By John Helmer in Moscow

Moscow has been having much the same week for the past four months – everyone down at the pier tossing streamers, and waving goodbye, as the flagship investment funds toot their horns and pull away, to sail swiftly over the horizon.

It’s cold comfort to the flag-wavers of the Moscow mining and metals sector that the flow of funds into and out of comparable emerging markets – China, India, Brazil, Africa, other Latin America — has now begun to sail in the same direction as the Russian trend. Back in October, the weekly fund flow charts showed the withdrawal of capital from Russian energy and hard-rock resource companies was less dramatic than the flow of funds out of other emerging markets. But then from mid-December to mid-February, China, India and Brazil became a positive destination for investment again. With the exception of just a couple of weeks in February, when a pickup in the Russian RTS stock market attracted a modest inflow of cash, the Russian trend has been continuing loss of capital – and a concomitant drop in the RTS aggregate index of almost 20% over the past three months.

In percentage terms, the Russian equity market has said goodbye to more money than the markets of China, India or Brazil. The $330 million of accumulated net outflow from Russian funds since the first week of November compares with $210 million from Indian funds. Brazil has accumulated a net inflow over the period of $306 million; China has received a net inflow of $30 million.

The course of the bigger Russian golds looks like an exception. Polymetal (PMTL:LI, PMTL:RU), the St.Petersburg-based silver specialist that is no longer owned by frontman Suleiman Kerimov, is up 168% in the three-month period. Polyus Gold (PLZL:RU), still being carved up in the fight between shareholders Vladimir Potanin and Mikhail Prokhorov, is up 118%. Internationally listed juniors, with producing Russian gold assets, have turned on a mixed show. Peter Hambro Mining (POG:LN) is up 150%; Highland Gold (HGM:LN) is down 14%; Zoloto Resources (ZR:CN), down 25%; High River Gold (HRG:CN), almost flat. Virtually all the explorers who lack production, like Silver Bear Resources (SBR:CN), are down, or at best flat. The gold internationals with Russian mine production or capital exposure have also been mixed. Kinross (KGC:US), with a significant share of its global growth supplied from the Kupol mine in Chukotka, is gaining equity value. Barrick’s (ABX:US) minority stake in Highland Gold is too small to make a market difference.



By John Helmer in Moscow

Mechel (MTL:US), owned by Igor Zyuzin, fell sharply in Moscow stock market trading Wednesday on news the company is to acquire unlisted, West Virginia-based Bluestone Coal.

Without an official company statement so far, Mechel has revealed to brokers and Moscow industry sources that it has agreed to a valuation of Bluestone, owned by James Justice, of about $870 million, and will acquire 100% of Bluestone’s shares for $425 million in cash, and an issue of 80 million Mechel preference shares, currently worth about $310 million. The cash was paid at the end of last year, it has now been revealed, and the share issue will amount to a 19% dilution for current shareholders. Mechel’s acquisition will also mean taking on $135 million in Bluestone debt.

Mechel spokesman Ilya Zhitomirsky told Minesite the company is making no comment at this stage. He did not deny the Bluestone takeover. But he said he could not explain why there has been no reference to the purchase in Mechel’s filing to the US Securities and Exchange Commission (SEC) on January 22, when operational results for the past year were reported, despite the fact, now known, that the takeover had already been signed with Bluestone, and the down payment made.

Mechel is listed on the New York Stock Exchange, but owns no steelmaking assets in the US, and can claim no coal supply synergies in that country. Last year, Mechel produced 26 million tonnes of coal, 15 million of coking coal, and 11 million tonnes of steam coal; along with smaller volumes of iron-ore, nickel, ferroalloys, and steel. Until now, its only operations outside Russia have been steelmaking in Romania, Bulgaria, and Lithuania; and chromium mining in Kazakhstan.

The larger Russian steelmaker Severstal (CHMF:RU) owns considerable steelmaking capacity in the US, and has bought US coalmines to supply it through its wholly owned mining division, Severstal Resources, which is currently expanding into iron-ore in west Africa and gold in Russia.



By John Helmer in Moscow

And the winner of the Slumdog Millionaire award goes to….Oleg Deripaska, Moscow oligarch, London mansion owner, and controlling shareholder of United Company Rusal, for announcing in Moscow over the weekend that he does not need any financial support from the state. Rusal, in which Deripaska holds a control stake of 56.8%, and which he currently runs as chief executive, is Russia’s monopoly producer of primary aluminium, bauxite, and alumina; in the global market for primary aluminium production, Rusal comes second after Rio Tinto.

The collapse of the aluminium price – the current London Metals Exchange cash price of $1,264 was last seen in 2002 – the full payout of Rusal’s cash dividends, and the liquidation of $200 million in cash, reported by the company in mid-2007, leaves Rusal in dire financial condition. As an unlisted private company, it issues no financial reports, and its spokesman Vera Kurochkina has repeatedly refused to answer questions.

Total debt requiring repayment was recently estimated by Victor Vekselberg, an 18.9% shareholder in Rusal, at $16.3 billion, of which $7 billion is reportedly owed to foreign banks, and $6.5 billion to Russian banks.

On the list of more than 70 foreign banks currently owed money by Rusal, the two largest are reported to be ABN Amro with exposure of $2.3 billion; and Natixis, owed $2.2 billion. ABN Amro’s obligations are now closely supervised by the UK and Netherlands governments; Natixis is indirectly controlled by the French government through its stakes in Natixis’s principal shareholders, Caisse d’Epargne and Banque Populaire.

While it is speculated – without independent corroboration or comment from the banks – that Rusal has been in technical default of loan agreements and loan covenants, the political and commercial implications of a formal default are international in scope. They are particularly problematic for Deripaska, who owns residences in England and France, but who is reportedly lacking the visas to enter these countries to negotiate on Rusal’s behalf.



By John Helmer in Moscow

Among the hard-pressed global diamond miners, only one, Russia’s Alrosa, has the capacity to sustain last year’s mining volumes without adding to the inventory overhang, or flooding the market, both of which will crush the price. This is because the Russian state stockpile agency Gokhran is ready to spend state funds in order to buy, and to hold the stones off the commercial market until demand begins to recover, and diamond prices revive.

De Beers acknowledged last week, according to remarks by spokesman Stephen Lussier, that it is “going to significantly reduce production levels to align them with levels of demand. There’s no point in digging a diamond out of the ground when you don’t have a client ready to buy it.” The company, which has been producing roughly 51 million carats annually, about 30% of the world’s rough diamond supply, is not estimating the size of its mining cutback beyond the statement from London spokesman Lynette Gould that “the reduction in production will be significant”.

BHP-Billiton (BHPB), which claims it produces about 3% of global diamond supply from the Ekati mine in Canada, has said its mine plan is unaffected, and there are no shutdowns. However, in its report of February 9 on production in the six months to December 31, 2008, BHPB disclosed that it had mined just 1.4 million carats; that was drop of 27% on the same period of 2007. This is not a market cutback by another name. BHPB spokesman Iltud Harri told Minesite: “BHP Billiton hasn’t announced any cutback in terms of our diamond production. However, actual production for the first half was 27 per cent lower than the corresponding period last year due to lower grades following changed ore sources. In terms of the future, as Ekati – BHP Billiton’s only producing asset – transitions from open pit mining to underground mining, the mix of ore processed will change from time to time.”

BHPB’s sales policy in the present market, Harri added, is that “we sell at the market price and always sell what we can.” He said data on the company’s diamond inventory are “commercially confidential.”



By John Helmer in Moscow

The Russian oil industry. and the state treasury too, have breathed a sigh of relief as the Chinese and Russian governments announced this week their agreement on a revolutionary shift in future Russian crude oil flows.

According to the announcement from Beijing on Tuesday, where Deputy Prime Ministers Wang Qishan and Igor Sechin were meeting, China and Russia have finally agreed on terms for a China Development Bank loan of $25 billion to Russian state oil exporter Rosneft, and pipeline company Transneft, to finance future crude oil shipments over a 20-year period of not less than 241,000 barrels per day (15 million tonnes per annum). The fine print of the financing and oil supply deals have not been released yet. However, the availability of $15 billion in 10-year finance for Rosneft, and $10 billion to Transneft, at a sub-market interest rate of around 6%, will guarantee China’s priority for East Siberian crude oil deliveries for the foreseeable future.

The loan and oil supply agreements implement the inter-government Memorandum of Understanding signed more than three months ago, on October 29, 2008. They are the second major initiative between Beijing and Moscow, following the Chinese financing in 2004 for Rosneft’s acquisition of Yuganskneftegaz, in exchange for delivery of 48.4 million tonnes (194,000 barrels per day) between 2005 and 2010.

For China in the medium to long term, according to one Russian bank, the new deal will “provide an impetus to massive development of Eastern Siberia” from which China is best placed to benefit. “We believe that two options are possible: greater [Chinese] access to the East Siberian fields (currently two upstream projects via a JV with Rosneft) and the potential transformation of East Siberian Pacific Ocean pipeline network into a joint stock company, with China getting 49% or 50% control in it.” If the latter materializes, that would give Beijing a control stake in the new oil port to be built at Kozmino Bay, near Nakhodka, on the Sea of Japan.


By John Helmer in Moscow

Alrosa is negotiating with Lazare Kaplan International (LKI) to decide whether to renew their expiring rough supply and polishing contract, or wind up their relationship. The talks and the details of the longstanding relationship between the two companies remain shrouded in unusual secrecy.

Alrosa sources say it is not certain whether the expiring contract, signed for a 10-year term in March 1999, will be renewed.

A Russian source told PolishedPrices that “everything regarding the Alrosa-LKI contract is hidden and non-transparent. The reason for this is that LKI has very advantageous conditions under this contract, according to which they have the right to pick the stones before buying.” In 2005, Alexander Nichiporuk, then Alrosa’s chief executive, sought to terminate the contract, because he believed Alrosa was penalizing itself in supplying rough on LKI’s terms. He did not prevail, and in February 2007, Nichiporuk was replaced by Sergei Vybornov. He is supervising the current negotiations, along with Sergei Uhlin, who runs Alrosa’s international marketing strategy. Neither agreed to comment on the issues in negotiation at the moment.

LKI, which reported in January that it is currently losing money on rough and polished sales, does not publish the value of the diamonds it buys from Alrosa, and cuts in Moscow, before exporting them. A company statement last month referred to the March 1999 agreement, and added: ” Under the terms of this agreement, the Company sells polished diamonds that are cut in facilities jointly managed and supervised by the Company and ALROSA personnel. The proceeds from the sale of these polished diamonds, after deduction of rough diamond cost, generally are shared equally with ALROSA.”

In the six months ending November 30, 2008, LKI is reporting that revenues from its sales of polished were down 21% to $61.1 million. Sales of rough in the same period fell 50% to $58.5 million.



By John Helmer in Moscow

Uralkali (ticker URKA:RU), once Russia’s fastest-rising potash miner, continues to wait nervously under the Damocles Sword of a government ruling, which may put the company, or its controlling shareholder, Dmitry Rybolovlev, out of business. Still, Moscow investor sentiment firmed last week, lifting the miner’s London and Moscow-listed share price by 24% to $1.28, after seven months of steep decline. Current market capitalization of the company is $2.7 billion. At last June’s peak, it was $31 billion.

The Deputy Minister for Natural Resources, Semyon Levi, held a meeting last Thursday, February 12, in Moscow to review estimates of the bill for costs compensation and liabilities facing Uralkali from the subsidence and loss of Mine-1 at Berezniki, in the Perm region. The collapse and loss of the mine occurred in October 2006. revival of government claims against Uralkali began, apparently on the initiative of Deputy Prime Minister Igor Sechin, in October 2008.

Hints from Prime Minister Vladimir Putin, Sechin and others suggests they have in mind to dispose of Rybolovlev, and reorganize Uralkali under the control of Vyacheslav Kantor, who currently controls the nitrogen fertilizer producer and exporter, Acron. For reasons of either their personal security or comfort, both Rybolovlev and Kantor prefer to live in Geneva, and run their Russian operations from there.

This Russian scheming is taking place against a background of serious drought in northern China, affecting the wheat crop. Chinese press reports this month, and a report on February 13 by Merrill Lynch, suggest that the drought may cut China’s wheat production at harvest this year by 13%, compared to last year — or about 15 million tonnes. Henan, Hebei, and Shandong are the provinces hardest hit so far by the lack of rainfall. The winter crop (planted in August, harvested in May) is more important than the crop planted in the spring, and it is the one currently suffering from drought. If the spring rains fail next month, then the drought is likely to hurt both crops.



By John Helmer in Moscow

The Agatha Christie story of 1939 started with a title and a children’s rhyme that are no longer printable for their racist connotations. The story has ended up being called “And There Were None”. Everyone turns up dead — 9 murdered, 1 suicide. It is the biggest-selling of all Christie’s plots – about 100 million copies sold so far.

A year ago, there were 19 Russians with a fortune estimated by Forbes at $9 billion or more. That qualified them in the Forbes top-100 worldwide. At the top was Oleg Deripaska; at the bottom, Alisher Usmanov. In the middle were Vladimir Potanin, Mikhail Prokhorov, and Victor Vekselberg. These men are all stakeholders in Norilsk Nickel (MNOD:LI, GMKN:RU), Russia’s largest hard-rock mining company, and a world leader in production of nickel, copper, platinum group metals, and cobalt. They are also fighting fiercely among themselves for control of the company, whose market capitalization this week is just under $8 billion. At peak last year it was $60 billion.

Two of the Russian stakeholders are already facing the law courts of the US and the UK. The outcome of the litigation directly affects the Russians’ credit and risk reputations with their banks; covenants that have been signed, also with the banks; their fitness under UK company law to sit on London listed companies; and their freedom of movement under US, UK and European Union visa regulations.

Deripaska is currently before the UK Court of Appeal, attempting to overturn the High Court judgement of last July, requiring him to stand trial for the multi-billion dollar contract violation claim of former partner, Mikhail Chernoy. Deripaska denies the claim.



By John Helmer in Moscow

Prime Minister Vladimir Putin has been reading his economic history.

He knows that the Smoot-Hawley Tariff Act (named after its sponsors, Congressman Willis Hawley and Senator Reed Smoot) was the American statute enacted on June 17, 1930, which raised US tariff barriers against more than 20,000 imported goods to record levels — over the objections of the then President Herbert Hoover, and most of the US economics profession of the time. After the enactment of Smoot-Hawley, other countries retaliated with their own increased tariffs on US goods, and American exports and imports plunged by more than half. The combined impact on international trade is generally thought to have turned the stock market collapse of 1929 into the Great Depression.

Speaking at Davos, a few days ago, Putin warned against Smoot-Hawley. “We must not revert to isolationism and unrestrained economic egotism. The leaders of the world’s largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles. Although additional protectionism will prove inevitable during the crisis-and we see it today, much to our regret-all of us must display a sense of proportion.”

In the question-and-answer session which followed, the Russian prime minister conceded: “True, we are increasing import duties of certain ready-made equipment to promote Russian manufacturers-but I don’t think we are extremists in this respect. We are also reducing and even abolishing import duties for technical equipment, especially of the kind Russia is not manufacturing, thus promoting Russian industrial advancement.”


By John Helmer in Moscow

It’s just as normal, geologically speaking, for potash mines to subside and flood, as for high-profit businesses to be taken over, if the price is a bargain, commercially speaking. Deputy Prime Minister Igor Sechin deserves some credit for combining the two — reviving a two-year old geological anomaly, in order make the takeover of Russia’s most expensive potash miner affordable.

On October 29 last, Uralkali (URKA:LI) had a market capitalization of $6.373 billion. In the three months since July, it had lost 64% of its value, because of the global collapse in equity values. In comparative terms, this was marginally better than the Russian RTS stock market index as a whole, which had dropped 67% in the same period.

This week, Uralkali’s share price fell 20% in Monday trading, and now stands at $2.145 billion. It has lost $4.228 billion in value in the three-month interval since October 29, roughly double the decline of the RTS index. The potash miner has been losing asset value at a rate of $45 million per day, including Saturdays and Sundays.

But the spot price for potash has remained virtually flat, unchanging since last July. A big deficit in supply of potash in the first half of 2008, and rapid action by Russian and North American producers to cut output in the second half of the year have combined to hold the bellwether price for potash delivered to Brazil at the $1,000 per tonne mark. It is also being held up by demand drivers — a sharp contraction in grain inventories, and a forecast improvement in grain prices.

Uralkali’s North American peers also lost share value and market capitalization from July. But they bottomed in December, and have been gaining value since then. Potash Corporation (POT:US) is up 44% since its December low, and its current market cap is $22 billion. Mosaic (MOS:US) is up 60% since December, and its market cap at the moment is $16 billion. Comparing the ratios of share price to earnings (P/E), Uralkali dropped to 2.7 for 2008, compared to 11.7 in 2007; and compared to 5.3 and 5.5 for Potash Corp and Mosaic, respectively, in 2008.



By John Helmer in Moscow

Russia’s leading maritime fleet executives, who were keen to announce newbuild orders and fleet renewal plans a year ago, have become very coy in the face of falling cargo volumes and freight rates, and the expiry of long-term charters. The principal lenders to the Russian shipping companies are even more uncommunicative.

State-owned Sovcomflot is the fleet leader with 132 vessels totaling 9.4 million dwt, and 31 vessels currently on order for another 2.7 million dwt. Ranking itself in the top-5 global tanker companies, Sovcomflot’s last annual report for 2007 refers to long-term debt of $2.1 billion, up 11% on 2006; the “current portion” of the long-term debt is $153 million. The interest expense line shows interest repayment in 2007 at $90 million, up 29% from 2006, when it was $70 million. There are no auditor’s notes or elaborations of debt or fleet valuations in the text of the report. The only reference to bank lenders for fleet says: “Sovcomflot has long established relationships with major Russian and international banks allowing it to secure long-term debt financing on attractive terms.”

Novorossiysk Shipping Company (Novoship), also state owned, reports that its current fleet of 52 vessels comes to 4 million dwt, and its order-book includes 14 vessels for another 1.4 million dwt. The company provides no further detail on fleet financing or debt.

A Russian fleet insider says that Sovcomflot, which has taken shareholding control of Novoship, has persuaded lenders to value ships with a formula based on the purchase price extended for 25 years. Before the adoption of this formula, the Sovcomflot fleet was valued every year at market value, with revaluation differences reflected in the annual financial statement on the profit/loss line. It is unclear what valuation policy Sovcomflot’s lending banks are now insisting on, or what balance-sheet and replayment impacts this is having at present.


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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