By John Helmer in Moscow

In a report issued this week, Troika Dialog, a Moscow investment bank, warns that a combination of operating financial risks, debt problems, and new coalmine costs will impact negatively on Mechel, the fifth-ranked Russian steelmaker and leading coking-coal producer. The report comes after last week’s trading on the Moscow stock exchange had slashed Mechel’s share price by 19% to $3.93.

This week, Mechel has dropped another 8% to $3.62. The current market capitalization of the group is $1.5 billion, down by almost 90% since the start of this year — a bigger loss of value than has been suffered by its Russian peers.

The report by Troika steel analyst Mikhail Stiskin concludes that “the stock is trading at a premium to international and Russian peers on forward multiples, which in our view is not justified by the fundamentals. Mechel (ticker MTL:US) has considerable financial leverage and major capex commitments, stretching its balance sheet and exerting pressure on cash flows. We also see a risk of significant losses in the group’s steel division, which is well known for its earnings volatility, and note that a big chunk of the company’s value is represented by the Elga [coalmine] project, which has serious execution risks.”

Mechel, which is controlled by Igor Zyuzin, has been reorganized into three semi-autonomous groups for steelmaking, ferrous alloys (including nickel), and mining (including coal and iron-ore). Earlier in the year, Zyuzin had been planning to spin off and separately list the alloys and mining divisions, in part to recoup the multi-billion dollar costs of the acquisition this year of the chrome mining and refining assets of Oriel Resources; and the purchase at a a state privatization auction in October 2007 of the Elgaugol and associated coal deposits in the fareastern region of Sakha. The ferroalloy and coal transactions cost $1.5 billion and $2 billion, respectively.


By John Helmer in Moscow

Russia’s leading mining company, and one of the leading suppliers of nickel to China’s stainless steelmills, may be facing further revenue and profit cuts in 2009, as the international nickel price continues to fall, and inventories of the metal grow.

However, political intervention by the Kremlin has ended a hostile takeover attempt aim,ed at Norilsk Nickel (ticker GKMN:RU) by Oleg Deripaska’s aluminium company, Rusal, allied with a former shareholder in Norilsk Nickel, Mikhail Prokhorov. A new 13-man board lineup, voted by Norilsk Nickel shareholders under Kremlin supervision last Friday, rejected Prokhorov’s bid for election, and limited Deripaska to 4 out of 13 seats.

An alliance between government nominees and controlling shareholder, Vladimir Potanin’s Interros group, provides a 7-man majority of votes on the new board, thereby ending months of uncertainty and conflict.

The Norilsk Nickel share price has responded this week, climbing 3% in Monday trading in Moscow and New York to $67; this is a gain of 9% on the week.

At the same time, the LME price of nickel has continued testing early-December lows; it is currently ranging between $9,755 and $9,925 per tonne. It is exceptional for Norilsk Nickel’s share price to move up when the nickel commodity price is coming down. The correlation between the two was suspended in the middle of the year when conflict between the three major shareholders of the Russian company, Potanin, Prokhorov, and Deripaska reached its peak.


Dancing Bears

By John Helmer in Moscow

Before the global collapse of mine commodities and mining equities in the autumn of 2008, Mineweb, the Johannesburg-based mining publication, suffered a meltdown in asset valuation. Then, in July 2008, it incurred the worst cash loss in the publication’s history.

The publisher and editor-in-chief of Mineweb is Alec Hogg. With Louise Hogg — his ex-wife, now a resident of Ireland — Hogg is the controlling shareholder of Moneyweb, the South African listed company (ticker MNY:SJ), which owns Mineweb. Each of the Hoggs individually holds a 24.4% stake. The single largest shareholder, with 25.1%, is Mvelaphanda, the South African conglomerate controlled by Tokyo Sexwale. According to Mvela’s representative on the Moneyweb board, Lindikhaya Sipoyo, the explanation for what has happened at Mineweb is still “in discussion”.

Hogg has told public shareholders that the cost of a defamation case, brought against Mineweb in London by Sergei Generalov, a Russian owner of a Georgian mining company called Madneuli, caused the cash loss. Hogg hasn’t disclosed his own role in the affair, or explained how it happened that, nine months before the settlement was announced, Hogg himself had refused to negotiate a no-cost deal with the Russian.

Nor has Hogg explained to shareholders that over several years, he has actively sought international sale offers for Mineweb, rejecting three in a sequence when each one elicited a significantly lower price than its predecessor. The first offer was for $5 million, according to the man whom Hogg asked to arrange the sale. The second was for more than $2 million; and the third, negotiated in London this past June, was for $1.5 million. Hogg initially accepted each of them; only to change his mind, and then refuse.


By John Helmer in Moscow

A Russian government effort to end special lobbying by major company shareholders, chief executives, sector cabinet ministers, and regional governors has either just ended; or else it has failed, because there isn’t enough government cash or credit for to satisfy everyone, and the political cost of saying no to some of the applicants is too high for the Kremlin to acknowledge publicly.

The Russian government website published yesterday a list of 295 companies, which have been identified as approved by a government commission on stabilization measures in the current crisis. The practical meaning of the approval list is unclear, however.

The commission has been headed by First Deputy Prime Minister Igor Shuvalov and Economic Development Minister Elvira Nabiullina. Their committee was appointed by President Dmitry Medvedev. According to a public statement by Shuvalov, a total of Rb3.2 trillion ($110 billion) may be required to prevent widespread insolvency and company collapse.

Russian reports indicate the new list was modified in discussions with Prime Minister Vladimir Putin and his deputy, Igor Sechin, whose proposal for the approved companies was different. Putin chairs the board of Vnesheconombank (VEB), which has been issuing bailout loans to Russian companies facing heavy foreign debt redemptions. Sechin is in charge of the energy, mining and natural resource sector, and chairman of the board of Rosneft, Russia’s leading oil company.


By John Helmer in Moscow

A meeting of the Gas Exporting Countries Forum (GECF) in Moscow this week has agreed on an organizational charter and a new headquarters, but stopped short of including all the gas exporting majors, and did not attempt to introduce a scheme for price controls for gas exports. But there was a quiet surprise the media have overlooked.

Western press coverage of the meeting focused on the price control issue, which the attending ministers dismissed as impossible to implement, and not on their agenda. “The difference between OPEC and the forum is very simple,” the Algerian energy minister Chekib Khelil was reported as saying. “OPEC looks at today, what happens on the market and makes the decision. The [gas] forum, of course, looks on today because it has to, but it’s more forward looking. It cannot control the volumes and price for the next 10 years because it’s locked into long-term contracts and also the price of gas is locked into oil.” Khelil is also president of the Orgganization of Petroleum Exporting Countries (OPEC).

The Moscow session of GECF fell short of representing all of the world’s leading gas exporters, since Brunei, Indonesia, Iraq, Malaysia, Turkmenistan, and the United Arab Emirates did not attend.

The top-3 gas producing countries in Moscow — Russia, Iran and Qatar — control an estimated 59% of global gas reserves; the missing group, including the US, which has shunned the GECF from the start, controls about 13%.


By John Helmer in Moscow

The sudden death, announced Tuesday, of Guinea’s 25-year president, Lansana Conte, threatens to uproot United Company Rusal from its lucrative bauxite mining concessions in the west African republic of Guinea. The bauxite reserves, whiuch Rusal controls, are among the largest and most valuable in the world, and are vital to supply Rusal’s aluminium smelters.

A threat to the longstanding Russian position in Guinea creates a new opportunity for Chinese aluminium concerns, as well as for Middle East and North American rivals.

“While Lansana Conte is the president of Guinea, I don’t think anything could happen with Rusal’s licenses there,” said a Moscow specialist on African politics, Vladimir Zaitsev, president of Rosafroexpertiza. He was speaking in November, when Conte, who has been ailing for many years, was still alive. Conte, he added, was “well-known for supporting Rusal there.” Earlier this year, Zaitsev added, Rusal’s involvement in accidents that caused chemical and oil spills “went unnoticed, and with the help of President Conte, the local regulatory commissions created to investigate went nowhere.”

Wire service reports from the Guinean capital Conakry indicate that, following the announcement of Conte’s death in the evening of December 22, a group of Guinean soldiers forced entry into the state radio headquarters, and broadcast a communique, declaring the constitution and government institutions suspended. The statement claimed a ruling council will be installed shortly to name a president, prime minister and a new government to fight corruption.


By John Helmer in Moscow

Herbert Smith is the large London-based law firm whose role in representing the Tajikistan Aluminium Company (Talco) has helped set one of the highest fee-charging cases in the UK High Court in recent history. The law firm also helped itself to some of the judge’s personal notes and papers in the case. That discovery led Justice Stephen Tomlinson to publicly rebuking Herbert Smith’s counsel in the case, Murray Rosen, just days before the case was settled out of court on November 27.

The UK High Court case began as a claim by Talco alleging fraud and mismanagement by Avaz Nazarov and others, who traded with the plant until they were ousted at the end of 2004. Nazarov filed a counter-claim, accusing the Talco management of fraud, forgery, and a scheme to force the plant to operate at a loss, while the profits of its aluminium exports were channeled through companies in the British Virgin Islands (BVI).

International banks, and the US and Norwegian governments, have become embroiled in the affair.

In June of this year, the International Monetary Fund (IMF) issued a public report ordering an independent international audit of Talco’s accounts, and charged the company with “most worrisome financial operations [which] remain nontransparent.” The IMF also ordered the establishment of “a special monitoring unit at the ministry of finance”, whose mandate will include identification in Talco’s books of “untapped tax revenues and hitherto hidden contingent liabilities.”


By John Helmer in Moscow

Oleg Mitvol, Russia’s well-known mining regulator and gadfly to AIM-listed stock values, has filed a half-dozen lawsuits in Moscow, challenging the terms of his removal from his functions. And he appears to have Deputy Prime Minister Igor Sechin on his side.

The legal and political moves follow months of effort by Vladimir Kirillov, the new chief of Russia’s mine licence inspectorate, Rosprirodnadzor, has tried to fire Mitvol, his independent deputy. 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.”


By John Helmer in Moscow

Mechel, the fifth-ranked Russian steelmaker and leading coal miner, lost 2.6% from its New York-listed share price as the market failed to react positively to this week’s company’s release of nine-month financial results. The Mechel group’s market capitalization is currently $2 billion. It was twelve times larger, $24.4 billion, when the share price hit peak on May 19 of this year.

Mechel is one of the leading Russian suppliers to China of coking coal and iron-ore concentrate, which are shipped from Posyet, a company-owned port close to the North Korean border.

The state guarantee implied in the award of a $2 billion loan from Vnesheconombank (VEB) — reported in the Moscow press at the start of December, but not confirmed by the bank or the company — has also failed to lift confidence in Mechel. One reason may be that VEB has so far refused to lend the money.

A company-inspired press leak on December 1 claimed that VEB had given “preliminary approval” to the big loan. According to VEB announcements last month, it has undertaken to process loan approvals within 18 days of application. In Mechel’s case, the deadline has now passed. Three weeks after the press leak, according to Mechel spokesman, Ilya Zhitomirsky, the company is not confirming or denying whether it applied for the VEB loan. Nor is Mechel saying whether it will get the VEB money.


By John Helmer in Moscow

Russia kept its observer’s status at this week’s summit conference of the Organization of Petroleum Exporting Countries (OPEC), and avoided taking the plunge into membership of the international oil cartel that was hinted at by the Kremlin last week.

At the same time, the Kremlin is playing a siren song to attract greater coordination of the international gas trade when the cartel of gas producers meet to hold hands in Moscow next Tuesday, December 23.

The new OPEC cut of 2.2 million barrels per day (bpd) in output quota will not be supplemented by a fresh Russian cut, although Igor Sechin, the deputy prime minister in charge of the oil sector, announced at the meeting in Algeria that if crude prices do not start to recover next year, Russia will cut export volumes by another 320,000 bpd, following the 350,000 bpd export cut in November.

The projected cut looks likely to occur whatever Sechin says, because falling prices have reduced incentives to produce among the smaller Russian producers, and the majors are also cutting back on field expansions, and delivering more of their crude to domestic refineries, instead of to the ports for export as crude.

The Russian move was considerably less than the 400,000 bpd cut OPEC members had sought. Also, Russia has not agreed to a specific cut by a specific date, as the OPEC countries have done. Industry sources note that it is more difficult for Russia, compared to leading OPEC members like Saudi Arabia, to close down producing wells, as the harsh operating conditions in Siberia make it difficult to recommission the wells later.


By John Helmer in Moscow

A 21-day ultimatum has been issued to the Russian government to put up the Grib pipe in Arkhangelsk for development by a joint venture between De Beers and LUKoil; or else De Beers will walk out of Russian diamond mining for good.

Sources close to De Beers claim that some senior executives in London are bluffing, in order to halve the $100 million payment which De Beers must pay LUKoil, if the agreement is finalized with the Kremlin by December 31. These executives believe that falling global demand, declining diamond prices, and a growing shortage of cash oblige De Beers to seek a modification of the terms of agreement, signed with LUKoil in mid-April. But some De Beers executives are more reportedly pessimistic. After a recent review of project costs, they are proposing to abandon the Arkhangelsk project altogether, and expect that LUKoil and the Russian government will oblige them by ignoring the ultimatum’s New Year deadline.

The ultimatum came in a press release from De Beers’s Toronto subsidiary, Archangel Diamond Corporation (ADC), labeled “notification of a Termination Event”.


By John Helmer in Moscow

The Indian government has until midnight to decide whether to pay a huge premium for undeveloped Siberian oil reserves held by one of the most highly leveraged oil companies in the Russian market. Yesterday, the UK Takeover Panel refused to extend the deal deadline beyond today. The oil is located in the Tomsk region, near the Chinese border, China and Japan have better chances of receiving the crude than India. Imperial Energy Corporation, a London listed company, owns the oilfield development licences, and controls the oil, which is still running at a trickle. In July, Imperial accepted a takeover offer from the Indian state group, Oil & Natural Gas Corporation (ONGC), for GBP1.4 billion ($2.1 billion). Since then, President Dmitry Medvedev and Prime Minister Vladimir Putin have given their approval.

They, however, may be backing Gazprom and Rosneft, both state owned, to buy a control share of Imperial from ONGC, in a second, and hitherto undisclosed transaction. That, it is speculated, is one reason the Indian bid has not been lowered to close the $800 million gap that has opened up between the original bid, and today’s market value of Imperial at $1.3 billion. According to ONGC, it must secure fresh sources of crude oil, outside India, to meet the demand. ONGC also defends its premium offer by forecasting $100 per barrel pricing for oil in future. So far, however, ONGC’s oil import replacement scheme has resulted in equity stakes in Russian assets, without dividends, and not oil that can be loaded on tankers.


By John Helmer in Moscow

A surprise board reshuffle announced on Wednesday by the Evraz group, Russia’s largest steelmaker, has triggered a sharp negative market reaction. It has fueled speculation that Prime Minister Vladimir Putin and the board of the state bailout bank, Vnesheconombank (VEB), are unhappy with the way in which Evraz has heavily leveraged its Russian mills, in order to buy North American assets, and is threatening more active state supervision of the company’s operations.

Evraz’s share price was cut 8.3% in Wednesday trading in Moscow, while other Russian steel majors remained largely unchanged, and the index as a whole dropped less than 3% on the day. The reaction against Evraz came after the company issued a statement that its board had elected former controlling shareholder, Alexander Abramov, to be chairman of the board, replacing Alexander Frolov.

The board move is a fresh sign of Kremlin displeasure at the way the oligarchs running Russia’s steel business have enriched themselves at the expense of the domestic economy. Evraz is currently producing steel at about 60% capacity at its Russian mills, having cut output and employment more sharply in Russia than in its operations outside Russia. Two of the Russian mills, Nizhny Tagil and Zapsib, were forced to admit last month that they lack the cash to pay their tax bills, and have had to borrow $360 million to cover their obligations. This is in addition to the VEB loan of $1.8 billion, confirmed by the company on November 27. The first tranche of $201.3 million has already been drawn.


By John Helmer in Moscow

Prime Minister Vladimir Putin has finally put in writing what Gunvor owner, Gennady Timchenko, has been lobbying the Kremlin to support for several years, ousting Transneft pipeline boss, Semyon Vainshtok, in the process. This is a new state-backed crude oil pipeline for the purpose of putting in business a new, Gunvor-owned tanker loading terminal at Ust-Luga, just 80 kilometres across the Gulf of Finland from Primorsk, Russia’s main Baltic oil outlet.

Why Ust-Luga? Gunvor declines through a spokesman to say. Putin’s order, signed this week, authorizes the design and construction of the BPS-2 (Baltic Pipeline System) pipeline that will pump crude from Unecha in the Bryansk region, about 900 kilometres northwards to Ust-Luga. Initial capacity in the Gunvor plan is for 600,000 barrels daily to be ready for tanker loading in 2012. A second stage of the plan, doubling capacity to about 1.2 million bd, is also on the drawing-boards. But the cost of the first stage has jumped from $2 billion, estimated when Transneft’s CEO Vainshtok was opposing Timchenko two years ago, to about $4.8 billion today.

The Geneva-based oil trader has been building the dominant trade position for Russian export crude, and in parallel with increasing the volumes it takes to market, the closely held company has been expanding its positions in rail transportation of oil, port loading, and tankering through ties to Sovcomflot, Russia’s state owned tanker group.


By John Helmer in Moscow

In theory, Russia’s economic performance is correlated with global supply and demand for mined materials and commodities, and thus with the rate of global economic growth, especially China.
In the Russian market, 80% of earnings come from commodity stocks. Before the collapse, the enormous gains in market capitalization of Russian producers and exporters of gas, oil, nickel, copper, aluminium, iron-ore, coal, steel, potash, nitrogen fertilizers, and precious metals showed how dependent Russian asset value was on the belief that global demand was in an unstoppable super-cycle, sustained by China.

In addition, the valuation of the ruble itself is dependent on commodity prices; at low oil prices, the ruble needs to fall in order to counter the terms of trade shock. Therefore, the easy forecast for 2009 is that the market will remain subject to the global growth cycle, as everyone could see when it bottomed out in 1998 and 200, and bounced back over 2003-2007.

The not so easy question, then, is whether or not Russia will start to move up faster or slower than the rest of the world — as a leader or a laggard in the recovery cycle. The International Energy Agency (IEA) argues that the underlying shortage of crude oil supply in the market is so significant that as soon as global growth returns, the oil price will rise. As the oil price is the principal variable for Russia’s macro position, and one of the few reliable sources of tax revenue for the Russian state budget, the market should be expected to react positively and rapidly.


By John Helmer, Moscow

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?”



By John Helmer, Moscow

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.



By John Helmer, Moscow

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.



By John Helmer, Moscow

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.  



By John Helmer, Moscow

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.  



By John Helmer, Moscow

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.



By John Helmer, Moscow

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.  



By John Helmer, Moscow

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), (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.  



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

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.



By John Helmer, Moscow

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.


Copyright © 2007-2017 Dances With Bears

Copyright © 2007-2017 Dances With Bears

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