WHILE THE BEAR WAS BOOMING

By John Helmer in Moscow

The Russian Federation’s decade of rampant economic growth has been a boon to maritime activity and ports on the Black Sea. But the good times are coming to an end, writes John Helmer

Russia has been aiming to develop dry cargo movements, both export and import, as the preferred direction for Russian oil exports shifts eastward towards China, and from Arctic oilfields in the north westwards into northern Europe. Of course, that was before the global financial crisis intensified earlier in the autumn.

But the signs of trouble were there to be seen as early as July. Container volumes into Novorossiysk, Russia’s leading Black Sea outlet, had been booming on the back of growth in Russian incomes and consumer demand – up 42% in the first five months of the year, compared to 2007. By July, however, the turndown was already on the horizon. Novorossiysk reported for the month that container volume had slipped 10%, compared to June, and by 33% compared to July 2007. Reefer volumes fell in parallel by 84% and 63%, respectively. Steel, scrap, sugar, timber, and non-ferrous metals also fell sharply in the month, compared to the same period of last year. Crude oil, the mainstay of Novorossiysk, remained flat, both June to July and year-on-year.

The gloom had also started to descend on the Azov Sea ports, as the export of steel, aluminium, copper, and scrap began to suffer from falling global prices and falling export demand. In their place, there was the Turkish cement boom, which began in January this year, after Moscow had eliminated the import duty and encouraged Turkish imports to supply the burgeoning demand, especially in southwest Russia, along the Black Sea coast, for construction materials. Import volumes of mineral construction materials (MCM) also skyrocketed. Reports from the regional North Caucasus Railroad indicate a 30% jump in MCM tonnage transported, compared to the first half of 2007. Cement more than doubled to about 1.5M tonnes in the same period.
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TAJIK ALUMINIUM COURT CASE ENDS IN LONDON DEFEAT FOR PRESIDENT RAHMON

By John Helmer in Moscow

In a stunning repudiation of Tajikistan’s President Emomali Rahmon, lawyers for the Tajikistan Aluminium Plant (Talco) agreed overnight to halt their High Court case in London. They have settled with Avaz Nazarov, the Ansol company, a former manager and traders of the aluminium plant, whom Rahmon and his cronies ousted in December 2004, in a scheme that has diverted more than half a billion dollars in aluminium export profits to safe haven in the British Virgin Islands.

Details of the settlement have not been made public; Nazarov and the others decline to comment. But the ramifications of their victory have only started to be counted — in Dushanbe, at Rahmon’s presidential palace, and in the board rooms of several international organizations, whose executives have been implicated in the frauds alleged in the court testimony, and documented in the evidence presented so far. The overnight agreement by the lawyers puts a stop to further disclosures in London, but the evidence remains for possible prosecution in Oslo, and internal investigations at the European Bank for Reconstruction and Development (EBRD), the World Bank, and the International Monetary Fund (IMF), who have been backing Rahmon in the litigation that has now failed.

Although noone is saying, the confidential settlement appears to include reimbursement by Talco of the multi-million pound costs incurred by the targets of the court case, one of the most costly ever recorded in the UK courts.
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PRESIDENT RAHMON FORCED TO END TAJIK ALUMINIUM COURT CASE IN LONDON

The news has just been received from London of the capitulation overnight of President Emomali Rahmon and the Tajikistan Aluminium Plant in their court case against Avaz Nazarov and a group of former managers and traders of the aluminium plant. The terms of the settlement, and details of the circumstances, which put a stop to one of the most costly court cases ever litigated in London, will follow shortly.

One of the key documents in evidence is an agreement involving Hydro Aluminium of Norway, the European Bank for Reconstruction and Development, and the World Bank, implicating their senior officials in what has been described in court as a racketeering scheme to divert hundreds of millions of dollars of profit out of Tajikistan.

Settlement Agreement between Norsk Hydro and TadAZ, Dec 20, 2006

USMANOV AND RASHNIKOV IN IRON-ORE PRICING BATTLE

By John Helmer in Moscow

In a contest of bargaining power reminiscent of the 2005 battle between Alisher Usmanov of Metalloinvest and Victor Rashnikov, owner of Magnitogorsk Metallurgical Combine (MMK), MMK is demanding that Metalloinvest lower its iron-ore price, and is refusing to pay for previous deliveries. Metalloinvest says it has cut production at its two iron-ore mines, Mikhailovsky and Lebedinsky, by 35% since October 1, and that it is demanding Russian mill buyers pay up on arrears of Rb10 billion ($357 million).

Olga Paleva, spokesman for Metalloinvest, told CRU Steel News, “the company doesn’t want to name the buyers who owe Metalloinvest.” Lev Chesalov, steel analyst at Rusmet, said the only major Russian steelmaker which buys from Metalloinvest is MMK.

On Friday [21 November], MMK posted an announcement on its website withdetails of its crisis management programme. The company said it has agreed with its coking coal suppliers — Raspadskaya (an Evraz unit), Mechel, and Belon (part-owned by MMK) — to reduce the price of their deliveries by 30%, starting on December 1. Rashnikov’s mill has already announced a 70% price cut for scrap — supplied by a company run by Rashnikov’s brother — and a 30% reduction for ferroalloys. Rashnikov is cited as claiming that the plant can respond to a revival of demand by boosting output by 1 million tonnes per month, if the market conditions warrant. But the company announcement omitted to say what target cut in the iron-ore price it is seeking.
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KALAHARI MINE DISPUTE PUTS OFF RUSSIANS

By John Helmer in Moscow

After six months of negotiations have failed to resolve investment and spending conditions, Victor Vekselberg’s Renova group and United Manganese of Kalahari (UMK), its South African partner, have been unable to agree on whether the project is dead, on care and maintenance, or life-support.

One result is that the Russian government appears to have downgraded its interest in the SA-Russia inter-governmental committee on trade and economic cooperation (ITEC). A session of the committee was held in Durban on Tuesday [November 25]. South Africa’s Foreign Minister, Nkosazana Dlamini-Zuma, chaired for the SA side. Yury Trutnev, the Russian Minister of Natural Resources, is usually the co-chairman, and he is attending the Durban meeting, between stops in Guinea and Namibia. Trustnev’s office told Business Day it has no information on the Kalahari manganese mine dispute.

“I don’t think anything is happening there,” a Russian analyst of Africa said of South Africa.

Vekselberg, who has a seat on the SA President’s International Investment Council, and attended its last meeting in October, refuses to answer questions about his investment promises and problems in SA. Instead, his spokesman referred to Mark Buzuk and Alexander Belokrys of Renova, who are responsible for the African operations of the group. They too refused to say what they have invested in the Kalahari manganese project, and what has happened to their conflict with Pretoria over investment terms, first reported last May.
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PUTIN SAVES ABRAMOVICH’S US SAFE HAVEN

By John Helmer in Moscow

Russian state development bank Vnesheconombank (VEB), chaired by Prime Minister Vladimir Putin, is reported to have approved a US$1.8 billion loan for steel and mining giant Evraz Group, whose major shareholders include Roman Abramovich, following a board session of the board last Friday.

Evraz sources decline to confirm the loan, reported by a Moscow newspaper. VEB issues no confirmations of its loans.

The group had announced earlier, on November 13, that it had secured a loan of 10 billion rubles (US$360 million) from the Russian state-controlled VTB bank to cover tax payment obligations of two of its domestic mills, Nizhny Tagil and Zabsib.

Details of how VEB will secure the new loan against US assets in the Evraz Group, such as Oregon Steel Mills (Oregon and Colorado), Claymont Steel (Delaware), and the IPSCO pipemaking units in Canada – Regina, Surrey, Red Deer, Camrose, and Calgary – have not been disclosed by the bank, and Evraz refuses to say.
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URALKALI MAKES OFFER FOR RAIL BYPASS TO END GOVT CLAIMS

By John Helmer in Moscow

Uralkali, Russia’s dominant potash exporter, has made an offer to compensate the costs of the state-owned Russian Railways Company (RZD) to build the bypass around the Berezinki sink-hole and mine subsidence. The offer was reported in a Moscow newspaper, and confirmed by a company source. The offer was contained in letters to Deputy Prime minister Igor Sechin, and the Minister for Natural Resources, Yury Trutnev.

Sources close to Uralkali told Fertilizer Week that Uralkali understands that the purpose of the newly appointed commission of inquiry into the Berezniki problems — ordered by Sechin October 29 — is to calculate how the rail costs should be apportioned between users of the new line. The commission has begun deliberations, and is due to issue its report next month. However, Uralkali believes it would be unfair for it to shoulder the rail costs alone, when several other major exporters, including potash producer Silvinit and titanium exporter VSMPO also use the rail-line. Other commercial users include ammonia and urea producer, Berezniki Azot, a unit of Uralchem.

RZD spokesman Dmitry Pertsev told FW that RZD has already financed on its own account the first 800-metre bypass built in 2006; then a 6-km line, costing Rb 450 million ($17 million); and “now we’ve planned a bypass line of 53-km.” He estimated that to date, the rail company has spent Rb50 million ($2 million) on the new bypass, and will require “another Rb9 to 11 billion [$333-$407 million]”.
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DE BEERS EXTENDS NEGOTATING DEADLINE FOR ARCHANGEL MINE

By John Helmer in Moscow

The Russian government agency responsible for negotiating the terms of DeBeers’s new Grib diamond mine project in the Arkhangelsk region of northwestern Russia has agreed to extend a deal deadline, which fell on November 15.

At that point, and in the week that followed, De Beers and its affiliate Archangel Diamond Corporation (ADC), have continued talks with the Federal Antimonopoly Service (FAS) in Moscow on terms for domestic cutting and polishing of the project’s mined rough. These terms, in a vaguely worded “ancillary agreement”, are the precondition for the Russian government’s approval of the joint venture between DeBeers and LUKoil, which respectively own ADC and Arkhangelskgeoldobycha (AGD), the project operators. Prime Minister Vladimir Putin chaired the Control Commission for Foreign Investment, which gave its conditional approval, on October 10.

Putin then delayed signing the protocol of the meeting for a fortnight, before ADC acknowledged receiving it, along with the draft of the approval conditions. FAS told PolishedPrices.com that November 15 was the deadline by which DeBeers should reply and agree, or allow the approval, and the deal, to lapse. Tom Beardmore-Grey, ADC’s chief executive and a DeBeers veteran, refuses to answer questions, as speculation grows that the senior management of DeBeers in London has become so diffident about its long-term Russian prospects, and so reluctant to commit to new project conditions, it is considering the option of abandoning the Grib project altogether.
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RUSSIA’S BLACK SEA STRATEGY DEPENDS ON DRY CARGO, MOSCOW SPENDING — AND FINGERS CROSSED

By John Helmer in Moscow

Russia’s Black Sea strategy has been aiming to develop dry-cargo movements, both export and import, as the preferred direction for Russian oil exportsshifts eastward towards China, and from Arctic oilfields in the north, westwards into northern Europe. That was before theglobal financial crisis intensified in the autumn.

But the signs of trouble were already darkening by July. Container volumes into Novorossiysk, Russia’s leading Black Sea outlet, had been booming on the growth of Russian incomes and consumer demand; up 42% in the first five months of the year, compared to 2007. In July, however, the turndown was already visible. Novorossiysk reported for that month that container volume had slipped 10%, compared to the month of June; and by 33%, compared to July of 2007. Reefer volumes fell in parallel by 84% and 63%, respectively. Steel scrap, sugar, timber, and non-ferrous metals also fell sharply in the month, compared to the same period of last year. Crude oil, the mainstay of Novorossiysk, remained flat, June to July, and year on year.

The gloom had also started to descend on the Azov Sea ports, as the export of steel, aluminium, copper, and scrap began to suffer from falling global prices and falling export demand.
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ALROSA AND KRISTALL CLASH OVER DISCOUNT

By John Helmer in Moscow

Market reports that Smolensk Kristall refused last month to buy rough from Alrosa have been denied by Alrosa.

According to sources in Alrosa, the Russian state diamond company, Kristall proposed a 20% discount on purchases of Alrosa’s current rough price. Alrosa refused to supply, claiming that its pricing is in line with levels reported by De Beers in September transactions.

Instead of a price discount, Alrosa said that Kristall, along with other buyers, may exercise the option not to take 20% of an assortment, if they are unprofitable to cut.

Alrosa also told PolishedPrices that Kristall’s pricing would be loss making for Alrosa.
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MYSTERY AND THREAT SURROUND URALKALI INVESTIGATION

By John Helmer in Moscow

Government officials refuse to provide details of the order to reopen an investigation into the two-year old collapse of Uralkali’s Mine-1 at Berezeniki.

Uralkali, meanwhile, fears that a scheme of renationalization may have been started, targeting a takeover of Uralkali from its current shareholders.

According to an Interfax wire service report, and an announcement last Friday by Uralkali, Deputy Prime Minister Igor Sechin has directed the Federal Service for Ecological, Technical and Atomic Supervision (Rostekhnadzor) to form a commission within the next two weeks to determine the causes of the accident at the Berezniki mine in October of 2006, the amount of damage inflicted on the state and on other companies, as well as the legal responsibility of the mine-owner, Uralkali. An initial Rostekhnadzor investigation, immediately after the mine collapse, ruled that “a very complicated, rare and abnormal geological condition” within the Verkhnekamsk deposit had caused the subsidence, and that this was force majeure, eliminating Uralkali’s liability.

Sechin’s office refused to respond to questions about the order, or the meeting of officials late last month, at which it was decided. First Deputy Prime Minister Victor Zubkov, the official who usually supervises the fertilizer sector, also refused comment on why Zubkov had not been involved. Both officials referred to the press spokesman of the Prime Ministry. He told FW he “cannot comment on anything”. There is no official notice of the meeting, reportedly on October 29, on the government website.
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PENNILESS IN WEST AFRICA — RUSSIAN ALUMINIUM EMPIRE IN TROUBLE IN NIGERIA, GUINEA

By John Helmer in Moscow

Financial collapse inside Oleg Deripaska’s aluminium empire in Moscow is triggering fresh moves by rivals and critics to oust his company from Nigeria and the Republic of Guinea (Conakry).

A costly electricity failure at the Aluminium Smelter Company of Nigeria (ALSCON) has already paralyzed operations there for several weeks, while a Nigerian Supreme Court challenge to the four-year old Russian takeover of the plant, Nigeria’s only domestic source of aluminiun, is expected to be adjudicated in hearings before the end of next month. A Nigerian National Assembly report recommended recently that the privatization agreement for ALSCON be revoked for failure on the part of Deripaska’s company to meet investment spending conditions.

In Guinea, a government move is under way to review the privatization terms, according to which United Company Rusal, which is registered in Jersey and controlled from Moscow by Deripaska, took control over the Friguia alumina refinery, the Kindia bauxite mine, and other licences. Again, alleged failure to make good on capital spending and investment obligations is at issue. Responding to local protests, the Guinean government is also seeking higher wage, social welfare, and infrastructure payments from Rusal.
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RUSSIANS DEMAND OPEN-END CUTTING DEAL FOR ARCHANGEL PROJECT TO START

By John Helmer in Moscow

De Beers has a hundred-million dollar hook in its mouth, and it isn’t sure whether to bite, or try spitting it out.

Russian sources say that the conditional approval, granted last month by Prime Minister Vladimir Putin for the Verkhotina diamond mining project to commence with joint venture partner LUKoil, has now been drafted into an “ancillary agreement”.

Tom Beardmore-Gray, the De Beers executive who heads Archangel Diamond Corporation (ADC), has declined to answer questions about what is in the agreement, and whether De Beers is likely to accept it.

An ADC source said: “We are currently seeking further clarity on the condition attached to the Commission’s approval and as such we are not able to comment right now on the specifics of any beneficiation programme or on the potential economic impact on any of the parties.” De Beers said through a spokesman: “We are an insider so we are unable to disclose anything further.”
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CHALCO IN THE WINGS AS RUSAL STUMBLES

By John Helmer in Moscow

In some cultures it is considered entertaining sport for a crowd to watch roosters tear each other to death with specially-fitted steel talons. In other cultures, the crowd prefers to watch a man in fancy-dress stab a bull that has been specially bred to do nothing unpredictable with its horns. In yet others, the crowd pays to watch naked women wrestling in mud.

For entertainment, the debt throes of Oleg Deripaska’s United Company Rusal and his Moscow holding, Basic Element, combine all three, though Deripaska himself remains about as transparent as the mud wrestlers.

That’s one of the reasons the Russian government made a little-noticed but unprecedented announcement late on Friday. For the first time, Deripaska’s aluminum empire is to be investigated by auditors from the Accounting Chamber, as the Russian state auditor is known. For years, the Moscow-based chamber, headed by former prime minister Sergei Stepashin, has tried to investigate the multi-billion dollar cashflows generated by Rusal, mostly by export trading schemes employing dozens of companies around the world.
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EVRAZ CUTS STEEL OUTPUT AS OFFSHORE HAVEN STRATEGY DRIVES SHARE PRICE DOWN

By John Helmer in Moscow

Leading Russian steel producer Evraz revealed its financial crisis management plan in Moscow on Thursday, although it claimed it will try to avoid cutting domestic jobs.

Evraz said it will cut output for the second half of this year by 25%, compared to to the first half, in Russia and Ukraine. In a press briefing, details of which have not been posted on the Evraz website, Pavel Tatyanin, a senior executive, said Zapsib had halted one of its three blast furnaces this week, and working hours are being reduced at other Evraz mills in Russia. No change in output or jobs is planned for North America, Europe, or South Africa, where steelworkers’ unions are more powerful than in Russia.

Tatyanin also said that capital expenditure by the group would be reduced this year from a planned $1.5 billion to $1 billion, and projects worth another $1.8 billion may be postponed. Next year’s capex may be slashed to $400 million — about one-third of the planned level. The De Long acquisition in China — costing an estimated $754 million — is to be delayed.
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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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