SOMETHING FUNNY HAPPENED ON THE WAY TO THE ROASTER

By John Helmer in Moscow

German miner Chronimet and America’s Comsup Commodities reveal mystery of Armenia’s molybdenum mines.

Molybdenum is a metal that doesn’t lose its cool.

Used in a variety of alloys for steel, it remains rigid at 3,000 degrees Fahrenheit, and doesn’t melt until 4,730 degrees F, a point at which everything but four other natural elements have vaporized and disappeared.

The biggest source of demand for molybdenum alloys is in stainless steel production, and as this also consumes nickel, the price of molybdenum usually moves in parallel with nickel. If nickel and stainless steel prices are rising, so is molybdenum. When they decline, moly follows them down.

At least, that’s the theory.
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KREMLIN CAN’T RESOLVE FIGHT OVER FOREIGN MINER EXCLUSION

By John Helmer in Moscow

Kremlin insiders fall into disarray over ‘strategic’ mineral resources.

Only in Russian politics can it be true that a politician, who is commanding in the polls, may also lack the authority to rule. And only in Russia is the political solution for this to lock everyone up.

In 1925, Mikhail Zoshchenko, the comedian of Russian life after the Communist revolution, wrote a tale called “Nervous People”. On the surface, it was about nothing more than an argument in a communal kitchen over whose property a pot-scourer was. “Nerves are always shaken after a civil war”, the narrator starts off his recounting. Two women started the fight; two men, one a cripple, joined it. The one-legged man came off worst, floored by a saucepan to the skull. The militiaman called to scene was able to break up the fight by shouting: “Get the coffins ready, you bastards! I’m going to shoot!” The melee dispersed, except for the cripple on the floor. Zoshchenko reminds the Soviet reader what always happens. “The People’s Judge was a nervous sort of man, too: he booked everyone.”
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RUSSIAN BULLDOGS UNDER THE URANIUM RUG

By John Helmer in Moscow

Can outsiders like Rio Tinto see who commands, who follows, in Russian uranium sector planning?

It was Winston Churchill who once epitomized what he didn’t know of Russians, and what he didn’t like, by describing them as bulldogs fighting under a rug.

In the Russian uranium business, the rug has been pulled so tightly, it has proved difficult to count the dogs involved, let alone identify them by name or authority. It’s one reason why the South African government, plus major international uranium miners like BHP Billiton, Rio Tinto, and Cameco, have found themselves in negotiations for uranium projects with the Russians — without being confident of who among them has the power to follow up their intentions, and implement their undertakings.

In the case of Rio Tinto, the problem appears to have been compounded by fierce internal divisions among Rio executives ambitious to make deals, but reluctant to share the limited intelligence they have with their own colleagues. Here it seems to have been a case of bulldogs on rugs barking at bulldogs under rugs.
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ALROSA ATTACKS AFRICAN DIAMOND BENEFICIATION

By John Helmer in Moscow

At the Antwerp diamond conference Alrosa and De Beers switch positions on value of diamond beneficiation.

Diamond-miners are wolves; diamond-cutters are sheep.

At least that’s the way it has usually appeared to the governments of countries fortunate enough to supervise lucrative mineable diamond deposits. Expressed in terms of the diamond supply pipeline, the mark-up in value of diamond mine sales, compared to the costs of production at the minehead, can be a wolfish 500%. By contrast, the mark-up in value of the polished, which cutters realize in relation to the cost of the rough they buy, can be a sheepish 25%.
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VYBRONOV’S ANTWERP SPEECH STIRS HORNET’S NEST

By John Helmer in Moscow

Russian diamond manufacturers have reacted critically towards Alrosa chief executive, Sergei Vybornov, attacking key proposals he made at last week’s Antwerp Diamond Conference.

Vybornov ousted Alexander Nichiporuk from the top spot at Alrosa in February. But after a string of misstatements drew fire from domestic policymakers, he has limited his appearances, and declined requests for public interviews.

Last week, at the Antwerp Diamond Conference, Vybornov took aim at African governments for establishing domestic diamond cutting centres and local beneficiation to add profitability to diamond mining.
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RUSSIAN ALUMINIUM GIANT RUNNING ON EMPTY

By John Helmer in Moscow

Litigators and analysts look for cash inside Russia’s global aluminium giant.

Most of the trouble Oleg Deripaska, controlling shareholder of United Company Rusal, has faced in the court claims confronting him in the past, and the one from Mikhail Chernoy (Michael Cherney) he currently faces in London, comes from the fact that Deripaska seems not to have the money, with which to meet his debts and obligations.

The claims of Cherney’s High Court lawsuit, including shares, dividends, proceeds from Rusal asset sales, and Rusal-funded transfers to Deripaska’s personal holding and other companies can be estimated at more than $5 billion. These claims are against Rusal, Deripaska, his Moscow holding Basic Element, and his worldwide assets.
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ANTIMONY HAS BILLION-DOLLAR POTENTIAL IN TAJIKISTAN

By John Helmer in Moscow

Mystery American company takes concession to mine large antimony reserves in Tajikistan.

Antimony is one of the rare metals for whom new applications are being devised in electronics, battery manufacture, and flame retardants, but whose worldwide supply is fast running out.

That imbalance between supply and demand makes for highly volatile prices, and the behaviour of the Chinese, who control the world’s largest reserves and annual output, as well as the world’s largest demand, has driven the price cycle sharply up and down over the past decade. Antimony hit its previous price peak in 1995-96, at $5,000 per metric ton, or about $2.27 per pound. The price then collapsed by December 2001 to $1,000/tonne, 45 cents/lb. The revival of Chinese demand, outstripping domestic production, started the price moving upward since then. It reached $5,350/tonne, $2.43/lb, in July 2007. Industry projections for antimony indicate that it will strike $6,000/tonne, $2.73/lb, later this quarter, and remain at least as high for the next three years.
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COURT DOCUMENTS REVEAL DE BEERS CHARGES AGAINST USMANOV OVER GRIB DIAMOND PIPE

By John Helmer in Moscow

De Beers’s arsenal resists Usmanov attack on the Grib pipe and the Arsenal pitch.

A public relations blitz under way this month in London and the UK media has produced charges and counter-charges involving Alisher Usmanov, an iron-ore and steel magnate. He is accused of conspiring with other Russians to defraud a De Beers-affiliated company of its 40% stake in, and several hundred millions of dollars in future profits from, the only major diamond deposit newly discovered in northwestern Russia.

Usmanov has had run-ins with the London press before. The first time, in 2003 and 2004, was when he started buying shares of the then Anglo-Dutch steelmaker Corus, and was rebuffed by the Corus board, which went on to sell itself to Tata of India. Usmanov found his champion at the time at the Financial Times. He also pocketed a substantial profit from the rise in the Corus share price.
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A SCAPEGOAT MADE OF GOLD – POLYUS IN SHAREHOLDER WAR

By John Helmer in Moscow

Open warfare declared at Russia’s largest gold miner exposes Lord Gillford, and starts a run at Polyus assets.

On their annual day of atonement for a year of sinning, the biblical Hebrews used to beat a goat over a cliff; or drive him into the desert to be devoured by the demon Azazel, carrying their sins with him.

From this substitution come our term, scapegoat; and the Hebrew exclamation, ‘lekh la-Azazel’, meaning ‘Go to hell’. This week Russian gold mining executive Pavel Skotvich discovered what it’s like to be the former, while Polyus shareholders discovered what it feels to be in the latter.

It has cost Polyus shareholders already this year $133 million in share options value to see off Chief Executive Officer Yevgeny Ivanov, Chief Financial Officer Alexei Osenmuk, and another executive, German Pikhoya, a few weeks ago. Ivanov took about $100 million; the others divided the balance.They had been insisting on the payoff, after counting how much Polyus Board Chairman Mikhail Prokhorov had been gathering from gains on his shares, as well as transactions.
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MADNEULI TAKEOVER OF ZOD IN DOUBT

By John Helmer

Armenian officials in charge of mining and natural resource licensing say they have yet to decide whether to approve the transfer of ownership of Zod, Armenia’s principal goldmine, from the Vedanta Resources group company, Sterlite Gold, to Madneuli, a Georgian company financed by Sergei Generalov, a Russian shipping magnate.

According to recent public announcements by Aram Harutunian, Minister of Environmental Protection and Natural Resources in Yerevan, his ministry’s requirements for the Ararat Gold Recovery Company (ARGC) — the locally based affiliate of Sterlite, the licence holder for Zod — must be fulfilled before the transfer of control of the mining concession can be approved.

At a press conference on September 28, Harutunian said that his ministry had yet to receive a formal request from Zod’s new owner. “So far, the Indian side in the form of Vedanta Resources Corporation remains the debtor to the Armenian Government”, Harutunian said. He added that the debts and obligations owed to the government by Vedanta amounted to the value of the gold which government inspectors accuse ARGC of concealing in their processing of tailings and other mine operations.

Armenian sources have told Mineweb this totals about 3 tonnes, or 96,450 ounces. At current prices, this is worth about $73 million. If the Armenians make this payment a precondition of Madneuli’s shareholding takeover of Sterlite and operating control of the Zod licences, the deal to replace Vedanta in Armenia may collapse.

Before and during Vedanta’s sale negotiations, the government in Yerevan had conducted licence checks; imposed a bank account freeze on ARGC; suspended work at the Zod site; and launched court proceedings with the threat to revoke ARGC’s licences altogether. If the government were to revoke the Zod licences, then Madneuli’s purchase of Sterlite would be worthless.

The official Armenian statement by Harutunian followed announcements between August 17 and September 27 of the sale and purchase agreement between Vedanta and Sterlite on the one hand, and Madneuli and parent company, GeoPromMining, on the other. Mineweb reported the details at:
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=37667&sn=Detail

Madneuli offered to pay $97.48 million in cash, and assumed several obligations in Armenia: loans outstanding to Sterlite and ARGC of about $27 million; debts to mine contractors and equipment suppliers of about $5 million; and claims by the Armenian government. Taxes, fines and penalties have previously been reported at about $5 million.

Altogether, but not counting Harutunian’s 3-tonne claim, Madneuli/GeoProMining have agreed to pay $139 million. A demand for another $73 million, or the revocation of the Zod licences, would be a deal-breaker.
Asked to confirm the government’s claims, and identify what precisely they are, Harutunian’s spokesman Artsum Peponyan told Mineweb “the claims are well grounded, and should be paid anyway, no matter who will own the company.” But as to the amount, he said: “I have reviewed all the data, and have been trying to find out information on the exact number, but it is impossible.” He repeated that the minister had been correctly cited by the government news agency, Arminfo, when it reported Harutunian as saying on September 28 that “whoever is Ararat Gold Recovery Company’s (AGRC) new owner, he will be obliged to pay the sum adequate to the gold volume concealedby the company.” According to Peponian, “the statement in ArmInfo is absolutely correct.”

The difficulties in Yerevan have obliged Sergei Generalov, owner of the Moscow-based Industrial Investors group and financier of Madneuli, to try negotiating with the Armenian officials. These talks have yet to produce agreement. “Thedeal is not yet finalized,” Generalov’s spokesman, Oleg Rumyantsev told Mineweb. “We hope to close the deal by the middle of October.”

Asked about Harutunian’s 3-tonne premium, Rumyantsev said: “Industrial investors are well informed about the situation around the enterprise, but I am not ready to comment on [this issue]now.”

Rumyantsev has confirmed that Industrial Investors is financing Madneuli; Madneulihas confirmed that Industrial Investors is financing its development. There is additional confirmation that Madneuli is controlled by Timur Alasaniya, a senior member of the family of Georgia’s President, Mikheil Saakashvili.

Rumyantsev complains that there aredetails in Mineweb’s reporting of the affair which “couldn’t be considered the truth…I can understand why this is written by Georgian oppositionists, or our ‘well-wishers’ in Russia, but I didn’t expect this from your bureau.” The one detail Rumyantsev cited as Mineweb’s misreporting was the price at which the state shareholding in Madneuli was privatized in 2005. The World Bank privatization database reports the transaction value of the privatization as $35 million, and this is the figure Mineweb reported:http://rru.worldbank.org/Privatization/Results.aspx?countryid=74&startyear=2000&endyear=2005&sectors=3

Butthe correct figure was $51.1 million, Rumyantsev says. In its announcement of November 2, 2005, the Georgian Ministry of Economic Development said that the winning bid for Madneuli was $35.1 million “and additional 16 000 000 USD to pay Madneuli’s liabilities towards Georgia’s State Budget.” When this sum was paid, and why the World Bank did not include it in the transaction value, are not known.

Rumyantsev also challenged Mineweb’s reporting that Madneuli is controlled by Georgian President Saakashvili’s uncle, Timur Alasaniya. He told Mineweb that Stanton Equities Corporation, the vehicle used by Generalov and Industrial Investors to acquire the state share in Madneuli, “doesn’t belong to Timur Alasaniya”.

If the 3-tonne premium turns out to be a calculated move by Armenian officials to create a stumbling block for Madneuli, then rival bidders can be expected to appear shortly in pursuit of the Zod concession.

COURT DOCUMENTS EXPOSE USMANOV DIAMOND CLAIMS

By John Helmer in Moscow

A public relations blitz under way in London and the UK media has produced charges and counter-charges involving Alisher Usmanov, an iron-ore and steel magnate, who was named in US court papers as one of the principal defendants in the affair of the Grib pipe, a major diamond deposit in northwestern Russia.

The allegations against Usmanov, and his campaign to rebut them, follow his acquisition of a bloc of shares in the Arsenal Football Club, and his attempt to buy more shares, and possible control of the club from other shareholders.
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GOLD FIELDS SEEN AS GLAD TO BE EXITING VENEZUELAN GOLD

By John Helmer in Moscow

Gold Fields’ sale of its Venezuelan gold assets to Rusoro is a profitable relief

There is a traditional Russian toast that can be roughly translated: “May we have more pies and doughnuts, fewer black eyes and bruises!”

After selling its loss-making Venezuelan gold assets at a profit to Rusoro Mining last week, Gold Fields has publicly raised its glass to toast the new buyers luck — not least of all, because Rusoro is making a great deal in public of its Russian connexions for solving the black eyes and bruises Gold Fields desired to be rid of in Venezuela.
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BARRICK FACES TWO-FRONT ATTACK ON RUSSIAN GOLD AND PLATINUM ASSETS

By John Helmer in Moscow

Controversy deepens in Moscow over a controversial gold licence extension for Highland Gold, and licence trouble starts brewing elsewhere

Somebody in Moscow seems to think that Barrick Gold, the world’s largest gold miner, is in horticultural terms ‘a weed’.

In one of Jim Thompson’s thrillers, the killer is told by his attorney that there’s nothing wrong with him, except that he’s a weed. That is then defined: “a weed is a plant out of place”. Barrick is very untalkative about its projects, operations, and spending in Russia, but there appears to be nothing wrong with them. But in two parallel attacks in recent days, Barrick has seems to have been targeted for being in the wrong place.
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RUSSIA GIVES LAKSHMI MITTAL, ONE OF WORLD’S RICHEST MEN, THE BUM’S RUSH

By John Helmer in Moscow

The Russian government has become the first in the world to tell billionaire industrialist Lakshmi Mittal to take his cash and his steel mills elsewhere.

India’s and England’s richest individual, and the world’s largest steelmaker, Lakshmi Mittal has been suffering from a defect of hearing, apparently not understanding the message, when it had been passed discreetly.

Then on Friday morning, following the auction of almost 4 billion tonnes of Russian coal assets, from which Mittal had been disqualified, a minor state property official announced that the government will take five days before sending Mittal a letter, explaining the reasons for his exclusion.
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THE RAHMON SECRET — TURNING TAJIK WATER AND ELECTRICITY INTO METAL AND CASH

By John Helmer in Moscow

In Tajikistan, the nexus between water, electricity, and aluminium turns out to be a dark secret — and a presidential treasure

It’s difficult to run a country in the dark.

Politicians who leave voters in the cold, unable to cook or keep warm, become unpopular with the flick of a switch . Swarms of secret police can’t offset the damage that having no electricity causes.

President Emomali Rahmon (Rahmonov), the 55-year old who has run Tajikistan for the past 15 years, understands the problem, and suspects his rivals of manipulating electricity supply to Tajikistan with the aim of toppling him, and those of his extended family with the ambition to keep power for another generation.
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GENERALOV LOOKS TO BE RUSSIAN FOR GREAT GENEROSITY TO GEORGIAN GOLD MINER

By John Helmer

Sterlite Gold reveals $140 million payday from Russian-funded Georgian gold miner. It has been a mixed week for Georgia’s President Mikheil Saakashvili

On September 26 he took to the podium of the UN General Assembly in New York to accuse Russia of interfering in his country’s internal affairs, and acting in “reckless and dangerous” fashion. He was referring to the deaths of two Russian military men, shot dead by Georgian forces a week before, in what Saakashvili termed a “law enforcement operation”. Whether the deaths occurred on Georgian territory, or on the territory of the breakaway region of Abkhazia, isn’t clear.

On September 27,Irakli Okruashvili, a former Georgian defence minister under Saakashvili, who has started campaigning to replace him at next year’s elections, publicly accused the president of corruption, and of ordering him to arrange the deaths of political opponents. The next day, Okruashvili was arrested and charged with extortion, money laundering, abuse of power and negligence during his time as defence minister.

The same day, the Saakashvili family enjoyed a big pay-day.

Mineweb reported recently on an unusual transaction, in which the Georgian gold miner Madneuli outbid a number of bidders for the Zod gold licences and operations in Armenia, buying them from Sterlite Gold, a Canadian registered affiliate of Vedanta Resources: here.

Details of the transaction were first announced on August 17 in a terse statement by Sterlite. Sterlite, the company claimed, “has been advised of an agreement between its controlling shareholder, Vedanta Resources plc and GeoProMining Ltd. (”GeoProMining”), parent company of Georgian mining Joint Stock Company Madneuli, which may lead to an offer for the shares in Sterlite Gold.” The deal, according to the release, was that Vedanta “has entered into an agreement with GeoProMining to tender its Sterlite Gold shares at a price of US$0.3845 per common share in cash.”

GeoPromMining, a Tortola-registered entity, followed on September 27, the deadline for its offer, with a completion disclosure. It said it had acquired 253,526,305 Sterlite Gold shares, representing 95.6% of the stock outstanding. The sale and purchase price was $0.3845 per share. “GeoProMining intends to acquire the remaining Sterlite Gold common shares by means of a statutory compulsory acquisition…at the same price as the Offer price, and to de-list the shares from the Toronto Stock Exchange.” The offer value of the entire company amounts to $102 million.

Sterlite, and its owner Anil Agarwal, were saying goodbye to the only business it had, Zod, for a cash payment from Madneuli of $97.48 million. Ernst & Young had been conducting a silent auction of the asset for months, and this process had also revealed that Sterlite’s Armenian operations had loans outstanding and related debts of about $27 million. Settlement payments to resolve tax and other claims by the Armenian government, also reported in Mineweb, totalled $5 million; while there were miscellaneous obligations to mine contractors and equipment suppliers of about $5 million. Altogether, the takeover has, and will cost Madneuli/GeoProMining about $139 million.

There are subtleties revealed in the figuring of this transaction, which raise the question of why the Georgian miner would pay so much for assets in as much trouble as Mineweb has already chronicled: here.

Madneuli’s valuation is also controversial. It was privatized by the Georgian government for $35 million in 2005,and is currently owned by Timur Alasaniya. He is President Saakashvili’s uncle.

The privatization of the company, the leading gold and copper miner in Georgia, has since been called a steal by Saakashvili’s political critics and opponents. Financial details for Madneuli are difficult to come by.

Saakashvili’s critics claim the company netted $60 million in profit the year of the privatization. This number is doubtful; the sale figure is confirmed by the World Bank.

The gold resource attributed by one western source to the Madneuli deposit in southern Georgia is 350,435 oz. Silver, copper and other minerals are also mined at the deposit, which has been worked for 30 years. A gold resource estimate for the deposit published by Anglo Asian Mining indicates 23.5 tonnes (756,000 oz). When an Australian junior Bolnisi Gold worked in a joint venture with Madneuli, only to fall out with the company and abandon Georgia entirely, the Australians estimated indicated and inferred gold resources at a total of 780,000 oz. Before the conflict with Madneuli halted mining operations, and then forced Bolnisi’s exit in 2005, Bolnisi reports show aggregate production of 482,636 oz of gold between May 1, 1997 and December 12, 2005. Silver produced in the same period amounted to 248,725 oz. Bolnisi estimated its cash operating cost at $199/oz.

There is nothing comparable for production detail or financials from Madneuli; the company website discloses just two words, “under construction”. Georgian export data for the year 2005 indicate the maximum revenues Madneuli could have generated that year in shipments of copper ores and concentrates for $36.4 million, and gold for $34.7 million. Total suggested revenues for Madneuli, $70.70 million.

Bolnisi reported that its 50% stake in the joint venture with Madneuli earned gross profit from the sale of gold and silver in 2005 of $11.4 million, and positive cash flow from operating activities in the same period of $6.8 million.

This patchwork of data allows a maximum valuation of the company’s gold resources at half a billion dollars, but there is no telling what probability should be assigned to production value, or earnings. In terms of Ebitda, Madneuli appears to be in the double-digits, but no more. In terms of investor risk — after the Bolnisi affair — the discount for the company should be high.

When the general director of Madneuli, Geula Akobia, was interviewed in September 2006, he said his “main partners are German companies”. He also claimed:”I am very happy that United States is our strategic partner.” Missing entirely then, and also now, is the fact that Madneuli’s financing comes from Russia, and from Sergei Generalov’s Industrial Investors group in Moscow. It was Generalov, who, initially deposited the funds in escrow required by Sterlite and Vedanta to secure the transaction in August. It is Generalov who has supplied the $97.48 million cash payment, and will cover the additional financing requirements.

Two weeks after Sterlite’s sale to Madneuli was announced, Generalov was asked by Mineweb whether he had discussed the deal, and Saakashvili’s involvement in it, with the Kremlin, and whether he had received approval. Mineweb was told: “I can’t tell you either yes, nor no.” Generalov promised an announcement on September 14.

Nothing appeared on that day, however. In the meantime, First Deputy Prime Minister Sergei Ivanov, the former Russian defence minister, read the Mineweb report of Generalov’s financing of the Saakashvili family venture. Ivanov is a candidate to succeed President Vladimir Putin next March. He is also the senior government official in charge of the maritime sector, overseeing Generalov’s principal line of business, the Fesco shipping, ports and transport group.

If the Kremlin is considering what is to be done about Generalov bankrolling Saakashvili, it will be Ivanov who will report to the Security Council. And it is Ivanov who is best positioned to remind Generalov that he is putting the heavily leveraged Fesco group at potential risk.

Ivanov told Mineweb through a spokesman that he will make no public comment.

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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