ALUMINIUM SMELTER EMISSIONS AT CENTRE OF TAKEOVER CONTEST

By John Helmer in Moscow

Smelter pollution charges fly in Rusal-Norilsk clash.

The fight for control of Russia’s largest mining company, Norilsk Nickel, has turned into a battle over smelter emissions and environmental safety.

UC Rusal (Russian Aluminium), the Russian aluminium monopoly, fired the first shot as part of its hostile takeover attempt of Norilsk Nickel, the leading nickel and palladium exporter in the world. Rusal is controlled by Oleg Deripaska; Norilsk Nickel by Vladimir Potanin. Never before have these Russian oligarchs tangled so publicly and directly with Russia’s growing ecological movements, and the internationals — Greenpeace, Greenline and Waterkeeper Alliance.

Rusal took the offensive after losing Russian government support for the takeover, following a meeting Deripaska and Potanin had with Deputy Prime Minister Igor Sechin on July 28.

On August 12, Rusal dispatched an open letter to Vladimir Strzhalkovsky, a former government administrator, and Sechin’s candidate as chief executive of Norilsk Nickel. In its letter to him, Rusal chief executive Alexander Bulygin claimed to be “seriously concerned with the environmental situation relating to production activities at Norilsk Nickel’s facilities in Russia. According to the state environmental monitoring service and international public organisations, the environmental situation at Norilsk is on the brink of catastrophe.”
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GUNVOR WIN IN OIL SHIPPING TENDER DRAWS COURT CHALLENGE

COURT TO RULE ON DISCLOSURE OF TRANSFER PRICE OF RUSSIAN OIL

By John Helmer in Moscow

The Russian oil trading company Gunvor, controlled in Geneva by Gennady Timchenko, is facing margin uncertainties as the global oil price falls, and Russian producers respond to a profit squeeze of high taxes and rising costs.

Exactly what happens when a barrel of Urals crude moves from the wellhead into the international market, at what cost, and at what margin of profit, are three questions a recent Moscow court ruling suggests may only be disclosed if you hold 25% or more of the shares of the Russian oil company. And in the case of Rosneft, Russia’s leading producer and exporter, that is the state. A series of three lawsuits, including one to be heard in St. Petersburg next week, is seeking court-ordered disclosure of shipment volumes, wellhead oil prices, freight charges, and trade discounts allegedly granted to Gunvor last year by several exporters — Rosneft, Gazpromneft, and Surgutneftgas. According to company disclosures, the state owns 88% of Rosneft; 72% of Gazpromneft.

According to oil production results for June of this year, total Russian crude output was 9.8 million barrels per day (mbd). Rosneft led the majors with 2.3 mbd; Surgutneftgas produced 1.3 mbd (third in line behind TNK-BP); while Gazpromneft was in fifth place with 621,000 bd.
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POTANIN GAINS SHAREHOLDING CONTROL AT NORILSK

POTANIN IN BUY-BACK — IS DERIPASKA IN SELL-OUT?

By John Helmer in Moscow

The Bubble Metric Index (BMI) is a measure of the distance between the fantasy of money and financial reality.

In the past month, it has been weighing unusually heavily on the oligarchs who own pieces of Norilsk Nickel, Russia’s largest mining company. Especially those whose obligations have been secured by the value of commodities that have dropped in price, and by shares whose value has plummeted.

In the Russian macro-economy, the BMI can be expressed as the distance between the market capitalization of the listed stocks, as recorded on the stock exchanges, and the money supply as reported by the Central Bank. Between the year 2000 and the autumn of 2005, the two measures tracked together closely. You could say that the amount of cash available to invest correlated with the cash value of the investment. Then the market cap took off, hitting a peak of about $1600 billion in May of this year. Money supply, however, grew at a snail’s pace. When market cap was at its May high, money supply was around $600 billion. The gap between the two, lasting the thirty months from 2006 to mid-2008, is what is popularly known as the bubble, or, on account of its duration and magnitude, the MEGA-BUBBLE.
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THE GASSLINGER — RUSSIA SIGNS STRATEGIC CARIBBEAN GAS DEAL, AS RUSSIAN NAVY FOLLOWS

Have gas, will travel

By John Helmer in Moscow

You have to be older than Condoleezza Rice (b. November 14, 1954) to remember the first episodes of the greatest western ever to be broadcast on US radio and television. That was “Have Gun, Will Travel”, beginning in 1957. Over the following six years, in 225 episodes, the pock-marked Richard Boone, attired in black on horseback and at table, played Paladin, a classically educated, multilingual gentleman, who preferred reading poetry to cards, and who recommended settling conflicts by negotiation. When that failed, however, he used a hair-trigger Colt revolver, a concealed derringer, and a Winchester rifle, to dispose of his adversaries.

The Asian audience for the series was less than enamoured of Paladin’s comic foil, a bellhop at his San Francisco hotel called Hey Boy.

The key to Paladin’s strategy was the symbol of the knight chess piece. In one of the scripts, Paladin explained that the knight is “the most versatile on the board. It can move in eight different directions, over obstacles, and it’s always unexpected.”

This past week, while Rice spokesman at State Department fumed and snickered, the Russians entered the American hemisphere, well-armed but with peaceful intentions, to teach a Paladin trick or two.
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RUSSIAN GOLD CLIMBS OUT OF THE BUNKER

By John Helmer in Moscow

Analysts at Moscow’s Renaissance Capital reckon Russian asset values are priced below bargain basement.

A typo in the lead cannot take the glister off Renaissance Capital’s fresh report on Russian gold buying opportunities.

The report, by analysts Rob Edwards and Andrey Krupnik, is entitled “CIS Gold and Silver: A Golden Opportunity”. The lead paragraph says: “We believe gold is well poisoned [sic] to make further gains in the near term. This is somewhat dependent on movements in the dollar, which has reversed its bull run against the world’s major currencies.”

RenCap analyzes just three of the Russian gold producers – Polyus Gold (PLZL:RU), which is currently trading at $25, 60% down over the past three months; Polymetal (PMTL:RU) at $5, down 40%; and Highland Gold (HGM) at 76 cents, down 75%. Peter Hambro Mining (POG:LN), which is London listed, is down 41%, and currently at 741 pence.
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OTHER SIDE OF THE TALCO SAGA

Tajik publication attacks Mineweb’s Helmer and his reporting on aluminium group.

Johannesburg – On September 11, Mineweb published a report by John Helmer, entitled “IMF Attacks Tajikistan Aluminium Co – orders international audit”.

Publication followed attempts by Mineweb’s Moscow office to ask the following questions of Talco in Dushanbe:

1. According to an IMF country report for Tajikistan, issued in June, the IMF considers Talco’s non-transparency and financial control to be “most worrisome”. The IMF says: “the financial operations of the aluminum company (Talco), the largest SOE in Tajikistan, remain nontransparent.”

How does Talco respond to the criticism?
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THE NEW STATE STRATEGY FOR SPECIAL STEELS

By John Helmer in Moscow

Russpetstal (“Russian Special Steel”, RSS), the steel affiliate of the state-owned Russian Technologies holding, has decided to acquire up to 4 new operating mills if the price is right, and it can raise the finance from Russian state banks. Details of the targets of RSS’s 18-24 month strategy were recently approved by the RSS board, and disclosed by Igor Alexeyev, deputy chief executive of RSS for strategy and finance.

In an interview this week with CRU Steel News, Alexeyev said the new strategy includes “two to three or four targets” for acquisition”, together with a target for investment into the plants RSS has already acquired.

One of the new acquisition targets may be outside Russia, Alexeyev said, the purpose of which will be to acquire specialty steel technology and management skills currently unavailable in the domestic sector. Following the collapse of demand for stainless and other specialty steels after the collapse of the Soviet Union, Alexeyev explains in a report to be presented at CRU’s stainless conference next week, there has been inadequate investment in new technology and plant facilities for state-of-the-art finishing equipment.
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MORDASHOV ARRANGES STEEL SHARE BUYBACK

Oligarchs put hand in till

By John Helmer in Moscow.

It is a time of extreme paradox. In Soviet style, the US Government is nationalizing its financial instututions to stave off massive default. The Russian Government, by contrast, is encouraging free-market operations to prop up the indebtedness of the oligarchs, while the Finance Ministry, having been embarrassed holding worthless Fannie Mae paper, is now proposing to invest the sovereign wealth fund in depreciating oligarch securities.

A Financial Times reporter close to Oleg Deripaska, owner of Rusal, the Russian aluminium conglomerate, reported this week that he is “facing margin calls of more than $4bn, people familiar with the situation say.” This is a reference to the financing Deripaska raised in the spring to pay part of the purchase price of Mikhail Prokhorov’s 25% shareholding in Norilsk Nickel. Also this week, Deripaska’s Moscow holding is reported as telling Reuters that it will shortly launch a China roadshow to put an improved value on the group’s mining assets. The roadshow is scheduled to follow a Hong Kong tour by the Bolshoi Theatre ballet company, sponsored by Deripaska.

The reports have suggested that if the Chinese market reaction is positive, and the price is right, Deripaska’s Strikeforce Mining and Resources (SMR) may attempt to place shares on the Hong Kong exchange. SMR mines copper-molybdenum deposits at two sites in Siberia, with capacity to lift and process 13 million tonnes of ore per annum. Two refineries in the production chain can produce up to 7,000 tonnes of ferromolybdenum per annum. The price of ferromolybdenum has been dropping, though not yet as steeply as the price of steel and aluminium.
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ALROSA AGREES WITH DRC ON SENGAMINES TAKEOVER

By John Helmer in Moscow

Mining entrepreneur Mike Nunn says First African Diamonds, a company he owns, was illegally expropriated, and that he is taking the DRC government to arbitration in Geneva.

President Joseph Kabila’s review and reorganization of controversial diamond-mining licences and concessions in the Democratic Republic of Congo (DRC) apparently took a new direction this past week, with approval of a Russian proposal to develop the Sengamines project. Until April of this year, this has been under the control of South African mining entrepreneur Mike Nunn and First African Diamonds Ltd. (FAD), a company he owns.

Nunn has told Mineweb that FAD was illegally expropriated, and he is taking the DRC government to arbitration in Geneva.

Alrosa says that it has agreed to start diamond prospecting in the DRC, at Kabila’s request. But Alrosa sources say that details of the undertaking, and of a meeting Alrosa chief executive Sergei Vybornov had last week with Kabila, should be kept secret. It is Vybornov’s second meeting with Kabila this year; the first occurred, with comparably little disclosure, in March.
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RUSSIANS AGREE TO LAUNCH SA SATELLITE, BUT UNCERTAINTY REMAINS

By John Helmer in Moscow

Russia’s space agency Roskosmos has agreed to launch the South African Sunbandila satellite by the end of this year at the Baikonour cosmodrome, Roskosmos sources have told Business Day. They confirm earlier statements by Foreign Minister Nkosazana Dlamini-Zuma that an earlier controversy over launch agreements between the two governments for rocketing both a civilian and a military satellite into space had been resolved.

One mystery remains, however. According to sources in Moscow, in the negotiations to resume the Sumbandila launch, the SA government agreed to permit the establishment of a Russian telemetry receiving and rocket tracking station on SA territory. However, the sources now say there is no agreement on this station, and it is not clear why.

Dlamini-Zuma said in May, during a visit to Moscow, that she and her Russian counterparts had resolved their differences on the satellite launch problem, and that she hoped to “see the launch of the satellite by the end of this year.” Ronnie Mamoepa, the Minister’s spokesman, told Business Day/Weekender that resolution of delays and disputes over the satellite launch had been the “priority” of the minister’s visit to Moscow at the time. The Russian text of the protocol, which Dlamini-Zuma and Yury Trutnev, Russia’s Minister of Natural Resources, signed on May 23 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 nature of the problems causing the delays, Mamoepa claimed they were technical ones.
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IMF ATTACKS TAJIKISTAN ALUMINIUM CO — ORDERS INTERNATIONAL AUDIT

By John Helmer in Moscow

A new IMF report reveals for the first time where Tajikistan’s aluminium revenues are going.

The International Monetary Fund (IMF) has issued a report that is sharply critical of the Tajikistan Aluminium Company (Talco), the leading enterprise of the Central Asian republic run by President Emomali Rahmon; and has ordered an independent international auditor to check Talco’s accounts for what the IMF describes as “most worrisome financial operations [which] remain nontransparent.”

For the first time, the IMF report has disclosed how little the country’s economy — the poorest in Central Asia — earned from its principal industry, biggest electricity consumer, and most valuable exporter — in 2006 and 2007, just 17% of the value of the aluminium Talco produces and ships to foreign buyers.

The IMF action is an embarrassing curtain-raiser for President Rahmon, who directly controls Talco, and who is behind the hugely expensive UK High Court case, which Talco is waging against Avaz Nazarov and his group of companies, who were ousted from management of the Tajik smelter in 2004, on Rahmon’s order. The four-year old case, in which Talco is represented by the UK law firm, Herbert Smith, has set a UK and world record for legal costs that have now exceeded $126 million. The judge in the case, Justice Tomlinson, has ordered leading figures in Tajikistan, including the President’s brother-in-law, the leading commercial banker of Tajikistan, Hassan Saduloev, to appear for testimony on oath and cross-examination in the trial now scheduled to commence in October.
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RUSSIA’S BIGGEST COPPER CONTEST IS DECIDED ON CLOUT

By John Helmer in Moscow

The Udokan copper contest has been won, but by whom?

In April, Mineweb reported that Russia’s biggest copper contest was going to be a very private affair.

Even if there are just two, possibly three contenders — we said at the time — predicting who will win over the next 90 days of the contest may prove to be more frustrating than it looks:
http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=50524&sn=Detail

This week, the decision to award Russia’s largest unmined copper deposit to a duo, Metalloinvest and Russian Technologies, which has never mined copper, confirmed, after the contest had stretched to six months, just how private — and how unclear the prospects for the project continue to be.

Metalloinvest is an unlisted private conglomerate, with two steel mills and two iron-ore mines, which has been having trouble getting a valuation and an underwriter to list its shares on the London Stock Exchange. It is owned in three stakes, whose magnitudes have never been publicly confirmed or verified, by Alisher Usmanov (with about 50%); Andrei Skoch (30%); and Vasily Anisimov (20%).
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URALKALI AND THE ICARUS FACTOR — WHY THE FUNDAMENTALS AREN’T SAVING THE SHARE PRICE FALL

By John Helmer in Moscow

In antique legend, Icarus was the boy who, ignoring his father’s prudential warning, flew too close to the sun, melting the wax from his wings, and plummeting to his death as a consequence. In W.H. Auden’s modern reflection on the incident, noone witnessing the plunge cared much, while “the expensive delicate ship that must have seen/Something amazing, a boy falling out of the sky/ had somewhere to get to and sailed calmly on.”

The commodity market has been like that recently, sailing on, as high-flyers like Uralkali, the leading Russian potash stock (ticker URKA:LI, URKA:RU) dropped into the sea.

The current standing for Uralkali, at the end of trading on September 9, is a share price of $7, and market capitalization of $14.9 billion. Since June 20, ten weeks ago, Uralkali has fallen from $16 per share, with market cap of $34 billion; a decline of 56% and $19 billion in value.
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RUSSIANS RESPOND WITH CALM TO AUSTRALIAN URANIUM THREAT

By John Helmer in Moscow

BHPB’s Russian relationship hostage to Canberra uranium threat as Australian govt invokes Caucasus war to stir uranium sale opposition.

A threat last week by Australian politicians to revoke a year-old agreement for Australian uranium concentrate to be processed into fuel in Russia has been met with calm in Moscow, where sources noted that the uranium is not planned to start moving for another seven years, until 2015. Russian sources close to the uranium negotiations between the two countries also point out that the major loser, if the Australian government implements its threat, will be BHP Billiton, which had been one of the most active lobbyists for the uranium supply deal in the first place.

At a public hearing in Canberra by the joint parliamentary committee on treaties on September 1, Kelvin Thompson, a backbencher who chairs the committee, said he wants to delay ratification of the agreement on uranium supply, processing, and nuclear energy cooperation, which was signed by then President Vladimir Putin and former Prime Minister John Howard, on September 8.
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BP ACCEPTS THE INEVITABLE — RUSSIAN DEAL IS DEFEAT FOR ENGLISH POLITICS, WIN FOR THE MARKET

By John Helmer in Moscow

If anyone needed convincing, the paper which British Petroleum (ticker BP:LN) signed yesterday with Mikhail Fridman and his Russian shareholding partners proves that defying the law of gravity is unlikely to succeed for long; even if the world’s weakest prime minister, Gordon Brown, and his foreign minister David Miliband, have tried to stake their short-term political careers on it; and even if the Financial Times has tried to make the inevitable fall appear to be a masterly exercise in BP negotiating skill.

To hang on to the 23% of its global oil reserves located in Russia, 25% of its current oil production, and a comparable amount of its market capitalization, BP has been trying to defy a losing position since Robert Dudley, BP’s chief operative in Moscow, was found out, having tried to negotiate secretly with Gazprom the sale and purchase of the 50% stake in TNK-BP.

TNK-BP (TNBP:RU) is the 50/50 joint venture which BP shares with the Russian trio of Fridman,Len Blavatnik, and Victor Vekselberg; reflecting the names of their respective holdings, Alfa, Access and Renova, they are collectively known as AAR.
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MITVOL STANDS UP TO NEW OUSTER MOVE BY RIVAL

By John Helmer in Moscow

Vladimir Kirillov, the new chief of Russia’s mine licence inspectorate, Rosprirodnadzor, has tried to fire Oleg Mitvol, his independent deputy, this week — after failing to oust Mitvol for the past seven months. In the annals of the federal Ministry of Natural Resources, Mitvol’s resistance is unique; as is the apparent reluctance of the minister, Yury Trutnev, a former provincial governor backed by the LUKoil oil company, to intervene in the contest of wills, and in the conflict below the surface of Russia’s use-or-lose resource licensing policy.

On June 18, the state newsagency Itar-Tass reported that Mitvol had been “stripped of his water, forest and ecological supervision powers, which have constituted most of his competences”. This was the first sign of an apparent official decision, following informal efforts by Kirillov, commencing in February, to press Mitvol to resign. An anonymous source was cited by Itar-Tass for its information. It was also reported that “according to the source, the Rosprirodnadzor chief, Vladimir Kirillov, has no intention of submitting a motion to Natural Resources Minister Yuri Trutnev for re-appointing Mitvol as his deputy.” Itar-Tass confirmed Mitvol as saying: “As far as I know, in a future staff list, yet to be authorized, the position of a fourth deputy, that is, of yours truly, is absent.”
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RUSSIA STEPS ON THE GAS – GEORGIA AND UKRAINE TO PAY

By John Helmer in Moscow

Anti-Russian allies fail to cook on hot air.

Russia demonstrated on Tuesday that it retains the backing of the major Central Asian gas producers and exporters to Europe – despite public calls from UK Prime Minister Gordon Brown and American figures that alternative, non-Russian supplies of Europe’s gas should be developed swiftly.

In a ceremony in Tashkent on Tuesday, Prime Minister Vladimir Putin and Uzbek President, Islam Karimov, agreed that Gazprom, Russia’s largest enterprise, will buy gas from Uzbekistan at European prices, and build a new gas pipeline from Central Asia, transiting Russia, in order to boost gas purchases from Uzbekistan and Turkmenistan. For lack of available gas-feed, the Tashkent deal dooms the Nabucco alternative pipeline, proposed by the NATO alliance to cross Georgian territory, and under the Black Sea to Austria.

In March, Gazprom had agreed with Kazakhstan, Uzbekistan and Turkmenistan over gas purchases starting in 2009 at European prices that have already reached $400 per thousand cubic metres (tcm); this is 50% to 100% higher than the current purchase prices of Central Asian gas.
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NO HOLE TOO DEEP OR TOO FAR FOR SHAFT SINKERS

By John Helmer in Moscow

The IMR takeover of Shaft Sinkers is the second major asset purchase in SA for a trio of Kazakh businessmen.

THE decline in mining stocks and metal prices is unlikely to hurt SA’s specialist in shaft and tunnel excavation for mines, Shaft Sinkers MD Rob Schroder says. Johannesburg-based Shaft Sinkers has won a $270m contract, its first in Russia, to dig one of two shafts at a new potash mine being developed south of Moscow by the Eurochem group.

“The market has been reflecting a rapid increase in demand over the last 12 months,” Schroder told Business Day in a recent interview.

“Not only due to the commodity boom, but to resources in general. Hydro-electrical schemes with their shaft requirements, as well as long-term nuclear storage facilities for waste, are also coming to the fore.”
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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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