By John Helmer in Moscow

Analysts at Moscow’s Renaissance Capital reckon Russian asset values are priced below bargain basement.

A typo in the lead cannot take the glister off Renaissance Capital’s fresh report on Russian gold buying opportunities.

The report, by analysts Rob Edwards and Andrey Krupnik, is entitled “CIS Gold and Silver: A Golden Opportunity”. The lead paragraph says: “We believe gold is well poisoned [sic] to make further gains in the near term. This is somewhat dependent on movements in the dollar, which has reversed its bull run against the world’s major currencies.”

RenCap analyzes just three of the Russian gold producers – Polyus Gold (PLZL:RU), which is currently trading at $25, 60% down over the past three months; Polymetal (PMTL:RU) at $5, down 40%; and Highland Gold (HGM) at 76 cents, down 75%. Peter Hambro Mining (POG:LN), which is London listed, is down 41%, and currently at 741 pence.
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by John Helmer - Friday, September 19th, 2008
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Tajik publication attacks Mineweb’s Helmer and his reporting on aluminium group.

Johannesburg – On September 11, Mineweb published a report by John Helmer, entitled “IMF Attacks Tajikistan Aluminium Co – orders international audit”.

Publication followed attempts by Mineweb’s Moscow office to ask the following questions of Talco in Dushanbe:

1. According to an IMF country report for Tajikistan, issued in June, the IMF considers Talco’s non-transparency and financial control to be “most worrisome”. The IMF says: “the financial operations of the aluminum company (Talco), the largest SOE in Tajikistan, remain nontransparent.”

How does Talco respond to the criticism?
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by John Helmer - Friday, September 19th, 2008
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By John Helmer in Moscow

Russpetstal (“Russian Special Steel”, RSS), the steel affiliate of the state-owned Russian Technologies holding, has decided to acquire up to 4 new operating mills if the price is right, and it can raise the finance from Russian state banks. Details of the targets of RSS’s 18-24 month strategy were recently approved by the RSS board, and disclosed by Igor Alexeyev, deputy chief executive of RSS for strategy and finance.

In an interview this week with CRU Steel News, Alexeyev said the new strategy includes “two to three or four targets” for acquisition”, together with a target for investment into the plants RSS has already acquired.

One of the new acquisition targets may be outside Russia, Alexeyev said, the purpose of which will be to acquire specialty steel technology and management skills currently unavailable in the domestic sector. Following the collapse of demand for stainless and other specialty steels after the collapse of the Soviet Union, Alexeyev explains in a report to be presented at CRU’s stainless conference next week, there has been inadequate investment in new technology and plant facilities for state-of-the-art finishing equipment.
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by John Helmer - Thursday, September 18th, 2008
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Oligarchs put hand in till

By John Helmer in Moscow.

It is a time of extreme paradox. In Soviet style, the US Government is nationalizing its financial instututions to stave off massive default. The Russian Government, by contrast, is encouraging free-market operations to prop up the indebtedness of the oligarchs, while the Finance Ministry, having been embarrassed holding worthless Fannie Mae paper, is now proposing to invest the sovereign wealth fund in depreciating oligarch securities.

A Financial Times reporter close to Oleg Deripaska, owner of Rusal, the Russian aluminium conglomerate, reported this week that he is “facing margin calls of more than $4bn, people familiar with the situation say.” This is a reference to the financing Deripaska raised in the spring to pay part of the purchase price of Mikhail Prokhorov’s 25% shareholding in Norilsk Nickel. Also this week, Deripaska’s Moscow holding is reported as telling Reuters that it will shortly launch a China roadshow to put an improved value on the group’s mining assets. The roadshow is scheduled to follow a Hong Kong tour by the Bolshoi Theatre ballet company, sponsored by Deripaska.

The reports have suggested that if the Chinese market reaction is positive, and the price is right, Deripaska’s Strikeforce Mining and Resources (SMR) may attempt to place shares on the Hong Kong exchange. SMR mines copper-molybdenum deposits at two sites in Siberia, with capacity to lift and process 13 million tonnes of ore per annum. Two refineries in the production chain can produce up to 7,000 tonnes of ferromolybdenum per annum. The price of ferromolybdenum has been dropping, though not yet as steeply as the price of steel and aluminium.
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by John Helmer - Wednesday, September 17th, 2008
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By John Helmer in Moscow

Mining entrepreneur Mike Nunn says First African Diamonds, a company he owns, was illegally expropriated, and that he is taking the DRC government to arbitration in Geneva.

President Joseph Kabila’s review and reorganization of controversial diamond-mining licences and concessions in the Democratic Republic of Congo (DRC) apparently took a new direction this past week, with approval of a Russian proposal to develop the Sengamines project. Until April of this year, this has been under the control of South African mining entrepreneur Mike Nunn and First African Diamonds Ltd. (FAD), a company he owns.

Nunn has told Mineweb that FAD was illegally expropriated, and he is taking the DRC government to arbitration in Geneva.

Alrosa says that it has agreed to start diamond prospecting in the DRC, at Kabila’s request. But Alrosa sources say that details of the undertaking, and of a meeting Alrosa chief executive Sergei Vybornov had last week with Kabila, should be kept secret. It is Vybornov’s second meeting with Kabila this year; the first occurred, with comparably little disclosure, in March.
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by John Helmer - Monday, September 15th, 2008
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By John Helmer in Moscow

Russia’s space agency Roskosmos has agreed to launch the South African Sunbandila satellite by the end of this year at the Baikonour cosmodrome, Roskosmos sources have told Business Day. They confirm earlier statements by Foreign Minister Nkosazana Dlamini-Zuma that an earlier controversy over launch agreements between the two governments for rocketing both a civilian and a military satellite into space had been resolved.

One mystery remains, however. According to sources in Moscow, in the negotiations to resume the Sumbandila launch, the SA government agreed to permit the establishment of a Russian telemetry receiving and rocket tracking station on SA territory. However, the sources now say there is no agreement on this station, and it is not clear why.

Dlamini-Zuma said in May, during a visit to Moscow, that she and her Russian counterparts had resolved their differences on the satellite launch problem, and that she hoped to “see the launch of the satellite by the end of this year.” Ronnie Mamoepa, the Minister’s spokesman, told Business Day/Weekender that resolution of delays and disputes over the satellite launch had been the “priority” of the minister’s visit to Moscow at the time. The Russian text of the protocol, which Dlamini-Zuma and Yury Trutnev, Russia’s Minister of Natural Resources, signed on May 23 set a deadline of July “to finish consultations to find the solution to the problems connected to the launch of the satellite ZA-002”. Asked about the nature of the problems causing the delays, Mamoepa claimed they were technical ones.
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by John Helmer - Sunday, September 14th, 2008
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By John Helmer in Moscow

A new IMF report reveals for the first time where Tajikistan’s aluminium revenues are going.

The International Monetary Fund (IMF) has issued a report that is sharply critical of the Tajikistan Aluminium Company (Talco), the leading enterprise of the Central Asian republic run by President Emomali Rahmon; and has ordered an independent international auditor to check Talco’s accounts for what the IMF describes as “most worrisome financial operations [which] remain nontransparent.”

For the first time, the IMF report has disclosed how little the country’s economy — the poorest in Central Asia — earned from its principal industry, biggest electricity consumer, and most valuable exporter — in 2006 and 2007, just 17% of the value of the aluminium Talco produces and ships to foreign buyers.

The IMF action is an embarrassing curtain-raiser for President Rahmon, who directly controls Talco, and who is behind the hugely expensive UK High Court case, which Talco is waging against Avaz Nazarov and his group of companies, who were ousted from management of the Tajik smelter in 2004, on Rahmon’s order. The four-year old case, in which Talco is represented by the UK law firm, Herbert Smith, has set a UK and world record for legal costs that have now exceeded $126 million. The judge in the case, Justice Tomlinson, has ordered leading figures in Tajikistan, including the President’s brother-in-law, the leading commercial banker of Tajikistan, Hassan Saduloev, to appear for testimony on oath and cross-examination in the trial now scheduled to commence in October.
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by John Helmer - Thursday, September 11th, 2008
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By John Helmer in Moscow

The Udokan copper contest has been won, but by whom?

In April, Mineweb reported that Russia’s biggest copper contest was going to be a very private affair.

Even if there are just two, possibly three contenders — we said at the time — predicting who will win over the next 90 days of the contest may prove to be more frustrating than it looks:
http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=50524&sn=Detail

This week, the decision to award Russia’s largest unmined copper deposit to a duo, Metalloinvest and Russian Technologies, which has never mined copper, confirmed, after the contest had stretched to six months, just how private — and how unclear the prospects for the project continue to be.

Metalloinvest is an unlisted private conglomerate, with two steel mills and two iron-ore mines, which has been having trouble getting a valuation and an underwriter to list its shares on the London Stock Exchange. It is owned in three stakes, whose magnitudes have never been publicly confirmed or verified, by Alisher Usmanov (with about 50%); Andrei Skoch (30%); and Vasily Anisimov (20%).
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by John Helmer - Wednesday, September 10th, 2008
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By John Helmer in Moscow

In antique legend, Icarus was the boy who, ignoring his father’s prudential warning, flew too close to the sun, melting the wax from his wings, and plummeting to his death as a consequence. In W.H. Auden’s modern reflection on the incident, noone witnessing the plunge cared much, while “the expensive delicate ship that must have seen/Something amazing, a boy falling out of the sky/ had somewhere to get to and sailed calmly on.”

The commodity market has been like that recently, sailing on, as high-flyers like Uralkali, the leading Russian potash stock (ticker URKA:LI, URKA:RU) dropped into the sea.

The current standing for Uralkali, at the end of trading on September 9, is a share price of $7, and market capitalization of $14.9 billion. Since June 20, ten weeks ago, Uralkali has fallen from $16 per share, with market cap of $34 billion; a decline of 56% and $19 billion in value.
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by John Helmer - Wednesday, September 10th, 2008
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By John Helmer in Moscow

BHPB’s Russian relationship hostage to Canberra uranium threat as Australian govt invokes Caucasus war to stir uranium sale opposition.

A threat last week by Australian politicians to revoke a year-old agreement for Australian uranium concentrate to be processed into fuel in Russia has been met with calm in Moscow, where sources noted that the uranium is not planned to start moving for another seven years, until 2015. Russian sources close to the uranium negotiations between the two countries also point out that the major loser, if the Australian government implements its threat, will be BHP Billiton, which had been one of the most active lobbyists for the uranium supply deal in the first place.

At a public hearing in Canberra by the joint parliamentary committee on treaties on September 1, Kelvin Thompson, a backbencher who chairs the committee, said he wants to delay ratification of the agreement on uranium supply, processing, and nuclear energy cooperation, which was signed by then President Vladimir Putin and former Prime Minister John Howard, on September 8.
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by John Helmer - Monday, September 8th, 2008
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