By John Helmer in Moscow

For mining and metals, Russia’s new cabinet is the same as the old one — business as usual

In less than a week, the bright promise of the Zubkov presidency of Russia has evaporated, and amid a bad case of election nerves inside the Kremlin, President Vladimir Putin himself has announced a set of cabinet appointments that appear to reverse several recommendations the week-old prime ministry had recommended. The status quo ante will now oversee the election campaigns for parliament in December and the presidency next March.

The market impacts registered to date are neutral to optimistic.”No surprise in structure, policy, little surprise in personalities,” commented Renaissance Capital, an active bookrunner for asset valuations at risk of heavy backtax claims.
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by John Helmer - Tuesday, September 25th, 2007
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By John Helmer in Moscow

Russian potash leader to sell London IPO on link to booming mineral price.

Uralkali, Russia’s leading potash producer, announced this morning that it intends to issue an initial placement offering (IPO) in the London market, with pricing to be fixed in October, according to market sources.

The company’s principal shareholder Madura Holdings, which is owned by Uralkali’s board chairman, Dmitry Rybolovlev who currently holds 80% of the shares outstanding, will sell the shares.

According to the last market report from UBS, Uralkali shares (ticker URKA:RTS) are trading on the Russian RTS market at $3.35, with a market cap of $7.1 billion. UBS calculates that this is 116% above the share price at the start of this year.
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by John Helmer - Monday, September 24th, 2007
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By John Helmer in Moscow

Scoop! Rabbit overtaken by tortoise.

The news that Oleg Deripaska – zaitschik, “rabbit”, as he was known when younger – has been overtaken, and overturned, by JP Morgan Cazenove and Goldman Sachs, was front-page on Friday. In a carefully worded despatch, the Financial Times claimed the world’s largest aluminium industry share flotation, and the London Stock Exchange’s biggest new listing for this year, had not failed, so much as been put “on hold because of market conditions”. A prospectus for the Rusal share issue was purportedly drafted a month ago, but it had not been filed with the UK Listing Authority, the market regulator, so Rusal “could monitor market conditions”. A meeting of the Rusal board of directors, on Wednesday September 19, had decided not to proceed with the share sale “because of market turmoil and liqudity worries.”
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by John Helmer - Sunday, September 23rd, 2007
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By John Helmer in Moscow

Contest for Tajik gold licenses warms up President Rahmon, as Chinese miners fuel the bidding.

A group of Tajik men were recently taken by surprise, in the woods outside Moscow, when they spotted an animal they had never seen before. “Small bear!” “Small bear!” they shouted in excitement to a Russian nearby, summoning her to come quickly.

The Russian ran to the scene, for sightings of bears are rare near Moscow – unless the creature has escaped from a zoo or circus. A young bear on its own, apart from its parent, or human handler, is even rarer. But as soon as the Russian followed the pointed fingers of the Tajiks to the high branch of a tree, it became clear the animal they were looking at was – a squirrel.
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by John Helmer - Friday, September 21st, 2007
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By John Helmer in Moscow

Russia’s new prime minister will reprice asset value in Russian mining, gold, and energy.

Madame de Montespan, the only one of French King Louis XIV’s mistresses to combine beauty and brains, used to say: “secrets add to the taste of things.” Intelligence officers don’t have to be either beautiful or smart to relish the same taste.

At the end of a surprising week in Moscow, President Vladimir Putin, and his new prime minister, Victor Zubkov, are enjoying their ability to have revealed a secret not a soul had anticipated. The best the political and investment communities have made of Wednesday’s appointment of Zubkov as prime minister is that a surprise had been anticipated — but not this one.

Zubkov is the second loyalist President Vladimir Putin has appointed as prime minister. He is also the second finance ministry man to rise to the top of the cabinet table; but a very different one from Mikhail Kasyanov, the prime minister Putin inherited from ex-President Boris Yeltsin, and then took three years to get rid of.
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by John Helmer - Friday, September 14th, 2007
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By John Helmer in Moscow

Russia’s new Prime Minister Victor Zubkov has moved from obscurity to presidential status in half a day, showing character not seen in Moscow for 25 years.

The man, whose name in Russian means “tooth”, shows he has mettle and bite – confidence in himself, pride in what he has done, and toughness toward what he must do, characteristics last on display in Moscow when Yuri Andropov took charge. That was in November 1982, when the Soviet Union was still going strong, and Andropov, head of the KGB, took over the country two days after the death of Leonid Brezhnev.

In Asia, the most likely reactions to Zubkov are a sigh of relief in Beijing and renewed frustration in Tokyo. If the Andropov model forecasts anything, applied to Russia’s future as energy, minerals and metals supplier to the factories of northern Asia, it means more certainty for China, less for Japan.
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by John Helmer - Friday, September 14th, 2007
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By John Helmer in Moscow

Saddleback Gold recruits General Sir Mike Jackson in an attempt to do battle for the Tajikistan gold sector.

It has been 140 years since last two English adventurers walked into Tajikistan with a sales pitch of commercial goods and guns, and with the barely concealed intention to beat the Russians.

Back then Robert Shaw, a Sandhurst trained soldier, and George Hayward, a member of the Royal Geographical Society, met Yakub Beg, ruler of what was then called Chinese Turkestan.

Yakub saw the Englishmen as an opportunity to enlist London to protect his fledgling kingdom against a Russian takeover, or a return of Chinese overlords. Shaw wanted to make more money than he could selling Indian tea. Hayward was a spy, commissioned to map the Pamir mountain passes through which London suspected that Russian troops might attack the Indian colonies.
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by John Helmer - Wednesday, September 12th, 2007
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By John Helmer in Moscow

The break-up of the partnership controlling Norilsk Nickel and Polyus Gold grows more interesting by the day.

A half-century ago, hardboiled US city cops used to prosecute the so-called badger game. At its origin, this involved a woman luring a man into a compromising position, only to be caught in flagrante by the woman’s “husband”; in fact, her accomplice. The victim was then told to pay blackmail to avoid exposure by the “badger”.

Very occasionally, more in the fiction of Dashiell Hammett than in reality, the badger got nabbed, and sent up.

This past January, when Mikhail Prokhorov, one of Russia’s richest mining entrepreneurs, was arrested and sent to prison in the French city of Lyon, he believed he had been framed by his partner, Vladimir Potanin. The two are co-controlling shareholders of Norilsk Nickel and Polyus Gold, the dominant Russian hard-rock mining companies listed internationally.
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by John Helmer - Monday, September 10th, 2007
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By John Helmer in Moscow

Russian steelmaker makes billion-dollar bid for Fortescue without explanation to the Russian market.

When Victor Rashnikov, owner of Magnitogorsk Metallurgical Combine (MMK), was in London in April, trying to persuade shareholders to buy up to 14% of his shares, he claimed that the steel mill, Russia’s largest, had secured its iron-ore requirements for the next decade, and the decade after that, from Kazakhstan, just 380 kilometres from the plant.

Rashnikov omitted to reveal that he had already spent $130 million buying shares in Fortescue Metals Group, developer of a large new iron-ore deposit in Western Australia’s Pilbara region, several thousand kms from MMK.

Last week, Rashnikov gave surprise notice — to Australia’s financial regulator, but not to MMK shareholders — that he is planning to spend up to another billion dollars on lifting his stake in Fortescue to about 16%. The buyout target, suggested by Australian reports, is a 9.9% shareholding in Fortescue currently owned by Leucadia National Corporation of the US. Rashnikov, the Australian regulatory disclosures revealed, already holds about 5.4% of Fortescue. Crossing the 15% shareholding barrier by a foreign investor requires Australian government permission.
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by John Helmer - Monday, September 10th, 2007
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By John Helmer in Moscow

Mitvol ignores London and goes to US to explain Russian mining rules

Roald Dahl once wrote a comedy about a man whose mental powers included the ability to see through cards. Understandably, he spent his life slipping through casino doors, only to be evicted from the gaming table as soon as he was recognized.

Oleg Mitvol, the chief mine licence regulator of Russia, carries a remote computer device that enables him, he says, to see through cards — the reserve estimates, that is, of mining companies licensed to develop oil, gas, and hard rock properties in Russia. As a regulator, he’s in charge of the casino. When he turned down an opportunity in May to visit London to discuss Russian regulatory policy with UK regulators, that was because, Mitvol said, the Ministry of Natural Resources, to which Mitvol belongs, wasn’t ready.
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by John Helmer - Wednesday, September 5th, 2007
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