex and the Telmex wireless spinoff, América Movil (Telcel), Slim came to dominate the Mexican economy. At one point it was estimated his companies accounted for one-third of the value of the Mexican stock exchange, while his net worth is equal to roughly seven percent of the country's GDP.

His reach has extended into other countries, too. Telmex and América Movil now compete - actually compete - successfully in other parts of Latin America. And Slim made a $250 million investment in The New York Times, which will pay him a 14 percent return - a situation the jailed former newspaper baron Conrad Black described as "a loan-shark's lifeline." (I disagree with Lord Black's other assessments of the Times, however.)

Slim won control of Telmex through an auction in 1990 as the then-administration of former president Carlos Salinas privatized a raft of government companies. The aptly-named Slim - who name fails to describe his wallet - claimed the crown jewel of the assets being privatized, along with permission to operate Telmex as a monopoly for at least seven years.

The rest, as they say, is history.

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