Yury Trutnev, the Russian minister in charge of issuing mining licences, had a youthful reputation he was proud of in the martial arts. Very recently, he was so keen to test his prowess as a big-game hunter, he insisted on going on a safari in a South African game-park.
Victor Vekselberg, the metals magnate who owns Renova, which holds a small, no-cost licence for manganese exploration in the Kalahari, was agreeable to flying Trutnev to South Africa on his aircraft for the expedition. Anglo American’s Moscow representative, Rick Witt — an American whom Anglo hired from a job selling oil pumps — prepared the invitation for the hunt; this took place at one of Anglo’s game parks. Exactly where and when is a corporate secret Anne Dunne, Anglo’s ‘ spokesman, refuses to discuss.
Trutnev is also keen to keep his shooting-match with the beasts a secret, since his spokesman refused to discuss the details.
Officials in South Africa say Trutnev tried camouflaging the foray into the bush with an official agenda, ostensibly to meet with his counterparts ^on the Russia-South Africa inter-government commission for trade and economic cooperation (ITEC). But Pretoria initially responded that the meeting lacked aptness, and tried discouraging it. SA officials had been meeting regularly with the Russians for weeks before; and had participated in the G8 summit conference in St.Petersburg, just days before Trutnev wanted to strap on his puttees and sun helmet.
Trutnev’s real intention was also poorly camouflaged by his own ministry, which confirmed that he had met with Tony Trahar, chief executive of Anglo American, without saying where. According to the Russian communique, Trutnev was in Pretoria on July 24 and 25, before he flew on to Angola and Namibia. In Pretoria, he met with SA Foreign Minister Nkosazana Dlamini-Zuma, co-chairman of ITEC, and others. The Trahar meeting was reported to be among them.
At the time, Dunne as Trahar’s spokesman told The Russia Journal that Trutnev and Trahar had met on July 25, adding that she would have no more to say about it. This week she declined to respond to more detailed questions about the safari that apparently preceded the meeting.
In Russian hunting lore, it is said that the lucky hunter escaped from a bear in the woods, only to run into his mother-in-law when he got home. In Moscow, Trutnev is concerned about the speculation, some of it in print, that the Kremlin views his 30-month management of his portfolio with lack of satisfaction, or worse. According to Trutnev’s spokesman, there is “no information” to substantiate the talk of his replacement.
Whether their big game-hunter stays or goes, why is Anglo is pinning its hopes on him? Trutnev was irrelevant when, last autumn, AngloGold Ashanti bid too low for a stake in Polymetal, Russia’s second largest goldminer. It was bought for $930 million in cash, which Suleiman Kerimov borrowed from Sberbank for the deal. Kerimov’s credit usually depends on other Russian partners and guarantors to secure such deals.
Before that, Anglo American was beaten to the sale of Celtic Resources by IG Alrosa — again for cash — to Norilsk Nickel’s gold unit, Polyus. That was the second time, historically, that Anglo had failed to make the Nezhdaninskoye goldmine in the Sakha republic its own. In the early 1990s, Anglo had held an option to develop the mine, signed by the then president of the region, Mikhail Nikolaev. After lengthy study, Anglo’s Minorco unit decided to drop it. Other opportunities for the Anglo group — such as a platinum prospect in the Urals — remain on the books as low-cost exploration plays, without Anglo control, substantial capital commitment, or significant local partnerships.
In terms of venture risk and appetite for mining, it has been De Beers, not Anglo, which has pursued mineable resources the more aggressively. At one time, De Beers had two potential diamond mines on the go, both in the Arkhangelsk region of northwestern Russia. Capturing one was quite an achievement, if the Russian history of the affair were ever to be told; it was later sold to Alrosa. Taking over the second, the Grib pipe of | the Archangel Diamond Corporation, and then losing it to Russian raiders, is a better known story — still without ending.
The one major Russian asset Anglo can claim to have acquired, and to have turned to financial success, is not a mine at all. It is the Syktyvkar Paper and Pulp Plant, in the Karelian republic. How that acquisition was first arranged by Anglo board members through European intermediaries is titivating, if the truth were told. How Oleg Deripaska attacked the stake in a bid for his own control is a story that isn’t quite over yet. But Anglo’s Mondi group remains the best performing of the corporate group’s branches in Russia; the rest have proved to be little more than spear-carriers, expensive ones at that.
Rather then than buy Russian assets, Anglo has been far more successful at selling its own assets to Russians. The first of its successes was the sale of Anglo’s 20% shareholding in Gold Fields to Norilsk Nickel for $1.16 billion in 2004. The second was the proposed sale of Anglo’s 79% control stake in Highveld Steel & Vanadium for $678 million to Evraz, the Russian steelmaker. Announced in July, that deal faces regulatory scrutiny on three continents, and may yet be reversed.
In Soviet history, and also in more recent Russian history, hunting as a sport by senior officials is always rigged so that the big shots always hit their marks. It isn’t known whether on their July safari together, Anglo executives helped drive game into Trutnev’s gunsights. What is much more certain is that Trutnev hasn’t set up any Russian assets for Anglo to capture. He can’t.