Up

Strange blockade... 05/06/2017 15:56:00. Total views 1776. Views today — 0.

The Ukrainian financial and industrial groups perceived the disruption of economic ties with the remaining enterprises in ungoverned areas of Donetsk and Luhansk oblasts and the cessation of cargo and railroad communication in different ways. Someone just took it as a fait accompli. And someone began to make up schemes how to bypass formal prohibitions...

For example, Yuriy Ryzhenkov, Director General of Metinvest, a mining and smelting holding, in an interview said that the assets, taken by the "LDPR", have been generating losses for the past 3 years. I.e. now the group has one less problem.

The fall due to the loss of production at the Yenakieve Steel Plant is compensated by its increase at the Ilyich Mariupol Metallurgical Plant and Azovstal.

Meanwhile, an interesting situation develops with metallurgical enterprises, "nationalized" by the “LDPR” militants since March. These are Alchevsk metallurgical complex of the corporation Industrial Union of Donbass, Makiivka and Yenakieve steel plants of the Metinvest holding.

As you might expect, the separatists did not have ready plans for transferring these assets to the new management.

As a result, 2 months passed and Donetsk informed only about the preparation of certain decisions, which, allegedly, will allow enterprises to continue working in the interests of "republics".

Previously, OstroV predicted that the greatest problems in terms of supplies of raw materials will be with iron ore - and it turned out so.

None of the Russian metallurgical groups decided to start legal deliveries of iron ore products to the Donbass in order not to run into international sanctions.

Russian media wrote that allegedly Severstal agreed to ship ore for the DPR, but the company denied it. Let us not forget about the presence of Severstal's assets in the EU countries, in particular, Poland and Italy. And also that its shares are placed on the London Stock Exchange. That is, the company is closely connected with western capital.

Therefore, if A.Mordashov, contrary to common sense, suddenly decided on such an adventure, he would have caused serious troubles for his business.

The same applies to other major Russian groups that have assets in the Kursk iron ore deposit: Metalloinvest of Alisher Usmanov and NLMK of Vladimir Lisin.

It was reported about another possible scheme of indirect supplies of iron ore raw materials to the “DPR”, in which the Kovdor ore mining and processing enterprise, part of the Russian holding Eurochem, is supposedly involved. Allegedly, Kovdor’s iron ore will go to the state Rosrezerv on the books, and from there will be send to Donetsk as a "humanitarian aid".

The main product of Kovdor ore mining and processing enterprise, located in the Russian Arctic, is apatite concentrate (raw material for the chemical industry).

For Eurochem in general and Kovdor enterprise in particular iron ore is a by-product. Therefore, in any case, it will not be enough to ensure the full operation of several metal plants in the Donbass.

In addition, it should also be noted that the headquarters of Eurochem is in Switzerland and the holding has assets in Lithuania and Belgium.

Therefore, Eurochem’s owner Andrei Melnichenko, has absolutely no reasons for risking a multibillion-dollar business for the sake of ephemeral support of A.Zakharchenko and I.Plotnitsky.

And let's not forget about the appeal of Eurochem to the government of Ukraine regarding the earlier launched anti-dumping investigation on the import of mineral fertilizers from the Russian Federation.

As follows from a letter sent by Russian producers to the first vice-premier of Ukraine Stepan Kubiv at the end of 2016, they consider suspicions of dumping unreasonable and ask to cancel barring duties on the import of their products to Ukraine.

Let us do some calculations. For 2016, imports of mineral fertilizers from Russia to Ukraine totaled $166.72 million in monetary terms. For January-February of this year it was $53.59 million.

The media reported on the plans of the self-proclaimed “DPR” authorities to receive 30 000 tons of iron ore from Russia. Its current market price is $75 per ton.

Therefore, it turns out that for the proceeds from the supply of iron ore to the uncontrolled part of Donbass $2.25 million per month or $27 million per year (although in the second half of last year analysts of investment banks forecasted a fall in prices for iron ore to $50 per ton - that is, the revenue for a year will be even less), the management of Eurochem is ready to voluntarily give up $167-324 million (taking into account the last year’s tendencies), which they earned from the supply of mineral fertilizers to Ukraine? Because it is absolutely clear that Ukrainian government will not raise the issue of removing any anti-dumping duties from Eurochem products if Kovdor enterprise starts shipment of iron ore to the “DPR”.

Therefore, the seized metal factories will continue to shut down, and the uncontrolled territories themselves will remain a heavy subsidizing ballast of the federal budget of Russia.

In this regard, a report on the preparations for the renewal of blast-furnace production at the Yenakieve steel plant, voiced by the separatist media on April 28, referring to the head of the "DPR" A. Zakharchenko, should be regarded as a bluff and nothing more.

Stirol games

Other FIGs are continuing to "go round" the formal blockade. Not by railroad, but by pipes. This is not so conspicuous.

A curious document became public in early April, although it was not appreciated by the media. At close examination it turns out to be a real information "bomb".

This is the draft decree of the Cabinet of Ministers of Ukraine (CMU) by which the Ministry of agrarian policy, Ukrainian Naftohaz, the State Agrarian Fund and Ukrgazbank are entrusted to ensure the supply of gas for the enterprises producing fertilizers on give-and-take conditions.

We are talking about factories belonging to Ostchem holding of oligarch Dmytro Firtash and his business partner, former vice-premier, oppositional Yuriy Boyko.

OstroV had told about this situation. Ostchem was not square with Naftohaz due to an old habit, the latter cut off the supply of resources to the group's enterprises.

Thus stopping production in Severodonetsk and Cherkassy Azot plants, as well as Rivneazot, because nitrogen fertilizers are made from natural gas.

Now their work can be resumed on a give-and-take basis, when Naftohaz does not sell its resource to Azots, but simply gives it up for recycling. And, accordingly, takes away the received fertilizers, leaving the enterprises a small part as payment for processing.

This is the issue that will be resolved in accordance with the decree of the CMU, so far existing only in the form of a draft developed... by Ostchem itself, as the head of Naftohaz of Ukraine Andriy Kobolev asserts.

However, the sensation is not even that the company voluntarily refuses to control its enterprises instead of simply paying off the debt.

The sensation hid in one line, which lists the volumes of gas that Naftohaz is committed to provide to the Ostchem plants. Among them is the Horlivka concern Stirol.

126 million m3 of gas is supposed to be provided there. At the same time, the enterprise is located on the territory seized by the “DPR” militants and earlier Group DF, Ostchem and personally D. Firtash in every way stressed the loss of control over Stirol.

So, in August 2014, Ostchem circulated a message stating that Horlivka Stirol halted its operation from May (i.e. from the beginning of the active phase of the ATO) for security reasons: the ammonia storage facility was completely freed.

Later, on March 3, 2015 in Vienna, D.Firtash himself told the journalists that his group still does not control the concern Stirol.

Further, in early February this year, in response to A. Zakharchenko’s statement about plans to resume operation of Stirol, Ostchem stated that "they have absolutely nothing to do with that".

"Probably, Zakharchenko's statement says about another plant - Stirolbiopharm. It has a completely different owner and this plant produces pharmaceuticals", - the speaker of Ostchem Natalia Ivanchenko suggested.

If is the truth, then why does the company offer to resume the gas supply to an enterprise that is not controlled by it?

Is not it strange? And what about the messages from the "DPR" about the "nationalization" of Stirol?

How can one not remember that in 2014 in Crimea the new authorities initially threatened D.Firtash with the expropriation of the association Crimean Titan and the Crimean alkali-works. But in the end they were simply reregistered to the Moscow company Titanium Investments associated with D. Firtash, and continued to work, becoming Russian taxpayers. At the same time, they continue to receive raw materials from Ukraine - ilmenite concentrate, which is produced at the Irshansky Ore Mining and Processing Plant (Zhytomyr oblast).

Previously, Ostchem owned this state enterprise on a leasehold basis. However, in August 2014, it was returned to the state and now it is a part of state-run enterprise United Mining and Chemical Company. Nevertheless, according to the Ukrainian and Russian media which cite different sources on the market, Irshansky Ore Mining and Processing Plant continues supplies to the Crimean Titan despite the ban on any economic ties with the annexed peninsula.

But now this is done not directly, but under the guise of export to the Russian Federation from where titano ferrite from the Zhytomyr oblast is delivered through the Kerch Strait ferry line.

Then it is not surprising that D.Firtash tries to "go around Robin Hood's barn" even with Stirol, using the old Moscow connections of the RosUkrEnergo times, which are now so interested by the Federal Bureau of Investigation of the United States.

It is not surprising that he does not pay attention to the decision of the National Security and Defence Council of Ukraine to end any relationship with enterprises in the uncontrolled territory of the Donbass from March 15 this year.

Just like the resolution of the Cabinet of Ministers of Ukraine No 1035 from December 26, 2015 "On the restriction of supply of certain goods (works, services) from the temporarily occupied territory to another territory of Ukraine and/or other territory of Ukraine to the temporarily occupied territory", which prohibits relationship with enterprises in the Crimea.

President's moves

As it is known, the problem of the work of Russian companies in Ukraine was on the agenda in 2014 during the active phase of ATO. However, after the conflict "freeze" in 2015-2016 it has paled into insignificance.

The economic blockade of the Donbass and the formal loss of jurisdiction over the enterprises located in the uncontrolled "DPR"-"LPR" regions have aggravated this issue again.

And there also were behind-the-scenes games with the "aggressor" on the part of the leadership of Ukraine. This is confirmed by reports on the details of the recent sale of the Ukrainian branch of Sberbank of Russia.

According to the media, the well-known ICU investment company which has been serving the business interests of the current president of Ukraine Petro Poroshenko for many years joined the negotiations in December 2016.

It allegedly tried to include the Lipetsk Confectionary Factory (LCF) of P.Poroshenko, that is a part of the Roshen company, in the transaction - i.e. in order that the buyer of Ukrainian assets of Sberbank of Russia bought out a factory in Lipetsk at the same time.

At the same time, ICU insisted on selling LCF for $250 million at its real price of $120-140 million. If that is the case, we should give credit to Petro Poroshenko's business acumen.

Taking advantage of the fact that Sberbank needed to "leg it" somehow from Ukraine, he tried to "hang up" his asset on it, the presence of which remains a blot on the presidential reputation.

Because it is difficult to perceive his arguments about the Russian "aggressor" that had occupied the Donbass with his own enterprise working for the same "aggressor".

And not just to "hang up", but also "quids in" on this extra one hundred million "green" – taking advantage of the hopelessness of the situation of Sberbank in Ukraine.

Of course, ICU made a rebuttal after the publication in the media – we know nothing, we did not participate in any negotiations, we do not concern Sberbank.

It is everyone's own business – to believe these statements or not. Let us only pay attention to one interesting coincidence.

After several branches of Sberbank were closed in the capital, the empty premises were occupied… by the Roshen company confectionery shops.

Is this coincidence accidental? Meanwhile, there are quite a few other rather strange circumstances connected with anti-Russian sanctions.

For example, Russian Aluminum holding company of the Russian oligarch Oleg Deripaska fell under them in October 2016.

Judson Trading Ltd. Cyprus-registered offshore company associated with Rusal is also mentioned in the Presidential Decree No 476/2016, signed by P.Poroshenko.

It was noted at that time that the blocking of assets was applied to Rusal: the temporary restriction of the right of owners to use and dispose of their property, the restriction of trade operations in Ukraine, the prevention of the disinvestment outside Ukraine, the suspension of fulfillment of economic and financial obligations, the complete prohibition on making transactions on securities.

Simply said, if Oleg Deripaska took it into his head to get rid of Mykolayiv Alumina Plant (MAP) owned by him he could not sell or rent it to someone.

But the nuance is that he does not sell it and is not exactly going to do it. MAP is a strategically important enterprise for Rusal, which provides the work of its aluminum plants in Russia.

Thanks to its location near the seaport, MAP allows to save transport costs in the production of alumina.

Namely: there is no need for rail transportation of raw materials - bauxite coming from Guinea by sea on bulk carriers. This is because alumina production is also in Russia itself.

However, even the reader who is far from the doctoral degree in economics will easily answer the question what is more profitable for an aluminum producer: to transport 10 tons of alumina or 100 tons of bauxite in 10 wagons to his own plant.

That is why MAP continues to work at an accelerated tempo – even in spite of the fact that world prices for aluminum have now dropped to a 10-year minimum.

At year-end 2016, MAP had ramped up production by 2%, to 1.51 million tons. The director of the alumina business of Rusal Yakov Itskov stated in an interview with Western media in February 2016 that the company sees opportunities for investment in expanding alumina production in Ukraine.

A year earlier, in January 2015, Rusal judicially obtained an extension for 15 years of rent of the Ukrainian state Dnipro-Buh commercial seaport which is used to unload bulk carriers with bauxites.

In other words, all indications are that O.Deripaska feels himself very comfortably in Ukraine even now and he does not intend to leave it. Therefore, the ban on selling this business should not upset him too much.

Just like the ban on disinvestment outside Ukraine within the framework of sanctions. It is about the dividend payment, but the owner of Rusal does not really need them.

He has the opportunity to sell Mykolayiv's alumina to his Russian plants at understated price – and do not show the profits of MAP, "overtaking" it on related companies.

More information on how to do this can be told by the oligarch Ihor Kolomoyskyi who has long and successfully implemented this scheme in Ukrnafta state company.

The ban on the fulfillment of financial obligations turns out to be no less than sham: i.e. If MAP had issues of bonds of the external corporate loan, the company could not settle accounts with creditors.

But it does not have such bonded loans. Consequently, the ban on the fulfillment of financial obligations affects MAP not more than any Arctic storm on the weather in the Sahara.

Such "tough" sanctions were imposed on the "aggressor" by the president of Ukraine.

At the same time, "patriots" and "activists" do not crowd the checkpoint of MAP in Mykolayiv, the entrance to the central office of the enterprise is not blocked – it continues to work like a charm.

And interestingly: in May, 2016, P.Poroshenko formally transferred his Roshen confectionery company to the management of the Rothschild Trust AG investment fund registered in Switzerland.

Whereas, according to the British media, O.Deripaska is an old business partner of the Rothschild family. And Nathan Rothschild himself called Oleg Deripaska his great personal friend in an interview with the media.

As the phrase goes – a friend of a friend… However, it is possible that it was accidentally coincided with MAP, as well as with the appearance of Roshen shops in the former offices of the Kyiv branches of Sberbank.

In such a case, the fact that sulfur content is not higher than 1.5% in the tender for the purchase of coal, announced recently by PJSC Centrenergo state company, should also be considered a simple coincidence.

However, according to the experts, a coincidence is out of the question: the conditions are specially prescribed for the purchase of anthracite coal from the uncontrolled territories, which have such characteristics.

Since the western standards provide for the presence of sulfur in anthracite that does not exceed 1%. And this much harmful impurity is contained in the Australian, South African and American coal.

Centrenergo refers to the informal sphere of influence of the presidential team: now the company is controlled by the State Property Fund of Ukraine.

This direction is overseen there by the deputy head of the SPFU Volodymyr Derzhavin who was an assistant to the first deputy of the Poroshenko Bloc parliamentary faction Ihor Kononenko, an old friend and business partner of the president, before his appointment to the current position.

So it is unlikely that such responsible decisions as a source of raw materials were taken at the performers' level without consultation and approval at the very top.

It is no coincidence that the Russian state VTB Bank which promised to get rid of its Ukrainian unit in March has suddenly announced on April 26 that it decided to postpone the deal – they say that they are not comfortable with the offers from buyers…

Vitaliy Krymov, OstroV