ANGLO AMERICAN POISED FOR RUSSIAN DEAL

MOSCOW (Mineweb.com) – When we last left our Great White Hunters, the Anglo American chief executive and two of his companions, they had arrived in Moscow for two days of meetings, Monday and today. Like the legendary Allan Quatermain himself, they were intent on covering their tracks, while manoeuvering into position for their prey. But back at base camp, no-one claimed to know what exactly the hunting party of Tony Trahar, Barry Davison, and Philip Baum were after in Russia.

A spokesman for Trahar in Johannesburg said the trip to Moscow was “a general courtesy visit to discuss paper and pulp.” But the ranking Russian official whom the group met on Monday, Minister of Natural Resources, Yury Trutnev, is primarily concerned with sub-soil mining projects. On Friday, a statement from his office reported that Anglo American wanted to discuss possible exploration in the country, and cooperation with domestic companies. Coal appeared to be the target, according to press reports of the ministry release. Following the Monday meeting, however, Trutnev was quoted in a ministry announcement as focusing on other minerals Proposed or pending amendments to Russia’s mining legislation, Trutnev reportedly said, “will make the sphere of natural resources’ use more attractive tc foreign investors”. He noted that the competition is intense, especially in the oil and gas sector. As for timber processing, Trutnev claimed the new timber: code “will raise the investment appeal of timber-processing enteprises for foreign companies.”

So far, there has been no public mention of Anglo American’s largest investment in Russia, the Mondi division’s investment of over $300 million in the Syktyvkar Forest Enterprise (SLPK), a paper and cardboard producer which was taken over in stages over several years. Based in the northwestern region of Komi, SLPK’s output of paper and cardboard accounts for 40 percent of Russia’s total production of office paper; 9 percent of paper for the country’s newspaper industry; and about 40 percent of cardboard production. In Russia SLPK’s Snegourochka (“Snow Maiden”) brand is acknowledged to be one of the best office-paper trademarks.

Mondi Europe’s strategy for investment into Eastern Europe started with a single paper mill in Austria producing 215,000 tons of paper products in 1995. Mondi then expanded into Hungary, Slovakia, Isreael, and Russia. The Syktyvkar plant has been an extremely lucrative one for Anglo American, as well as for Trahar, who came into the chief executive’s suite from the paper and pulp sector.

The success has attracted Russian raiders. Anglo American has acknowledged that Oleg Deripaska, the aluminium oligarch who has made aggressive takeover bids for other Russian paper, packaging and pulp mills, has been a threat to Syktyvkar. However, Deripaska is no longer a threat, Anglo American now believes. According to the company spokesperson in London, Kate Aindow, Trahar’s visit to Moscow was “in connexion with our paper and pulp interests.” She acknowledged that no-one from that division of the company was accompanying Trahar, and that Davison and Baum have different supervisory roles on the Anglo executive board. Asked if the group was meeting Deripaska, or other Russian paper and pulp producers, Aindow said she “genuinely does not know who they are meeting.” Rick Witt, Anglo’s newly-appointed Moscow representative, an American from the oil equipment sector, declined to respond to a request for the group’s meetings in Moscow.

Deripaska’s Basic Element holding was categorical that it has not met with the Anglo American group. A source at Him Pulp, which manages Kotlass Pulp & Paper, said the same thing. A year ago, llim’s controlling shareholder had been unable to fight or buy off a Deripaska raid, and offered to sell instead to Anglo American, in the hope that it might ride to the rescue. Victor Khristenko, the minister of industry and energy whose ministry supervises the downstream industry, also confirmed that he had not met with Trahar.

A source close to Anglo American believes it is unlikely that Anglo’s strategy in Russia will increase the concentration the group currently has in the paper and pulp sector. Diversification into minerals, including precious metals, is more likely, the source said. AngloGold Ashanti has already bought a $30 million shareholding stake in the UK-listed junior, Trans-Siberian Gold, and has plans to develop mines in the Krasnoyarsk and Kamchatka regiohs. AngloGold has been a regular visitor to Moscow this year, and has been doing due diligence on the mine assets and exploration prospects of at least two major Russian goldminers. No-one from AngloGold was accompanying Trahar in Moscow this week.

Sources at Anglo American acknowledge that the group wants to sell the chrome division of Samancor, which is jointly owned with BHP Billiton; Anglo’s stake is 40 percent; BHP Billiton’s is 60 percent. The sources also claim that the manganese division of Samancor, which may be worth at least $1 billion, is not for sale.

Russian oligarch, Victor Vekselberg, has reportedly been talking to Anglo during the year, both directly on two visits he has made to South Africa; and through his new dealmaker, Brian Gilbertson. Vekselberg was in Johannesburg early in November, but none of his spokesmen nor Gilbertson will confirm with whom he met. Gilbertson heads SUAL, which is primarily a domestic bauxite, alumina and aluminium producer, seeking to diversify (offshore if foreign investors can be found to finance the move. Vekselberg’s holding company Renova is ostensibly a separate company, or group of companies; and although it has no mining experience, and operates no mining projects directly, it has engaged Mark Bouzuk, a former aluminium trader, to negotiate for mining investments in South Africa (SA).

Bouzuk makes plain in an interview that he cannot speak for either Renova or SUAL, Gilbertson or Vekselberg. His company has been contracted by Renova, he says, to develop a South African base, but he himself is not a Renova executive. Clarifying some Russian media reports, which he described as having misquoted him or misunderstood remarks he made last week to the Russian news agency Interfax, Bouzuk said: “we are not interested in Samancor chrome. It is too early to talk about Samancor manganese. Is it for sale?”

For the time being, according to Bouzuk, he has negotiated memoranda of understanding and contracts with several black-owned or empowered companies in SA, with the objective of their partnering Renova in joint mining ventures in SA. The target of these discussions, Bouzuk confirmed, is manganese in the Northern Cape province. He said that lie knows nothing about any presentations of a manganese project to President Thabo Mbeki, or to senior SA government officials. Indeed, he added, his local partner companies have yet to apply for mining licences, or to receive them. He added that he cannot disclose the identities of the SA partner companies at this stage. “We have contracts, but we are not ready to disclose the names,’ he said. When asked if he or Renova were meeting with Trahar in Moscow, Bouzuk replied; “As far as I know, no.” At SUAL headquarters, Gilbertson referred the question to Renova.

Renova’s office in Moscow is headed by Alexander Zarubin. His spokesman said: “As for today, I can confirm that there were no meetings of Renova officials or Viktor Vekselberg personally with anyone from Anglo American.”

ANGLO AMERICAN IN SALE TALKS WITH RENOVA?

MOSCOW (Mineweb.com) -The headline in the Moscow newspaper came straight out of Rider Haggard’s century-old adventures. “Renova masters Africa”, it said, going on to describe how Victor Vekselberg, the Russian oligarch behind the Renova company, recently visited South Africa to arrange local approval of a plan for the largest manganese mine in the world, and of another plan which he is still keeping secret.

Whether the plan is for Vekselberg to dig a new mine, or to buy one from South Africa’s Samancor will be clearer by the end of today, after Anglo American executives Tony Trahar, Barry Davison, and Philip Baum complete a round of meetings in Moscow. Baum’s office in Johannesburg confirmed that he, CEO of Anglo’s Ferrous Metals and Industries division, is in Moscow with Trahar and Davison. One meeting on their agenda, confirmed by the Russians, is with Yury Trutnev, Minister of Natural Resources.

In an announcement to the Russian media, Trutnev’s ministry has intimated that today’s session would focus on coal. Baum’s presence suggests the focus is on Samancor’s manganese and chrome. Davison’s involvement indicates that another billion-dollar deal with a Russian oligarch may be in the works. The first, done in perfect secrecy and in less than two weeks in March, saw Anglo American sell a 20% stake in Gold Fields to Vladimir Potanin and Mikhail Prokhorov, the controlling shareholders of Norilsk Nickel, for $1.16 billion.

If Anglo American is about to make a deal with Vekselberg for cash and shares, they are also about to court South African and Russian government investigations into the deal that may reverse it on national interest grounds, much as Kremlin pressure has forced the Norilsk Nickel shareholders to find an exit from their Gold Fields acquisition.

“How can a world be good,” wondered Haggard, creator of gentleman adventurer in Africa, Sir Allan Quatermain, “in which Money is the moving power, and self-interest the guiding star? The wonder is not that it is so bad, but that there should be any good left in it”.

In his quest to find a domicile outside Russia for his mining and mineral assets, Vekselberg has visited South Africa at least twice this year, according to those he met. The first time was in February and the second time, a few days ago, when he left an adventure safari arranged with Mikhail Fridman, the oligarch who heads the Alfa Bank group. In addition, those who have met him say that Brian Gilbertson, now Vekselberg’s appointee as chief executive of the SUAL group, has been calling or meeting with every major South African mineral company, looking for takeover or merger targets. SUAL mines bauxite in northern Russia, and produces alumina and aluminium, and it trades its metal according to Russian tax optimization schemes that have come under increasing scrutiny from the tax authorities in Moscow in recent weeks. Gilbertson and Vekselberg are in a hurry.

Until this month, according to SUAL’s London spokesman Bill Spears, “it is not our policy to disclose the identity of those participating in business meetings with us.” But the group has become more talkative during the visit to Pretoria by Minister Trutnev, in mid-November. Trutnev headed a delegation of Russians for the annual session of the Russia-South Africa commission on inter-government trade and economic cooperation (ITEC). Renova’s Moscow office tried to keep radio silence, refusing to identify in advance that it had joined Trutnev’s delegation. Renova, which was recently divided by Vekselberg into several sections, is nominally headed in Moscow by Alexander Zatulin. For the Pretoria meetings on November 17-18, he was in South Africa, along with Mark Bouzuk, a former Swiss-based aluminium trader who now heads Vekselberg’s drive into Africa. Bouzuk’s deputy in Moscow is Alexei Belokrys.

Ahead of his trip, Trutnev was asked by Mineweb to say if he “supports or opposes efforts by Russian mineral resource licensees) like Victor Vekselberg and Vladimir Potanin to buy stakes in South African companies, and to reverse-list their Russian assets in SA or international listings?” He declined to answer. But in Pretoria, he told a Russian reporter traveling with him that, in parallel with SA company interests in Russia, “there are also: counterpart [Russian] interests; for example, GMK Norilsk Nickel starts work with the Republic of South Africa, and the company Renova has shown interest in ciooperation.”

Exactly what work Trutnev was thinking of when he mentioned Norilsk Nickel is not clear. A team of people, led by a former Russian ambassador to Baghdad and a man identifying himself as a former KGB intelligence liaison with the anti-apartheid movement, have been introducing themselves in Johannesburg as Norilsk Nickel representatives to South Africa. So far, the only work the company has done has been to participate in the hostile takeover bid Gold Fields, which began in planning with HSBC Bank a few weeks after the March 29 purchase. That transaction is the largest single Russian investment abroad, and concomitantly the largest Russian investment ever in Africa. Following Kremlin and Central Bank review, that transaction is being reversed.

Meantime, Trutnev’s intimation of approval for the process has encouraged Renova executive Bouzuk to unveil in Moscow what he claims to be two ambitious plans Renova has for mining in South Africa. In remarks reported by Kommersant, a Moscow business newspaper, Bouzuk claimed one of the plans is still secret. The other, he said, calls for the investment of more than $300 million in a mine and ore-processing mill in the northwest of South Africa. Target, said Bouzuk, is manganese, an important metal used as a purifying and strengthening alloy for steel.

The newspaper report claims that Bouzuk described a plan in which Renova, working with a black-owned South African partner, will explore the area, which already hosts several manganese mines operated by South African interests, including the Sacco family and Samancor, a chrome land manganese mining company jointly owned by BHP Billiton (60%) and Anglo American (40%). An open-pit and underground shaft mine will produce 1.5 million tons of manganese ore, Bouzuk reportedly said, and the mill and concentrator will turn out between 400,000 and 500,000 tons of manganese.

About 80% of the world’s commercially mineable manganese ores are located in SA’s Northern Cape province, where Samancor mines at sites around Hotazel. Together, they lift up to 3.4 million tons of ore per annum. At a nearby plant, this is processed into ferro and silicomanganese According to Samancor it produces between 300,000 and 420,000 tons annually. The Renova mine target is thus substantially larger; indeed, it could be the largest manganese mine in the world so far. At current market prices, Sarmancor sells just short of $400 million worth of manganese per year, most of it to export buyers. The estimated cost of Renova’s project will be more than $300 million, according to Bouzuk.

He told the Moscow press that Renova will raise all of the funds, but will hold just 40% to 45% of the joint venture company. The balance of the shareholding will be held, he reportedly said, by “South African companies belonging to black businessmen”. They were not identified. Again according to Bouzuk, a briefing on the manganese project was made to President Thabo Mbeki and the SA government in what is described as a “closed presentation” sometime during the Russian summer. “This project has already met with the approval of the government of the republic of South Africa,” it was reported in Moscow.

Renova has been unwilling so far to provide any details of this approval process; Bouzuk has refused to answer questions. SA mining sources say they do not believe the approval reports, and they are skeptical of the project claims. In September, during a visit to Moscow of Lulu Xingwana, deputy minister of mining and minerals, she told Mineweb that she had been briefed by Renova officials, and she subsequently made a public speech endorsing Renova’s activity in South Africa. Xingwana also declined to provide any details of her endorsement. She subsequently met Trutnev during the ITEC session in Pretoria, when both appeared to endorse the Renova manganese project.

It is necessary to create “conditions for South African companies to feel comfortable in Russia, and Russian companies in the republic of South Africa, “Trutnev told the Russian news agency Tass, after his recent meeting in Pretoria with Xingwana. But according to SA executives, during his meetings in SA Trutnev concentrated almost entirely on what Russian companies want in SA There appear to have been no reciprocal demands, nor discussion, of SA corporate operations in Russia. According to the official minutes of ITEC prepared by the two governments, Russian interest in SA mining was explicitly identified as manganese and platinum.

SA sources told Mineweb that it is possible that Vekselberg is interested in bidding for existing mine assets, not in developing a new mine. An uncorroborated source has told Mineweb that Vekselberg and Gilbertson have been in discussion with Anglo American for a billion-dollar deal. A senior Anglo American told Mineweb that Samancor is for sale, and that among the potential bidders there may be a Russian. However, the source was categorical that it is Samancor’s chrome division that is for sale, and that the manganese business is not on the block. Market sources told Mineweb they have heard that an unidentified Russian group is seeking substantial financing for a SA mining project, although the rumour did not distinguish between a greenfields project and a takeover. The sources also expressed skepticism that the Renova group, which through SUAL International, has been unable to raise any finance in almost two years of trying, and has been limited in its fund-raising capability for its Russian bauxite projects, could manage the much greater capital requirements that Bouzuk has identified.

On the other hand, Russian government opposition to the expatriation of assets by the oligarchs should make it difficult for Vekselberg to add his Russian assets to a takeover or merger bid in South Africa. Growing scrutiny in Moscow of the asset consolidation and cashflow management schemes of oligarch companies, including Vekselberg’s, may be accelerating his desire to strike an offshore deal as quickly as possible. At the same time, Kremlin policy may make the move impossible – a point which, oddly, Trutnev failed to mention while he was in Pretoria.

WHAT’S IN A NAME, IF IT’S A RUSSIAN OLIGARCH

By John Helmer in Moscow

Laundering a man’s reputation is a little like laundering money. The more you churn the facts, the harder it is to remember them; the less damage they can do; and the whiter the outcome.

It is for this reason that Russia’s oligarchs have spent so much effort bringing defamation cases against their critics and investigators in the courts of foreign countries. The countries chosen are those where the oligarchs have set up their homes and families; and also where their bankers issue their loans, or where an oligarch can leverage his local business interests against advertising-dependent newspapers. As defamation law varies from country to country, favouring the press in the United States, and the oligarch in the United Kingdom, the preferred choice for a reputation laundering operation is London. There, it is not only the courts, but also the English newspapers, not to mention the English prime ministry, which specialize in reputation laundering.

The greatest disadvantage that a certified Russian oligarch has in the libel courts of the United States is that he is a public person, not a private figure. According to US defamation law, the free-speech provisions of the constitution, and the way in which the US courts have interpreted both, if a good man is deemed to be so well-known in his activities, through government, market or media, a great deal that is bad about him may be reported but not qualify as libel, according to the US standard. For oligarchs who have spent small fortunes at American public relations companies to promote themselves in the US as internationally respected public figures, it is difficult for them to turn around and confide to a US judge that they are nothing but humble individuals unseeking of fame, and undeserving of notoriety. One oligarch, who will argue this before a judge in a US federal court very soon, has amassed the voluminous record of 11,500 pages of English-language press reportage, not to count the Internet, in the last four years. If the judge rules that a man with that record is a public person, then the truthfulness of the bad that has been published about him need not be proven by those who have reported it. Rather, the bad but good oligarch must prove malice in the reporting about him, or reckless disregard for the truth. For oligarchs accustomed to paying for good reports, and assuming that bad reports must be paid for by a rival or enemy, this is a legal standard that is next to impossible to meet. Accordingly, no oligarch is likely to be libeled, according to a US court. But on the other hand, no US judge is likely to get around to adjudicate the truthfully bad from the truthfully good in an oligarch’s reputation.

While England and the US are the countries which the Russian oligarchs depend on the most, there are a handful of other places where they like to live, make and spend their money. In Germany and France, for example, Russian oligarchs have applied for courts to adjudicate libel in their favour against newspapers, generally business newspapers influential in the bank suites. The mere threat of litigation is often enough to persuade even the most respectable of media managements to avoid informing their readers about the risks – real, perceived, suspected, rumoured — of doing business with Russian oligarchs.

This public form of due diligence is serious and problematic enough for at least one oligarch to have gone to the trouble, two years ago, of hiring an internationally reputed detective agency to prepare a report on his reputation. While the contract documents show that the oligarch agreed to pay a large sum of money for the job, the cost of his bankers’ suspicion that he might be a bad man to lend money to was substantially greater, as the detective agency pointed out in the correspondence. And so, the detective agency was hired; a code name was coined for the project; and a large advance payment was invoiced.

To be sure, the detective agency had a reputation of its own to guard. And so, there was a certain awkwardness, on the detective agency’s part, in taking pay from the oligarch for what was mutually agreed to be an “independent” evaluation of all the bad the man was reputed to have done; and for the oligarch to then distribute the detectives’ report to those he suspected of believing he was a bad man. Enquiries were therefore promised of officially independent law enforcement and intelligence agencies around the world, to which the detective agency claimed access. Unfortunately, for the reputation of the detective agency and its report, the latter must have resisted the enquiries that were sought. They told the detectives nothing the latter managed to include in their report.

The internationally reputable detective agency could hardly be drawn into a US court, because the effect of its report would be to substantiate the very point an oligarch must try to deny – that he is a public person with international notoriety. As a private foreign enterprise purporting to investigate official Russian agencies of government, the report would be inadmissible as evidence in a Russian court.

And so, when the report was dispatched recently to a French court, its existence begged the question of what the French government and its intelligence agencies knew about the subject matter. Even if French jurisprudence is inclined to be generous to oligarchs on the distinction between public persons and private individuals, and strict in the requirements for veracity by reporters in print, many centuries have passed since a French court accepted as evidence the opinion of a private foreign enterprise gathering and selling information for money.

For any man to put his reputation on trial in a court of law, there is always the risk of adding to his notoriety, and thus, win or lose on the legal issues, to reinforce the impression that he is the very bad man he has been made out, so wrongly, to be. After all, it is not the exoneration, or esteem, of the man in the street, or the reader of newspapers, that an oligarch is seeking when he goes to court. His target is a bankers’ head of risk, the chairman of the credit committee, the insurer of officers and directors’ liability, the independent auditor, and the legal drafter of his next prospectus for an unsecured Eurobond or American Depositary Share. That’s a small, sophisticated audience, who know the unprintable truth. They are not greatly influenced by guilty or innocent verdicts in libel cases.

Note to readers : on November 22, at the 17th Court of Paris, Mikhail Fridman will present his case for defamation against Les Echos, France’s business newspaper. On December 21, Judge John Banks of the federal US district court of Washington, DC, will hear oral argument on a defendants’ motion for summary judgement in the case of OAO Alfa Bank, ZAO Alfa Eco, Mikhail Fridman and Pyotr Aven v. Center for Public Integrity, Knut Royce and Nathaniel Heller.

WHAT’S IN A NAME, IF IT’S A RUSSIAN OLIGARCH

Laundering a man’s reputation is a little like laundering money. The more you churn the facts, the harder it is to remember them; the less damage they can do; and the whiter the outcome.

It is for this reason that Russia’s oligarchs have spent so much effort bringing defamation cases against their critics and investigators in the courts of foreign countries. The countries chosen are those where the oligarchs have set up their homes and families; and also where their bankers issue their loans, or where an oligarch can leverage his local business interests against advertising-dependent newspapers. As defamation law varies from country to country, favouring the press in the United States, and the oligarch in the United Kingdom, the preferred choice for a reputation laundering operation is London. There, it is not only the courts, but also the English newspapers, not to mention the English prime ministry, which specialize in reputation laundering.

The greatest disadvantage that a certified Russian oligarch has in the libel courts of the United States is that he is a public person, not a private figure. According to US defamation law, the free-speech provisions of the constitution, and the way in which the US courts have man is deemed to be so well-known interpreted both, if a good man is deemed to be so well-known in his activities, through government, market or media, a great deal that is bad about him may be reported but not qualify as libel, according to the US standard. For oligarchs who have spent small fortunes at American public relations companies to promote themselves in the US as internationally respected public figures, it is difficult for them to turn around and confide to a US judge that they are nothing but humble individuals unseeking of fame, and undeserving of notoriety. One oligarch, who will argue this before a judge in a US federal court very soon, has amassed the voluminous record of 11,500 pages of English-language press reportage, not to count the Internet, in the last four years. If the judge rules that a man with that record is a public person, then the! truthfulness of the bad that has been published about him need not be proven by those who have reported it. Rather, the bad but good oligarch must prove malice in the reporting about him, or reckless disregard for the truth. For oligarchs accustomed to paying for good reports, and assuming that bad reports must be paid for by a rival or enemy, this is a legal standard that is next to impossible to meet. Accordingly, no oligarch is likely to be libeled, according to a US court. But on the other hand, no US judge is; likely to get around to adjudicate the truthfully bad from the truthfully good in an oligarch’s reputation.

While England and the US are the countries which the Russian oligarchs depend on the most, there are a handful of other places where they like to live, make and spend their money. In Germany and France, for example, Russian oligarchs have applied for courts ‘to adjudicate libel in their favour against newspapers, generally business newspapers influential in the bank suites. The mere threat of litigation is often enough to persuade even the most respectable of media managements to avoid informing their readers about the risks – real, perceived, suspected, rumoured — of doing business with Russian oligarchs.

This public form of due diligence is serious and problematic enough for at least one oligarch to have gone to the: trouble, two years ago, of hiring an internationally reputed detective agency to prepare a report on his reputation. While the contract documents show that the oligarch agreed to pay a large: sum of money for the job, the cost of his bankers’ suspicion that he might be a bad man to lend money to was substantially greater, as the detective agency pointed out in the correspondence. And so, the detective agency was hired; a code name was coined for the project; and a large advance payment was invoiced.

To be sure, the detective agency had a reputation of its own to guard. And so, there was a certain awkwardness, on the detective agency’s part, in taking pay from the oligarch for what was mutually agreed to be an “independent” evaluation of all the bad the man was reputed to have done; and for the oligarch to then distribute the detectives’ report to those he suspected of believing he was a bad man. Enquiries were therefore promised of officially independent law enforcement and intelligence agencies around the world, to which the detective agency claimed access. Unfortunately, for the reputation of the detective agency and its report, the latter must have resisted the enquiries that were sought. They told the detectives nothing the latter managed to include in their report.

The internationally reputable detective agency could hardly be drawn into a US court, because the effect of its report would be to substantiate the very point an oligarch must try to deny – that he is a public person with international notoriety. As a private foreign enterprise purporting to investigate official Russian agencies of government, the report would be inadmissible as evidence in a Russian court.

And so, when the report was dispatched recently to a French court, its existence begged the question of what me French government and its intelligence agencies knew about the subject matter. Even if French jurisprudence is inclined to be generous to oligarchs on the distinction between public persons and private individuals, and strict in the requirements for veracity by reporters in print, many centuries have passed since a French court accepted as evidence the opinion of a private foreign enterprise (lathering and selling information for money.

For any man to put his reputation on trial in a court of law, there is always the risk of adding to his notoriety, and thus, win or lose on the legal issues, to reinforce the impression that he is the very bad man he has been made out, so wrongly, to be, After all, it is not the exoneration, or esteem, of the man in the street, or the reader of newspapers, that an oligarch is seeking when he goes to court. His target is a bankers’ head of risk, the chairman of the credit committee, the insurer of officers and directors’ liability, the independent auditor, and the legal drafter of his next prospectus for an unsecured Eurobond or American Depositary Share. That’s a small, sophisticated audience, who know th« unprintable truth. They are not greatly influenced by guilty or innocent verdicts in libel cases.

Note to readers: on November 22, at the 17th Court of Paris, Mikhail Fridman will present his case for defamation against Les Echos, France’s business newspaper. On December 21, Judge John Banks of the federal US district court of Washington, DC, will hear oral argument on a defendants’ motion for summary judgement in the case of OAO Alfa Bank, ZAO Alfa Eco, Mikhail Fridman and Pyotr Aven v. Center for Public Integrity, Knut Royce and Nathaniel Heller.

BRIAN GILBERTSON’S UNEXPECTED HEADACHE

MOSCOW (Mineweb.com) – Brian Gilbertson, the South African appointed a few months ago to head SUAL, a Russian mining and metals company, has run into a problem from a direction he couldn’t have anticipated — from the past. And unless he can quickly resolve the problem, the company he was hired to sell to foreign investors at a premium will have a gaping hole where one of its prize assets should be.

The challenge to SUAL, endorsed by a Russian court ruling two weeks ago, is also an embarrassment for Renova, the US-registered company controlled by SUAL’s chairman, Victor Vekselberg. Renova has been promoting itself in South Africa this year with promises of big investments to come in SA resource projects and black empowerment. Renova has also lobbied SA government officials to smooth the way ahead.

The reality of Renova’s position, however, is that, in Russia, it has allegations of shareholding and metals trading fraud to answer in the courts, while the tax authorities have begun pressing claims that Vekselberg, his company, and his partners should pay.

Once a major shareholder in the Volgograd Aluminium Plant, Shota Mikhelashvili told Mineweb that a recent Volgograd court ruling, invalidating a share emission for the plant that had favoured its takeover by Siberian Ural Aluminum (SUAL), is just the beginning of his campaign to recover a stake he values at a minimum of $20 million.

Mikhelashvili is chairman of the board of the Ralco company, which has held a 17-percent shareholding in the Volgograd smelter since 1993. He and lawyer Timofei Kryuchkov won a ruling this month from the Volgograd region arbitration court over opposition from SUAL, which has been planning to consolidate full control and ownership of Volgograd. The court move has blocked that.

SUAL is controlled by Vekselberg, and Len Blavatnik; Vekselberg’s personal holding company is Renova, while Blavatnik directs Access Industries, both US companies. Bill Spears, their spokesman, told Mineweb he anticipates a successful appeal. “Once the court has studied the faces, we believe it will support the legality of our partners’ position,” he said. Asked what SUAL says in response to Ralco’s claims in the court suit, Speaks said: “concerning Volgograd Aluminium, we are sure our partners are in the right. Beyond this, we do not wish to add anything further.”

The court ruling against SUAL comes at an awkward time for Vekselberg and Blavatnik, two of the three former controlling shareholders of Tyumen Oil Company (TNK), who in 2003 sold their stake in the top-5 oil producer to British Petroleum for cash and BP shares worth a total of $6.75 billion. The third shareholder to sell was Mikhail Fridman of the Alfa group.

Last week, the Russian tax authorities filed a back-tax claim against TNK’s successor, TNK-BP, for the year 2001 totaling $89 million. BP is holding an indemnity, agreed to by Vekselberg, Blavatnik, and Fridman, that makes them liable for any tax claims against TNK, prior to BP’s takeover.

Peter Charow, BP’s Moscow representative, told Mineweb that the indemnity from Vekselberg, Blavatnik and Fridman is in place, but it is “too early to tell” if BP will be obliged to enforce it. “Until we know more about the potential tax claim at issue, it will not be possible to say whether the indemnity will apply to all or part of the potential liability,” Charow said.

The Ralco challenge could prove to be equally costly. According to Mikhelashvili, “we want to fight for a share of SUAL), comparable to our legitimate stake in Volgograd. Our first target is to keep it, not to sell it.”

Two years ago, SUAL announced that it would acquire the assets of Volkhovsky Aluminium Plant, Volgograd Aluminium Plant and Pikalevo Alumina Plant from the Sevzapprom holding company; Sevzapprom is a Russian acronym meaning “Northwestern Industry”. In August of this year, SUAL’s shareholders approved the terms of consolidation with Sevzapprom’s Volgograd Aluminium Plant. At the time of the SUAL takeover, the controlling shareholder in Volgograd was Alexander Bronstein. Since 2003 he has been one of the 7 members of the SUAL board. Gilbertson is a fellow board member.

According to Mikhelashvili, Bronstein was responsible for the manipulation of the Volgograd smelter’s shareholding, before he and Vekselberg made their merger deal. After that, Mikhelashvili claims Vekselberg knew, or had a duty to know, what had become of the Volgograd’s minority shareholders. The statement from Spears confirms that Vekselberg is endorsing Bronstein.

Just before Gilbertson’s takeover, in a document circulated to SUAL shareholders in mid-2004, the SUAL management estimated the value of the Volgograd plant at between $105 million and $135 million, with a midpoint estimate of $120 million. That figure, Mikhelashvili told Mineweb in Moscow this week, “is a value below which it is not polite to go.” He added that if the plant is valued at the market cost of its current annual output, the valuation should be at least twice the SUAL estimate. Mikhelashvili’s 17-percent stake would then jump in value to around $41 million. If a higher valuation for SUAL’s assets is drawn from Gilbertson’s presentations to international investors, Ralco’s claim would grow accordingly.

In a website release, dated September 14, SUAL announced that at shareholder meetings, held on August 31, “an absolute majority of the participants, 99.99 per cent of the total of OAO SUAL shareholders and 93.02 per cent of OAO Volgograd Aluminium shareholders voted in favour of the incorporation of Volgograd Aluminium into OAO SUAL. The next step required to complete the merger will be a joint general meeting of the shareholders of both companies. Volgograd Aluminium and the OAO Metallurg subsidiaries, Volkhov Aluminium and Pikalevo Alumina, were incorporated into the SUAL Group production chain in 2002, after the SUAL Group and the SevZapProm Management Company had made arrangements to merge their aluminium assets.”

The 6.98 percent of shareholders who voted against Volgograd’s incorporation into SUAL comprise the Ralco stake. Mikhelashvili told Mineweb that his original stake of 17 percent was diluted to this by a share emission in 2000. “This emission was not legal,” Mikhelashvili said. This is the claim which the regional arbitration court upheld on November 5, and which SUAL is now appealing.

The Volgograd smelter began operating in 1959, and it has been producing at 150,000 metric tons per annum, said Mikhelashvili, who was a board director at the plant in 1996 and 1997. This is above initial design capacity of 141,000 tons per annum. The output figure is confirmed by a SUAL press release of September 2004. SUAL’s release of quarterly production results does not identify individual smelters, but Volgograd appears to account for about 17 percent of the SUAL aggregate of about 890,000 tons.

Mikhelashvili told Mineweb that Volgograd exports its aluminium through tolling contracts that deprive the plant of between $150 and $200 per ton. “There is an underestimate of annual revenue of $25 to $30 million,” Miikhelashvili alleges.

Alfa-Bank metals analyst Maxim Matveyev reports that Ralco’s court action “could delay the incorporation process, which would be negative for SUAL

RUSSIA’S MR MINING IS A MYSTERY

MOSCOW (Mineweb.com) – There is an old Russian tradition of never speaking ill of the powerful. But in March, when President Vladimir Putin plucked Yury Trutnev from provincial obscurity to become his minister of natural resources, it was far from clear whether Trutnev had been chosen because he was already a powerful figure, or because he could be trusted not to become one. Eight months later, Trutnev, who is in South Africa this week heading the Russian delegation at the annual SA-Russia ministerial conference, has still not demonstrated why he was promoted, and what he intends to do for Russia’s vital mining sector. Those who speak for Trutnev are understandably reluctant to answer questions on his behalf; a couple of weeks ago, Trutnev fired one spokesman, and appointed a fresh one. But Trutnev is no-less tight-lipped himself. For the months since his appointment as the co-chairman of the SA-Russia inter-government committee on trade and economic cooperation (ITEC), he has refused to say anythng at all a out his SA assignment, or about the issues that concern SA mining companies in Russia. He has been too busy, a spokesman said, to indicate whether he favours compensating the SA-Australian partnership that held the mining licence for Sukhoi Log, Russia’s largest gold deposit, before it was illegally revoked by corrupt officials in 1997. On the other hand, Trutnev was not too busy to announce in July in Irkutsk, where Sukhoi Log is located, that he favours accelerating the process of awarding the licence anew, a move that has been lobbied by Norilsk Nickel, Russia’s largest goldminer. Many weeks have passed since then. However, there is no sign of the legislative amendments Trutnev promised to implement his intention. Instead, Norilsk Nickel has run into serious trouble with the Kremlin, and with the President’s advisor on mining policy, Vladimir Litvinenko, one of the leading academic geologists in Russia. Trutnev and Litvinenko do not see eye to eye.

Trutnev is also coy, when it comes to saying how he regards the mineral monopoly over diamond-mining jealously guarded by Alrosa, and that of nickel held by Norilsk Nickel. Asked if he favours legislating a 65 percent cap on the mineral reserves a single company can hold under licence in a single region -a measure favoured not only by Litvinenko, but also by the Federal Anti-Monopoly Service – Trutnev refuses again to answer.

He is not even sure whether foreign mining companies should be permitted to bid for Sukhoi Log, or for the large copper deposit known as Udokan. Litvinenko thinks not, but Trutnev has tried to say both yes and no. “We do not see the necessity to create a distinct ban on foreigners,” he announced in July. “Although there are situations when the state should protect the national interest in the sphere of natural resources usage, such situations should not be resolved by administrative methods, and should be required to be registered in the law.” Regarding the future of Udokan, he said “competition is necessary for us…we say an open and transparent auction for the licence.” The front-runner for Udokan is Ural Mining and Metallurgy, a Moscow group controlled by Iskander Makhmudov, a oligarch-sized figure.

The De Beers dispute with a local businessman over the mining licence to the Verkhotina deposit, in the Arkhangelsk region – a diamond deposit estimated to be worth more than $3 billion – has been running now for six years. But when Trutnev was asked to say what he proposed doing about it, his spokesman told Mineweb there had been a scheduled check of activity at the exploration site. Several technical violations had been found, but the spokesman claimed they were removed, and that “nobody was seriously speaking about taking their license.” That was a mistake. At the Kremlin’s direction, out of reach of Trutnev and his ministry, an order had been issued to stop work at the site, and to press for an end to the licence violations that have been caused by the dispute over the De Beers role. Litvinenko is believed to have been the moving force.

When De Beers managing director Gary Ralfe was in Moscow recently, he met with Prime Minister Mikhail Fradkov. The only foreign miner whom Trutnev has met in his new office is BHP Billiton’s chief executive Chip Goodyear. But Trutnev himself did not admit it, and his spokesman at the time attempted to conceal that the October meeting had actually taken place.

Russians who have been dealing with Trutnev say he is much more commercially minded than his predecessors, and more energetic. Most leading Russian miners say they do not know him directly, nor who was behind his appointment. One believes he may have been the candidate of German Gref, Minister of Economic Development and Trade, whose ministry has often clashed with the Natural Resources Ministry in the past.

According to the official biography Trutnev posted on a personal website, he was born into a family of oil-industry workers living in Perm. He graduated from university as a mining engineer, and after a brief spell working on oilfields, he returned to Perm to work as an administrator of the local sports organization. He was well-known in sports circles as a contestant and instructor in various forms of wrestling. As the Soviet Union crumbled, he and his sportsmen went into business together, creating a company called EKS to import Swiss foodstuffs, pharmaceuticals and other goods on order from the region. Russian press estimates suggest that by the mid-1990s, this had made him a comfortable fortune, and he moved into politics, first as a municipal councilman in Perm city, then mayor, and finally, in the year 2000, governor, replacing the incumbent who fallen out of favour with the Kremlin. It was a narrow victory. EKS, Trutnev’s company, remained a supplier to the region, while LUKoil, the major oil driller n Perm, and Uralkali, the major miner (of fertilizers), were supporters.

To gauge his reputation in Perm today, local elected officials, newspaper reporters, and editors were asked to name three positive things they remember Trutnev as having done when he was mayor or governor, and one negative thing. No-one managed to recall a single negative. But they were almost stumped for positives.

According to the editor in chief of Perm News, Yury Puzniansky: “there were no incidents nor any scandals during the time Trutnev was mayor or governor. He was very silent.” Arkadiy Kamenev, Trutnev’s successor as mayor, said: “I do remember his lobbying of a former army building to pass to a church school, and several things like that. I do not remember any very big faults, or anything like that.” A source in the governor’s office said: “We remember Trutnev as a nice man, very powerful and ambitious. From the positive things I can mention the unification of the Perm region and Komi-Permyak autonomous region. He supported small business in Perm when he was a mayor, and all other ways of personal activity. He was supporting the social sphere of the city, and after that, of the region.”

The unification of two separate units of the Russian federation, Perm oblast and the much smaller, poorer Komi-Permyak okrug, was completed last December. It is one of the type of administrative reforrms which the Kremlin has supported around the country as a way of streamlining central authority and cutting budget costs. According to a publication that appeared a few days after Trutnev’s appointment to Moscow was announced, he and Putin became acquainted during a presidential visit to Perm. The president, claims the report, found that he shared a passion for the oriental martial arts with Trutnev; valued his contribution to the regional unification effort, and was “fascinated” by him on other, not so obvious grounds. The most important of these, according to the report that appeared on the website kompromat.ru, on March 19, was that Putin and his political advisors believe Trutnev would make a suitable candidate to succeed Putin as president of Russia in 2008. “The mysterious successor of President Putin is already chosen,” the publication attributed to Victor Anisimov claims. In Russian, the term kompromat refers to material that is compromising for its target, revealing alleged crimes, vices, and other negatives that, were they to be widely circulated, and believed, would do serious, possibly fatal damage to the reputation and standing of the target. Kompromat may be true, but since there is so much in circulation, the authorities so weak, and the public so cynical, it may have absolutely no effect on the intended victim. Or kompromat may be false. Paying for publication of kompromat is a common business tactic for dealing with all manner of rivals and business competition.

In Trutnev’s case, so little was known about him to begin with that the publication of this particular komproma, predicting that Trutnev will be the heir apparent, seemed anything but compromising. Some think that it is a message from those in the Kremlin, who, having overheard Trutnev dreaming aloud, want to warn him against getting too big for his boots.

No-one in a position to know Putin’s thinking on the subject of his succession believes the President, who keeps these things to himself, would overlook much better tested candidates in favour of Trutnev. But of one point, there is no doubt in Moscow. Putin is planning to arrange his succession, so that, although the Russian constitution limits him to two consecutive terms in office, he can arrange the succession in such a way as to return for a third term, so long as there is a decent interval in between. That may require a new president, who resigns after a year. It may involve a game of musical chairs, so that Putin would move to become Prime Minister (or Governor of St Petersburg), while his stand-in takes the presidency, and they make a further swap after a four-year term. Whatever Putin decides to do, Trutnev has every reason to keep his mouth shut, his fingers clean, and his feet ready to march in the direction the wind is blowing.

Making an enigma out of a riddle is something Winston Churchill once claimed that Russians were good at. The Trutnev mystery is no exception.

AFTERSHOCK OF NORD STREAM EXPLOSIONS RUMBLES WARSAW — POLISH POLITICIANS GO “NUTTERS”

By John Helmer, Moscow
  @bears_with

The Polish government in Warsaw, facing re-election in less than a year, wants all the credit from Washington for their joint operation to sabotage the Nord Stream gas pipelines on the Baltic seabed.

It also wants to intimidate the German chancellor in Berlin, and deter both American and German officials from plotting a takeover by the Polish opposition party, Civic Platform, next year.

Blaming the Russians for the attack is their cover story. Attacking anyone who doesn’t believe it, including Poles and Germans, Warsaw officials and their supporting media claim they are dupes or agents of Russian disinformation.

Their rivals, Civic Platform (PO) politicians trailing the PiS in the polls by seven percentage points,   want Polish voters to think that no credit for the Nord Stream attack should be earned by the ruling Law and Justice (PiS) party. They also want to divert  the Russian counter-attack from Warsaw to Washington.

“Thank you USA” was the first Polish political declaration tweeted hours after the blasts by Radoslaw Sikorski (lead image, left), the PO’s former defence and foreign minister, now a European Parliament deputy. In support and justification,  his old friend and PO ministerial colleague, Roman Giertych, warned Sikorski’s critics: “Would you nutters prefer that the Russians find us guilty?”

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THE BORNHOLM BLOW-UP REPEATS THE BORNHOLM BASH — POLAND ATTACKS GERMANY AND BLAMES RUSSIA

By John Helmer, Moscow
  @bears_with

The military operation on Monday night which fired munitions to blow holes in the Nord Stream I and Nord Stream II pipelines on the Baltic Sea floor, near Bornholm Island,  was executed by the Polish Navy and special forces.

It was aided by the Danish and Swedish military; planned and coordinated with US intelligence and technical support; and approved by the Polish Prime Minister Mateusz Morawiecki.

The operation is a repeat of the Bornholm Bash operation of April 2021, which attempted to sabotage Russian vessels laying the gas pipes, but ended in ignominious retreat by the Polish forces. That was a direct attack on Russia. This time the attack is targeting the Germans, especially the business and union lobby and the East German voters, with a scheme to blame Moscow for the troubles they already have — and their troubles to come with winter.

Morawiecki is bluffing. “It is a very strange coincidence,” he has announced, “that on the same day that the Baltic Gas Pipeline  opens, someone is most likely committing an act of sabotage. This shows what means the Russians can resort to in order to destabilize Europe. They are to blame for the very high gas prices”.   The truth bubbling up from the seabed at Bornholm is the opposite of what Morawiecki says.

But the political value to Morawiecki, already running for the Polish election in eleven months’ time, is his government’s claim to have solved all of Poland’s needs for gas and electricity through the winter — when he knows that won’t come true.  

Inaugurating the 21-year old Baltic Pipe project from the Norwegian and Danish gas networks, Morawiecki announced: “This gas pipeline is the end of the era of dependence on Russian gas. It is also a gas pipeline of security, sovereignty and freedom not only for Polish, but in the future, also for others…[Opposition Civic Platform leader Donald] Tusk’s government preferred Russian gas. They wanted to conclude a deal with the Russians even by 2045…thanks to the Baltic Pipe, extraction from Polish deposits,  LNG supply from the USA and Qatar, as well as interconnection with its neighbours, Poland is now secured in terms of gas supplies.”

Civic Platform’s former defence and foreign minister Radek Sikorski also celebrated the Bornholm Blow-up. “As we say in Polish, a small thing, but so much joy”.  “Thank you USA,” Sikorski added,   diverting the credit for the operation, away from domestic rival Morawiecki to President Joseph Biden; he had publicly threatened to sabotage the line in February.  Biden’s ambassador in Warsaw is also backing Sikorski’s Civic Platform party to replace  Morawiecki next year.  

The attack not only escalates the Polish election campaign. It also continues the Morawiecki government’s plan to attack Germany, first by reviving the reparations claim for the invasion and occupation of 1939-45;  and second, by targeting alleged German complicity, corruption,  and appeasement in the Russian scheme to rule Europe at Poland’s expense. .

“The appeasement policy towards Putin”, announced PISM, the official government think tank in Warsaw in June,  “is part of an American attempt to free itself from its obligations of maintaining peace in Europe. The bargain is that Americans will allow Putin to finish building the Nord Stream 2 pipeline in exchange for Putin’s commitment not use it to blackmail Eastern Europe. Sounds convincing? Sounds like something you heard before? It’s not without reason that Winston Churchill commented on the American decision-making process: ‘Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.’ However, by pursuing such a policy now, the Biden administration takes even more responsibility for the security of Europe, including Ukraine, which is the stake for subsequent American mistakes.”

“Where does this place Poland? Almost 18 years ago the Federal Republic of Germany, our European ally, decided to prioritize its own business interests with Putin’s Russia over solidarity and cooperation with allies in Central Europe. It was a wrong decision to make and all Polish governments – regardless of political differences – communicated this clearly and forcefully to Berlin. But since Putin succeeded in corrupting the German elite and already decided to pay the price of infamy, ignoring the Polish objections was the only strategy Germany was left with.”

The explosions at Bornholm are the new Polish strike for war in Europe against Chancellor Olaf Scholz. So far the Chancellery in Berlin is silent, tellingly.

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LEMONS, MIMOSAS, AND STALIN’S SHOVEL

By John Helmer, Moscow
  @bears_with

The only Russian leader in a thousand years who was a genuine gardener and who allowed himself to be recorded with a shovel in his hand was Joseph Stalin (lead image, mid-1930s). Compared to Stalin, the honouring of the new British king Charles III as a gardener pales into imitativeness and pretension.   

Stalin cultivated lemon trees and flowering mimosas at his Gagra dacha  by the Black Sea in Abkhazia.  Growing mimosas (acacias) is tricky. No plantsman serving the monarchs in London or at Versailles has made a go of it in four hundred years. Even in the most favourable climates, mimosas – there are almost six hundred varieties of them — are short-lived. They can revive after bushfires; they can go into sudden death for no apparent reason. Russians know nothing of this – they love them for their blossom and scent, and give bouquets of them to celebrate the arrival of spring.

Stalin didn’t attempt the near-impossible, to grow lemons and other fruit in the Moscow climate. That was the sort of thing which the Kremlin noblemen did to impress the tsar and compete in conspicuous affluence with each other. At Kuskovo, now in the eastern district of Moscow, Count Pyotr Sheremetyev built a heated orangerie between 1761 and 1762, where he protected his lemons, pomegranates, peaches, olives, and almonds, baskets of which he would present in mid-winter to the Empress Catherine the Great and many others. The spade work was done by serfs. Sheremetyev beat the French king Louis XIV to the punch – his first orangerie at Versailles wasn’t built until 1763.

Stalin also had a dacha at Kuskovo But he cultivated his lemons and mimosas seventeen hundred  kilometres to the south where they reminded him of home in Georgia. Doing his own spade work wasn’t Stalin showing off, as Charles III does in his gardens, like Louis XIV before him. Stalin’s spade work was what he had done in his youth. It also illustrated his message – “I’m showing you how to work”, he would tell visitors surprised to see him with the shovel.  As to his mimosas, Stalin’s Abkhazian confidante, Akaki Mgeladze, claimed in his memoirs that Stalin intended them as another lesson. “How Muscovites love mimosas, they stand in queues for them” he reportedly told him.  “Think how to grow more to make the Muscovites happy!”

In the new war with the US and its allies in Europe, Stalin’s lessons of the shovel and the mimosas are being re-learned in conditions which Stalin never knew – how to fight the war for survival and at the same time keep everyone happy with flowers on the dining table.

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AND THEN THERE WERE NONE

By John Helmer, Moscow
  @bears_with

Agatha Christie’s whodunit entitled And Then There Were None – the concluding words of the children’s counting rhyme — is reputed to be the world’s best-selling mystery story.    

There’s no mystery now about the war of Europe and North America against Russia; it is the continuation of Germany’s war of 1939-45 and the war aims of the General Staff in Washington since 1943. Defense Minister Sergei Shoigu (left) and President Vladimir Putin (right) both said it plainly enough this week.

There is also no mystery in the decision-making in Moscow of the President and the Defense Minister, the General Staff, and the others; it is the continuation of the Stavka of 1941-45.  

Just because there is no mystery about this, it doesn’t follow that it should be reported publicly, debated in the State Duma, speculated and advertised by bloggers, podcasters, and twitterers.  In war what should not be said cannot be said. When the war ends, then there will be none.  

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RUSSIANS RAISE THEIR GLASSES – THE TOAST IS TO BEATING THE BLOCKADE OF MOSCOW



By John Helmer, Moscow
  @bears_with

Alas and alack for the Berlin Blockade of 1948-49 (Berliner Luftbrücke): those were the days when the Germans waved their salutes against the unification of Germany demilitarised and denazified; and cheered instead for their alliance with the US and British armies to fight another seventy years of war in order to achieve what they and Adolf Hitler hadn’t managed, but which they now hope to achieve under  Olaf Scholtz — the defeat of the Russian Army and the destruction of Russia.

How little the Germans have changed.

But alas and alack — the Blockade now is the one they and the NATO armies aim to enforce against Russia. “We are drawing up a new National Security Strategy,” according to Foreign Minister Annalena Baerbock. “We are taking even the most severe scenarios seriously.”  By severe Baerbock means nuclear. The new German generation — she has also declared “now these grandparents, mothers, fathers and their children sit at the kitchen table and discuss rearmament.”  

So, for Russia to survive the continuation of this war, the Germans and their army must be fought and defeated again. That’s the toast of Russian people as they salute the intrepid flyers who are beating the Moscow Blockade.  

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THE INTERNATIONAL ATOMIC ENERGY AGENCY GOES TO WAR — GORILLA RADIO GOES NUCLEAR

By John Helmer, Moscow
  @bears_with

Last week the International Atomic Energy Agency’s (IAEA) board of governors voted to go to war with Russia by a vote of 26 member countries against 9.

China, Vietnam, India, Pakistan, Egypt, Senegal and South Africa voted against war with Russia.  

The IAEA Secretary-General Rafael Grossi (lead image, left) has refused to tell the press whether a simple majority of votes (18) or a super-majority of two-thirds (23) was required by the agency charter for the vote; he also wouldn’t say which countries voted for or against. The United Nations Secretary-General Antonio Guterres then covered up for what had happened by telling the press: “I believe that [IAEA’s] independence that exists and must be preserved is essential. The IAEA cannot be the instrument of parties against other parties.” The IAEA vote for war made a liar of Guterres.

In the IAEA’s 65-year history, Resolution Number 58, the war vote of September 15, 2022,  is the first time the agency has taken one side in a war between member countries when nuclear reactors have either been attacked or threatened with attack. It is also the first time the IAEA has attacked one of its member states, Russia, when its military were attempting to protect and secure a nuclear reactor from attack by another member state, the Ukraine, and its war allies, the US, NATO and the European Union states. The vote followed the first-ever IAEA inspection of a nuclear reactor while it was under active artillery fire and troop assault.

There is a first time for everything but this is the end of the IAEA. On to the scrap heap of good intentions and international treaties, the IAEA is following the Organisation for the Prohibition of Chemical Weapons (OPCW), and the UN Secretary-General himself.  Listen to this discussion of the past history when the IAEA responded quite differently following the Iranian and Israeli air-bombing attacks on the Iraqi nuclear reactor known as Osirak, and later, the attacks on Pakistan’s nuclear weapons sites.

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INTERNATIONAL ATOMIC ENERGY AGENCY TAKES UKRAINE SIDE IN WAR IN SEPTEMBER 15 VOTE, MAKING UN SECRETARY-GENERAL GUTERRES EITHER A LIAR OR A FOOL

By John Helmer, Moscow
  @bears_with

The International Atomic Energy Agency (IAEA) decided this week to take the side of Ukraine in the current war; blame Russia for the shelling of the Zaporozhye Nuclear Power Plant (ZNPP); and issue a demand for Russia to surrender the plant to the Kiev regime “to regain full control over all nuclear facilities within Ukraine’s internationally recognized borders, including the Zaporizhzhya Nuclear Power Plant.”      

This is the most dramatic shift by the United Nations (UN) nuclear power regulator in the 65-year history of the organisation based in Vienna.

The terms of the IAEA Resolution Number 58, which were proposed early this week by the Polish and Canadian governors on the agency board, were known in advance by UN Secretary-General Antonio Guterres when he spoke by telephone with President Vladimir Putin in the late afternoon of September 14, before the vote was taken. Guterres did not reveal what he already knew would be the IAEA action the next day.  

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THE RUSSIAN SITUATION COMEDY IS NO LYING MATTER – THE JOKE IS ON THE OFFICE OF FOREIGN ASSETS CONTROL

By John Helmer, Moscow
  @bears_with

Never mind that King Solomon said proverbially three thousand years ago, “a merry heart doeth good like a medicine.”  

With seven hundred wives and three hundred concubines, Solomon realized he was the inventor of the situation comedy. If not for the sitcom as his medicine, the bodily and psychological stress Old Solly had to endure in the bedroom would have killed him long before he made it to his death bed at eighty years of age,  after ruling his kingdom for forty of them.

After the British sitcom died in the 1990s, the subsequent stress has not only killed very large numbers of ordinary people. It has culminated today in a system of rule according to which a comic king in Buckingham Palace must now manage the first prime minister in Westminster  history to be her own joke.

Even the Norwegians, the unfunniest people in Europe, have acknowledged that the only way to attract the British as tourists, was to pay John Cleese of Monty Python and Fawlty Towers to make them laugh at Norway itself.   This has been a bigger success for the locals than for the visitors, boosting the fjord boatman’s life expectancy several years ahead of the British tourist’s.  

In fact, Norwegian scientists studying a sample of 54,000 of their countrymen have proved that spending the state budget on public health and social welfare will only work effectively if the population is laughing all the way to the grave. “The cognitive component of the sense of humour is positively associated with survival from mortality related to CVD [cardio-vascular disease] and infections in women and with infection-related mortality in men” – Norwegian doctors reported in 2016. Never mind the Viking English:  the Norwegian point is the same as Solomon’s that “a sense of humour is a health-protecting cognitive coping resource” – especially if you’ve got cancer.  

The Russians understand this better than the Norwegians or the British.  Laughter is an antidote to the war propaganda coming from abroad, as Lexus and Vovan have been demonstrating.   The Russian sitcom is also surviving in its classic form to match the best of the British sitcoms, all now dead – Fawlty Towers (d. 1975), Black Adder (d. 1989), You Rang M’Lord? (d. 1988), Jeeves and Wooster (d. 1990), Oh Dr Beeching! (d.1995), and Thin Blue Line (d. 1996).

The Russian situation comedies, alive and well on TV screens and internet streaming devices across the country, are also increasingly profitable business for their production and broadcast companies – not despite the war but because of it. This has transformed the Russian media industry’s calculation of profitability by removing US and European-made films and television series, as well as advertising revenues from Nestlé, PepsiCo, Mars, and Bayer. In their place powerful  Russian video-on-demand (VOD) streaming platform companies like Yandex (KinoPoisk), MTS (Kion),  Mail.ru (VK), and Ivi (Leonid Boguslavsky, ProfMedia, Baring Vostok)  are now intensifying the competition for audience with traditional television channels and film studios for domestic audiences.  The revenue base of the VOD platforms is less vulnerable to advertisers, more dependent on telecommunications subscriptions.

Russian script writers, cameramen, actors, designers, and directors are now in shorter supply than ever before, and earning more money.  “It’s the Russian New Wave,” claims Olga Filipuk, head of media content for Yandex, the powerful leader of the new film production platforms; its  controlling shareholder and chief executive were sanctioned last year.  

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RUSSIAN AVIATION INDUSTRY CORRECTS YELTSIN YAW – BOEING, AIRBUS DITCHED



By Olga Samofalova, translated and introduced by John Helmer, Moscow
  @bears_with

It was the American humourist Mark Twain who didn’t die in 1897 when it was reported that he had. Twain had thirteen more lively years to go.

The death of the Russian aerospace and aviation industry in the present war is proving to be an even greater exaggeration – and the life to come will be much longer. From the Russian point of view, the death which the sanctions have inflicted is that of the US, European and British offensive against the Soviet-era industry which President Boris Yeltsin (lead image, left) and his advisers encouraged from 1991.

Since 2014, when the sanctions war began, the question of what Moscow would do when the supply of original aircraft components was first threatened, then prohibited, has been answered. The answer began at the Federal Aviation Administration (FAA) in 1947 when the first  Supplemental Type Certificate (STC) or Parts Manufacturing Approval (PMA) was issued by Washington officials for aircraft parts or components meeting the airworthiness standards but manufactured by sources which were not the original suppliers.   

China has been quicker to implement this practice; Chinese state and commercial enterprises have been producing PMA components for Boeing and Airbus aircraft in the Chinese airline fleets for many years.  The Russian Transport Ministry has followed suit; in its certification process and airworthiness regulations it has used the abbreviation RMA, Cyrillic for PMA. This process has been accelerating as the sanctions war has escalated.

So has the Russian process of replacing foreign imports entirely.

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FOR WANT OF A NAIL THE KINGDOM WAS LOST – ENGLISH PATHOLOGIST GUY RUTTY FACES CHALLENGE TO THE RELIABILITY OF HIS NOVICHOK EVIDENCE



By John Helmer, Moscow
  @bears_with

The weakest link in the British government’s four-year long story of Russian Novichok assassination operations in the UK – prelude to the current war – is an English medical expert by the name of Guy Rutty (lead image, standing).

A government-appointed pathologist advising the Home Office, police, and county coroners, Rutty is the head of the East Midlands Forensic Pathology Unit in Leicester,  he is the author of a post-mortem report, dated November 29, 2018,  claiming that the only fatality in the history of the Novichok nerve agent (lead image, document), Dawn Sturgess, had died of Novichok poisoning on July 8, 2018. Rutty’s finding was added four months after initial post-mortem results and a coroner’s cremation certificate stopped short of confirming that Novichok had been the cause of her death.

Rutty’s Novichok finding was a state secret for more than two years. It was revealed publicly   by the second government coroner to investigate Sturgess’s death, Dame Heather Hallett, at a public hearing in London on March 30, 2021. In written evidence it was reported that “on 17th July 2018, Professor Guy Rutty MBE, a Home Office Registered Forensic Pathologist conducted an independent post-mortem examination. He was accompanied by Dr Phillip Lumb, also an independent Home Office Registered Forensic Pathologist. Professor Rutty’s Post-Mortem Report of 29th November 2018 records the cause of death as Ia Post cardiac arrest hypoxic brain injury and intracerebral haemorrhage; Ib Novichok toxicity.”  

Hallett, Rutty, Lumb, and others engaged by the government to work on the Novichok case have refused to answer questions about the post-mortem investigations which followed immediately after Sturgess’s death was reported at Salisbury District Hospital; and a cause of death report signed by the Wiltshire Country coroner David Ridley, when Sturgess’s body was released to her family for funeral and cremation on July 30, 2018.  

After another three years, Ridley was replaced as coroner in the case by Hallett in March 2021. Hallett was replaced by Lord Anthony Hughes (lead image, sitting) in March 2022.

The cause-of-death documents remain state secrets. “As you have no formal role in the inquest proceedings,” Hallett’s and Rutty’s spokesman Martin Smith said on May 17, 2021, “it would not be appropriate to provide you with the information that you have requested.” 

Since then official leaks have revealed that Rutty had been despatched by the Home Office in London to take charge of the Sturgess post-mortem, and Lumb ordered not to undertake an autopsy or draw conclusions on the cause of Sturgess’s death until Rutty arrived. Why? The sources are not saying whether the two forensic professors differed in their interpretation of the evidence; and if so, whether the published excerpt of Rutty’s report of Novichok poisoning is the full story.   

New developments in the official investigation of Sturgess’s death, now directed by Hughes, have removed the state secrecy cover for Rutty, Lumb, and other medical specialists who attended the post-mortem on July 17, 2018. The appointment by Hughes of a London lawyer, Adam Chapman, to represent Sergei and Yulia Skripal, opens these post-mortem documents to the Skripals, along with the cremation certificate, and related hospital, ambulance and laboratory records. Chapman’s role is “appropriate” – Smith’s term – for the Skripals to cross-examine Rutty and Lumb and add independent expert evidence.

Hughes’s appointment of another lawyer, Emilie Pottle (lead image, top left), to act on behalf of the three Russian military officers accused of the Novichok attack exposes this evidence to testing at the same forensic standard. According to Hughes,  it is Pottle’s “responsibility for ensuring that the inquiry takes all reasonable steps to test the  evidence connecting those Russian nationals to Ms Sturgess’s death.” Pottle’s responsibility is to  cross-examine Rutty and Lumb.

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Copyright © 2007-2017 Dances With Bears

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