By John Helmer in Moscow

Eric Ambler once told the tale of a clapped-out Australian reporter, based in Hong Kong, whose near-bankrupt newsletter suddenly starts to make a fortune on its classified advertisements. The journalist couldn’t understand why, but didn’t want to look his gift horse too closely in the mouth.

It turned out that someone was publishing coded intelligence on secret Chinese nuclear missile silos. The Chinese then tried to buy the newsletter at a premium to stop the disclosures.

It’s mysteries like these, some of them fictional, that are suggested when phantoms emerge to sign apparently real mining concession agreements with real government officials. The phantom in the latest mystery is Pavel Krivoshei, whose name, possibly of Ukrainian ethnicity, suggests in Russian, Krivaya sheya — “crooked neck”. Krivoshei was reported on February 16 by the press of Myanmar as having signed, on behalf of a Singapore-registered company, Chandwin International, an agreement to prospect for gold and other miners along the River Uru.
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by John Helmer - Monday, February 25th, 2008
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By John Helmer in Moscow

Nigerians try to wind up international gas companies against Gazprom “threat”

Gazprom, the world’s largest gas producer and Russia’s dominant enterprise, is not ready for mega-deals with Nigeria, executives told Mineweb this week in Moscow. They also warned the Nigerian Gas Company and government officials against manipulating Gazprom as a billion-dollar bogeyman in schemes to press other international gas producers into bidding higher for their Nigerian targets.

The Russian officials are reacting to a report in Tuesday’s Daily Trust of Abuja, the Nigerian capital, claiming that a Gazprom “technical team will be around for two weeks, while the managing director of Gazprom is expected to arrive Nigeria tomorrow and may hold talks with President Umaru Musa Yar’adua. After the on-going talks with the Nigeria oil authorities, a Memorandum of Understanding, (MOU) will be signed.”

The managing director did not appear. There was no meeting with President Yar’adua. No MoU was signed. Not yet.
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by John Helmer - Thursday, February 21st, 2008
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By John Helmer in Moscow

It’s never been the custom of Russian hunters to speak of hitting two birds with one stone. Instead, the Russian expression is to kill two rabbits with one shot.

Lest anyone think that President Vladimir Putin is losing his grip, the Kremlin last evening revealed a move that firmly knocks two metal and mining oligarchs on the head. In a announcement after market closing, Norilsk Nickel, Russia’s largest mining company, revealed that it is to merge with the iron-ore and steelmaking assets of Alisher Usmanov. A proposal for the deal from Interros, the holding company of controlling shareholder Vladimir Potanin, calls for a vote at the next Norilsk Nickel board of directors’ session on February 29.

If implemented, the move creates a $75 billion capital hurdle too high for Oleg Deripaska, the aluminium oligarch, to attempt his merger on hostile terms with Norilsk Nickel.

It also takes Usmanov out of action — a man who began his career as bagman and debt collector for the clique who once controlled Gazprom, and with whom Gazprom’s current directorate, including presidential successor Dmitry Medvedev, have never felt comfortable.

Deripaska — nicknamed “zaitschik” (hare) by his patron, Mikhail Chernoy (Michael Cherney) — had been telling the Russian press and brokers early this week that he had secured his takeover deal against Potanin. Deripaska claimed that remarks by a mid-level official at the Federal Antimonopoly Service (FAS) yesterday signaled Kremlin approval for the takeover.
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by John Helmer - Tuesday, February 19th, 2008
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By John Helmer in Moscow

There’s a well-known Russian maxim, which can be roughly translated as: “Pull out your nose, your tail will get stuck; pull out your tail, your nose will get stuck.” The sticking place, it’s understood, is mud; murk; one unpleasantly adhesive predicament, or another.

You might say this is what has happened to the leftovers of the Yukos oil empire, once amassed by Mikhail Khodorkovsky. And while his nose is firmly stuck in a Russian jail, his tail is being wagged by a handful of American former subordinates, led by the former chief financial officer of Yukos, Bruce Misamore. To hear his advocates tell his story, he is the innocent victim of a Russian extortion and bribe scheme, in which the prize is a very large amount of cash currently sitting in two escrow accounts of Fortis Bank in the Netherlands. The Russian version charges Misamore and his associates with illegally claiming the last of the Yukos loot, sold up by a Russian bankruptcy administrator after convictions of Khodorkovsky, the company, and his associates on fraud and tax evasion charges.

Late next month, a court-ordered auction will be held in Amsterdam for cash of $1.492 billion, plus a 49% stake in a central European oil pipeline company, worth between $1.2 billion and $1.6 billion. The assets belong to Yukos Finance, a company Khodorkovsky registered for safe haven in Holland. The cash comes from the sale of a 54% stake in the Lithuanian oil refinery Mazeikiu; the balance represents the audited valuation of equity of Transpetrol, the Slovak republic’s pipeline company, in which Yukos held a 49% stake.
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by John Helmer - Monday, February 18th, 2008
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By John Helmer in Moscow

Potanin gathers Kremlin support for blocking Norilsk Nickel takeover by Deripaska’s Rusal.

One of the key Kremlin figures, who intervened last autumn in the fight between Vladimir Potanin and Mikhail Prokhorov, has decided not to back Oleg Deripaska in his hostile takeover bid for Norilsk Nickel.

The figure, who declined to respond to requests for comment, had earlier taken Prokhorov’s side, when Prokhorov and Potanin failed to agree on terms for a sale and purchase of Prokhorov’s 25% plus one shareholding in Norilsk Nickel, the diversified global metals miner and Russia’s largest mining company. Prokhorov then drafted a deal with Deripaska, swapping his Norilsk Nickel stake for an 11% shareholding in United Company Rusal (formerly Russian Aluminium); plus $4.438 billion in cash. A purported cash balance of $2.7 billion was also agreed between the two as a deferred payment obligation. The effective price Deripaska paid, and Prokhorov received for his Norilsk Nickel stake, was $251 per share.

The terms were revealed by Mineweb in mid-December:

http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=42218&sn=Detail
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by John Helmer - Thursday, February 14th, 2008
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By John Helmer in Moscow

Ukrainian steel company rejects Usmanov merger proposal on respective value grounds.

Alisher Usmanov’s Russian iron-ore group Gazmetall has failed to strike a deal to take over the Industrial Union of Donbass (IUD), a Ukrainian steelmaker, after the Ukrainians agreed to take Usmanov’s iron-ore for their furnaces, but refused to accept his shareholding terms.

Talks between the two were first reported almost exactly a year ago, in February 2007. Sources close to the abortive negotations claim

IUD had initially valued Usmanov’s assets in Gazmetall at roughly double IUD’s value, and allowing for a premium, the Ukrainians told Usmanov that a merger would cost him more than 50% of his Gazmetall holding.

Losing control of his assets wasn’t what Usmanov had in mind. In a clumsy attempt to sandbag the Ukrainians in a campaign of Moscow press leaks, Usmanov said publicly he valued his holding at $10-$12 billion, while he considered IUD to be worth $5 billion. He insisted that a swap of shares should leave IUD with less than a 50% stake in the new, merged company.
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by John Helmer - Wednesday, February 13th, 2008
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By John Helmer in Moscow

The latest in Russian checks on penny gold stocks ABV Gold and Aurus fail to support gold resource and other claims made by the companies concerned.

Following Mineweb’s previous reports on the companies, fresh announcements from ABV Gold and Aurus have had mixed impact on the US over-the-counter pinksheets market.

On January 25, Aurus issued a statement advising shareholders not to believe what they have been reading in Mineweb:

“NEW YORK, NY–(Marketwire – January 25, 2008) – Aurus Corp. (PINKSHEETS: AURC) must once again answer allegations that are unsubstantiated and opinionated. This matter refers to an article written by John Helmer and released on Mineweb. The Board is meeting with its attorneys to prepare a news release to address the statements and insinuations of Mr. Helmer. The news release shall be issued on January 29, 2008.”

January 29 passed calmly, and no news release has followed.
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by John Helmer - Wednesday, February 13th, 2008
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By John Helmer in Moscow

A mysterious and protracted investigation by the Toronto Stock Exchange and Ontario market regulators of De Beers-owned Archangel Diamond Corporation (ADC) is being kept secret on the apparent legal advice of Robert Shirriff. A Canadian Queen’s Counsel since 1972, and partner in the law firm of Fasken Martineau DuMoulin, Shirriff is a director of the Ontario Securities Commission. Shirriff is also a director of Archangel Diamond Corporation (ADC), and of several other De Beers companies in Canada — De Beers Canada Holdings, De Beers Canada, and Diapros Canada.

Trading in ADC shares — ticker AAD — was suspended by the Toronto exchange on November 9. Three months have now passed, but the stock remains in suspension — without explanation from ADC or De Beers; and without a report of the investigation initiated by Canadian regulators.

The Toronto-listed ADC hit its trading low of 35 cents last year on October 31. As the Bloomberg chart shows, on or about November 1, someone started buying, and the share price rocketed upward by 43%:
http://www.bloomberg.com/apps/cbuilder?ticker1=AAD:CN
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by John Helmer - Monday, February 11th, 2008
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By John Helmer in Moscow

The UK High Court has opened for the first time documents showing how Deripaska created his empire.

It was the 19th century poet Robert Browning, who claimed: “A man’s reach should exceed his grasp, or what’s a heaven for?” If Oleg Deripaska is a romantic overreacher like that, the UK High Court may shortly acquaint him with the tougher, older admonition that it is easier for a camel to pass through the eye of a needle, than for a rich man to enter the kingdom of heaven.

Deripaska’s new problem is that, for the first time ever, documentary evidence has been submitted to an international court suggesting how Deripaska, on what purports to be his own signature and instruction, moved cash out of his aluminium smelters in Russia into an international shareholding scheme of trusts, holding companies, cutouts, trading units, and production assets. Consolidating and controlling these, as he went along, Deripaska created a series of super-holdings; these have now evolved into Basic Element, Deripaska’s Moscow holding.

The evidence is part of an amended complaint filed in the London court by lawyers for Michael Cherney (Mikhail Chernoy). He is charging Deripaska with violating the terms of their partnership agreement; diverting money and assets out of the aluminium business Cherney had created; emptying Cherney’s stake in the Radom super-holding of its value; and ultimately depriving Cherney of his buyout share, first signed by the two men in March 2001, and tied to a larger set of agreements for enforcement in London.
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by John Helmer - Thursday, February 7th, 2008
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By John Helmer in Moscow

Russian environmental inspector to despatch bailiffs to halt Evraz steelmill for water pollution.

Evraz, Russia’s largest steelmaker, is testing for the second time in two years the will of the Russian government to enforce environmental protection and water emission rules.

At stake is the continued operation of the biggest rail producer in Russia — and the drinking water of the two rivers serving Novokuznetsk city, in the Kemerovo region of Siberia.

A series of federal government environmental inspections, just completed at two of Evraz’s steelmills in Novokuznetsk, has found that one of the mills, West Siberian Metallurgical Combine (Zapsib), has met a court-ordered emission standard, but the second, Novokuznetsk Metallurgical Combine, has not. The result is that the federal regulator, Rosprirodnadzor, has gone to court for an order that may force the closure of the Evraz mill.

The disclosures by Rosprirodnadzor follow two years of bitter recriminations, court litigation, and political lobbying. In September 2006, they resulted in the largest penalty ever imposed on a Russian company for industrial pollution.
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by John Helmer - Wednesday, February 6th, 2008
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