By John Helmer in Moscow

Ukraine demand for coking-coal weighed against rising death toll in possible decisions to shut down coal mine where 106 miners have been killed and many injured in methane explosions.

Ukrainian miners have proved that when it comes to methane, lightning can strike twice, and thrice, in the same place.

This week, the Ukrainian President Victor Yushchenko ordered the suspension of operations at the Zasyadko coal-mine in the Donetsk region of eastern Ukraine after a third, and fatal, explosion in the mine on Sunday. His political rival, Prime Minister Victor Yanukovich, has also issued a public call for suspending mine operations.

In the latest incident, five were killed, and 66 injured, 9 seriously, according to a local miners’ union source. He told Mineweb there have been three methane explosions at the mine in the past fortnight — on November 18, when 101 miners were killed; on December 1, when there were no fatalities, but 44 miners were hospitalized; and on December 2, when 5 miners were killed. “I can’t tell you if there is any decision to close the mine, but methane concentration seems to be dangerous, ” the union source said.
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by John Helmer - Wednesday, December 5th, 2007
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By John Helmer in Moscow

Is holding hedge fund a gold share price hawk or a vulture?

On Thursday of last week, Oxus Gold, a junior gold miner listed on the London Alternative investment Market (AIM), lost 18% of its market value, pricing at 25.5 pence, with a market cap of GBP93 million. The chart of the company’s share price shows that it hit this year’s high in May at 66.25 pence. It then held in the 50 to 60-pence range until November. But from then, the price plummeted downwards.

During October, the price of gold was marching steadily upwards from $730 per ounce to hit November highs of around $840.

Oxus, whose principal gold assets are in the former Soviet republic of Uzbekistan, is flummoxed by the share movement. “As far as I know,” Oxus investment relations shpokesman Julia Flowers told Mineweb, “there isn’t anything to cause the share price to go down.”

Two days later, on Friday November 30, the price shot up 28% on a trading volume of almost 5 million shares (1.4%). Today, on smaller volume, the share price gained another 9%. It is currently at 35.5p.
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by John Helmer - Monday, December 3rd, 2007
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By John Helmer in Moscow

Nigeria’s President Yar’Adua promises US to reopen Rusal smelter deal.

Oleg Deripaska, the Russian oligarch who controls UC Rusal, the world’s second largest producer of aluminium, is in hot water in Nigeria, and in Washington, DC, as US companies have persuaded the Bush Administration to back them in a bid to oust Deripaska from the Aluminium Smelter Company of Nigeria (Alscon).

Leading the new US charge at a meeting on November 27 with the President of Nigeria, Umuru Musa Yar’Adua, are Reuben Jaja and his Los Angeles-based Bancorp Financial Investment Group (BFIG). BFIG has been suing Rusal in the Nigerian and US courts for abuse of the privatization process that awarded Alscon to Rusal on a low bid in 2004. Mineweb has reported the blow-by-blow action: http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=18731&sn=Detail
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by John Helmer - Friday, November 30th, 2007
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By John Helmer in Moscow

Adam Smith hides his talent — making Tajik mining’s sow’s ear into a silk purse.

A European Commission (EC) contract to promote foreign mining investment in Tajikistan collapsed this month into denials and mystification, as the deputy head of the Tajikistan government’s committee on foreign investment claims he has never heard of it. A US project consultant and the London-based Adam Smith international, for which he worked, claim their task was to staunch a growing loss of confidence on the part of international resource investors, not promote fresh investment.

The apparent hitch in the promotional effort comes as Norwegian investigators probe financial relations between the state-controlled Hydro Aluminium company and Tajikistan aluminium Plant (Talco aka TadAZ), the dominant enterprise and principal export earner of the economy, which is personally directed by Tajik President Emomali Rahmon. According to many sources in Dushanbe and in the international mining community, Rahmon is part of the problem. According to the annual Tajikistan country report from the International Monetary Fund, issued on April 27, Rahmon told the IMF that “governance concerns, which continue to plague Tajikistan, are seriously affecting the business climate and private sector growth.”
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by John Helmer - Wednesday, November 28th, 2007
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By John Helmer in Moscow

Russian oligarchs use the media for pressure on price and financing terms for change of ownership at Norilsk Nickel.

The Arab bedouin had a term for it – the jackals’ wedding. That’s a marriage of convenience between angry dogs, who couple for a single night, and then bite each other, as they pursue their own game for the rest of their lives.

This week, at a party-political rally in Moscow, President Vladimir Putin also referred to the rule of oligarchs as rapacious dogs. “They want to come back,” he said, of the factions which had ruled Russia during the Yeltsin period, “to return to power, to spheres of influence, and gradually restore oligarchic rule based on corruption and lies. Unfortunately, inside the country there are those who scrounge at foreign embassies, importune diplomatic missions, count on the support of foreign funds and governments, and not the support of their own people.”
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by John Helmer - Sunday, November 25th, 2007
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By John Helmer in Moscow

The apparent owner and board chairman of the Zasyadko mine has been targeted for blame in Ukraine’s worst mine explosion by surviving miners.

Miners who survived the catastrophic methane explosion at the Zasyadko mine in the Ukraine on Sunday say that the mine’s chairman and apparent proprietor, Yefim Zvagilsky, is to blame for unsafe working conditions at the mine, and for imposing steep shift production quotas that led to the suppression of methane detection and shut-off systems.

The accident occurred on November 18 in the Donetsk area of eastern Ukraine. 457 miners were working the overnight shift, when a methane explosion occurred at the Zasyadko pit. A total of 90 miners are confirmed dead; 10 are still missing; 30 are hospitalized. The explosion and fire at a depth of more than a thousand metres has continued to burn; it incinerated most of the dead miners beyond recognition. The fatalities amount to the worst death toll in a Ukrainian coal-mine since 2000.
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by John Helmer - Thursday, November 22nd, 2007
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By John Helmer in Moscow

Suddenly this month, Hydro Aluminum, the state-led metal producer of Norway, has been called to public account by senior members of the Norwegian Parliament; by independent Norwegian experts; and by Norway’s trade and foreign ministers over the terms of alumina and aluminum contracts the company signed last December with the Tajikistan Aluminum Plant (Talco, aka TadAZ).

The Norwegian concern is focused on allegations of corruption among Tajik government officials involved in the aluminum business, and on what Hydro knows and is doing about it.

At the same time, Adam Smith International (ASI), a London-based consultancy specializing in Asian development, is stumbling silently over the terms of a contract, recently awarded by the Tajik government, to promote resistance among foreign investors to concerns about the risk posed by stories of corruption in the country.
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by John Helmer - Tuesday, November 20th, 2007
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By John Helmer in Moscow

De Beers, NM Rothschild hold secret talks which could result in the release of Russian diamond asset

How long must the clock tick before disclosure delayed turns into news concealed, and insider trading?

Speculators on the share value of Toronto-listed Archangel Diamond Corporation (ADC) — ticker AAD — thought they knew enough to start buying shares of the company after it reached a year-low of 35 cents (Canadian) on October 31. As the Bloomberg chart shows, on or about November 1, someone started buying, and the share price rocketed upward by 43%: Bloomberg ticker.

Trading in ADC has been so rare, and the share so illiquid, that the Bloomberg charts show the speculative jump has occurred on just four transactions, totaling just 29,200 shares. The biggest of the trades, dwarfing all others for the past six months, was 19,000. Unlike the earlier big trades on record, this one was a purchase, not a sale. The amount of money involved was paltry, but the motive serious.
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by John Helmer - Monday, November 19th, 2007
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By John Helmer in Moscow

Russian diamond cutters face shutdown of operations or domestic supplies if VAT tax waiver is abolished on January 1.

Alrosa, Russia’s dominant supplier of rough, has sent a notice to domestic diamond cutters, warning that from January 1, it will add 18% value-added tax (VAT) to its rough diamond pricing. The diamond cutters have told Mineweb that, while they understand the move as a cost-cutting expedient for Alrosa, the impact will be ruinous for the low-margin manufacturers. They have asked Alrosa to reconsider, and delay the move for another twelve months, in order to allow time for the government to be persuaded to send a zero-tax amendment to tax legislation for enactment by parliament.

There is suspicion that Alrosa’s move is aimed at reducing the presence in Russia of foreign cutting enterprises, and boosting Alrosa’s cutting plants at their expense. At present, Alrosa reports that its own polished sales amount to about $160 million per annum. This trails well behind sector leader, Smolensk Kristall, which is state owned, and reports sales of $358 million in 2006; and Ruis Diamonds, which is controlled by Lev Leviev, and sells over $220 million in polished. According to one of Moscow’s leading cutters, “I wouldn’t say that Alrosa is making this move intentionally to destroy the remainder of the Russian cutting industry, but this [VAT] decision would be a catastrophe.”
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by John Helmer - Tuesday, November 13th, 2007
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By John Helmer in Moscow

Suddenly this month, Hydro Aluminium, the state-led metal producer of Norway, has been called to public account by senior members of the Norwegian parliament; by independent Norwegian experts; and by Norway’s Trade and Foreign Ministers over the terms of alumina and aluminium contracts it signed last December with the Tajikistan Aluminium Plant (Talco, aka TadAZ). The focus of the Norwegian concern is allegations of corruption among Tajik government officials involved in the aluminium business, and on what Hydro knows, and is doing about it.

Talco is currently turning out about 450,000 tonnes of aluminium a year, worth about $1.2 billion on the international market. In December 2004, the Tajik government initiated a purge of the plant’s management, and defaulted on sale and purchase agreements with the ousted management, and with Hydro. The Norwegians sued for recovery in London; won a $150 million award in compensation for non-delivery of 80,000 tonnes of aluminium; collected compensation from a syndicate of insurers; and concealed the bookkeeping loss, and the payoff, in its consolidated accounts. Hydro has told Mineweb this isn’t concealment, because “the net exposure was immaterial for reporting purposes.”
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by John Helmer - Monday, November 12th, 2007
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