PROKHOROV & DERIPASKA STYMIED AS POTANIN FORGES NEW ALLIANCE FOR NORILSK NICKEL

By John Helmer in Moscow

Terms of new nickel-iron-ore combination put pressure on Rusal and Deripaska

“Though poverty and want are an irresistible temptation to the poor, vanity and great things are as irresistible to others”.

As she got up from a night of bedding with a high-paying prince in France, this was how Roxana, Daniel Defoe’s least successful hero, philosophized. But in Defoe’s 18th century novel, Roxana was meant to be a practical warning against marriages of convenience; as well as the short-lived allures of sex and cash.

Mikhail Prokhorov, the latest of Russian oligarchs to be moving his fortune elsewhere, is reported to suffer from irresistible temptations, and to have been quite successful at satisfying them. Vanity he is known to have, and great things have come to him, too. Not less can be said of Alisher Usmanov, semi-proprietor of the iron-ore and steel holding Metalloinvest, which yesterday began to pass beyond his control, at a discount he has begrudged having to accept.

Through the keyhole, watch carefully at our two Roxanas, as they climb into and out of their separate beds — I mean, bids.
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BATTLE FOR POLYUS GOLD MOVES TO LONDON — EPISODE 2

By John Helmer in Moscow

The FSA investigation of Polyus Gold’s affairs hears duck quacking.

Last February, Interros, the Moscow asset holding of Vladimir Potanin, was getting ready to go to the High Court in London to enforce Potanin’s rights in KM-Invest, a special purpose vehicle Potanin controlled with disgruntled partner, Mikhail Prokhorov.

At stake was a 7.4% stake in Polyus Gold, Russia’s leading gold miner, which KM-Invest held for the two men. KM-Invest’s establishment documents provided for UK court jurisdiction, in the event of disputes.

At the time, 7.4% of Polyus was worth about $775 million. Last week, it reached $1.1 billion, before falling again. The gyrations of share value are part of the conflict between Potanin and Prokhorov, as Mineweb has already reported, as Potanin tries to gather the votes himself, and the support of minority shareholders, to stop Prokhorov from carving-out the exploration assets of the company, and starting an entirely new company, Polyus Exploration, under his exclusive control.
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RUSSIAN STEELMAKERS CRASH ON TAX THREAT

By John Helmer in Moscow

Brokers put fingers in the dyke, as Kremlin takes fresh bite out of profit

According to the tale of Hans Brinker, the brave little Dutch boy stuck his finger in the Haarlem dyke to save the Netherlands from being flooded.

In truth, the tale was a 19th century American invention. Until 1950 there was no dyke, no finger, and no little Hans. Then the Dutch Bureau of Tourism thought too many visiting Americans believed the story, so they erected a statue to Hans, and moved the non-existent exploit to Spaarndam, where the statue was.

Brokers and investment bankers are like that; and it’s at volatile times like these that you are bound to see a great many fictional fingers aiming to keep real floods at bay. Take, for example, the reaction of Renaissance Capital, a big Moscow house, to the disclosure last week that the Kremlin is thinking of intervening to hold steel prices down.

What is happening is that domestic steel prices have been going up so fast, traders say their quotes are obsolete within 24 hours. They joke that, after crossing the thousand-dollar level in April, hot-rolled coil (HRC) is now approaching the thousand-Euro mark, with no flattening or downturn in sight.
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DLAMINI-ZUMA GETS SATELLITE LIFTOFF, BUT TROUBLE PERSISTS IN KALAHARI PROJECT

By John Helmer in Moscow

South Africa’s Foreign Minister, Nkosazana Dlamini-Zuma, said there has been a breakthrough in negotiations with the Russian government over terms for the Russian space agency to launch a South African communications satellite.

She said she hopes to “see the launch of the satellite by the end of this year.” Dlamini-Zuma headed a delegation of more than 30 South African officials and businessmen in Moscow for a 2-day session of the bilateral intergovernmental committee on trade and economic cooeration (ITEC).

Ronnie Mamoepa, the Minister’s spokesman, told Business Day/Weekender, that resolution of delays and disputes over the satellite launch was the “priority” of this week’s talks.

The Russian text of the protocol, which Dlamini-Zuma and Yury Trutnev, Russia’s Minister of Natural Resources, signed late Friday set a deadline of July “to finish consultations to find the solution to the problems connected to the launch of the satellite ZA-002”. Asked about the reason for the delays, Mamoepa said they were technical ones.

The text of the protocol indicated that problems remain between the two governments and businessmen on both sides, involved in the Kalahari manganese mining project. This involves the Renova group of companies, owned by Victor Vekselberg, who has publicly promised to invest a billion dollars in the project.
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STEADYING THE POTASH ROLLER-COASTER

By John Helmer in Moscow

Volatility in Uralkali share price is no sign of change in value.

A month ago, when Mineweb reported that the spot price of potash had cleared the $1,000-tonne threshold and was continuing to rise, the Russian stock market reacted by lifting the share price of lead potash producer, Uralkali (ticker URKA:RU), by 1% in the first hour of trading, then another 5% in the second hour. That represented $1.3 billion in extra market capitalization for the company — $11 million per trading minute.

The news was real, and that day, April 23, URKA’s share price hit its historic high of $12.40; this represented a market capitalization of $26.3 billion. Since then, with virtually no news to speak of, and negligible trading volumes, the charts show that Uralkali’s share price has been extremely volatile, seesawing down and upwards by up to 17% in value on the day.

Chief executive Vladislav Baumgertner explained the share price increase as the direct result of the commodity price growth, itself driven by the underlying global supply-demand balance, and the relative attractiveness of potash to commodity investment funds. “These price increases,” Baumgertner said on April 23, “are driven by the continuous growth of global demand, historically low inventory levels and unprecedented tightening of the supply for the remainder of 2008 after the agreements reached by the Company in China and India.”

Nothing has changed in the plant kingdom or in the global fertilizer market, so how to explain the instability of the share price in recent days?
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OIL TRADE IS NO STAIN ON PUTIN

News analysis in Business Day, Johannesburg

By John Helmer in Moscow

A campaign of smears and innuendo linking Russian Prime Minister Vladimir Putin to powerful Russian oil interests, launched last week by a newspaper in London, has drawn a withering counter-attack by Gennady Timchenko, controlling shareholder of Gunvor, and one of the leading oil traders in the world.

The Geneva-based trading firm is challenging Glencore and Vitol for control of the multi-billion dollar Russia oil export trade, the world’s largest.

In a letter to the Financial Times, published on May 22, Timchenko accused the newspaper of reporting “inaccuracies and false claims…misleading ambiguity…conspiracy theory [and] unwarranted suggestions.” In a hint that commercial rivalry from Glencore and Vitol, who have been losing their Russian positions to Gunvor, are behind the published attacks, Timchenko wrote: “Gunvor is what it seems…When it comes to price — ask our rivals and study our record in open tenders. The truth is there for all to see.”

The target of Timchenko’s reply was a report on May 15 by Moscow-based Financial Times reporter, Catherine Belton. She alleged that Timchenko and Putin have been friends since their service days in Soviet intelligence; and that Timchenko’s business success is due to shadowy political and personal favours, and discount pricing of oil, as it moved from wellhead and refinery to loading port and destination.
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ALL FALL DOWN — POLYUS BOARD IN RECRIMINATION, AS SHARE PRICE DROPS

By John Helmer in Moscow

The fight between shareholders Mikhail Prokhorov and Vladimir Potanin over the future of Polyus Gold, Russia’s leading goldminer, escalated angrily at the board meeting on May 21, when chief executive Evgeny Ivanov called for a vote to eliminate independent director, Lord Patrick Gillford, from the slate to be submitted to the annual shareholders’ meeting next month.

Ivanov also rebuffed board consideration of a proposal to sell a 2.5% bloc of company-controlled shares to the Kazimir group in London.

Details of the board meeting were summarized in an official press statement by Polyus. This sidesteps the conflict, reporting only that Gillford, who has been an independent board member since 2006, was dropped “due to the ongoing investigation initiated by Lord Patrick James Gillford in relation to his status as an independent director.” The language suggests that it had been Gillford, who had initiated the move, not Prokhorov and Ivanov.

Gillford was not available to answer Mineweb questions on what has happened. However, his office in London issued a formal statement. This charges that Ivanov and the board statement had “cynically misinterpreted in a wholly unacceptable way” the independence issue, and Gillford’s earlier request to Ivanov to find out where a press leak, challenging his independence, had come from.
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SEVERSTAL BID FOR ESMARK TRIGGERS NEGATIVE REACTION

By John Helmer in Moscow

Market cuts $2 billion in capital value from Russian steelmaker as US acquisitions mount up.

In a market of booming coal, coke, iron-ore and scrap prices, and still insatiable Chinese and Indian demand for steel, it stands to reason that the great vertically integrated Russian steelmaking groups, largely self-sufficient in raw materials, should be booming, too.

How then to explain why Alexei Mordashov, owner of third-ranked Severstal steel and mining group, has seen almost $2 billion wiped off the market capitalization of his company in the past week? On May 16, the commodity boom logic lifted Severstal to its historic high — $28.50, ticker CHMF:RU. On May 21, it had fallen below $26, and it is currently at $26.85.

In the interval, Mordashov bought one failing US steelmaker on Friday for $370 million; and on Monday announced a $1.1 billion offer for another.

Sinking ships usually induce exits, but Mordashov has been steadily climbing aboard, while shareholders have taken the jump. If his Monday bid goes through, Mordashov will have almost as much steelmaking capacity in the US as he has in Russia; and he can lay claim to be the fourth largest steelmaker in the US.
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POLYUS GOLD BOARD TO REVIEW GILLFORD CHALLENGE, KAZIMIR OFFER

By John Helmer in Moscow

Independent director Lord Gillford effectively warns Polyus Board against potential asset stripping plan while emphasising his independence of the warring factions.

Lord Patrick Gillford, the influential independent on the board of Polyus Gold, Russia’s leading goldminer, has warned the board that the company is in danger of an asset stripping scheme devised by chief executive Evgeny Ivanov, and his stakeholding ally, Mikhail Prokhorov.

Gillford issued a letter following a press leak to a Moscow business news service that suggested Gillford had a vested interest in the battle for Polyus Gold with Vladimir Potanin. At present, Potanin and his Interros holding control about 34% of Polyus Gold; Prokhorov and his Onexim holding control 30%. In practice, control of the board remains for the time being with Ivanov and Prokhorov.

Gillford is the sole international independent on the Polyus board, as the two other named independents, Russians, don’t qualify. An old Etonian, Tory advisor, and career PR agent, Gillford took his Polyus seat before the company’s London float in 2006. He runs Policy Partnership Ltd. at an address in southwest London. According to the firm’s website, “we provide expert advice and sound judgement to help our clients anticipate and respond to regulatory, policy and communication challenges, both domestically and internationally.” Gillford does not hold shares or share options in Polyus. The verbatim text of his letter is as follows:
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GUNVORACIOUS – PUTIN STRENGTHENS OIL CONCESSION FOR SECHIN AND TIMCHENKO

By John Helmer in Moscow

The largest oil concession in the world is changing direction as Glencore may be losing out in Russia again.

Announcements last week from Prime Minister Vladimir Putin indicate that the movement of Russian oil for export is now to be supervised by Putin’s former chief Kremlin aide, Igor Sechin, who was named deputy prime minister in charge of Russian industry on May 12.

Sechin is also to take over the entire maritime policy concession from other officials, in an ambitious bid to concentrate oil trading in Russian hands; create new Russian oil ports on the Baltic; and build a new generation of oil and gas tankers in Russian yards, which have hitherto lacked the technical capacity.

The ambition has already attracted ferociously negative reporting from the international media, which accuse Sechin, as well as Putin, of being in league with Gunvor, the Geneva-based oil trader controlled by Gennady Timchenko, who has influential business, friendship, and family ties in the Russian maritime sector.
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WEBSITE ATTACK

Attack

On Saturday May 17 this site was attacked by a Russian, who left behind a trail of technical identifiers, and whose identity is known. The feedback confirms the accuracy and value of the materials posted on the site during the past week. We appreciate the backhanded acknowledgement.

ARCHANGEL DIAMOND TRAPS ITSELF IN MINE VALUATION

By John Helmer in Moscow

Announcement from ADC suggests there is more value in the Grib pipe than De Beers report calculates.

Archangel Diamond Corporation (ADC), the Toronto-listed junior diamond miner, headed by De Beers lawyer Jonathan Dickman, has trapped itself in an awkward contradiction over the value of its Russian asset, the Grib pipe in Arkhangelsk region. The contradiction also appears to have been relevant to share trading in mid-May, when nearly a million ADC shares exchanged hands, causing a sharp drop in the price.

On April 29, the day after Toronto Stock Exchange trading in ADC shares recommenced after a six months suspension, ADC was reported as telling Street Wire “the company would begin technical work that would lead to what amounts to a feasibility study by 2010. A production decision would follow the expected favourable result, with engagement of contractors and the start of construction beginning early next decade” (emphasis added).

If ADC was expecting a favourable result on April 29, it did not appear to be thinking so on April 8, when the NI 43-101 Technical Report, prepared by De Beers analysts Johan Ferreira and WEolf Skublak, signed off on their Net Present Valuation of the project, along with estimates of the diamond value in the Grib pipe, if mined to the 1,000-metre level.
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ARCHANGEL DIAMOND MINE HINGES ON GIRLS AND IGOR SECHIN

By John Helmer in Moscow

De Beers report heightens geotechnical and political challenges in Archangel diamond mining project.

To adapt the old saw, a great many fresh girls are going to be obliged to make diamonds their best friends before Grib, Russia’s newest, and possibly largest, diamond pipe, can make enough profit to justify digging.

Located in Arkhangelsk region, one thousand kilometres northwest of Moscow, Grib was discovered in 1996; it is the largest kimberlite pipe newly found in Russia. Developed initially by Archangel Diamond Corporation (ADC), a De Beers-controlled company, it was the target of a 10-year hostile takeover by Vagit Alekperov and Alisher Usmanov, who between them control substantial Russian oil, iron-ore and steel assets. De Beers sued for recovery in Sweden and damages in the US.

With LUKoil, Alekperov’s oil company, which wholly owns the local licence-holder for Grib, Arkhagelskgeoldobycha (AGD), De Beers and ADC signed an out of court settlement a month ago. This provides for a staged development plan for the new mine, starting with a down-payment of $100 million from De Beers and ADC, once the new project framework has been approved.
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RUSSIAN ALUMINIUM DEFENCE BENDS UNDER PRESSURE

By John Helmer in Moscow

Fate of Rusal shareholding hinges on evidence in UK, Swiss and Israeli courts

In what is shaping up as the most significant case against the Russian business oligarchy ever argued in an international court, Oleg Deripaska, Russia’s richest man, has told the UK High Court, in his defence, that he didn’t have a business partnership with Michael Cherney (Mikhail Chernoy), but he did sign an agreement with him in London, and he did pay him about $250 million.

Missed by newspapers and wire services, which failed to read the transcripts and several thousand pages of evidence presented in the High Court during two days of hearings on April 30 and May 1, Deripaska’s new defence strategy is the ancient one of the pot calling the kettle black.

Deripaska is claiming that Cherney extorted his signature, plus the payoff, in return for protection. No evidence was presented to substantiate this claim, except for references to a Russian gangster named Anton Malevsky. A parachute enthusiast, Malevsky was killed in a jumping accident in South Africa on November 6, 2001.

Mineweb has verified the cause of Malevsky’s death, according to SA Police Inspector H.J. van Wyk, and an Interpol telecopy from Pretoria: “on approaching the landing site, the wind whirled the parachute out of control and caused the landing to be fatal.”
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RUSSIA’S NEW GOVERNMENT PROMISES NO CHANGE IN RESOURCE CONCESSIONS, YET

By John Helmer in Moscow

Putin names his merry men, no change in the forest

The list of the new Russian government ministers, released by Prime Minister Vladimir Putin this afternoon, preserves most senior officials in their place, and keeps the precarious balance of factions, which compete for and decide Russia’s major resource concessions, and the biggest of the money-spinners, energy exports.

The immediate and obvious practical effect is that none of the established oligarchs, nor rising commercial challengers, has been able to promote his own man into the cabinet. Oil and gas, pipelines, ports, and tanker fleets remain in much the same hands that have controlled these lines of business for the past four years.

For those who may have been looking to gauge who is likely to win the major new mining concessions to be awarded this year — the Udokan copper project in Chita region, and the Sukhoi Log gold licence in Irkutsk — the new cabinet appointments suggest the same answer as before: Putin and his closest associates will encourage competitive bidding, and then decide for themselves.
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US CALLS FOR INVESTIGATION OF TAJIKISTAN ALUMINIUM SPENDING

By John Helmer in Moscow

In the good old days, when intrepid Englishmen competed with Russians for commercial and military footholds in Central Asia, the object of their Great Game was to fill the local bazaars with English manufactured goods, and extract in exchange as much treasure as the locals could be gulled into giving up.

Never in two centuries, however, was there ever an Englishmen (or Russian), who played this game, a practising lawyer. So, who could have imagined that what moves today along the old Silk Road to Dushanbe are invoices for legal services, performed in the London courts; for the price of which the great despot of the Pamirs is prepared to let his country’s people freeze for lack of money to generate electricity and pay for heat.

Mineweb reported on April 28 that Herbert Smith, one of the largest billing of the UK law firms, has been setting an English, and probably a world record, for charging the Tajikistan government more than $100 million for a 3-year court claim ordered by the Tajik President, Imomali Rakhmonov (Rahmon): here
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MARKET NERVES TOWARDS POTASH PRICING GROW, DECIMATING URALKALI’S STOCK PRICE

By John Helmer in Moscow

Acron reports big jump in complex fertilizer revenue, but Uralkali tanks on potash nerves.

Acron, Russia’s leading producer of complex fertilizers, has reported that in the first quarter to March 31, sales revenue reached $493 million; that is a jump of 72%, compared with the corresponding quarter of 2007. It is the largest quarterly growth rate yet recorded by the Moscow-based company, which consolidates three production subsidiaries – Acron plant, Dorogobuzh and Hongri-Acron (in China).

Net profit, calculated according to Russian Accounting Standards, more than quadrupled — from $116 mllion in 1Q07 to $558 million in 1Q08. Part of this profit reflects the jump in share value of stakes Acron holds in potash producer, Silivinit (8.1%); in phosphate producer Apatit (5.3%), and Sibneftegaz (21%). The growth rate for Acron’s profit figure, if this equity gain is removed from the calculation, is 343% — from $47 million to $161 million.

Ebitda surged 206% from $73.8 million in 1Q 2007 to $227.5 million in Q1 2008.
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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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KILLING IS CHEAPER — THE US ARMY SPECIAL OPERATIONS COMMAND WEAPONIZES TWITTER, FACEBOOK, INSTAGRAM, WHATSAPP, TELEGRAM

By John Helmer, Moscow
  @bears_with

The US Army’s Special Operations Command (SOCOM) has been firing several hundred million dollars’ worth of cyber warheads at Russian targets from its headquarters at MacDill Airforce Base in Florida. They have all been duds.

The weapons, the source, and their failure to strike effectively have been exposed in a new report, published on August 24, by the Cyber Policy Center of the Stanford Internet Observatory.  The title of the 54-page study is “Unheard Voice: Evaluating Five Years of Pro-Western Covert Influence Operations”.

“We believe”, the report concludes, “this activity represents the most extensive case of covert pro-Western IO [influence operations] on social media to be reviewed and analyzed by open-source researchers to date… the data also shows the limitations of using inauthentic tactics to generate engagement and build influence online. The vast majority of posts and tweets we reviewed received no more than a handful of likes or retweets, and only 19% of the covert assets we identified had more than 1,000 followers. The average tweet received 0.49 likes and 0.02 retweets.”

“Tellingly,” according to the Stanford report, “the two most followed assets in the data provided by Twitter were overt accounts that publicly declared a connection to the U.S. military.”

The report comes from a branch of Stanford University, and is funded by the Stanford Law School and the Spogli Institute for Institutional Studies, headed by Michael McFaul (lead image).   McFaul, once a US ambassador to Moscow, has been a career advocate of war against Russia. The new report exposes many of McFaul’s allegations to be crude fabrications and propaganda which the Special Operations Command (SOCOM) has been paying contractors to fire at Russia for a decade.

Strangely, there is no mention in the report of the US Army, Pentagon, the Special Operations Command, or its principal cyberwar contractor, the Rendon Group.

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MARIA YUDINA OUT OF THE DARK – THE RUSSIAN CLASSICAL PIANIST PLAYS AGAIN

By John Helmer, Moscow
  @bears_with

Maria Yudina (lead image) is one of the great Russian pianists. She was not, however, one who appealed to all tastes in her lifetime, 1899 to 1970.

In a new biography of her by Elizabeth Wilson, Yudina’s belief that music represents Orthodox Christian faith is made out to be so heroic, the art of the piano is diminished — and Yudina’s reputation consigned again to minority and obscurity. Russian classical music and its performers, who have not recovered from the Yeltsin period and now from the renewal of the German-American war, deserve better than Wilson’s propaganda tune.

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