Death can be a coincidence, but not in the Russian aluminium business.
So when Dmitry Bosov died of a pistol shot at his home near Moscow on the evening between May 5 and May 6, and Anatoly Bykov was arrested by federal agents in Krasnoyarsk on May 7, everyone with well informed suspicion asked if there is a connection to a Kremlin political calculation made at the highest level.
There are two reasons why the aluminium metal markets are not making long-term bets on the price of the metal, the alumina required to make it, and the share prices of the metal producers, including Russia’s aluminium monopoly United Company Rusal. The first reason is that the US Treasury Secretary Stephen Mnuchin (lead image, right) has decided to eliminate Rusal’s controlling shareholder, Oleg Deripaska (left), but leave Rusal to carry on its business without him. The second reason is that President Vladimir Putin cannot make up his mind on whether to sacrifice Deripaska for the good of the company and Russia’s metal industry. If Putin refuses Mnuchin’s deal, the US sanctions to put the company out of business, announced on April 6, will be enforced in full. Pricing the consequences now of then is next to impossible.
According to Mnuchin’s statement on Monday, “RUSAL has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on RUSAL and its subsidiaries. RUSAL has approached us to petition for delisting. Given the impact on our partners and allies, we are issuing a general license extending the maintenance and wind-down period while we consider RUSAL’s petition.”
On Tuesday Putin responded through his spokesman Dmitry Peskov. “so far it is difficult to say how consistent our American counterparts are in their approach. We still consider these sanctions to be illegal. We believe that in relation to a single company such actions are akin to asset grabbing.”
That is Deripaska himself doing the talking. The only man in Russia who thinks that state recovery of a heavily indebted asset from an oligarch is an asset grab is Deripaska. Putin has yet to disagree. Mnuchin has given Putin six months until October 23 to make up his mind. (more…)
There are many Russian reasons why no Russian, man or woman, has trusted Oleg Deripaska (lead picture, on the wall), control shareholder and chief executive of the state aluminium monopoly Rusal (Russian Aluminium), for more than a few months at a time. The reasons have varied from business to business, contract to contract, individual to individual. But now that the US Treasury has put Deripaska and Rusal out of business, one week before the Russian General Staff demonstrated that it can put the air forces of the US out of the attack business, the plan for the future of Rusal is simple.
There are six points under discussion in the Kremlin. President Vladimir Putin must decide and announce his running orders; appoint a Russian military officer with at least one tour under fire in Syria to implement the orders; and retire Deripaska from command of anything of state importance.
When you are a Russian oligarch with a 20-year record of settling out of court with friends, partners and investors accusing you of deceit; when you have a 7-year record of failing to sustain your share value in a genuine stock market, what do you do next? You announce to a neophyte Financial Times reporter that you are selling your shares on the London Stock Exchange with the price underwritten by an anchor investor from China. The newspaper provides free advertising. Noone asks the Chinese anchormen why they are spending money on a business combining Russian electricity and Russian aluminium whose separate parts other Chinese investors have nixed many times before.
Answer: the deal is guaranteed by the Chinese and Russian states, with an assured premium in a secret buy-back option. The Russian state aluminium monopoly Rusal, is now the Chinese-Russian state aluminium monopoly, plus the Siberian electricity utilities, Eurosibenergo and Irkutskenergo. So long Oleg Deripaska (lead image)! Howdy-doo Vladimir Putin and Xi Jinping!
Hold on, says an insider familiar with the Rusal board deliberations: “the London IPO which Oleg Vladimirovich is now promoting looks like a test of foreign investor resistance to sanctions, combined with a bet on the rising price of aluminium. Who in his sober mind would now invest into a fully state-controlled company such as Rusal or En+? Only investors fully backed up or financed by the state. But is Deripaska sharing Kremlin control with Beijng control? Unlikely — so this is a fake privatization, just like the Rosneft share sale.” (more…)
Oleg Deripaska, control shareholder of Rusal, the Russian state aluminium monopoly, is the leading investor of Russian funds in offshore businesses which have failed. He is also Russia’s largest corporate debtor. Noone else in the circle of President Vladimir Putin has performed so improvidently and unpatriotically.
When the costs are counted of last month’s Nigerian High Court ruling against Rusal’s ownership of the Aluminium Smelter Company of Nigeria (Alscon), and the ruling expected from the same court in Abuja next week, Rusal is facing a liability and compensation judgement amounting to $2.8 billion. That’s one-third of Rusal’s annual sales revenues; it’s also one-third of Rusal’s gross debt, and almost half its current market capitalization on the Hong Kong Stock Exchange. Not a single metals analyst or investment banker in Moscow dares to acknowledge the case, or analyse the risk now facing Rusal from the Nigerian courts and its government. (more…)
In “Any Old Iron”, a popular British music-hall song of a century ago, the cockney comedian Harry Champion made audiences laugh at the vanity of people showing off wealth they don’t have, and at pretentiousness in general. In our century there’s said to be a homosexual come-on in the words of the song, but they still mean the same thing — you aren’t worth what you say you are. This is the punchline: “Any old iron, any old iron, any, any, any old iron? You look neat, talk about a treat… But I wouldn’t give you tuppence for your old watch chain. Old iron, old iron.”
When Mikhail Prokhorov (lead image, right) announced last week that he wants to sell his 17.02% of United Company Rusal, the Russian state aluminium monopoly, he was asking the audience to believe the company controlled by Oleg Deripaska (left) is worth much more than it is. The market didn’t laugh or sing along. It did move more than the usual number of Rusal shares traded daily – 2.5 million – but the price went down by 4%. This means the market isn’t betting on Prokhorov to get his price.
In the Bloomberg version of what had happened, Prokhorov’s Moscow holding “made informal approaches in the past three months to sell its 17 percent stake to two other Rusal partners, Sual, a group led by billionaire Viktor Vekselberg, and Glencore Plc, the people said, asking not be identified because the discussions are private. No official talks were held because the two sides have different views on the value of the stake. While Onexim wants a premium to the current value, the potential buyers aren’t ready to offer it, the people said.” (more…)
Oleg Deripaska has launched an attack on Leonid Mikhelson, GennadyTimchenko and Kirill Shamalov in an oligarch showdown which President Vladimir Putin must decide, because Prime Minister Dmitry Medvedev cannot. Not since 2008, when Deripaska appealed to Putin for support of his attempt to take Norilsk Nickel away from Vladimir Potanin, has there been a multimillion dollar contest like this, inside the Kremlin wall. Deripaska’s move also comes after two years of attempts by the US Government to force regime change in Moscow by attacking Putin, his family and his “cronies”. (more…)
Rusal announced on March 9 that its earnings for 2015 were up, and its profit too. But Rusal’s share price, listed on the Hong Kong Stock Exchange, shot downwards by one of the largest one-day falls in months.
Hong Kong Exchange sources say the Rusal share is so illiquid, there is no real market demand, and so there is no response to good news – or to bad. Rusal insiders say the reason for this month’s share price collapse is that Moscow took a two-day holiday on March 7 and 8, and the company’s share operators were still asleep when the price in Hong Kong began to fall. They didn’t wake up in time to stop the decline, as they usually do in the Hong Kong afternoon, Moscow morning. If that sounds like stock price manipulation in violation of the exchange rules, the insider says it is. (more…)
As the Kremlin’s apparatchik for the state aluminium monopoly, Oleg Deripaska (lead image), chief executive of United Company Rusal, has a personal price problem which threatens to turn into an income problem for Russians. If it does that, and loss of income turns into negative opinion polls and protest votes, Deripaska has a political problem with President Vladimir Putin. (more…)
On what the Paris Agreement for climate change (COP21) should have decided last Saturday, no Russian business figure has been as outspoken as Oleg Deripaska (lead image), chief executive and control shareholder of the Russian aluminium monopoly, Rusal.
“Balderdash”, Deripaska said of the agreement terms during a whistlestop interview with a British newspaper in Paris. “We all know that countries submit [emission cuts] as a way to do nothing, to wait for the next election. They do not want to be criticised, they do not want to deal with the substantial issues.” Concretely, he added: “there is no other solution. For us engineers and managers who run companies, for the financial community, the only way [to reduce emissions] is to put in a global carbon tax. Seriously, it is carbon tax or die.” (more…)
A federal US judge and jury have dismissed a billion-dollar claim by Oleg Deripaska’s companies against investment bank Morgan Stanley after three years of litigation and two weeks of trial in a Manhattan courtroom. The jury verdict was announced on November 13.
The case is the first in which Deripaska, chief executive and control shareholder of Rusal, Russian Machines and Basic Element, and Gulzhan Moldazhanova, his closest aide for more than a decade, have testified under cross-examination in a US court. Commencing with an initial filing against several international banks on August 3, 2012, the case has continued for three years and three months. Before the trial opened on November 2, the presiding judge McMahon had dismissed six other banks listed as defendants in Deripaska’s claim, and rejected all but one of the charges against Morgan Stanley. (more…)
The Bible is clear on what horny musclemen like Samson should beware. If they want to go bed with Delilah types, they may wake up without their hair on.
Oleg Deripaska, control shareholder of the Russian aluminium monopoly Rusal and of Russian Machines, a holding of automobile and automotive component manufacturers, is suing Morgan Stanley, the US investment bank, for cheating him of billions of dollars of profit in order to make a quick profit itself of “tens of millions of dollars”. The claims, kept sealed by a New York federal court judge until recently, reveal inside dealing between Deripaska and Canadian businessman Frank Stronach, which Canadian investment institutions and the Canadian press had tried to oppose when their deal was first made in 2007.
Deripaska is now accusing Morgan Stanley of insider dealing in a jury trial under way this month. The trial has required Deripaska and his long-time money manager, Gulzhan Moldazhanova, to face cross-examination in a US court for the first time. Deripaska testified by videolink yesterday; Moldazhanova was on the stand on Monday and Tuesday. (more…)
The commodity supercycle made an offshore fortune for Oleg Deripaska, control shareholder of United Company Rusal, the Russian aluminium monopoly, and for Glencore, the Swiss combine which has financed and managed Rusal’s trade. But the cycle is now in reverse, as the markets accept that China’s economic performance will now trigger short-term booms and busts, keeping the price of aluminium low for the foreseeable future. Too low for the cost advantages to Rusal of the rouble crash to produce optimism for the company’s profitability as a global aluminium exporter.
In September Deripaska declared his first profit dividend in seven years. As an 8.75% stakeholder, Glencore’s share of the $250 million payout will be about $22 million. But Glencore chief executive Ivan Glasenberg’s parallel announcement of cuts to Glencore’s trade loans to its clients means that he is quietly asking Deripaska to pay more cash up front, both for trading commissions and interest on trade advances. How much is a secret Deripaska and Glasenberg aim to keep from the minority Russian shareholders in Rusal; and from the Russian government, which is pushing Rusal to refocus its business on the domestic trade in aluminium, for which Glencore is no longer necessary. (more…)
Insiders at the Russian aluminium monopoly Rusal say that chief executive and control shareholder Oleg Deripaska has been miscalculating the effect of share price surges Rusal has enjoyed on the Hong Kong Stock Exchange in recent weeks. That’s because the share price gains have been quickly reversed – and because Rusal’s most important lender, state owned Sberbank, is unpersuaded that the value of the company is gaining.
Sources on the Hong Kong exchange acknowledge a case officer has been assigned to monitor share trading of Rusal, and that he has been aware of abnormal trade volumes on several days in February and March, along with seesawing in the price of the share. But the Exchange chief executive, Charles Li, is reluctant to confirm what the exchange has done to uncover what happened and enforce exchange trading rules. The exchange is also afraid of being accused of covering up irregular trading practice and inside information. According to Li’s spokesman, Scott Sapp, “HKEx does not comment on individual companies or its regulatory actions.” Sapp then asked not to be named. (more…)
In Ukrainian villages they still say a dog won’t cry if you beat him with a bone. In the Zaporozhye region of eastern Ukraine, there are exceptions – bones on which even dogs fear to choke. The Zaporozhye Alumina and Alumimium Combine (ZALK) is an example. Owned by the Russian aluminium monopoly, Rusal, it has been closed since 2009 because Rusal judges it is unprofitable to operate. That has been a bone of contention between Rusal and the Ukrainian authorities for almost a decade.
This week, the State Property Fund of Ukraine announced it has begun “enforcement proceedings by the executive service after the decision of the highest court to return the [ZALK] shares to the state. We are following the process.” The Ukrainian Supreme Court ruled on March 11 to renationalize Rusal’s shares in ZALK.
Oleg Deripaska (lead image, left), the chief executive of Rusal, says through a spokesman he will appeal the Supreme Court ruling in the international courts. Rusal is “a bona fide purchaser of the plant”, the company spokesman told a Moscow wire service. (more…)
Oleg Deripaska (left), chief executive of the Russian state aluminium monopoly Rusal, makes a practice of thriving when everyone else is suffering. That’s because the Russian government and the state banks cast a more protective cover over heavy debtors when times are bad than when times are better.
Rusal owes $9 billion, a sum that has been greater than its stock market capitalization for much of the past year. But since January 1 Rusal’s share price has been doing so well, the company has issued notices to the Hong Kong Stock Exchange claiming it is innocent of any hanky panky. If Deripaska isn’t protesting too much, what then is driving Rusal’s apparent recovery so far this year? (more…)
United Company Rusal, the state aluminium monopoly run by Oleg Deripaska (lead image), has announced a third-quarter profit of $25 million, its first bottom-line in the black for three years. The company’s report explains the result by pointing to production cuts, the decline in costs of production, and a rise in the market price of aluminium.
In theory, the reason for the profit is that demand for Rusal metal is growing, and supply falling. “Healthy consumption growth,” Deripaska said on the company website last week, “coupled with production curtailments, have led to a deficit in the global market, ex-China, of 0.9 million tonnes of aluminium in the first nine months of the year. This, together with falling LME inventories, which have dropped below 4.5 million tonnes, means the deficit is continuing to widen. These positive market developments and our continued focus on cost controls and increasing margins through value added production have enabled UC RUSAL to report significantly improved third quarter results.”
In fact, Zug, London, and New York traders report, demand for physical metal is uncertain, especially inside China, while supply outside China is being restricted in warehouse by producers like Rusal, and traders allied with them. It remains more profitable to finance aluminium in storage than to sell to metal users and consumers. This is market manipulation, the traders say, pointing to Glencore, a minority shareholder in Rusal and Rusal’s principal trader. The fix isn’t stable and the revenue benefit for Rusal is neither certain nor predictable, the traders warn. (more…)
United Company Rusal, the Russian aluminium monopoly, has announced it has won a judgement of the London Court of International Arbitration (LCIA) confirming its shareholding control of the Aluminium Smelter Company of Nigeria (Alscon), the only aluminium producer in the west African state. The LCIA, Rusal claims, has defeated the Nigerian Government’s challenge to the legality of the privatization of the plant in Rusal’s favour in 2004, and Rusal’s subsequent purchase of Alscon shares in 2006. (more…)
United Company Rusal, Russia’s aluminium monopoly, lost a prop for its sale revenues, debt repayments, and share price this week, when the UK Court of Appeal allowed a new aluminium stocking rule by the London Metal Exchange (LME) which Rusal has been opposing since July 2013. (more…)
The Nigerian government was ordered by the Federal High Court in Abuja on Tuesday to oust United Company Rusal from the country’s aluminium smelter, and hand it over to a Nigerian-American group which has been suing for a decade. (more…)
A combination of American and British commodity traders, aided by George Soros (lead image, left), is planning to oust United Company Rusal, the Russian aluminium monopoly, from its Friguia bauxite and alumina concession in the west African Republic of Guinea. The plan, according to sources in London and Conakry, the Guinean capital, calls for the Guinean President Alpha Conde to revoke Rusal’s production agreement, according to the recommendations of an inter-ministerial group of officials known as the Comité Technique de Revue des Titres et Conventions Miniers (Technical Committee of Review of Mining Titles and Concessions). Conde is being urged by Soros to replace the Russians led by Rusal chief executive, Oleg Deripaska (lead image, right).
The Gerald Group, according to a London source, has a double-barreled target, aiming also at Rusal’s control of the Nikolaev Alumina Refinery (NGZ) in eastern Ukraine. Defending Rusal from the attack, says a source close to Rusal, is Glencore, the Switzerland-based global commodity trader, which is a minority stakeholder in Rusal and the financier of much of its aluminium and alumina trade. (more…)
United Company Rusal, the state aluminium monopoly controlled by Oleg Deripaska (right), has failed in a bid to ward off billion-dollar sanctions from Alpha Conde (centre), the President of Guinea, with an offer to start a cheap, new bauxite mine three years from now.
Sources in Conakry, the capital of the West African republic, have confirmed that an inter-ministerial committee, which has been reviewing the contract records for more than a decade of mineral resource concessions and mining agreements signed by earlier Guinean governments, has found Rusal to have under-paid and under-performed at its Friguia bauxite mine and alumina refinery. Word that the Technical Committee for Review of Mining Titles and Agreements (Comite Technique de Revue des Titres et Conventions Miniers, CTRTCM) was about to rule Rusal in violation and propose major financial penalties led Deripaska to despatch Victor Boyarkin to Conakry for talks to head off the committee’s recommendations. (more…)
United Company Rusal has admitted that one large international bank is refusing to accept the restructuring terms the company has offered for loans totaling $5.15 billion which fall due for repayment by July 7. Until now, there has been speculation that state-owned Chinese banks had been pressing for repayment in cash, rather than accept extension of the loan maturity date and other terms. On Friday, the holdout banks were identified by Rusal sources as Royal Bank of Scotland (RBS), which is majority-owned by the UK Government; and the German bank WestLB, which has been in a form of bankruptcy management since June 2012. Today, Portligon, which has taken over WestLB, reportedly changed its mind, and accepted Rusal’s offer of terms.
The latest Rusal disclosures also provide for an international court to oblige the last holdout to accept another four to five months of negotiating time, thereby preventing it from pitching Rusal into default and bankruptcy next Monday. (more…)
Victor Boyarkin, the former lieutenant-colonel of Russian military intelligence and special operations chief for United Company Rusal, returned to the company on Monday after an absence of fifteen months. In Conakry, the capital of Guinea, his arrival is anticipated shortly for a fresh attempt by Oleg Deripaska, Rusal’s chief executive, to relieve new pressure on Rusal to reopen the Friguia (Fria) alumina refinery and bauxite mine, and spend several hundred million dollars committed earlier to investment in Guinea.
The Guinean President, Alpha Conde (image, right foreground), has started to prepare his presidential election campaign for the poll, which is due in less than a year’s time. In Friguia, where Rusal is the principal source of employment, the alumina refinery has been closed since 2012, and according to local sources, the city is “dead. People are starving, and only a heavy military presence can keep things quiet. Conde has nothing to show for his presidency, and unless he can persuade Rusal to reopen the refinery, he must persuade the Russians to make a large compensation to help the city.” (more…)
Multibillion dollar contracts between GlencoreXstrata and United Company Rusal, signed for trading of aluminium and alumina late in 2011, appear to have unravelled in a London arbitration court. However, because the arbitration has been conducted behind closed doors, Glencore is refusing to confirm or deny that the company is facing liability for a retrospective veto of their six-year $47 billion undertaking.
Glencore’s spokesman, Charles Watenphul for media and Paul Smith for investor relations, will not acknowledge that a ruling by the London Court of International Arbitration [LCIA] has upheld a veto of its Rusal contracts by Victor Vekselberg, the former chairman of the Rusal board and by SUAL Partners, a combination of Vekselberg and Len Blavatnik which holds an 8.75% shareholding in Rusal. The two Glencore spokesmen are also refusing to confirm or deny fresh evidence that Glencore has already paid SUAL Partners $80 million as their share of claims before the LCIA partially settled in January. (more…)
The Oradea alumina refinery is a property of Oleg Deripaska’s in Romania. Deripaska (centre image) is the chief executive and controlling shareholder of United Company Rusal, the Russian aluminium monopoly. Deripaska bought Oradea in 2000 over the unanimous objections of the senior management of Rusal in Moscow at the time. The company’s experts warned that Oradea would be too costly to operate, and of insufficient benefit to Rusal for its alumina needs to warrant the expense.
Since then the asset has all but disappeared from the balance-sheets of Deripaska’s holdings. His ownership of the plant is almost invisible in Romania itself. But the refinery is still there, shuttered and unsellable. (more…)
United Company Rusal, the state aluminium monopoly run by Oleg Deripaska, is selling the Aluminium Smelter Company of Nigeria (Alscon). Only the Rusal announcement to the Hong Kong Stock Exchange (HKEx) doesn’t put a name to the asset. Rusal is also not accepting that the Nigerian courts have already decided the Alscon asset isn’t Rusal’s property to dispose of.
The decision to sell Alscon was reported to the exchange on April 8. The notice explains that the Jersey subsidiary of Rusal, RTI Limited, has hired Renaissance Securities to provide “financial advisory services in respect of a potential sale of shares of a subsidiary(ies) of the Company.” The services are to cost “up to USD10 million (including a fixed success fee of USD3 million and an incentive fee of up to USD7 million) for the entire term of the Mandate Letter, including any extended period of the term.” (more…)
A decade ago, before the Annie-get-your-gun ladies got control of US policy in Ukraine, their Hopalong Cassidy predecessors were in charge. Back then, the menfolk tried an identical combination of bribery and democracy-funding, the point of which was to make sure Serbians lost their right to go to their own beach – that is to say, Montenegro. If the children reading would go to bed immediately, it would be possible to reveal how the unconventional sexual orientation of Annie and Hoppy usually leads to such jolly, if not gay American combinations – bribery, democracy, and beaches.
The war between Moscow, Washington, and Brussels over Montenegro went to the wire on May 21, 2006, when 55.5% of Montenegrin voters approved their secession from Serbia, and applied for recognition, first as an independent state, then as a candidate member of the European Union (EU). Russian policy opposed the breakaway, backed the union with Serbia – rump of the former Yugoslavia – and offered Montenegrins a Russian cash-and-carry alternative to EU grants and conditions. The validity of the super-majority required for the US-EU option to carry was just 0.5% of the 419,236 votes cast – 2,096. In Podgorica, the country’s capital and site of the Podgorica Aluminium Combine (KAP), the US-EU vote came to 53.2%, not enough for the European option to prevail. (more…)
Winston Churchill likened his inability to know what happens in Moscow to a case of bulldogs fighting under a rug. Ivan Glasenberg (right), chief executive of GlencoreXstrata, and Oleg Deripaska (left), chief executive of United Company Rusal — secretive though they are — are too fond of each other to fight. What they do under the rug is something else.
So when Glencore announced last week that it is marking its shareholding in United Company Rusal for sale at $394 million, 53% less than the year before, it’s clear that for Glencore the Rusal stake is a pup. Less obvious is it that when Glencore says it is selling Rusal, it means to do what it says. (more…)
A new type of warfare is being tested in Ukraine. The strategem was first publicly disclosed on February 23, when Zbigniew Brzezinski — the wannabe Secretary of State if the Democratic Party wins the 2016 presidential election — proposed a billion-dollar levy on each of ten Ukrainian oligarchs. Brzezinski didn’t identify them by name, but suggested they were “principal beneficiaries of the country’s stunningly widespread corruption”. Another $10 billion, according to Brzezinski’s scheme, should be “matched” by the deposed president, Viktor Yanukovich, and his family.
Swiss sources reveal that the Swiss government and banks are under pressure right now to extend their freeze of the Yanukovich bank accounts to other Ukrainians on a US Government target list. Brzezinski’s proposal used the term “persuade” for his billion-dollar levy. The US Treasury has conveyed to the Swiss, as well as to banks of the European Union (EU), the targeting of as many Ukrainians as the new government in Kiev wants to threaten, especially if their business is concentrated in the eastern half of the country. (more…)
United Company Rusal, the Russian aluminium monopoly headed by Oleg Deripaska (image right), has won a fresh round in its battle to keep control of its Nigerian aluminium smelter, and ward off claims from a Nigerian-American group whom it defeated in the privatization of the asset almost a decade ago. For the time being, the Nigerian government, headed by President Goodluck Jonathan (left), will neither support Rusal, nor act against it. The indecisive Jonathan lost majority control of the Nigerian House of Representatives in December, and he faces an uncertain presidential election in a year’s time.
In a ruling of Nigerian High Court Justice Jude Okeke, issued in Abuja on January 27, the Nigerian Government’s Attorney-General and Minister of Justice were ordered to face trial with Rusal in the corruption and damages claim by BFI Group Divino Corporation (BFIG). Rusal had asked the court to join the government to the case. BFIG opposed, arguing that in a separate proceeding the Nigerian courts had already ruled against the government, and in favour of BFIG. According to BFIG’s lawyer in court, Rusal’s move threatened to “open a floodgate for everyone who seeks to interrupt proceedings.” (more…)
The Belgians like to speak of themselves as the victims when the great powers of Europe go to war. They were when the Germans invaded in 1914 and 1940.
But since 2014 when the Belgian government has been repeating it is gung-ho for the war with Russia, there has been no Russian attack, no occupation. Instead, there has been the amicable Russia-Belgium diamond trade worth more than $30 billion in annual exports and imports, supplied by the Russian state diamond company Alrosa.
If Belgian officials cut that trade off by agreeing to the European Union (EU) sanctions banning Russian diamond imports, as proposed by other EU states, that would liquidate ten thousand diamond polishing and related jobs concentrated in Antwerp, and destroy the country’s fifth largest export business forever. Alrosa would move its diamonds to Dubai, killing Antwerp as a diamond trading and cutting centre, just as Amsterdam as a diamond centre was killed by the German occupation of 1940. Antwerp took advantage of Amsterdam’s misfortune in 1946. Dubai will now do the same.
This is what Belgian government and diamond industry officials mean when they say they favour the toughest possible sanctions on Russian gas exports to Europe – but no sanctions on Russian diamonds. This is what Prime Minister Alexander De Croo meant when he told an Antwerp conference of diamantaires on September 14: “Sanctions should focus more on the aggressor than ourselves.”
Earlier, reacting to an attack on the diamond trade with Russia by Ukrainian President Vladimir Zelensky in a speech to the Belgian parliament, the spokesman for the Antwerp World Diamond Centre (AWDC) said: “Not only are thousands of jobs in Antwerp at stake in the short term, but this decision will inevitably lead to a worldwide shift in the diamond trade in the long term. As long as international policy-makers worldwide do not adopt a unanimous position to sanction Russian diamonds in their entirety, Antwerp will be the only place that will bear the consequences of an EU sanction.”
By “worldwide shift” he meant Dubai.
De Croo has camouflaged Belgium’s resistance by repeating he will not veto a Russian diamond ban if there is “overwhelming support” for it in the EU. So a majority of the EU states have continued pressing; they are led by Poland. In March of this year, De Croo announced: “I would like to officially state that our country has never hindered any measures regarding diamonds. Our country did not interfere in this issue.” In private, however, De Croo has been casting Belgium’s veto.
The Poles have been attacking De Croo, pressing the case for an EU ban on Russian diamond imports as payback for De Croo’s insistence on imposing EU budget sanctions against the Warsaw government last year. De Croo is also refusing to accept Ukraine’s demand for accelerated membership of the EU and of NATO, and for fresh EU funding to pay Kiev’s war-fighting bills.
Instead, he has just announced €8 million in non-lethal aid to Kiev. “Ukraine can keep on counting on Belgium,” De Croo declared. “More than words, there are actions. Once again, Belgium is responding to concrete needs and will be providing essential equipment to Ukraine in the coming weeks.” The equipment is first-aid kits and pharmaceuticals produced by Belgian companies.
This week the secret Belgian veto campaign appears to have succeeded. The new draft of the eighth round of EU sanctions includes dental floss and deodorants; it leaves out diamonds. This omission is expected to be confirmed publicly on Friday of this week at the EU summit meeting in Prague.
“At the moment, diamonds are not included on the agenda for the next round of sanctions,” announced Tom Neys, the AWDC spokesman. “But things change quickly. [On] Friday [October 7] they will finalize discussions, and the EU [leaders decide] on October 6 and 7. The fact that sanctions also create other ethical problems, and that these sanctions will have no effect in Russia, are probably important elements in these debates. Now is the time to focus on international solutions.”
By “international solutions” the Belgians mean keeping Dubai from taking over Antwerp’s diamond business.
Timing is everything when you are telling jokes on stage; summing up for the jury in a murder trial; or when you are a general preparing to send your army over the top. Knock the comedian, lawyer, or general off his timing, and the laugh, the verdict, and the casualties will go against him.
John Mortimer, a London barrister and author of the Rumpole of the Bailey television show, once told the story of a friend who was coming to the end of his final jury address when he saw the judge writing a note and handing it to the usher. When it was passed to the lawyer as he was speaking, he glanced down to read: “Dear Jim, I thought you’d like to know that your flies are open and I can see your cock.”
Cocks which show or crow – like boys crying wolf – don’t comprehend the risks they create for themselves, and others. This is how it is in Berlin for Olaf Scholz and in Washington for Joseph Biden right now. They can afford to be impervious to the derision they are drawing in Warsaw; not so to the reaction to their antics in Moscow.
In this broadcast by Chris Cook, Gorilla Radio blows the final whistle before we all go over the top (Germans first, then the Poles). Even former Secretary of State John Kerry, career liar that he’s been, is revealed to be blowing on the same whistle this time round.
The official Russian reaction to the Nord Stream attack is to identify it as a US military operation, and to wait for an investigation to produce the evidence. That means wait, delay. No retaliation.
“How will we respond?” Foreign Ministry spokesman Maria Zakharova said on Thursday in the most detailed briefing so far from Moscow. “We will respond with an investigation. This is a must, and our law-enforcement bodies have already launched it. This [the gas pipelines] is our property, resources, and infrastructure.”
“I would like to believe that the international investigation of what happened on the gas pipelines in the Baltic Sea will be objective… We will seek to conduct an honest and objective investigation… I hope that someone in the United States, or maybe someone in Europe — although, unfortunately, Europe in this case can no longer be counted on — someone from the independent investigators will have the desire to clarify the involvement of the United States, the special services and all other bodies in what happened on 25-27 September of this year in the Baltic Sea.”
This means that the Russian Government is waiting, delaying. There will be no retaliation for the time being.
The reason is that Russian officials suspect the Biden Administration of preparing an October Surprise just ahead of Election Day, November 8: an attack on domestic US infrastructure – the electricity grids, for example – which will be reported as the Russian retaliation that won’t be.
The Nord Stream attacks were a military operation of the US, Poland, Denmark, and Sweden, with additional NATO air surveillance support from bases in Italy. Politically, they were an attack on Germany, but the German Chancellor Olaf Scholz has yet to say publicly what he knew in advance, what he knows now.
Who then knows what will come next except that there is now war in Europe, outside the Ukraine. Will the October Surprise begin war inside the United States?
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?”
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.
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.
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.