OPEN AND SHUT CASE – THE RUSSIAN DIAMOND MINE THAT HAS BEEN STOLEN AT LEAST FOUR TIMES IN TWENTY YEARS

By John Helmer, Moscow

Stealing diamonds is a common crime. Stealing diamond mines is not unheard of, particularly  in Africa. But the Grib diamond mine in the Arkhangelsk region of Russia is the only diamond mine to have been stolen four times in just twenty years. This is a record in the history of the diamond world, and one which four well-known Russian men and one lady can be proud of, quietly.

Alisher Usmanov (lead image, in frame), Vagit Alekperov (under fedora hat), and Vadim Belyaev (kepi) were the culprits until August of this year,  when Elvira Nabiullina, Governor of the Central Bank of Russia,  and Andrei Kostin, chief executive of the VTB state bank , joined in the getaway. The value of the loot is now $1.45 billion. (more…)

AFTER PRIVATIZATION, ALROSA INTRODUCES PIRATIZATION

By John Helmer, Moscow

Alrosa, the largest diamond miner in the world, and a public shareholding company listed on the Moscow Stock Exchange, has replaced its chief executive, Andrei Zharkov (lead image, left) , twelve months before his contract was due to expire.  On Monday the company refused to announce the change, or explain the reason. It refused even to disclose that Zharkov’s contract, which commenced on April 23, 2015, is for a three-year term ending in 2018. Nor has the company confirmed that Zharkov’s replacement is Sergei Ivanov Junior (right side, 1st) the 37-year old son of former Kremlin chief of staff, Sergei Ivanov (right side, 3rd).  

The official announcement of the switch was made by Prime Minister Dmitry Medvedev, when he called Ivanov Junior into his office on Monday afternoon. Medvedev told Ivanov “the Alrosa company is the world’s largest [in diamond mining] and has backbone value for our country, in particular for development of the Far East. Therefore, I would ask you to concentrate on this.  It is necessary to work actively according to all production and economic programs with the [federal] Government, with the Ministry of Finance, to build up a fully fledged relationship with the regional authorities because the company has unconditional value for the Republic of Sakha-Yakutia. You should put all these factors into the set of your priorities as the company’s chief executive.”

Even after the ceremony at the prime ministry and the signing of the government’s appointment paper for Ivanov, Alrosa management was in denial. By the next day the company website had not removed Zharkov from the chief executive’s page; there was no mention of Ivanov. According to Alrosa spokesman Andrei Ryabinnikov, speaking on Monday afternoon: “we do not comment on the details of the employment agreement with Mr. Zharkov. We report all new appointments in the company in special press releases.”

Sources close to Alrosa in Moscow and in diamond trade centres abroad believe Zharkov’s abrupt ouster was the outcome of a power play between former Finance Minister Alexei Kudrin, an economic advisor to the Kremlin, and Yury Trutnev, the deputy prime minister in charge of the Russian Far East.  For many years the dominant state official on the Alrosa board, Kudrin was defeated.  Trutnev, victorious, leaked first word of Zharkov’s replacement by Ivanov on February 27.

The sources also reveal that Zharkov, a long-time protégé of Kudrin and subordinate of the current finance minister Anton Siluanov (lead image, right centre) was removed for pushing too hard the share sell-off and cash collection schemes of the Finance Ministry, also touted by Kudrin.  The Sakha republic, where most of Alrosa’s mines are based, and which holds 25% of the company’s shares, opposed Zharkov, and got Trutnev to agree. Medvedev and President Vladimir Putin then decided that the man they could trust to satisfy the locals, but remain under their thumb, was Ivanov Junior.

 “This is piratization by the state,” explains a London source. “It makes nonsense of the privatization of Alrosa shares, of the 34% free float, of the governance rules of the company. It is simply state companies reverting to form – that’s Soviet form but with less control than in the Soviet days.  It’s now a gang of men wearing state uniforms feathering their nests.”   State piratization is so sensitive that noone inside Alrosa, and almost noone in the Russian diamond industry, will admit what is happening. (more…)

NEWS FROM THE DEAD DROP — THE CROOK WHO FOUND HIS FACE, THE SPY WHO LOST HIS SECRETS

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By John Helmer. Moscow

Confidential subscribers to Dances with Bears have been provided with directions and codes required to find, then open, the dead drops for leaving and collecting the sensitive information on which this website’s investigations depend. This month the dead drop is a rat.  Inside the rat there is a moisture-proof container for miniaturized rolls of film, tape-recordings, official documents, and secret messages.

This week the rat has disgorged two film negatives. The first reveals the face of Benedict Worsley, the man behind Russia’s biggest bank robbery who, until now, has kept his face out of the public media and off the internet. The second is Robert Owen-Jones, an Australian government espionage agent.   Next week he will take over as the Russia-hating chairman of the global diamond trade regulator known as the Kimberley Process. (more…)

OLD MASTERS — YURY TRUTNEV OFFERS RUSSIAN ART COLLECTORS SAFE HARBOUR IN VLADIVOSTOK

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By John Helmer, Moscow

Yury Trutnev, the Kremlin’s special representative for the Russian Fareast, has come up with a scheme, starting this month, for storing the world’s most valuable art works in Vladivostok, one of the world’s smallest art markets, with the personal backing of President Vladimir Putin; and on the advice of Dmitry Rybolovlev, the art-collecting oligarch exiled to Switzerland and Monaco, who is charging Yves Bouvier, the French operator of comparable art storage schemes in Europe, with multimillion dollar art fraud.

This tale was published in Mediapart, a French internet publication, on October 11. It was translated into Russian and published two days later. Not a shred of evidence has since been found to substantiate it. Desperation measures then, but for whose benefit?
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BELGIUM GOES TO WAR AGAINST RUSSIA – WHAT WILL ALROSA DO TO THE ANTWERP DIAMOND TRADE?

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By John Helmer, Moscow

The German invasion of the Netherlands in 1940 wiped out Amsterdam as the centre of the global diamond trade at the time. When the war ended, Antwerp, across the border in Belgium, was preferred by the diamantaires, and so it has remained. Until last week, perhaps.

That’s when the Belgian courts accepted an application from a group of Yukos shareholders to seek out and arrest bank accounts and other assets of identifiable Russian state entities. Alrosa, the state-owned diamond mining company, is considering whether it should continue to do business in Antwerp. Alrosa accounts for 28% of the world’s diamond supply, and 56% of Russian diamonds are exported to Belgium. As the Kremlin orders Russian trade in strategic commodities like oil and gas to move eastward and southward, away from Europe, will Alrosa redirect its diamonds?
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US JUDGE PROTECTS PUTIN DIAMOND MINE — LUKOIL ESCAPES US COURT TEST OF 17-YEAR MINE FRAUD

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By John Helmer, Moscow

A federal US judge has dismissed a 17-year long attempt by Archangel Diamond Corporation (ADC) to recover damages for the alleged theft of its stake in a multibillion-dollar Russian diamond mine by two Russian oligarchs, Alisher Usmanov and Vagit Alekperov (lead image, left), and Alekperov’s company, LUKoil. The legal action protects LUKoil, which has been under US Government sanctions since September 12, from liabilities — if the ADC lawsuit were to succeed — of almost $5 billion.
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WHO IS PULLING THE STRINGS AT ALROSA?

alrosa_strings

By John Helmer, Moscow

When a man falls on his sword, his demise isn’t usually blamed on medical reasons.

A statement from the state diamond miner Alrosa on Monday reported that chief executive Fyodor Andreyev (image, lower right) “decided to resign from the post of ALROSA president for medical reasons. He announced about this decision at the weekly management meeting held on 22 September. Stepping down from the operative management of the company, Fyodor Andreyev will continue to take part in ALROSA governance as a member of the Supervisory Board.” Now the smallest child in Russia knows that to absent himself from school, he must deliver a signed medical certificate. For a publicly listed shareholding company, as Alrosa has been since October 2013, to omit such a detail, and for Andreyev to judge it unnecessary, signals how little has changed in the governance of the company, and how unaccountable and non-transparent Andreyev was both in his coming to Alrosa, and in his going from it.
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WHO IS EMPLOYING THE DECOY TO BLAST FYODOR ANDREYEV? LEV LEVIEV SAYS IT ISN’T HIM. WHAT DID THE ALROSA CHIEF EXECUTIVE DO TO DESERVE YURY TRUTNEV’S SHOT?

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By John Helmer, Moscow

Diamonds are a bit like champagne: even in the worst of times, demand can grow among consumers, and for producers, sales revenues and profits too.

Good news isn’t usually the honey which attracts this particular bear; and Alrosa has been producing plenty of it. Released early this month, the company’s financial report for 2013 and operational report for the first quarter of 2014 show that production of rough stones is up, with higher grades for each tonne of ore and higher volumes of ore out of the company’s newest mines. Rough diamond prices are rising, so sales revenues grew at 11% last year, and are forecast to accelerate to 16% this year. Compared to its major global rivals, Alrosa has been able to maintain its output at the minehead, while the others – De Beers, Rio Tinto — have retreated, and BHP Billiton has left the business altogether.
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LUKOIL WILL SELL THE GRIB DIAMOND PIPE, BUT ALROSA CAN’T AFFORD THE PRICE

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By John Helmer, Moscow

For the first time Alrosa, the state-owned diamond miner, has come out in public and said it wants to buy Grib, the only commercially developed Russian diamond mine owned by LUKoil and its chief executive, Vagit Alekperov. Why it should say so now, when earlier announcements by Alrosa have veiled the target and concealed sale and purchase talks with LUKoil a year ago, isn’t clear.

“If the asset proves to be interesting,” said Igor Kulichik, Alrosa’s chief financial officer, “and if we agree on the price then we are prepared to discuss with Lukoil the purchase of this asset.” Kulichik was briefing sector analysts on Alrosa’s third-quarter financial results on December 5. He was explicitly asked about the Grib sale by a VTB analyst. “We know this asset quite well and we follow it. Yes, Lukoil is targeting to commence production and beneficiation early next year and in the next year they are targeting to already sell from there. We discussed with Lukoil a potential sale of that pipe about a year ago. But our geologists find it difficult to assess exactly what raw material is there in that pipe. So we decided not to rush, basically to let Lukoil start production there, see what comes out of that pipe, see how it develops and then to consider the potential purchase of the asset.” Kulichik made his comment on December 5; Alrosa published the transcript five days later.
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BLOOD MEDIA — LET’S HEAR IT FOR INTERNATIONAL SANCTIONS AGAINST GOOGLE, YAHOO, FACEBOOK, MICROSOFT, APPLE, CISCO, AND OTHER US GOVERNMENT-BACKED VIOLATORS OF INTERNATIONAL HUMAN RIGHTS

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By John Helmer, Moscow

If the US Government and Congress believe they have the right to impose sanctions on Russian individuals and companies for conduct that is legal in Russian and international law, what would happen if the boot were on the other foot – if the Russian Government imposed sanctions on US individuals and corporations for violating Russian law?

The question arises often, very often. Two weeks ago, for instance, a group of US Senators told the US Treasury that VTB, Vnesheconombank and Gazprombank should be penalized for violating “international sanctions by enabling Syria to pay for imports and receive funds for exports. This assistance eases much of the financial burden on the Assad regime, allowing it to continue military purchases and pay the soldiers that sustain the war in Syria.” For background on Russia’s legal position toward the Syrian conflict, read this.
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ALROSA REPORTS PROFIT GROWTH AS DIAMOND PRICES GAIN — PRODUCTION PAY RISES BUT MANAGEMENT IS CUT

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By John Helmer, Moscow

Diamond prices have been growing in the global market since January, but depending on your choice of accounting period, the growth rate is either not much; or not at all; or negative since July. Alrosa, the state-owned diamond miner directed by Fyodor Andreyev (image left), reported its latest financial results this week, noting “positive dynamics in the diamond markets in H1 2013, which resulted in a 7% growth of rough diamond prices since the beginning of 2013.”

The company is hoping to make a start selling 14% of its shares on the Moscow Stock Exchange next month, so it’s putting its best foot forward. A bloc of 7% will come from the 51% shareholding of the federal government; another 7% bloc will come from the Sakha republic’s 32% holding. The regional authorities want the privatization to go no further; so they won’t be too unhappy if share sale demand fails to reach Andreyev’s top of the range valuation at $15 billion. Vladimir Potanin, who was interested in taking over the company in the late 1990s, announced this week he isn’t interested in buying shares, and for good measure accused the federal government of artificially stoking demand.
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SPEEDY GONZALES AND RUSSIA’S RUSH TO ENDORSE THE ZIMBABWE ELECTION RESULT – HOW THE LAVROV DOCTRINE WORKS IN AFRICA

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By John Helmer, Moscow

Sergei Lavrov, the foreign minister of Russia for the past nine years, is almost as well-known for rushing to the rescue of Russian companies in trouble in Africa, as the payback for the favour is unknown. Still, the Lavrov Doctrine is the first major change to have been introduced in the Kremlin’s foreign policy in Africa since the collapse of the Soviet Union.

In the old days the Soviet strategy was one of non-intervention in the internal affairs of the African states. The strategic meaning was that Moscow opposed arms deliveries, bush wars, assassinations, putsches, economic threats and bribery operations by the competing colonial powers and superpowers – the British, French, Americans, Portuguese, Belgians. The Russian Foreign Ministry reiterates this non-intervention doctrine from time to time. In Nigeria, for example, it has had the effect of allowing the local navy to take Russians hostage with impunity, and for the courts to rule punitively against local Russian investments.
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LUKOIL AND AGD START 4-MILLION CARAT DIAMOND MINE AT GRIB

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By John Helmer, Moscow

Arkhangelskgeoldobycha (AGD), the LUKoil diamond-mining subsidiary, has made its first detailed presentation of the new mine it is building in Arkhangelsk, with confirmation of the new mine’s diamond grades, volume of production, and financial value. The Grib mine, named after the Russian geologist who first found the deposit, is the first major diamond source to start production in Russia in several years, and the first to be developed independently of the state miner, Alrosa. As chief executive Maxim Mescheryakov, AGD’s chief executive, told a Toronto, Canada, audience, the presentation is designed “to show that we exist; that we are big; and that we commence production this year, fourth quarter. We are talking about 4 million carats delivered to the market annually.”
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LIFEBUOY MEASURES AT ALROSA – DID FYODOR ANDREYEV BEG NICKY OPPENHEIMER TO INFLATE HIS SHARE PRICE?

By John Helmer, Moscow

If necessity is generally judged to be the mother of invention, crude invention – the fake that is exposed swiftly – is generally the product of desperate mothers. The idea that the Oppenheimer family is keen to buy Alrosa shares, reported by one Moscow business newspaper yesterday and reinforced by another, was regarded as ludicrous by miners and diamantaires who know the circumstances in which Nicky Oppenheimer (image centre) and De Beers were ousted from their last Russian venture in 2008. But a little checking by the Moscow reporters should have turned up the evidence that such a deal, even the faintest interest in it, is also impossible until at least August 15, 2014. So who in Moscow is so desperate as to promote an impossible sale of Alrosa shares? And what does a display of desperation do to the future share price?

The Oppenheimers were pushed out of Russia in 2008 in circumstances which have never been publicly admitted. LUKoil’s controlling shareholder, Vagit Alekperov, the De Beers joint-venture partner initially approved by then Prime Minister Vladimir Putin, had a hand in it. So did Alrosa, then ruled by Deputy Prime Minister Alexei Kudrin. Between the three of them, the formal approval by the government’s Control Commission to authorize the mining of the Grib pipe in Arkhangelsk, was privately reversed, first by delay, then on a technicality, and finally by the writing on the wall. Since the same cast of characters is still running the same business in the same way – expect Kudrin’s return shortly – the Oppenheimers can be certain there is noone in Russia whose word could reliably safeguard their investment.
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OUT OF AFRICA, BACK TO AFRICA — ALROSA RESUMES OFFSHORE MONEYSPINNERS

By John Helmer, Moscow

Alrosa is reopening its African business but there is no song and dance yet. The chief executive, Fyodor Andreyev, is in Angola this week, the company has confirmed, and is discussing with state diamond company Endiama the formation of joint ventures to explore for diamonds on the Angolan-Congolese border. Similar exploration ventures are being planned with Botswana Diamonds Plc and an unidentified company in Zimbabwe. Andreyev’s negotiations are the result of a still secret shift in Alrosa’s policy towards capital expenditure outside the republic of Sakha.

According to the company announcement on April 2, “in the near future, ALROSA’s geologists will conduct preliminary work to assess the areas most promising in terms of potential discovery of a primary diamond deposit.”
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MOTHER NATURE DELIVERS RUSSIAN BOUNTY THE NATURAL WAY, BY SURPRISE, BUT THE GESSEN CLAQUE IS ENVIOUS

By John Helmer, Moscow

Last week Mother Nature delivered a once-in-a-billion-geological-year event — one of the largest natural diamonds ever found in Russia, at Alrosa’s Yubileynaya (Jubilee) mine in fareastern Sakha (Yakutia) (image right). The American diamonds found to date have been peanuts by comparison.

Then ПРИРОДА МАТЬ despatched a meteorite at 54,000 kilometres per hour to burn, bang, break up, and drop over Chelyabinsk city in the central Urals (image left). Not since the Tunguska event of 1908 has such a thing happened in Russia. The US reports three times more meteorite falls than Russia; but at an estimated 10 tonnes by the time it was over Chelyabinsk, the latest meteorite was bigger than most of its American counterparts. It killed noone, but flying glass and blast effects injured about 1,100. Early the same week, a combination of Mother Nature’s blizzards and tornadoes in the US killed at least 9, and inflicted far more valuable damage.
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LUKOIL PLANS LAUNCH OF GRIB MINE IN ARKHANGELSK IN SEPTEMBER

By John Helmer, Moscow

Russian oil company LUKoil plans to launch commercial production of diamonds at its Grib diamond mine in September, the company confirms. It is the first diamond mine to be opened in Russia since Alrosa, the state diamond miner, commissioned the Nyurba mine in Sakha in 2003. Alrosa’s Lomonosov diamond mine, less than 50 kilometres from the Grib site, has been in development since 2005, and the first stripping for the Botyubinskaya mine in Yakutia commenced last month.

On LUKoil’s and Alrosa’s current estimates, the Grib mine with 98 million carats holds roughly twice the volume of mineable diamonds compared to Lomonosov next door. Grib ranks fourth in size of reserves on the table of Russia’s diamond mines, after Udachny, Jubilee, and Mir, all being worked by Alrosa in Sakha.
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ALROSA CONFIRMS TIFFANY DIAMOND CONTRACT, PREFERENTIAL ASSORTMENT SUSPECTED BY RUSSIAN DIAMOND CUTTERS

By John Helmer, Moscow

Alrosa, the Russian diamond miner, signed an agreement on Wednesday [November 28] to supply selected rough diamonds to Tiffany of New York. Signing with Alrosa chief executive Fyodor Andreyev was Andrew Hart, president of Laurelton Diamonds, a Belgian subsidiary of Tiffany, as well as executive vice president of Tiffany Corporation in New York. The Alrosa press release reports that there had been single-lot supply deals on spot market terms between the two in the past, but this is the first long-term agreement between them. According to Andreyev, it “will make our partnership permanent and serve to increase the supply of diamonds to Tiffany.”

This is the second time in a month when Alrosa has publicized diamond supply contracts. On November 13 Alrosa announced it had signed a two-year contract with Conroy Cheng, executive director of Chow Tai Fook, the Chinese diamond-cutter and jewellery manufacturer of China.
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THE BIG BOART BANG – RUSSIA TO SUPPLY DIAMONDS FOR CHINESE TEETH, SAVE GLOBAL DIAMOND MARKET

By John Helmer, Moscow

After more than forty years, the last great Soviet state secret is out. And in its wake, a sensitive Chinese state secret, too.

Russian geologists reported over the weekend that the Popigai crater on the border between the Krasnoyarsk and Sakha regions of north eastern Siberia, formed by the 100-kilometre wide impact of a meteorite about 35 million years ago, could contain trillions of carats of small diamonds. The secret has been locked up in the Soviet archives since the discovery of the crater at least forty years ago.
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THE BRITISH MINISTRY OF TRUTH DECIDES THAT ANOTHER THREE WELL-KNOWN RUSSIANS ARE LIARS – LEV LEVIEV, ARKADY GAYDAMAK, AND CHIEF RABBI BERL LAZAR

By John Helmer, Moscow

When a powerful Kremlin official recently confided that he values the usefulness of UK High Court proceedings involving some of Russia’s wealthiest businessmen, he probably wasn’t thinking of the case which concluded on Friday with a judgement issued by Justice Sir Geoffrey Vos. The Russian official was intimating that the British court is providing an internationally credible platform for forensic analysis of crimes which have been the foundations of many recent Russian fortunes. He probably wasn’t thinking of the diamond and real estate fortune of Lev Leviev (image left); the Soviet debt, gun and diamond fortune of Arkady Gaydamak (centre); or the celestial credits of Chief Rabbi of Russia, Berl Lazar (right). All three were condemned by this ruling.
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HOW TO POKE A PIG IN A POKE — ALROSA PLANS 18% INCREASE IN DIAMOND OUTPUT, 61% INCREASE IN RESERVES – OFFERS VAGIT ALEKPEROV A TAKEOVER OF HIS DIAMOND ASSET AT NO MONEY

By John Helmer, Moscow

Alrosa has announced new strategic targets until the end of 2021, following this week’s meeting of the Supervisory Board, as Alrosa’s board of directors is known. How much of the projected growth will depend on Alrosa getting the Kremlin to persuade Vagit Alekperov of LUKoil to do what he doesn’t want to do is the big question for them all — especially for Deputy Prime Minister Igor Shuvalov, who has been demonstrating sharp interest recently in the price he can arrange for an Alrosa asset sale.

An Alrosa statement says its current diamond production level of about 34 million carats per annum will be lifted to between 38 and 40 million carats, a cumulative growth rate of 6%, by increasing production at the new underground mines in Yakutia, and expanding open-pit production at mines in the Arkhangelsk region of northwest Russia. At the same time, the company’s diamond reserves are to be lifted to 1.19 billion carats, a 61% increase over their present level.
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FOOTNOTE — SHUVALOV STUBS TOE ON ALROSA SCHEME, POSTPONES KICKOFF

By John Helmer, Moscow

The Kremlin has not decided yet how it should privatize Alrosa, according to official disclosures at yesterday’s cabinet meeting chaired by Prime Minister Dmitry Medvedev. The kickback, I mean kickoff of the diamond privatization worth at least $14 billion remains out of reach for the time being.
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KERIMOV AND SHUVALOV COOK UP NEW SCHEME FOR ALROSA AS RUSSIAN AS APPLE PIE – MAKE THAT ЧЕРНИКА

By John Helmer, Moscow

If President Vladimir Putin is intending to demonstrate he has already lost control of the newly appointed government and their oligarch business partners, then in the proposal of Suleiman Kerimov to expand Alrosa’s asset base by buying BHP’s diamond mines in Canada, and privatize 51% of the company in a public share offering, he has his chance. And who better to address this problem (opportunity) than the First Deputy Prime Minister, Igor Shuvalov?

Kerimov made his proposal on May 14 in Vedomosti, and followed with an unprecedented acknowledgement by his spokesman in Bloomberg. In the Vedomosti report, Alrosa sources were reported to have said that last year Kerimov had asked Alexei Kudrin, then finance minister and chairman of Alrosa’s supervisory board, to endorse a deal in which a 51% state shareholding in Alrosa would be put up for sale. Kerimov reportedly told Kudrin also that the international marketability and value of the Alrosa shares should be supplemented by adding diamond mines in Canada which BHP is offering for sale at an initially reported price of about $750 million. Naturally, Kerimov added, his friends at VTB, one of Russia’s state banks, would be happy to lend whatever BHP wanted for the deal.
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ALROSA ISSUES SHARE WARNING, LUKOIL REPEATS MINE SALE OFFER

By John Helmer, Moscow

Alrosa has announced that the privatization plan for sale of its shares on the open market should be restricted in order to preserve government control of the company. The announcement was released Friday after a meeting of the Supervisory Board, Alrosa’s board of directors.

Now why exactly would this group of government officials representing the principal and controlling shares in the Russian diamond mining monopoly go to all the trouble of declaring the obvious? Who doesn’t already know and accept this policy?
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LUKOIL ADVERTISES ARCHANGEL DIAMOND MINE FOR SALE

By John Helmer, Moscow

LUKoil, the second largest of Russia’s oil producers and exporters, is thinking of disposing of its northwestern Russian diamond mine known as Grib, selling the subsidiary Arkhangelskgeoldobycha (AGD) which has held the controversial mining licence through fifteen years of litigation and arbitration with Archangel Diamond Corporation (ADC), a De Beers-owned company until its bankruptcy in 2010.

This isn’t the first time LUKoil has advertised such a sale. Because of the unresolved litigation and the mountain of evidence it has produced, the asset may be unsellable, at least to a foreign buyer. But if timing and tattle are telling against the sale, then is LUKoil doing no more than asking the state, through Alrosa, to take the diamond-mine off its hands at a conveniently high price?
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DOWN FEDINKA! SIT! – ALROSA SHARE SALE OFF UNTIL 2017

By John Helmer, Moscow

Alrosa’s state-owned shares will not be privatized until 2017, if then, a Kremlin document reveals this week.

The document is a 35-page briefing paper compiled by the Ministry of Economic Development, and presented by the Minister, Elvira Nabiullina, to President Dmitry Medvedev on January 24. In a tabulation of the government’s latest privatization schedule, at page 11 of the brief, a 50.9% stake in Alrosa is identified as subject to sale by 2017. The ministry declined to respond to a request for clarification.
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ARCHANGEL DIAMOND TAKES LUKOIL TO THE MAT AGAIN

By John Helmer, Moscow

Archangel Diamond Corporation (ADC) has this month renewed its battle against LUKoil for the latter’s alleged theft of multi-billion diamond mining rights at the Verkhotina deposit in the Arkhangelsk region of northwestern Russia. The new claims were lodged in the US District Court in the District of Colorado on January 6. Lead lawyers for ADC are the US-Russian law firm, Marks & Sokolov.

The case has been in the US and Swedish courts for more than a decade; in 2010 ADC’s failure to recover its 40% stake in the project and enforce its joint-venture agreement to mine the diamonds resulted in the company’s bankruptcy. What remains of ADC is a liquidation trust, based in Colorado, where ADC once had its headquarters for the Russian mining project. LUKoil operations in Colorado have also been documented in the court submissions in order for ADC’s applications to the courts in that state to be allowed to go to trial.
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PUTIN SAYS SOMETHING TO ANDREYEV — ALROSA SHARE SALE PROMOTION DEFLATES

By John Helmer, Moscow

Alrosa has been attempting to boost its share price, following the start to regular share trading on the Moscow MICEX exchange at the beginning of this month. On December 13, the company released a forecast for next year of rising mine volumes and higher revenues and profits.

But four days earlier, on December 9, Alrosa’s chief executive Fyodor Andreyev (image left) met Prime Minister Vladimir Putin for his first-ever solo session with the head of government (image right). While Putin meets from time to time with heads of the Sakha republic, where Alrosa’s mines are concentrated – the last of those was on January 18 of this year — Putin has not met one on one with a chief executive of the company since 2004. That was when he discussed moving the then chief executive, Vyacheslav Shtirov, from the company to the presidency of the Sakha republic.
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SEX CHANGE IN THE DIAMOND BUSINESS — ALROSA NOW WEARS THE PANTS, AFTER THE OPPENHEIMERS SELL THEIR BALLS, I MEAN THE CROWN JEWELS

By John Helmer, Moscow

There’s not much of a market in used testicles.

When Jonathan Oppenheimer (right image) was obliged to sell his last week, ending the Oppenheimer family’s century-old diamond business, those closest to the affair in Johannesburg sniffed that Jonathan Oppenheimer’s wife Jennifer Ward Oppenheimer had so gravely damaged the value of the De Beers brand, her father-in-law, Nicholas Oppenheimer, was obliged to accept a discount buyout from Anglo American Corporation.
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AND THEN THERE WERE NONE

By John Helmer, Moscow
  @bears_with

Agatha Christie’s whodunit entitled And Then There Were None – the concluding words of the children’s counting rhyme — is reputed to be the world’s best-selling mystery story.    

There’s no mystery now about the war of Europe and North America against Russia; it is the continuation of Germany’s war of 1939-45 and the war aims of the General Staff in Washington since 1943. Defense Minister Sergei Shoigu (left) and President Vladimir Putin (right) both said it plainly enough this week.

There is also no mystery in the decision-making in Moscow of the President and the Defense Minister, the General Staff, and the others; it is the continuation of the Stavka of 1941-45.  

Just because there is no mystery about this, it doesn’t follow that it should be reported publicly, debated in the State Duma, speculated and advertised by bloggers, podcasters, and twitterers.  In war what should not be said cannot be said. When the war ends, then there will be none.  

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RUSSIANS RAISE THEIR GLASSES – THE TOAST IS TO BEATING THE BLOCKADE OF MOSCOW



By John Helmer, Moscow
  @bears_with

Alas and alack for the Berlin Blockade of 1948-49 (Berliner Luftbrücke): those were the days when the Germans waved their salutes against the unification of Germany demilitarised and denazified; and cheered instead for their alliance with the US and British armies to fight another seventy years of war in order to achieve what they and Adolf Hitler hadn’t managed, but which they now hope to achieve under  Olaf Scholtz — the defeat of the Russian Army and the destruction of Russia.

How little the Germans have changed.

But alas and alack — the Blockade now is the one they and the NATO armies aim to enforce against Russia. “We are drawing up a new National Security Strategy,” according to Foreign Minister Annalena Baerbock. “We are taking even the most severe scenarios seriously.”  By severe Baerbock means nuclear. The new German generation — she has also declared “now these grandparents, mothers, fathers and their children sit at the kitchen table and discuss rearmament.”  

So, for Russia to survive the continuation of this war, the Germans and their army must be fought and defeated again. That’s the toast of Russian people as they salute the intrepid flyers who are beating the Moscow Blockade.  

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THE INTERNATIONAL ATOMIC ENERGY AGENCY GOES TO WAR — GORILLA RADIO GOES NUCLEAR

By John Helmer, Moscow
  @bears_with

Last week the International Atomic Energy Agency’s (IAEA) board of governors voted to go to war with Russia by a vote of 26 member countries against 9.

China, Vietnam, India, Pakistan, Egypt, Senegal and South Africa voted against war with Russia.  

The IAEA Secretary-General Rafael Grossi (lead image, left) has refused to tell the press whether a simple majority of votes (18) or a super-majority of two-thirds (23) was required by the agency charter for the vote; he also wouldn’t say which countries voted for or against. The United Nations Secretary-General Antonio Guterres then covered up for what had happened by telling the press: “I believe that [IAEA’s] independence that exists and must be preserved is essential. The IAEA cannot be the instrument of parties against other parties.” The IAEA vote for war made a liar of Guterres.

In the IAEA’s 65-year history, Resolution Number 58, the war vote of September 15, 2022,  is the first time the agency has taken one side in a war between member countries when nuclear reactors have either been attacked or threatened with attack. It is also the first time the IAEA has attacked one of its member states, Russia, when its military were attempting to protect and secure a nuclear reactor from attack by another member state, the Ukraine, and its war allies, the US, NATO and the European Union states. The vote followed the first-ever IAEA inspection of a nuclear reactor while it was under active artillery fire and troop assault.

There is a first time for everything but this is the end of the IAEA. On to the scrap heap of good intentions and international treaties, the IAEA is following the Organisation for the Prohibition of Chemical Weapons (OPCW), and the UN Secretary-General himself.  Listen to this discussion of the past history when the IAEA responded quite differently following the Iranian and Israeli air-bombing attacks on the Iraqi nuclear reactor known as Osirak, and later, the attacks on Pakistan’s nuclear weapons sites.

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INTERNATIONAL ATOMIC ENERGY AGENCY TAKES UKRAINE SIDE IN WAR IN SEPTEMBER 15 VOTE, MAKING UN SECRETARY-GENERAL GUTERRES EITHER A LIAR OR A FOOL

By John Helmer, Moscow
  @bears_with

The International Atomic Energy Agency (IAEA) decided this week to take the side of Ukraine in the current war; blame Russia for the shelling of the Zaporozhye Nuclear Power Plant (ZNPP); and issue a demand for Russia to surrender the plant to the Kiev regime “to regain full control over all nuclear facilities within Ukraine’s internationally recognized borders, including the Zaporizhzhya Nuclear Power Plant.”      

This is the most dramatic shift by the United Nations (UN) nuclear power regulator in the 65-year history of the organisation based in Vienna.

The terms of the IAEA Resolution Number 58, which were proposed early this week by the Polish and Canadian governors on the agency board, were known in advance by UN Secretary-General Antonio Guterres when he spoke by telephone with President Vladimir Putin in the late afternoon of September 14, before the vote was taken. Guterres did not reveal what he already knew would be the IAEA action the next day.  

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THE RUSSIAN SITUATION COMEDY IS NO LYING MATTER – THE JOKE IS ON THE OFFICE OF FOREIGN ASSETS CONTROL

By John Helmer, Moscow
  @bears_with

Never mind that King Solomon said proverbially three thousand years ago, “a merry heart doeth good like a medicine.”  

With seven hundred wives and three hundred concubines, Solomon realized he was the inventor of the situation comedy. If not for the sitcom as his medicine, the bodily and psychological stress Old Solly had to endure in the bedroom would have killed him long before he made it to his death bed at eighty years of age,  after ruling his kingdom for forty of them.

After the British sitcom died in the 1990s, the subsequent stress has not only killed very large numbers of ordinary people. It has culminated today in a system of rule according to which a comic king in Buckingham Palace must now manage the first prime minister in Westminster  history to be her own joke.

Even the Norwegians, the unfunniest people in Europe, have acknowledged that the only way to attract the British as tourists, was to pay John Cleese of Monty Python and Fawlty Towers to make them laugh at Norway itself.   This has been a bigger success for the locals than for the visitors, boosting the fjord boatman’s life expectancy several years ahead of the British tourist’s.  

In fact, Norwegian scientists studying a sample of 54,000 of their countrymen have proved that spending the state budget on public health and social welfare will only work effectively if the population is laughing all the way to the grave. “The cognitive component of the sense of humour is positively associated with survival from mortality related to CVD [cardio-vascular disease] and infections in women and with infection-related mortality in men” – Norwegian doctors reported in 2016. Never mind the Viking English:  the Norwegian point is the same as Solomon’s that “a sense of humour is a health-protecting cognitive coping resource” – especially if you’ve got cancer.  

The Russians understand this better than the Norwegians or the British.  Laughter is an antidote to the war propaganda coming from abroad, as Lexus and Vovan have been demonstrating.   The Russian sitcom is also surviving in its classic form to match the best of the British sitcoms, all now dead – Fawlty Towers (d. 1975), Black Adder (d. 1989), You Rang M’Lord? (d. 1988), Jeeves and Wooster (d. 1990), Oh Dr Beeching! (d.1995), and Thin Blue Line (d. 1996).

The Russian situation comedies, alive and well on TV screens and internet streaming devices across the country, are also increasingly profitable business for their production and broadcast companies – not despite the war but because of it. This has transformed the Russian media industry’s calculation of profitability by removing US and European-made films and television series, as well as advertising revenues from Nestlé, PepsiCo, Mars, and Bayer. In their place powerful  Russian video-on-demand (VOD) streaming platform companies like Yandex (KinoPoisk), MTS (Kion),  Mail.ru (VK), and Ivi (Leonid Boguslavsky, ProfMedia, Baring Vostok)  are now intensifying the competition for audience with traditional television channels and film studios for domestic audiences.  The revenue base of the VOD platforms is less vulnerable to advertisers, more dependent on telecommunications subscriptions.

Russian script writers, cameramen, actors, designers, and directors are now in shorter supply than ever before, and earning more money.  “It’s the Russian New Wave,” claims Olga Filipuk, head of media content for Yandex, the powerful leader of the new film production platforms; its  controlling shareholder and chief executive were sanctioned last year.  

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RUSSIAN AVIATION INDUSTRY CORRECTS YELTSIN YAW – BOEING, AIRBUS DITCHED



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

It was the American humourist Mark Twain who didn’t die in 1897 when it was reported that he had. Twain had thirteen more lively years to go.

The death of the Russian aerospace and aviation industry in the present war is proving to be an even greater exaggeration – and the life to come will be much longer. From the Russian point of view, the death which the sanctions have inflicted is that of the US, European and British offensive against the Soviet-era industry which President Boris Yeltsin (lead image, left) and his advisers encouraged from 1991.

Since 2014, when the sanctions war began, the question of what Moscow would do when the supply of original aircraft components was first threatened, then prohibited, has been answered. The answer began at the Federal Aviation Administration (FAA) in 1947 when the first  Supplemental Type Certificate (STC) or Parts Manufacturing Approval (PMA) was issued by Washington officials for aircraft parts or components meeting the airworthiness standards but manufactured by sources which were not the original suppliers.   

China has been quicker to implement this practice; Chinese state and commercial enterprises have been producing PMA components for Boeing and Airbus aircraft in the Chinese airline fleets for many years.  The Russian Transport Ministry has followed suit; in its certification process and airworthiness regulations it has used the abbreviation RMA, Cyrillic for PMA. This process has been accelerating as the sanctions war has escalated.

So has the Russian process of replacing foreign imports entirely.

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FOR WANT OF A NAIL THE KINGDOM WAS LOST – ENGLISH PATHOLOGIST GUY RUTTY FACES CHALLENGE TO THE RELIABILITY OF HIS NOVICHOK EVIDENCE



By John Helmer, Moscow
  @bears_with

The weakest link in the British government’s four-year long story of Russian Novichok assassination operations in the UK – prelude to the current war – is an English medical expert by the name of Guy Rutty (lead image, standing).

A government-appointed pathologist advising the Home Office, police, and county coroners, Rutty is the head of the East Midlands Forensic Pathology Unit in Leicester,  he is the author of a post-mortem report, dated November 29, 2018,  claiming that the only fatality in the history of the Novichok nerve agent (lead image, document), Dawn Sturgess, had died of Novichok poisoning on July 8, 2018. Rutty’s finding was added four months after initial post-mortem results and a coroner’s cremation certificate stopped short of confirming that Novichok had been the cause of her death.

Rutty’s Novichok finding was a state secret for more than two years. It was revealed publicly   by the second government coroner to investigate Sturgess’s death, Dame Heather Hallett, at a public hearing in London on March 30, 2021. In written evidence it was reported that “on 17th July 2018, Professor Guy Rutty MBE, a Home Office Registered Forensic Pathologist conducted an independent post-mortem examination. He was accompanied by Dr Phillip Lumb, also an independent Home Office Registered Forensic Pathologist. Professor Rutty’s Post-Mortem Report of 29th November 2018 records the cause of death as Ia Post cardiac arrest hypoxic brain injury and intracerebral haemorrhage; Ib Novichok toxicity.”  

Hallett, Rutty, Lumb, and others engaged by the government to work on the Novichok case have refused to answer questions about the post-mortem investigations which followed immediately after Sturgess’s death was reported at Salisbury District Hospital; and a cause of death report signed by the Wiltshire Country coroner David Ridley, when Sturgess’s body was released to her family for funeral and cremation on July 30, 2018.  

After another three years, Ridley was replaced as coroner in the case by Hallett in March 2021. Hallett was replaced by Lord Anthony Hughes (lead image, sitting) in March 2022.

The cause-of-death documents remain state secrets. “As you have no formal role in the inquest proceedings,” Hallett’s and Rutty’s spokesman Martin Smith said on May 17, 2021, “it would not be appropriate to provide you with the information that you have requested.” 

Since then official leaks have revealed that Rutty had been despatched by the Home Office in London to take charge of the Sturgess post-mortem, and Lumb ordered not to undertake an autopsy or draw conclusions on the cause of Sturgess’s death until Rutty arrived. Why? The sources are not saying whether the two forensic professors differed in their interpretation of the evidence; and if so, whether the published excerpt of Rutty’s report of Novichok poisoning is the full story.   

New developments in the official investigation of Sturgess’s death, now directed by Hughes, have removed the state secrecy cover for Rutty, Lumb, and other medical specialists who attended the post-mortem on July 17, 2018. The appointment by Hughes of a London lawyer, Adam Chapman, to represent Sergei and Yulia Skripal, opens these post-mortem documents to the Skripals, along with the cremation certificate, and related hospital, ambulance and laboratory records. Chapman’s role is “appropriate” – Smith’s term – for the Skripals to cross-examine Rutty and Lumb and add independent expert evidence.

Hughes’s appointment of another lawyer, Emilie Pottle (lead image, top left), to act on behalf of the three Russian military officers accused of the Novichok attack exposes this evidence to testing at the same forensic standard. According to Hughes,  it is Pottle’s “responsibility for ensuring that the inquiry takes all reasonable steps to test the  evidence connecting those Russian nationals to Ms Sturgess’s death.” Pottle’s responsibility is to  cross-examine Rutty and Lumb.

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KILLING IS CHEAPER — THE US ARMY SPECIAL OPERATIONS COMMAND WEAPONIZES TWITTER, FACEBOOK, INSTAGRAM, WHATSAPP, TELEGRAM

By John Helmer, Moscow
  @bears_with

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.

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MARIA YUDINA OUT OF THE DARK – THE RUSSIAN CLASSICAL PIANIST PLAYS AGAIN

By John Helmer, Moscow
  @bears_with

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.

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