By John Helmer in Moscow

Nesis considers chrome sell-out in the most lucrative, short mining career on record

A press leak in Moscow on Monday, followed by a confirming announcement from Mechel, the Russian stainless steel producer, have indicated that Igor Zyuzin, Mechel’s controlling shareholder, is trying to buy out chrome producer Oriel Resources, owned by Alexander Nesis and the ICT group of St. Petersburg.

Mechel’s corporate office was initially reluctant to confirm the reported talks, and the company’s press release said only that Mechel “is currently contemplating the acquisition of Oriel. This process is at an early stage and there can be no certainty that any offer will ultimately be forthcoming.”

The target of takeover is an integrated ferrochrome producer based in the Leningrad region, the Tikhvin ferroalloy plant, with its own raw supply from two mines in Kazakhstan — a chrome mine called Voskhod, and a nickel mine called Shevchenko. Nesis’s ICT group have been involved in the chrome project for several years, when Nesis owned Polymetal, a St.Petersburg based silver miner. In 2006 Nesis sold Polymetal for $930 million in cash to Suleiman Kerimov, and began investing some of the proceeds in the chrome project.
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by John Helmer - Tuesday, March 4th, 2008
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By John Helmer in Moscow

Potanin’s cash and shares deal puts Deripaska in the hole.

Just two things are remembered about King Canute, a Viking who invaded England in 1013. One is that he had a large hooked nose. The other is that he tried to command the sea tide not to roll into shore. The second has made Canute’s name synonymous with the folly of being on the losing side, when you don’t have to be.

In the fierce war for Norilsk Nickel, the most expensive fight over a Russian mining asset ever fought, it is becoming as clear as arithmetic, and the sea tide, what the outcome will be. A recent report in a Russian newspaper, claiming that a member of the Norilsk Nickel board, Ralph Tavakolian Morgan, believes the company cannot afford to buy back a bloc of its shares is therefore interpreted as either a misquote, or Morgan’s miscalculation.

The buy-back scheme is part of chief shareholder Vladimir Potanin’s defence against a hostile takeover by Rusal and its owner, Oleg Deripaska. He and Potanin’s disgruntled former partner Mikhail Prokhorov began their assault on the company, after Prokhorov sold 25% plus 1 share in Norilsk Nickel to Deripaska in December. Mineweb has reported on the reaction to that deal, and Potanin’s new arrangement with the Kremlin, after Potanin met President Vladimir Putin in Sochi on February 5:

http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=47758&sn=Detail
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by John Helmer - Monday, March 3rd, 2008
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By John Helmer in Moscow

Drilling into SA diplomatic communiqués comes up empty for manganese and platinum

An unusual meeting of South African (SA) and Russian government ministers two weeks ago in Moscow has triggered recriminations in Pretoria and Moscow. These follow the refusal of SA officials to clarify an upbeat description of co-operation in mining projects, which Russian sources deny.

Nkosazana Dlamini-Zuma, SA’s Foreign Minister, who headed the delegation to Moscow on February 12-13, claimed there has been commercial progress in the Russian-SA relationship. The evidence for that, according to an official communiqué issued in Pretoria on February 13, is the activity of a single, well-known Russian oligarch, Victor Vekselberg, who owns the Renova group. Dlamini-Zuma said in the communiqué she personally “welcomed progress with regard to Joint Venture Manganese Project by the Renova Group and South African company Pitsa ya Setshaba and wished the company well in the second phase of the project. ”

Renova refuses to provide details of its investment and exploration spending in South Africa, since the award of licences to Heuningdraii and Mooidraai in the Kalahari Manganese Field (KMF) in 2005.
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by John Helmer - Sunday, March 2nd, 2008
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By John Helmer in Moscow

RUSSIAN government officials have revealed that relations with SA are in crisis, after cancellation by Pretoria of the two largest commercial agreements ever negotiated between the countries.

The crisis directly affects SA government plans for nuclear energy to increase Eskom’s power supply, and for SA military and civilian satellite communications.

The breakdown in relations triggered an urgent mission to Moscow two weeks ago by Foreign Affairs Minister Nkosazana Dlamini-Zuma. But her failure to repair the damage has led to recriminations in Pretoria, and an order to South African ambassador Bheki Langa and other South African officials to cover up what has happened.

A multibillion-rand contract to build nuclear reactors for Eskom — one of the largest government contracts contemplated by SA — was to have been open for bidding by the Russian reactor builder, Atomstroyexport (ASE), according to agreements reached during President Vladimir Putin’s visit to SA in 2006, and reiterated by officials of the two governments in the middle of last year .

Eskom said the licensing process for the five nuclear power stations, which would produce up to 20000MW of electricity, would start this year.
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by John Helmer - Saturday, March 1st, 2008
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By John Helmer in Moscow

Two steel oligarchs are trying riding the Russian wave of boom and bust.

There’s nothing like a little oil (and gas) to grease the wheels of demand. But announcements this week from two of Russia’s largest steelmakers — 3rd ranked Severstal, owned by Alexei Mordashov, and 5th ranked Mechel, owned by Igor Zyuzin — suggest that the boom in Russian demand for domestic construction is also lifting their confidence of surviving the redistribution of assets expected after Dmitry Medvedev wins the presidential election on Sunday.

Inadvertently revealing how nervous he is, Mordashov commissioned his London PR agent Tulchan to get out the message that, despite two serious blast furnace explosions this year, the company’s production is on the up, along with capital investment. Mordashov has also made a a show of support for Medvedev, telling a London newspaper last weekend: “I believe I should be a good CEO – and being a good CEO of a big industrial company I have to develop a relationship with the Government to help development of the company. It is in line with the normal rules of conduct. My personal relationship with the Kremlin is normal, it resembles those in France, or the US.”

Severstal recently admitted to industry analysts that all is not so normal, at least on the plant floor. its production level at the Rouge plant in Dearborn, Michigan — the largest of the units in Severstal North America — will be cut by 35% for up to two years, on account of the accident and explosion at blast furnace B. The accident occured on January 5 at the mill; no casualties were reported. The blast furnace had been relined in 1997.
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by John Helmer - Thursday, February 28th, 2008
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By John Helmer in Moscow

MOSCOW – Eric Ambler told the tale of a clapped-out reporter 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.

Mysteries such as these, not all of them fictional, are remembered when phantoms emerge to sign apparently real mining concession agreements with real government officials. Take Pavel Krivoshei, whose name, possibly of Ukrainian ethnicity, suggests in Russian, Krivaya sheya, or “Crooked neck”. Krivoshei was reported by the press in Myanmar on February 16 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.

Krivoshei signed with U Win Te (also referred to as Win Ti), of the Myanmar Ministry of Mining’s Geological Survey and Mineral Exploration Department. Attending the ceremony was Brigadier General Ohn Myint, the mining minister, and Russian ambassador Mikhail Mgeladze. The news appeared first in New Light of Myanmar, and was then relayed by Reuters and Russian and Chinese wire services. These muddled the corporate details, and some reported that Victorious Glory International, the foreign concessionaire at the signing ceremony, is a Russian company. In Russian records there is no trace.
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by John Helmer - Wednesday, February 27th, 2008
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By John Helmer in Moscow

Never mind Walt Disney or Johnny Depp — the last certified Caribbean pirate was Edward Teach, aka Blackbeard. He died on November 21, 1718. His professional practice came to an end with five bullet holes, and 21 stab-wounds. His head was then cut off, and stuck on the bowsprit of a British naval vessel, HMS Ranger, before being taken ashore for the bounty claim. Daniel Defoe was the first to write up the tale in 1724.

The British are engaged once more; and this time the charge is piracy of an altogether modern sort. The locale is still the Caribbean. This time, the Financial Services Authority (FSA), the UK markets regulator, is to investigate whether Polyus Gold – listed on the main board of the London Stock Exchange since 2006 (PLZL:LI) — is the target of an asset-stripping scheme perpetrated by a British Virgin Islands-registered company called Polyus Exploration Ltd. This looks to be the same as the company called Polyus Geologorazvedka, established last May and registered in Moscow. The English appears to be a translation of the Russian in the company title. But they are far from the same company – and that’s the rub, or shall we say in pirate lingo, rub-out.

Polyus Exploration Ltd. was registered just two months ago at Tortola, BVI, on December 18, 2007. It was created by Mikhail Prokhorov and Yevgeny Ivanov; the latter was acting on Prokhorov’s orders as chief executive of ZAO Polyus Zoloto (Closed Joint Stock Company Polyus Gold). This is a wholly owned subsidiary of OAO Polyus Zoloto (Open Joint Stock Company Polyus Gold), which is the publicly listed vehicle.
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by John Helmer - Wednesday, February 27th, 2008
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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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