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Oleg Deripaska, chief executive of Russian Aluminum (RusAI), Russia’s largest aluminum producer, and head of Basic Element, which holds his investments in other sectors of the Russian economy, has been feeling maligned for a long time now. A two-year-old lawsuit by smelting rival Mikhail Zhivilo in New York accusing Deripaska and his associates of using illegal tactics in the acquisition of his assets has been dismissed for lack of jurisdiction. But, in all likelihood, the case will either be returned to the courts on appeal or refiled. The trouble Deripaska has had with the U.S. authorities preceded the court case and appears to be persisting, despite the efforts of well-known American lawyers he has engaged to clear him. In Zurich, Deripaska has lost an appeal of an arbitration panel’s award of $90 million to Krasnoyarsk archrival Anatoly Bykov. He faces more of the same in other European jurisdictions. In Frankfurt am Main, lawyers defending Germany’s leading financial newspaper, Frankfurter Allgemeine Zeitung, from a defamation suit filed by Deripaska have turned up more than he can have bargained for.

In Russia, Deripaska can also complain that he’s been maligned. In Moscow, he is the target of a recent petition to the Kremlin by paper and pulp producers who accuse him of using a variety of hostile-takeover tactics. His acquisition of the Ingosstrakh insurance company is under investigation by the General Prosecutor’s Office. Although he married into the Yeltsin circle, he hasn’t been able to put his Kremlin connections to much use in recent months. The four keys to his profit margin in the aluminum trade – electricity, alumina, freight rates and tolling privileges – have come under serious pressure. His attempts to secure shareholding control or regional political influence over the price of energy to his smelters have been less than effective. His control of the Nikolayev alumina refinery, the supplier of roughly one-third of his smelter’s raw-material requirement, is under threat from the government in Kiev and an ambitious Ukrainian metals magnate. Rail tariffs have recently been raised by 5 percent or more, and the possibility of special discounting has shrunk. Deripaska was able to lobby Finance Minister Alexei Kudrin to drop his attempt to halt the tax concessions conferred by tolling contracts – but he lost a similar bid in Ukraine.

Through RusAl, Deripaska has made big promises – to build a new smelter in Murmansk, a new bauxite mine in Guinea, a new partnership with the Chinese Aluminum Co., a new metals complex in Australia, a new smelter in western Ukraine – but there is little yet to show for any of them.

In its section describing investment plans for the next five years, RusAI’s Web site lists four priority projects that are quite different and a good deal less costly. A Ukrainian court recently appointed an expert to take inventory of what exactly has been done at the site of the promised Pervomaiskoye smelter in order to enable it to rule on whether Deripaska has broken the terms of the agreement with the Ukrainian government that allowed him to take over the Nikolayev asset.

To the question of why his fellow oligarchs are looking to cash out at least some of their assets, but not Deripaska, the short answer may be that he has looked for a multitude of exits, only to find that the way is blocked. He can’t list RusAI shares on the London or New York Stock Exchange, because the company’s assets have yet to be consolidated into a single shareholding company. Although Deripaska recently denied that he had made a deal with Roman Abramovich to buy the latter’s half-share of RusAI, sources inside Millhouse, Abramovich’s holding company, claim that Deripaska has been making a bid but lacks the cash to pay the $3 billion sale price outright and cannot come to terms with other shareholders at Millhouse who don’t share the desire to cash out of Russia. They may be biding their time for a counter-bid aimed at Deripaska’s half-share of RusAI. Then, on Oct. 3, Deripaska turned around and declared he had bought a 25 percent stake in RusAI from Abramovich. No price or payment terms were disclose.Deripaska has never revealed the price of any of his transactions, or how they have been paid for.

Borrowing to fund asset takeovers, leverage existing assets, or even pay for production upgrades and expansions, isn’t easy for Deripaska. Although he considers that a current debt portfolio totaling $1.5 billion – including last week’s $100 million loan from Credit Suisse First Boston – is a gilt-edged indicator of his international creditworthiness, he still trails behind his fellow oligarchs in being able to obtain unsecured credits. For every dollar RusAI borrows, international banks want their hands on a metal ingot.

It was therefore noteworthy when Deripaska, on a recent visit to the southeastern Siberian city of Irkutsk, announced that he wants to add to his stakes in the region’s Bratsk smelter, a new smelter site at Taishet and the regional electrical utility, Irkutskenergo. Deripaska said that he aims to bid for Sukhoi Log, the largest unmined gold deposit in Russia.

Now, goldmining would be a first for Deripaska, and Sukhoi Log nothing if not expensive. A few days before his remark, Deripaska had lost out in the bidding for a 45 percent state shareholding in Lenzoloto, the Irkutsk regional goldminer, which has been taken over by Vladimir Potanin’s Norilsk Nickel group at a price of more than $152 million. Potanin would like the market to think that, with control of Lenzoloto, he now has the inside running for the state award of the Sukhoi Log mining license, which will go up for tender after the presidential election next March.

Deripaska’s announcement suggests that he thinks that Potanin may be politically vulnerable and open to a Kremlin challenge to knock him out of the race. Other declared bidders for Sukhoi Log include Polymetal of St. Petersburg, led by Alexander Nesis, and Khazret Sovmen, former owner of Polyus, Russia’s largest operating goldmine, which was acquired a year ago by Potanin. One thing all of them have already learned is that the tender will not be issued by Natural Resources Minister Vitaly Artyukhov until he learns whom the Kremlin wants to win. And that decision won’t be made until after the election season is behind us.

So, Deripaska’s open bid for Sukhoi Log turns out to be a wager that, among the oligarchs and Yeltsin leftovers, he has a better chance of surviving than Potanin. It’s little wonder that Deripaska thinks he’s been maligned to date.

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