By John Helmer, Moscow

Every competent gardener knows that horse shit makes valuable fertilizer, so long as you give it at least two months of airing and composting to get rid of the acidity which kills plant roots, and the seeds which grow weeds where you don’t want them. Chicken shit is more balanced, biochemically and horticulturally speaking, because fowls do all their excreting through a single hole. The same can’t be said of the Sunday Telegraph of London or their Russian heroes, Oleg Deripaska and Alexei Mordashov.

That’s because Deripaska and Mordashov pay PR men to place their droppings, all too fresh, in the newspaper; from where energetic reporters, Kamal Ahmed and Elaine Rowley, shovel the product straight on to the Sunday breakfast tables of judges and investors.
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by John Helmer - Tuesday, May 1st, 2012
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By John Helmer, Moscow

If you believe what RusPetro Plc says, this loss-making venture on a small oil patch in Khantiy-Mansiysk — a patch no major Russian oil company has wanted to bother with — is already worth a billion dollars, and is bound to be worth multiples of that. The reason, also according to RusPetro, is the brilliant technical performance of a group of American oilfield engineers. They can be trusted to manage the RusPetro miracle, they claim,because it’s a miracle they have pulled off at least once before – for Mikhail Khodorkovsky’s Yukos. The president of RusPetro doesn’t know much about oil wells, but he too comes from the miracle workers of Khodorkovsky’s Menatep Bank. And the spokesman for this company of miracle-makers is also part of the old Yukos team.

If not the ghost of Khodorkovsky, what makes the miracle believable? Sberbank has continued to lend more than $330 million to finance the dream — with collateral that sold for just $305 million, and despite breaches of loan covenants, violations of oilfield licence and concession terms, and the expiration of one of the licence terms within months.
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by John Helmer - Saturday, April 28th, 2012
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By John Helmer, Moscow

Judge Natalia Bulavintseva ruled yesterday in Chelyabinsk Arbitrazh court that the hearing she had previously fixed for argument by lawyers on the substance of the case against Magnitogorsk Metallurgical Combine’s (MMK) purchase of Flinders Mines will be delayed for another month. Instead of April 25, this hearing has now been set for May 24.

On April 12, when ruling to dismiss a motion by MMK to lift her injunction against proceeding with the deal, Bulavintseva had written: “The validity of [the plaintiff’s] arguments (abuse of discretion) can be verified in court when considering the merits of the case… the court considers [these] issues that should be ascertained when considering the merits of the case.”
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by John Helmer - Thursday, April 26th, 2012
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By John Helmer, Moscow

Oleg Deripaska has insulted another President of the Republic of Guinea as Rusal’s entire country position, including its bauxite mine concessions and the Friguia alumina refinery, is now under review by a presidential commission. More than 20% of Rusal’s worldwide mineral resources and the raw material base supplying its Russian smelters, is now under threat of revocation and nationalization by the government in Conakry.

Just how sharp the recent deterioration between Deripaska and Alpha Conde, Guinea’s president, has become, and how dangerous for Rusal’s ability to continue operating in the country, was signaled by the Russian Foreign Ministry on April 10. In an unprecedented attack on a domestic Guinean movement for higher wages and safer working conditions at Friguia, site of Rusal’s alumina refinery, the Russian ministry headed by Sergei Lavrov, warned against “illegal actions of a local trade union” and “extremist syndicalists.” According to the ministry, “a threat to the safety of Russian employees has been created; looting has begun of the equipment of the enterprise; and production is halted.”
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by John Helmer - Saturday, April 21st, 2012
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By John Helmer, Moscow

From the Bo Xilai case it can be inferred that at the senior level of the Chinese government, the only things done really fast there are taking bribes and poisoning squealers.

By contrast in Moscow, not having a Russian government for several months and not having capital punishment should be the kind of investor-friendly attributes of Russia which have been underrated and under-priced in emerging market trades.

But consider the costs of inertia and delay in the affair of Sergei Pugachev’s heist from the Central Bank of Russia, and one of the assets he left behind, Northern Shipyard of St. Petersburg. This yard is an asset of strategic importance because it supplies the Russian Navy (plus the Chinese and Indian navies) with its surface combatants. Because it absorbs such a large amount of state budget money, control of the cashflow has been fought over since it was first privatized by President Boris Yeltsin in favour of Boris Kuzyk, one of his defence industry advisors, backed by Vladimir Potanin.
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by John Helmer - Thursday, April 19th, 2012
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By John Helmer, Moscow

Flinders Mines (FMS) is what one investor calls a hedge fund hotel, a hangout for bettors on a sure thing.

The source means that after Victor Rashnikov (front seat, left), owner of Magnitogorsk Metallurgical Combine (MMK), decided to buy FMS last November, roughly half the value of the company was bought by hedge funds aiming to collect on the difference between what they advanced and the takeover price they were certain the big Russian would end up paying at deal closure. Because of the action by the Chelyabinsk Arbitrazh Court on March 30, and in the days that have followed, that bet now threatens to lose the hedge funds A$255 million.
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by John Helmer - Tuesday, April 17th, 2012
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By John Helmer, Moscow

Vladimir Kekhman, owner of the Joint Fruit Company (JFC), the near-monopoly supplier of bananas to the Russian market, has wound up his dispute with Star Reefers, the banana boat supplier whose charter contracts JFC cut short and terminated in 2010. The Star boats were operated by JFC to ship bananas from JFC-owned plantations in Ecuador to St. Petersburg, dropping smaller banana cargoes for sale at ports along the way.

The dispute over those contracts resulted in more than a year of litigation in the UK High Court, and an award to Star of $16.3 million in damages and costs, plus interest. When JFC failed to pay that by the November 2011 deadline, Star got the High Court to issue asset disclosure and freeze orders against Kekhman and his associates all over the world. This imperilled not only Russia’s banana traffic, but also Kekhman’s other line of business, the Mikhailovsky theatre and ballet company; the latter has been scheduled to perform in London and New York in a few weeks’ time. Both bananas and ballerinas now appear to be safe from seizure.
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by John Helmer - Sunday, April 15th, 2012
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By John Helmer, Moscow

The unprecedented display of judicial power against the steel oligarch, Victor Rashnikov, on his home turf continued yesterday and today.

Yesterday, at a hearing in the Chelyabinsk Arbitrazh Court Judge Natalia Bulavintseva took a few minutes without the attendance of lawyers, plaintiff Elena Egorova, or executives of Magnitogorsk Metallurgical Combine (MMK), to dismiss an urgent motion from Rashnikov to lift an injunction preventing his completing his A$554 million (US$571 million) takeover of Flinders Mines, an iron-ore prospector in Western Australia.
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by John Helmer - Friday, April 13th, 2012
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By John Helmer, Moscow

This is not the time of year when there’s much sympathy for the plagues in Egypt.

If you are Jewish, there’s the lot the Pharaoh richly deserved — the gnats, flies, frogs, locusts, boils, etc.

If you are Russian, there’s pseudomonas solanacearum Smith, the potato brown rot. This Egyptian plague is a nasty one, not because it’s Egyptian, but because once established in potato cropping areas, the bacterium is resistant to chemical treatments. It can ruin the farmer whose fields are afflicted, and everyone else the poxy spuds come into contact with. Growers who want to export to regulated areas like the European Union and Russia must invest in new areas of cultivation, and take special quarantine measures to keep the plague away. And if the Egyptian growers succeed at that, and manage to lift import barriers and also earn higher prices, there’s the risk that local potato growers will combine to protect their own prices from the import competition.
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by John Helmer - Friday, April 13th, 2012
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By John Helmer, Moscow

If, and it remains a big if, Victor Rashnikov’s Magnitogorsk Metallurgical Combine (MMK) is not clandestinely behind the attempt last week by an unknown shareholder to block the completion of MMK’s proposed takeover of Australian iron-ore prospector, Flinders Mines, then a ruling yesterday by Judge N.A.Bulavintseva is the first sign.

According to the website of the Chelyabinsk Arbitrazh Court, yesterday the judge issued a ruling agreeing to MMK’s request for accelerated consideration of the injunction, which she issued on March 30. Instead of a scheduled date of April 25 for hearing the case of plaintiff Elena Egorova, and MMK’s defence and counter-claim, the judge has now advanced the hearing date to April 12. Here is the latest court record.
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by John Helmer - Tuesday, April 10th, 2012
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