South of the Sahara desert, the Kremlin doesn’t have a strategy so much as a checklist of commercial interests. These days it can ill afford even those. But when it was decided in the spring that President Dmitry Medvedev would make his first presidential visit to the region, he was assigned the two African countries, whose economic resources make them more valuable to Russian corporations than anywhere else in Africa.
They are Nigeria and Angola. Medvedev stopped in each for less than 24 hours last week.
Nigeria is much the more important, commercially, of these two, because Gazprom, Russia’s largest company and the world’s dominant producer and exporter of gas, wants to bring the Nigerians, with the 7th largest gas reserves in the world and a major exporter of gas to the US, in line with the marketing strategy being developed by the Gas Exporting Countries Forum (GECF), led by Russia, Iran, and Qatar.
Gazprom would have started working on the Nigerians much earlier, had it not been for an unpleasant hostage-taking in 2004 and 2005, when Nigerian officials were suspected by the Kremlin of aiming to profit from the ransom demand for 12 Russian seamen, taken off the Greek-owned oil tanker, African Pride. (more…)
The Russian and Azeri governments have taken the air out of a scheme to provide Europe with an alternative source of gas supply to Gazprom, which signed an agreement on Monday with the State Oil Company of the Azerbaijan Republic (SOCAR). When it comes to putting the gas into high-priority political schemes for Europe’s energy needs, the Kremlin proves once again that it is prepared to put money where its mouth is, while the European Union raises hot air in think-tanks and editorial columns.
The new deal, signed in Baku during a visit by President Dmitry Medvedev, provides for Gazprom to begin purchasing gas from Azerbaijan from the start of next year. The initial volumes are very small — just 500 million cubic metres per annum. But they give Gazprom the option to increase them, as Azeri production from the Shah Deniz field, in the Caspian, ramps up. “All things being equal among potential buyers, priority will be given to Gazprom,” Gazprom CEO Alexei Miller said at the signing ceremony. “Other buyers would have to offer conditions that are more financially attractive.”
According to unidentified sources cited in the press, Gazprom is going to pay some $350 per thousand cubic metres, a substantial premium to the current market price, and roughly in line with the $340 price paid by Gazprom to Turkmenistan in the first quarter of this year. From the point of western brokerages and western shareholders, this is costly for the company’s bottom-line, and thus for its dividends and share price. So long as gas prices remain low on low demand, there is the potential, argues a report from Unicredit Securities, “to force Gazprom to cut its own production while replacing it with virtually zero-margin Central Asian gas.” (more…)
In Russia today, there is a word that dares not speak its name — and it isn’t the one that got Oscar Wilde into his famous trouble at the Old Bailey in the spring of 1895. That word is банкротство — “bankruptcy”.
In the short history of Russian politics, it is to be expected that now — just as in 1998 and 2003 — the dominating fear of Prime Minister Vladimir Putin is of a domino-effect collapse of the banking system. Given the growth and potential size of the non-performing loans Russia’s banking system is currently carrying, it is realistic to fear this could happen some time in the second half of this year. For the time being, then, it is realistic for the Russian government to aim at short-term measures to avert a series of corporate bankruptcies that might then trigger bank failures, with tsunami impact on the cities and regions that depend on them. This has the policy corollary of persuading all high-policy decision-makers to camouflage or protect the insolvent trading positions of oligarchs like Oleg Deripaska. He has managed to get President Dmitry Medvedev to beg Alfa Bank to call off its loan repayment call (in vain); and then Putin to announce, months before it falls due, a rollover of his largest debt, while obliging a state bank and a regional budget to cover the wage bill his Pikalevo cement plant had run up.
For the time being, therefore, the men who produce aluminium, nickel, and copper are being protected at the highest level from the B word. The steelmakers are another kettle of fish — and most of those are getting the same protection. But not all — and not Nikolai Maximov. (more…)
The Udokan copper deposit, in southeastern Siberia, will not be mined any time soon, according to government and commercial mining sources in Moscow. For miners, who have been watching this particular copper pot pass from one hand to another, including BHP’s very briefly in 1992, this should come as no surprise. According to one of the current stakeholders with the mining licence, Alisher Usmanov’s Metalloinvest, there is simply too much copper in the market to warrant the capital cost of digging more out of Udokan.
Officially, all the closely held Metalloinvest group will say, in a press release dated June 25, is that after a nine-month delay, it has finally signed the Udokan licence agreement with the federal mine licensing agency, Rosnedra, a branch of the Ministry of Natural Resources. The terms have been changed, the release acknowledged: “In the course of negotiations between Metalloinvest and Rosnedra the parties reached an agreement about changes in the terms of the license agreement taking into consideration the interests of the government and the investor.”
A ministry source told Minesite, off the record, that the licence terms have not been changed since Metalloinvest won a state tender for the project last September, and accepted the licence price and terms at that time. A source at Metalloinvest said “the terms are the same as the initial ones.” But he acknowledged that the “time frame” is being renegotiated. In short, the investment spending and production targets set out in the licence agreement remain, but the time allowed to the mining group to reach them is being stretched out. “The timing was set while the copper price and demand for copper were completely different,” Metalloinvest now says, admitting the delay in making payment for the licence, and signing this week’s agreement. “We are delaying, not because of lack of financing, but because we don’t understand whether market needs that much copper soon.” (more…)
The grain trade war between Moscow and Cairo took a fresh twist this week, following the announcement during President Dmitry Medvedev’s visit to Egypt on Tuesday that the two governments have agreed on terms for direct, large-volume shipments.
A Russian government briefer has claimed that Medvedev agreed with his counterpart, Egyptian President Hosni Mubarak, to the Egyptian proviso that Russian grain sales to Egypt would grow above the current annual 3-million tonne level, if quality issues are resolved.
In May, government officials at the Egyptian ports, Safaga and Damietta, seized and quarantined an estimated 137,000 tonners of grain which had been put on board ship at Novorossiysk. The seizures were reported in the Egyptian and Russian media to have been ordered by the Egyptian prosecutor, allegedly on claims of high weevil infestation. Subsequently, there are unconfirmed reports of the release of 56,000 tonnes, leaving an estimated 81,000 tonnes of Russian grain in Egyptian limbo. Medvedev’s one-day appearance in Cairo, and reference to the grain trade problem, appears not to have produced the release of this cargo, according to a source at the Russian Grain Union.
What then was Medvedev intending to do about the problem in Russia’s most important market for export wheat? (more…)
The Mechel steel and mining group — Russia’s largest producer of stainless steel and coking coal — is the only Russian metals and mining company to submit to the regulatory requirements of the US Securities and Exchange Commission (SEC). That began in 2004, when Mechel, then owned by Igor Zyuzin and Vladimir Iorikh, were the co-owners. Since then, Iorikh sold out, and moved his investment operations to Switzerland. He opted to jump. The New York Times and its reporter who published a different story were recently obliged to admit their mistake, and apologize to Iorikh.
Zyuzin has remained behind to borrow heavily and pay premium prices for ferroalloy and coal assets he is now having trouble affording. In retrospect, Iorikh’s calculation and timing gather wisdom.
In the meantime also, all the other Russian metals and mining proprietors, who wished to sell unsecured securities in their concerns to foreign investors, get an international market valuation, and borrow against it, have opted not to submit to the requirements of a US listing. Their debts, pledges, and loan covenants are probably just burdensome as Zyuzin’s. But they have been obliged to disclose much less to the market than the SEC has required of Mechel. (more…)
The buyout offer for minority shareholdings in Toronto-listed High River Gold (HRG:TSX) now looks double-doomed. A combination of minority shareholders has now formed that is numerically strong enough to prevent the Russian Severstal group, owned by Alexei Mordashov, from suceeding in his 22-cent offer for the 42.7% of shares he doesn’t already control. And Mordashov himself, and his Severstal group, appear to be under strict bank loan covenants to preclude any new deal worth $150 million, and thus in no position to raise their bid high enough, or borrow more money, to make the buyout possible.
HRG will hold its annual general shareholder meeting on June 30 in Toronto. Although the buyout bidding has been the dominating topic of shareholder talk for weeks — Mordashov raised his offer from 18 Canadian cents to 22 cents on June 9 — no action on that issue is expected. In the meantime, there have been threats of litigation against Severstal and the HRG management, while the Ontario Securities Commission is considering a shareholder complaint filed on April 24.
An HRG board deadline for a delisting review has been fixed for August 17. If Mordashov’s buyout offer of 22 cents fails by then, there will no delisting top speak of. (more…)
Responding to a request from PolishedPrices.com for clarification of the June 20 election of a new Alrosa board of directors, without chief executive Sergei Vybornov, Alrosa spokesman, Yelena Nikiforova, has provided the following company statement. “The largest shareholder of the company in the name of the government of the Russian Federation does not consider necessary the presence of representatives of executive management as a part of the Supervisory Board of Alrosa… According to the government decision, the structure of boards of directors of state companies should include professional counselors, Alrosa says, and so representatives of the Russian Federation voted for inclusion in the structure of the Supervisory Board of the company of independent directors. The President of Alrosa [the chief executive] in any case participates in the Council work as the head of an executive office of the company. As to the election in the structure of the Supervisory Board of Alrosa vice-president Ivan Demyanov, this [was the] decision of the second-largest shareholder, the Government of the Republic of Sakha.”
Nikiforova also said that Vybornov is a member of the presidential delegation, led by President Dmitry Medvedev, which leaves Moscow today for a tour of Africa, with stops in Egypt, Nigeria, Namibia, and Angola.
Igor Zyuzin, the controlling shareholder of the Mechel steel and coal-mining group has disclosed to the US Securities and Exchange Commission (SEC) that he has pledged as security about 158 million of his shares in the group, in order to secure bank loans now under negotiation. Mechel is the Russian leader ion stainless steel production, and one of the world’s largest coking-coal miners.
The purpose of the pledges is reported to the SEC as “in connection with certain financings.”
Since Mechel has on issue about 416 million shares, Zyuzin’s pledge represents just under 38% of the total issue. It is not quite clear what proportion this represents of his own control stake in Mechel. According to the SEC filing, as well as Moscow brokerage reports, Zyuzin was obliged to give up a 3.1% stake in the company when convertible bondholders were repaid 12.9 million shares worth $150 million in a transaction of three months ago. Following that transfer, Zyuzin reportedly held 66.8% of the Mechel share issue, or 278 million shares. The latest SEC disclosure means that Zyuzin has lost direct control of 57% of his shareholding.
This is an outcome that industry and company sources have consistently suggested that Zyuzin himself had been trying to avoid in his negotiations with the Russian state-controlled banks, as well as with the commercial lending sydicates, with which Mechel has been discussing terms for the refinancing and repayment of more than $3.5 billion in overdue loans. (more…)
Sergei Vybornov, chief executive of Alrosa, has been omitted from the new board of directors, known as the Supervisory Board, according to a company announcement posted after the annual general shareholders meeting on June 20: http://www.alrosa.ru/press/releases/detail.php?ID=4338
Other changes in board membership have also been disclosed in the new board listing; these suggest the impact of the financial crisis on Alrosa’s operations, and of problems reportedly uncovered by the Accounting Chamber, the independent Russian state auditor. A member of the Chamber audit team said the check of Alrosa took place at the beginning of this year, and the results were reviewed by the Chamber Collegium in April. She said the results were reported to the government iun a report stamped confidential.
The new 15-member board has 5 representatives of the Sakha republic, including the Sakha President Vyacheslav Shtirov; the 2007-2008 board had 6 Sakha representatives, so the Sakha representation has been reduced in line with the 32% shareholding in Alrosa held by the regional government.
The Alrosa management had two seats on the old board — the Chief Executive Officer Sergei Vybornov and the Vice President, Ivan Demyanov. Vybornov has been omitted from the new listing, and Demyanov remains. No CEO of Alrosa has been excluded from the board before. Last week, Vybornov told an industry outlet: “Alrosa has only one shareholder — the state — who could fire me, and it has said it does not plan to do so.” Vybornov’s spokesman was contacted for comment, but his telephone was not answering. (more…)
A briefing by Russian coking coal producer Raspadskaya this week suggests pessimism that sales to the domestic steelmills will recover beyond their current monthly level. For brokers and speculators, the fortunes of the publicly listed mining company (ticker RASP:RU) now depend on betting that China will continuing substituting costly home-grown coal supplies with cheaper Russian imports, and that Russian miners like Raspadskaya can continue beating the Australians and South Africans on price.
Deputy General Director Alexander Andreyev said on June 17 that Raspadskaya is currently operating at a 75% capacity utilization rate, compared to pre-crisis September 2008. At that time, the company produced 734,000 tonnes of coking coal concentrate, so the implied June 2009 output should be about 550,000t. The last officially reported production figure from Raspadskaya was for March at 529,000t.
Andreyev also said that the current price for his concentrate is $53 per tonne.
According to a report on Raspadskaya today by Michael Kavanagh, steel analyst at Uralsib Bank, coking coal output in April and May was also at the 550,000t level, so “production appears to have reached a plateau.” He also notes that earlier targets announced by the company have not been met. “Raspadskaya’s management had previously stated that 2Q09 production was expected to be 2.5 mln tons of coal (1.87 mln tons of concentrate), and that production capacity utilization should reach 80%. It now looks as though 2Q09 production will be just 2.2 mln tons of coal (1.65 mln tons of concentrate), which is 12% below the previous target. ” (more…)
Severstal announced Monday that the Russian state savings bank Sberbank has granted it a three-year $300 million credit line. Quoting the chief financial officer, Sergei Kuznetsov, the steelmaker said: “These credit facilities will allow the Company to further strengthen its liquidity and extend maturity profile. Sberbank facility is a reliable long-term source of capital which will be used to finance ongoing needs and replace some of our maturing obligations.” There was no disclosure of the interest rate, the security pledged, or the loan covenants imposed by Sberbank.
Severstal’s financial reports to date indicate that atotal of about $1.9 billion in debt matures this year, and must either be repaid or refinanced. In February already, the group repaid $325 million in Eurobond obligations; and must repay another $480 million by year’s end. In 2010 Severstal will have another $900 million in debt repayments. Then between 2010 and 2013, about $4 billion in debt will reportedly fall due.
Although Severstal, the third-ranked Russian steelmaker, has indicated confidence it has enough cash on hand, and current cashflow, to handle this year’s repayments, the Eurobond loan agreements which Severstal signed are putting pressure on Mordashov to remove losses from his current balance-sheet by selling loss-making North American steelmills. At the same time, the loan covenants imposed by loans outstanding and Eurobonds sharply curtail the company’s refinancing and restructuring options. (more…)
The attempt last week by Russia’s consumer protection agency to halt all imports of Belarus dairy products on technical labeling grounds has been called off, after an agreement was reached between Moscow and Minsk to impose a quota on imports of dry milk shipments, and increase the tonnage of imported Belarussian cheese, yoghurt and other dairy products.
Industry sources in Belarus and Moscow believe that two of Russia’s largest dairy companies, Wimm Bill Dann (WBD) and Unimilk, sought to improve the pricing and profitability of their dry-milk business by blocking the low-price Belarus imports. WBD is owned by David Yakobashvili; Unimilk by managers, who acquired their stakes from Roman Abramovich.
Last week, Russian politicians, including President Dmitry Medvedev, issued personal attacks on Belarus president Alexander Lukashenko, who responded in kind. The import ban was an orchestrated political campaign against him personally, Lukashenko charged. Prime Minister Vladimir Putin then said at yesterday’s cabinet meeting that Russian officials “need to be accurate in their statements. To offend someone is not the best option. We and Belarus, whatever happens, are part of one family.”
After Putin and other officials claimed that Belarus dry-milk imports would be lowered from 110,000 tonnes to 70,000 tonnes annually, the Russian Minister of Agriculture Elena Skrynnik revealed yesterday that dry-milk imports from Minsk will be halted for six months, while the volume of other dairy imports will be permitted to increase from 110,000 tonnes to 132,000 tonnes. (more…)
A bid to revive the Russian mine prospects of Toronto-listed Archangel Diamond Corporation (ADC), and head off liquidation by De Beers, failed over the weekend with the disclosure that a US and UK hedge fund operated by Elliott Management Corporation and Elliott Advisors was withdrawing its offer to buy a controlling share in ADC and clear its debts to De Beers.
An announcement by ADC, issued to the market on June 15, says: “Archangel Diamond Corporation… announces that it has received notice from the investor group under the non-binding private placement term sheet announced June 4, 2009 that the investor has determined not to proceed on the terms contemplated in that term sheet and has, therefore, terminated it.”
Despite the fact that negotiations between the investor group, De Beers and ADC have been under way for some time, ADC has not publicly identified Elliott as the bidder. This is Elliott Management Corporation, which is headquartered in New York, and was founded by a lawyer, Paul Singer, in the 1970s. The hedge fund has been reported to be managing almost $13 billion in investor funds, but the company website provides no information. A subsidiary, Elliott Advisors, based in London, has also been involved in the De Beers buyout bid.
No reason has apparently been given by Elliott for withdrawing its interest in ADC, which did not publicly confirm the offer until June 4, three days after Polished Prices.com reported it. (more…)
A client alert was issued Thursday by Deutsche Bank analyst Olga Okunova, warning that even if the Mechel Group succeeds in refinancing a $1.5 billion loan, which has been overdue since March, the group faces serious cash shortage and debt service problems this year and next.
Mechel has made new information available to shareholders and banks, though not in a public news release, ahead of the scheduled annual general meeting (AGM) of shareholders on June 30. This identifies problems with creditors, who have loaned Mechel $2 billion for the purchase of fareastern coal mining assets, including Yakutugol, which the group controlled by Igor Zyuzin won at a state auction in October 5, 2007.
Mechel won the large but relatively undeveloped assets with a bid ofRb58.196 billion (then $2.3 billion), defeating Arcelor Mittal and Alrosa. Zyuzin then raised $2 billion in new loans to finance the acquisition. The money was provided in the form of a 5-year loan for $1.7 billion, secured for repayment by coal exports; and a smaller 3-year loan of $300 million, apparently secured by shares. The original lenders were ABN AMRO, BNP Paribas, Calyon, Natixis, Sumitomo Mitsui Banking Corporation Europe Limited, Société Générale Corporate & Investment Banking, and Commerzbank Aktiengesellschaft. Sumitomo had already been identified as a financial backer for Mechel to expand its coal output, and exports to Japan, from the Yakut coalfields. The assets included the issued share capital of Yakutugol (75% of the statutory issued share capital minus one share), Elgaugol (68.86% of the statutory issued share capital), and the real estate complex of a railway and a road from the Zeysk Railway Station (Far Eastern Railway) in Zeysk to the Elga coal deposits.
It appears from the latest Deutsche Bank report that the five-year term of the loan, requiring repayment in 2012, was foreclosed by the banks, because of loan covenant breaches by Mechel that have not been disclosed before. (more…)
Russia’sconsumer protection service has issued a ban on imports of milk and dairy products from Belarus. Although the reason given publicly appears to apply to imports from the Ukraine, Lithuania, and Latvia, their milk trade has so far not been interrupted. This has encouraged speculation that the Kremlin is using the milk bottle to strike at Belarus President, Alexander Lukashenko.
TheRussian dairy product import market is worth about $6 billion per year, Moscow agriprod experts say; Belarus holds the largest share of about one-third, while Finland, New Zealand, Germany, and other European sources account for the remainder. Virtually all of Belarus’s milk exports go to Russia, so the sudden cutoff, which started Saturday and widened on Tuesday, is financially costly to the government in Minsk.
The head of Rospoterbnadzor (RPN), Gennady Onishchenko, claims the problem is that Belarus has failed to update the product information required by six-month old Russian package disclosure regulations. But his spokesman refuses to explain why non-compliance by other Baltic state exporters has not been hit with bans. A publication by RPN on May 29, reporting on package check for domestic dairy products, as well as imports, found that five Russian regions had no packaging that met the new rules, while 13 regions were reporting less than 50% compliance. Even in Moscow, the RPN report suggests, one product package in five being sold lacked the right information labels. (more…)
At a hearing on June 9, the Australian Federal Court issued filing deadlines, and ordered a hearing date in August for adjudication of the clash between manganese miners, OM Holdings (OMH) of Singapore and Stratford Sun Ltd, a unit of Consolidated Minerals. It is the first skirmish over the tactics OMH has been employing to preserve current shareholder control in what is increasingly viewed as a test of strength in the global manganese market that supplies China’s steelmills.
China rules the world of steel — biggest producer, biggest consumer, and until this year, biggest exporter. Manganese is vital to steel production, because it is an alloy that hardens the metal for most industrial applications. So China also rules the world of manganese, which is concentrated in Australia and two southern African countries; and also the price of manganese; and thus, the share price of the manganese mining companies.
But if a China-linked, publicly listed manganese company — one of the only pure manganese miners in the world — wants to block buyers of its shares in the marketplace from buying, and shareholders from holding the management to account, can anyone lift the bamboo curtain, and oblige the company to follow the market governance rules? For the first time, that’s a question for the Australian Federal Court to decide.
More importantly, the action, which commenced hearing this week in the Perth division of the court, is a curtain-raiser on an even larger play — this one is about how the world of manganese is being prepared for a redistribution of shareholding ownership and control, in which big actors, like BHP Billiton, Australia’s most powerful enterprise, are contemplating their exit, while challengers from all over the mining world calculate their opportunity to move in. Because the price of manganese is so volatile, the potential in a new carve-up of global manganese is high risk, but also high profit. But for the dominant Chinese steelmakers, volatility and unpredictability for inputs like manganese should be curbed, if possible. So, will the Chinese act directly to buy up manganese miners now, while they are relatively cheap? Or will they act indirectly, having regard for the way the direct approach to buying resource companies can trigger popular backlash and political resistance in countries like Australia, South Africa, the US, or Russia? (more…)
Alrosa has issued the following statement, dated June 8, through a Russian internet publication, www.rough-polished.com:
“ALROSA intends to bring a case before the Court of the United Kingdom claiming damage to the company’s commercial interests due to the publications by John Helmer posted on the PolishedPrices website. The Russian diamond mining company has already engaged the Mezhregion Bar Association to prepare this lawsuit.
As ALROSA informed rough-polished.com, the company “believes that publishing materials on would-be changes in its management with reference to some unnamed sources is directly damaging the company’s commercial interests while ALROSA is concluding long-term contracts.”
“Indeed, the company’s important customers had anything but simple experience interacting with ALROSA, when the rules and principles of mutual relationship were not transparent providing enough grounds for all kind of rumours,” ALROSA stressed. (more…)
A new ratings report by Fitch has declared Alrosa, the state-owned Russian diamond miner, to be twice as profitable — as measured by Ebitda margin — than global leader, De Beers.
Alrosa doesn’t issue production figures for its mines by carat, but claims a 25% share of global diamond mine output by value. Diamond sales in 2008 have been reported at $2.8 billion. Anglo American, a part-owner of De Beers, reports that the latter produced last year about 48 million carats, and holds a 40% global mine market share. De Beers’s sales in 2008 were $6.9 billion.
According to the report issued by Fitch on May 21, Alrosa’s advantages include its lower rouble cost structure and state financial backing. “The company’s EBITDA margin is 30%, on average, ” according to Fitch analyst Sergei Grishunin, “which exceeds the EBITDA margin of market leader De Beers, which had an EBITDA margin of 17% in 2008 and 2007.”
According to Grishunin, the value of the Kremlin’s financial support for Alrosa this year will include Rb45 billion in procurement of rough diamonds for the state stockpile agency Gokhran in the first half of the year; and Rb44 billion in financing from the state VTB Bank for covering some of Alrosa’s maturing obligations to foreign lenders. At the current exchange rate, these inputs are worth $1.5 billion and $1.4 billion, respectively. (more…)
There wasn’t much that the two Steptoes could ever agree on in the near-50 year old English comedy series about the scrap business — except that they would have sold out, if anyone was buying.
There is nothing at all comical about the Rashnikov family. But now brother Victor has managed to arrange the sale of his and his brother Sergey’s scrap business, one of the largest in Russia. The buyer, you might say without joking, is in the family.
Magnitogorsk Metallurgical company (MMK), operator of Russia’s largest steelmill, has reported this week that it has “acquired 99.99% of ZAO Profit – the largest metal scrap collector and processor in Russia. The acquisition of the strategic raw material supplier will significantly strengthen MMK security in terms of raw materials supplies.” The deal is reported to have been agreed at a board of directors meeting two weeks ago, on May 20.
The company announcement discloses that Profit’s financial results from scrap trading will be consolidated in MMK’s international accounting standards reports from the second half of 2009. Profit is also reported as supplying 75% of the ferrous scrap volume of about 5 million tonnes per annum, required by MMK.
The announcement omits to disclose the seller, or the transaction price. (more…)
The Russian government and the association representing Russian grain exporters in Moscow appear to have backed down from claims that Egypt wrongfully seized several cargoes of Russian wheat last month.
Until now, the public position, according to Arkady Zlochevsky, spokesman for the Russian Grain Union, was that Egyptian claims to have found weevil infestation in 137,000 tonnes of grain arrested at the ports of Safaga and Damietta, were false. He told Fairplay the affair was an attempt “at internal political manipulation in Egyptian government circles.” He added that Russian grain traders believed the seizures were a form of pressure to lower the Russian price at state grain tenders; and a bid by the Egyptian industry to reallocate shares in their market in favour of domestic or foreign rivals.
Russia provides about one-quarter of Egypt’s annual grain imports, more than double the next largest exporter, India. This year, Moscow has been planning to ship 3 million tonnes of grain to Egypt. But there is acute pressure on the Russian state stocking agency to move the grain out of silos and into the export trade, because this year’s new harvest is expected to be another bumper one.
Last year’s crop totaled 108 million tonnes, a 15-year record. And unless room is quickly cleared in the silos this month, there will be no room to store the incoming crop. Forced and discounted selling is inevitable. This dynamic has convinced some importing countries to defer their purchases until the exporters cut their prices. (more…)
You don’t have to be a child with an especially good memory to remember this one, which is pre-Mother Goose:
Jack Sprat could eat no fat.
His wife could eat no lean.
And so between them both, you see,
They licked the platter clean.
What four hundred years of nurses, mothers, and cooks have done to twist the meaning shouldn’t obscure the original moral of the tale – when it comes to appetite, rapacity will usually clear the plate ahead of modesty.
What attorneys for a Canadian shareholder in High River Gold (HRG:CN) have told stock market regulators in Vancouver and Toronto recently is that, when it comes to the management of the company and its share price by its Russian owner, Alexei Mordashov, there’s something decidedly unbalanced about the way HRG has been handled since Mordashov’s takeover of last November.
HRG is a Toronto-listed junior with four operating gold mines in Russia and Burkina Faso, and two mine projects in development. It has currently attributable production of about 300,000 ounces per annum, and is cashflow positive. Attributable gold reserves were estimated in February by Dan Hrushewsky, HRG’s investment relations director, at 2.2 million oz, with silver reserves at 5.2 million oz. A subsequent release from the company on March 17 reported a MICON expert audit of gold reserves at the Zun-Holba and Irokinda mines (Buryat region of southeastern Siberia). Altogether, counting the Bissa gold project in Burkino Faso and the Prognoz silver project (Sakha region of fareastern Siberia), and converting silver reserves into gold equivalent, HRG’s gold equivalent reserves and resources, on the Canadian NI 43-101 basis, add up to 6.1 million oz. (more…)
De Beers has agreed to sell its controlling stake in Archangel Diamond Corporation (ADC) to a North American investment fund which aims to intensify the litigation campaign in the US and Europe against LUKoil and Archangelskgeoldobycha (AGD), the two Russian companies charged with raiding the Grib diamond pipe.
At a board session on Friday, a bid by De Beers to call in a $10 million loan, and put ADC into liquidation, was topped by an offer to repay the loan, ADC’s remaining creditors, and conserve the company and its minority shareholders. Had the liquidation plan gone ahead, the latter would have lost everything.
ADC has yet to make an announcement, identifying who has made the offer which the board has accepted, or the terms. It is believed the offer comes from a lawyer-managed US fund, which is well-known as an investor in high-value litigations, with a strong record of winning large settlements for the cases it has taken on.
At this point, the fund appears to be paying about $14 million to clear ADC’s debts, and committing itself to a litigation budget of another $10 million, in order to pursue claims against the Russians of $4.8 billion; this sum includes $30 million in ADC’s direct investment in the exploration and testing of the Grib pipe; $400 million in lost profits according to ADC’s 40% stake in the halted mining venture; $800 million in profits lost from other diamond pipes within the Verkhotina-area exploration and mining licence; and $3.6 billion in triple punitive damages under the Colorado state racketeering statute.
The most recent De Beers valuation of the Grib pipe, based on early 2008 diamond prices, puts the project’s mineable value between $8 and $10 billion. (more…)
Russia’s Chief Prosecutor’s office has acknowleded that putting Somali pirates ashore for trial in Kenya is no longer an option, unless the Kenyan courts are replaced by a fully funded international tribunal.
Responding to questions from Fairplay, Alexander Zvyagintsev, the deputy prosecutor-general, has issued the longest official statement on the piracy issue since the Russian Navy despatched a destroyer squadron to patrol the waters off Somalia last year. According to Zvyagintsev, the 29 pirates captured by the Admiral Panteleyev on April 29, following an armed attack on a Russian oil tanker, included 12 Pakistanis, 11 Somalis, and 6 Iranian nationals; he claimed their excuse of being fishermen is not credible.
But Zvyagintsev did not disclose what has been done with the men. Russia is unlikely to put them on trial in Moscow, he hinted. Sending them to the Kenyan courts is also unlikely, because he said Kenya will have “serious problems” in trying up to 100 men already charged there with pirate offences off Somalia.
Rejecting “extreme unilateralism” as a policy, Zvyagintsev said the pros and cons of an international piracy tribunal have yet to be resolved by negotiation with the African coast states, and the Group of Eight states. Zvyagintsev said that he will be meeting with prosecutors from the other G8 states in Rome over the weekend to consider what is to be done next. Among the legal problems the G8 lawyers are discussing is the problem of sufficient evidence to secure convictions against the Somali pirates. Noting that “the legislation of many states does not provide the possibility of prosecuting the criminal liability of foreign citizens and persons without citizenship for crimes of piracy committed out of the [territorial or juridictional] limits of these states, [and so] there is the issue of how implement criminal prosecution using the mechanisms of international law.” (more…)
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.
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.
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.
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.
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 BlueLine (d. 1996).
The Russian situation comedies, alive and well on TV screens and internet streaming devices across the country, are also increasingly profitable business for their production and broadcast companies – not despite the war but because of it. This has transformed the Russian media industry’s calculation of profitability by removing US and European-made films and television series, as well as advertising revenues from Nestlé, PepsiCo, Mars, and Bayer. In their place powerful Russian video-on-demand (VOD) streaming platform companies like Yandex (KinoPoisk), MTS (Kion), Mail.ru (VK), and Ivi (Leonid Boguslavsky, ProfMedia, Baring Vostok) are now intensifying the competition for audience with traditional television channels and film studios for domestic audiences. The revenue base of the VOD platforms is less vulnerable to advertisers, more dependent on telecommunications subscriptions.
Russian script writers, cameramen, actors, designers, and directors are now in shorter supply than ever before, and earning more money. “It’s the Russian New Wave,” claims Olga Filipuk, head of media content for Yandex, the powerful leader of the new film production platforms; its controlling shareholder and chief executive were sanctioned last year.
By Olga Samofalova, translated and introduced by John Helmer, Moscow @bears_with
It was the American humourist Mark Twain who didn’t die in 1897 when it was reported that he had. Twain had thirteen more lively years to go.
The death of the Russian aerospace and aviation industry in the present war is proving to be an even greater exaggeration – and the life to come will be much longer. From the Russian point of view, the death which the sanctions have inflicted is that of the US, European and British offensive against the Soviet-era industry which President Boris Yeltsin (lead image, left) and his advisers encouraged from 1991.
Since 2014, when the sanctions war began, the question of what Moscow would do when the supply of original aircraft components was first threatened, then prohibited, has been answered. The answer began at the Federal Aviation Administration (FAA) in 1947 when the first Supplemental Type Certificate (STC) or Parts Manufacturing Approval (PMA) was issued by Washington officials for aircraft parts or components meeting the airworthiness standards but manufactured by sources which were not the original suppliers.
China has been quicker to implement this practice; Chinese state and commercial enterprises have been producing PMA components for Boeing and Airbus aircraft in the Chinese airline fleets for many years. The Russian Transport Ministry has followed suit; in its certification process and airworthiness regulations it has used the abbreviation RMA, Cyrillic for PMA. This process has been accelerating as the sanctions war has escalated.
So has the Russian process of replacing foreign imports entirely.
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.
The US Army’s Special Operations Command (SOCOM) has been firing several hundred million dollars’ worth of cyber warheads at Russian targets from its headquarters at MacDill Airforce Base in Florida. They have all been duds.
The weapons, the source, and their failure to strike effectively have been exposed in a new report, published on August 24, by the Cyber Policy Center of the Stanford Internet Observatory. The title of the 54-page study is “Unheard Voice: Evaluating Five Years of Pro-Western Covert Influence Operations”.
“We believe”, the report concludes, “this activity represents the most extensive case of covert pro-Western IO [influence operations] on social media to be reviewed and analyzed by open-source researchers to date… the data also shows the limitations of using inauthentic tactics to generate engagement and build influence online. The vast majority of posts and tweets we reviewed received no more than a handful of likes or retweets, and only 19% of the covert assets we identified had more than 1,000 followers. The average tweet received 0.49 likes and 0.02 retweets.”
“Tellingly,” according to the Stanford report, “the two most followed assets in the data provided by Twitter were overt accounts that publicly declared a connection to the U.S. military.”
The report comes from a branch of Stanford University, and is funded by the Stanford Law School and the Spogli Institute for Institutional Studies, headed by Michael McFaul (lead image). McFaul, once a US ambassador to Moscow, has been a career advocate of war against Russia. The new report exposes many of McFaul’s allegations to be crude fabrications and propaganda which the Special Operations Command (SOCOM) has been paying contractors to fire at Russia for a decade.
Strangely, there is no mention in the report of the US Army, Pentagon, the Special Operations Command, or its principal cyberwar contractor, the Rendon Group.
Maria Yudina (lead image) is one of the great Russian pianists. She was not, however, one who appealed to all tastes in her lifetime, 1899 to 1970.
In a new biography of her by Elizabeth Wilson, Yudina’s belief that music represents Orthodox Christian faith is made out to be so heroic, the art of the piano is diminished — and Yudina’s reputation consigned again to minority and obscurity. Russian classical music and its performers, who have not recovered from the Yeltsin period and now from the renewal of the German-American war, deserve better than Wilson’s propaganda tune.
Those lighting Mikhail Gorbachev’s funeral pyre are torching the truth of the matter – that Gorbachev was a liar of monumental vanity who betrayed his country out of greed and incompetence, outpointed by his adversaries in Moscow, Washington, and London because they knew him better than he knew himself.