MOSCOW, July 11 (RIA Novosti) Putin rejects secret plan for Transdnestr settlement/ Europe wants Russia to open up its mineral resources/ Environmental watchdog to revoke British company's gold production license/ China bargaining over gas supply prices/ Ford Motor Co. set to expand production in Russia
Moskovsky Komsomolets
Putin rejects secret plan for Transdnestr settlement
Several days after talking with Russian President Vladimir Putin in his Novo-Ogaryovo residence near Moscow, Moldovan President Vladimir Voronin had a confidential meeting with ambassadors from Western countries. His goal was to counter rumors that he had signed a secret pact with Moscow on the settlement of the Transdnestr conflict.
The Transdnestr authorities do not believe there is such a pact.
"No documents have been prepared for signing, although Chisinau has compiled a list of proposals," said a high-ranking source in Tiraspol.
Political analyst Oazu Nantoi from Chisinau claims that Voronin's team drafted a settlement plan, but Putin rejected it. "Chisinau has been negotiating with the Kremlin since last September," he said. "Voronin tells Moscow that it would gain more from cooperation with Moldova than from supporting Transdnestr. But Putin said no, and the project folded."
Sources close to the Kremlin said Voronin proposed at the meeting in Novo-Ogaryovo that early elections to the united parliament should be held on the right and left banks of the Dniester in 2007. Under the plan, all Russian troops should be pulled out of Transdnestr before the elections, and the peacekeeping operation kept to the left bank after them.
The source said the proposal was rejected because of the clause on the withdrawal of troops.
"Nobody is going to pull out the troops," the source said. "Instead, the Kremlin proposed signing a transit protocol to prevent mutual blockades before beginning talks."
Moldova did not impose the intended ban on imports into Transdnestr on July 1. Moreover, on July 9 it made a surprise move, releasing Valeriu Passat, a former Defense Minister of Moldova and an adviser to RAO UES CEO Anatoly Chubais, who had been charged with planning a coup and sentenced to 10 years.
Taken together, this may mean that the Moldovan president still hopes to come to terms with Moscow.
Gazeta.ru
Europe wants Russia to open up its mineral resources
Europe is planning to pass a law preventing unsuitable companies from buying its energy assets. This evidently anti-Gazprom act is expected to force Russia to give European companies access to its mineral wealth. But analysts are certain that the EU countries will get nothing, because they do not have any assets attractive enough.
To keep its domestic gas and power networks safe, the European Parliament intends to ban their sale to private companies and hedge funds if the prospective buyers are not up to the European Commission's investment requirements.
Gazprom, which is neither a private company nor a hedge fund, has still found itself in the line of fire. True, if Russia agrees to share its own assets, the EU could rethink its plan.
The European Parliament has recalled that Gazprom announced its intention to purchase assets in Britain. Europe seems to be hinting that Gazprom should act in the same spirit and offer some of its plants when signing forward-looking agreements.
"The Europeans have set their sights on Russian minerals and hope to get some political concessions from Russia, such as the signing of the Energy Charter," said one of the market experts. "But Europe is going to get nothing."
Most of the political analysts share industry experts' views, but do not absolutely rule out an asset swap. However, according to political analysts, Europe has nothing truly attractive to catch Russia's eye and begin hard bargaining for its resources. "A more massive presence of foreign capital in Russia's fuel and energy sector is possible in principle, but Russian state-owned companies and especially Gazprom are unwilling to exchange assets, because in most cases the Europeans can offer nothing of equal worth," said Sergei Mikheyev, deputy general director of the Center for Political Technologies. "An obvious example is the Shtokman deposit, the access to which has been denied to foreigners because they had nothing to offer in payment for it."
Vedomosti
Environmental watchdog to revoke British company's gold production license
Russia's Federal Service for the Oversight of Natural Resources wants to revoke the license of the British company Highland Gold Mining Limited, which is developing the promising Maiskoye gold deposit on the Chukchee Peninsula in the Russian Far East.
The company has been facing problems for some time. In September 2006, 25 workers were killed in a fire at its Vershino-Darasunsky gold mine in the Chita Region, about 5,000 km (3,000 miles) east of Moscow.
Highland Gold capitalization then fell by 30%; and the company is now negotiating the sale of the mine.
Last week, the Federal Service for the Oversight of Natural Resources announced an unscheduled inspection at the Maiskoye deposit, the second largest after Sukhoi Log, the largest untapped gold deposit in Eurasia.
The British company's capitalization then fell by another 12%.
On Tuesday, the Natural Resources Ministry said the relevant materials had been submitted to the license-revocation commission of the Federal Agency for the Management of Mineral Resources.
The Federal Service for the Oversight of Natural Resources said Highland Gold does not have an action plan to develop the deposit, and that it would be unable to produce one metric ton of gold from Maiskoye in 2007.
The Natural Resources Ministry said this seriously violated the license contract. Highland Gold will have three months to eliminate all drawbacks if the commission agrees with the ministry.
Deputy Director of the Federal Service for the Oversight of Natural Resources Oleg Mitvol said it was impossible to improve the situation in three months. Federal Agency for the Management of Mineral Resources officials could not be reached for comment, and a spokesperson for Highland Gold did not elaborate.
Last week, Highland Gold CEO Henry Horne said the company and the Federal Service for the Oversight of Natural Resources were negotiating amendments to the license contract.
"We are responsible for the cost effective management of mineral resources and therefore oppose an extended license contract," Mitvol told the paper.
On Tuesday, Highland Gold capitalization dwindled by 4.8% and totaled $465 million.
Alpha Bank analyst Vladimir Zhukov said the British company would suffer a major setback if the license were revoked, because the Maiskoye deposit could yield as much as 150,000 to 200,000 ounces of gold annually, while Highland Gold planned to produce about 160,000 ounces in 2007.
Business & Financial Markets
China bargaining over gas supply prices
If Gazprom fails to agree terms for gas exports with the China National Petroleum Corporation (CNPC) by the yearend, deliveries will be postponed indefinitely.
According to analysts, this is not bad news for the gas monopoly, which in this case will be able to focus on the growing gas demand in Europe and Russia.
"Gas deliveries along the western leg of the gas pipeline should begin in 2011, and along the eastern leg, in 2016," Industry and Energy Minister Viktor Khristenko said in Beijing Tuesday. "This is a window of opportunity for our companies. But it can be kept open only if commercial talks on the western leg end this year, and on the eastern leg in 2008."
In March 2006, Gazprom and the CNPC signed a protocol on the annual supply of 68 billion cubic meters of natural gas to China. It stipulates two routes, a western from West Siberian deposits along the Altai pipeline with a capacity of 30 billion cubic meters, and an eastern pipe from East Siberian deposits.
Gazprom is negotiating the terms of supplies with CNPC. Khristenko said the two companies needed only to polish the contracts.
Price is the main stumbling block.
Valery Nesterov, an analyst with Troika Dialog, said: "China is not ready to pay market prices for large-scale gas supplies."
Timur Khairulin, an analyst with the Antanta Capital investment company, said: "China insists that export gas prices should be linked to China's domestic coal prices, which does not suit Gazprom."
Analysts cannot say if the sides will complete the talks this year.
"The stakes are too high," said Nesterov.
The postponement of deliveries will not be bad news for Gazprom.
"Postponement will strengthen [Gazprom's] reserve base for satisfying the growing gas requirements in Europe and Russia," said Khairulin.
This may also encourage the gas monopoly to establish new gas liquefaction plants.
Kommersant
Ford Motor Co. set to expand production in Russia
U.S. automotive giant Ford Motor Co., which annually assembles 72,000 Ford Focus vehicles at its plant in Vsevolozhsk near St. Petersburg, said it wanted to boost production capacity to 100,000, turning out 25,000 brand new Ford Mondeo cars per year.
Although Chevrolet now sells more cars than Ford Motor Co., experts said the Ford Focus remained the most popular car in Russia.
In all, the new project will receive $100 million worth of investment, and total investment will reach $330 million. The first Ford Mondeo cars will roll off the assembly line in 2008, and the Vsevolozhsk plant will reach design capacity by 2009.
Most other foreign carmakers operating in Russia will also follow suit by that time.
Ford of Europe CEO John Fleming said plans for expanded production were linked with the rapidly growing Russian market. In January-June 2007, new foreign car sales soared by 70% all over Russia.
It took top Ford Motor Co. executives a year to finalize their plans for the Vsevolozhsk plant. Economic Development and Trade Ministry officials and the Leningrad Region administration announced such plans in July 2006 and last December.
The Economic Development and Trade Ministry said the U.S. carmaker would also produce Land Rover and Ford Maverick sports utility vehicles (SUVs) and would invest a total of $500 million into the Vsevolozhsk plant.
However, Ford Motor Co. has twice postponed its final plans, which are less ambitious than the Economic Development and Trade Ministry had predicted.
A source in the ministry said the company had decided not to assemble Land Rover SUVs because only 5,000 of these cars were sold in Russia from January to June 2007.
Consequently, it would be pointless to weld and paint Land Rover bodies in Vsevolozhsk under industrial assembly contracts.
The source said the Ford Maverick would be taken off the production line.
Vitaly Novikov, head of St. Petersburg affiliate of Avtomir-SPb, the official dealer of Lada, Daewoo, KIA, Hyundai, Suzuki, said the Ford Focus would remain the leader on the Russian market in the mid-term, despite the U.S. automaker's flagging performance.
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