MOSCOW, February 22 (RIA Novosti) Putin's successors are not yet politicians/Russia approves creation of "gas OPEC"/Evraz to control 30% of global vanadium market/Japan eyes Russian uranium/Allianz appraises Russian insurer at $1.5 billion
(RIA Novosti does not accept responsibility for articles in the press)
Nezavisimaya Gazeta
Putin's successors are not yet politicians
Few Russians can pinpoint the strengths of Putin's potential successors, according to pollsters. Experts said that Sergei Ivanov and Dmitry Medvedev, first deputy prime ministers, have not yet become political figures in their own right.
According to the Levada Center, 41% of Russians cannot pinpoint the virtues of Medvedev, and Ivanov's advantages remain a mystery to 32%.
The respondents said the two candidates' strong points are their closeness to Putin (27% and 30%), their high education and culture (24% and 19%), and their energy (23% and 24%).
More than two-thirds of the respondents (68% and 70%) could not name any negative features of the two officials.
However, 9% said Medvedev "has no experience of state management," while 12% said Ivanov "talks too much and does too little."
Putin's successors have not learned to be politicians yet, Sergei Markov, a member of the Public Chamber, said about the poll results. "They are the technical staff and managers, not political figures," he said.
Markov said that Medvedev and Ivanov have so far not taken any independent decisions, but have only acted on the instructions of Vladimir Putin.
" People like this, but they don't know if Ivanov and Medvedev have employed their personal skills," he said. "They are clean slates, and may remain that way unless they do something on their own."
Putin's potential successors are being promoted in a one-dimensional political space, which prevents people from correctly evaluating their weak and strong points, said Andrei Ryabov, scholar-in-residence at the Carnegie Moscow Center.
Russians mainly learn about the actions of the two candidates from television, he said, where they are presented in a way that precludes an accurate assessment of their efficiency.
"Television presents Ivanov and Medvedev in one dimension, simply as nice guys," Ryabov said.
Gazeta
Russia approves creation of "gas OPEC"
On Wednesday, the supervisory council of the Russian Gas Society approved the notion of a "gas OPEC" that would strengthen Moscow's leverage over Europe.
The new organization, referred to as an alliance rather than a cartel, will involve the Eurasian Economic Community, comprising Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan, as well as the Commonwealth of Independent States.
Analysts said the Kremlin has approved the creation of a post-Soviet "gas OPEC."
Top managers of energy giant Gazprom did not attend the council's session, which discussed the creation of an international alliance of the gas industry's non-governmental and non-profit companies, because Moscow does not yet want to alarm the West.
However, Gazprom is the Russian Gas Society's main member, and society President Valery Yazev lobbies for Gazprom interests in the State Duma, the lower house of parliament.
A member of the working group to establish the international gas alliance said that this is being done on orders from the Kremlin.
The proposed CIS gas alliance, which is receiving all-out support, would enter global markets if it proves to be a successful performer.
Yazev said Iran has proposed a "gas OPEC" to Russia, and Qatar and Saudi Arabia have also reacted positively to the project.
Even Christophe de Margerie, CEO of oil giant Total, has called it constructive, Yazev said.
Although the West already fears a "gas OPEC," the Kremlin has passed legislation allowing Gazprom to monopolize gas exports and is doing everything to persuade independent gas producers to saturate the domestic market.
Russia's Industry and Energy Ministry, Economic Development and Trade Ministry and Foreign Ministry are now streamlining the gas alliance concept that stipulates new transport corridors, technology transfers and coordinated pricing policies.
Most importantly, Gazprom and the Kremlin Administration have approved the creation of a "gas OPEC," due to be unveiled at the Eurasian Economic Community's energy forum in September.
Kommersant
Evraz to control 30% of global vanadium market
The European Commission has approved the purchase of 54.1% in South Africa's Highveld Steel and Vanadium Corporation Ltd. by Evraz Group, one of Russia's largest vertically integrated steel and mining businesses.
In return, Evraz must sell 50% of Highveld's vanadium business.
As a result, Evraz will not be able to take over 40% of the global vanadium business, though analysts said the deal is a success.
Highveld's purchased assets cost about $250 million, but Evraz will pay a total of $678 million for Highveld as a whole.
Evraz bought 24.9% in Highveld from Anglo American in the summer of 2006, with an option to buy the remaining 44% from Anglo American and Credit Suisse, if permitted by the European Commission and South Africa's anti-monopoly bodies.
The European Commission yesterday refused to comment on the deal's harsh terms, and Evraz also does not have an answer to that question.
Leonid Smirnov, head of the Urals Metals Institute, said that taking into account US Stratcor, another vanadium asset of Evraz, the company's share on the global vanadium market would have reached 40%. He said that probably frightened the European Commission.
Experts said Evraz's share will not drop too low after the sale of its Highveld assets. It now holds 10% of the global market of vanadium pentoxide, one of the main vanadium products.
That information, combined with Smirnov's calculations, shows that Evraz will control 25%-35% of the world vanadium market even if it fulfils the instructions of the European Commission.
Analysts have evaluated the assets that should be sold. Kirill Chuiko, from the Uralsib financial corporation, said that Evraz would lose some assets producing and processing vanadium slag, which account for a half of Highveld's revenues in its vanadium segment, and 30% of the African company's revenues.
"According to our calculations, Highveld's purchased assets cost $250 million, or 2% of Evraz's assets," Chuiko said.
Although Evraz will lose some of its Highveld assets, the market welcomed the approval of the deal by the European Commission.
Evraz's global depositary receipts traded in London went up 1% to $33.1 per GDR yesterday, while Highveld's shares traded on the Johannesburg Securities Exchange grew by 2.5%.
Evraz Group is a leading Russian vertically integrated mining company, comprising three major steel mills and several mining and coal-producing assets.
Highveld annually produces one million metric tons of steel and is the world's largest producer of vanadium (25% of the world's total) and ferrovanadium alloys.
Gazeta.ru
Japan eyes Russian uranium
Japan wants to both enrich uranium in Russia and gain access to its uranium deposits. After a new law regulating the nuclear industry comes into force, they will have a chance of doing both, experts told the paper.
During the first stage, according to the Yomiuri Shimbun, Japan will cooperate with the Atomprom holding to enrich uranium derived from used fuel rods from nuclear reactors, now stored in England.
The goal of the second stage will be to gain access to the development of Russian uranium deposits. The country is also considering the possibility of enriching uranium ore produced in Kazakhstan.
An agreement on the issue can be signed during top-level talks before this summer, the paper reported.
Until now, uranium for Japanese nuclear power plants has been enriched in France and Britain.
As their services have grown more expensive, Japan has decided to cooperate with Russia.
"The cost of enrichment in Russia is far lower than in Europe. It is about $90 per enrichment unit," said MP Valentin Ivanov, a member of the expert council of the Association of Nuclear Industry Producers and Service Providers. The reason is Russia's low electricity costs.
"Moreover, Russia has spare enrichment capacities - four facilities in Siberia and in the Urals," said Bulat Nigmatulin, another expert of the Association and first deputy director general of the Institute of Natural Monopolies' Problems.
On February 1, Russian President Vladimir Putin signed a new law regulating the nuclear industry.
It allows foreign legal entities to develop uranium deposits in partnership with Russian firms, such as the Uranium Mining Company.
However, to do so, Japanese companies will have to make it onto a special list of companies endorsed by the Russian president.
"The uranium price on global markets has reached $100 per kilogram, which makes development of new fields profitable," Nigmatulin said.
However, Russia will require enormous infrastructure to carry out uranium production projects and to develop its nuclear industry, experts said.
Vedomosti\Gazeta.ru
Allianz appraises Russian insurer at $1.5 billion
One of Russia's largest insurance companies has been bought by Germany's Allianz.
Experts said that the purchase of a 49% stake in Rosno for $750 million is a good deal. The price of the insurer has soared 25-fold to $1.5 billion, since the partners' first transaction.
In 2001, Allianz paid $28.6 million for 45.3% of Rosno, which is a Sistema subsidiary.
"It was a very good deal, we got a super price," said Sistema president Alexander Goncharuk about the new agreement.
Ilya Fedotov, leading analyst with Veles Capital, said the transaction was beneficial for Sistema. The average international price/earnings ratio for insurance companies is 0.85 (Allianz has 0.76).
Given Rosno's appraisal for the latest transaction and its revenues for last year, the ratio is close to 2. That is a high ratio, said Andrei Savelyev, a member of the board of directors of Reso Garantia.
But the high price is justified for Allianz as well, he said. After all, the German company has acquired one of the largest insurers on the most dynamically developing market in Europe.
Allianz's representatives shared that view. Yesterday both parties to the transaction saw an increase in their capitalization - Sistema by 3.3% and Allianz by 0.88%.
For the first time ever, the top five Russian insurance companies will include a company controlled by foreigners.
Market players, however, are not worried about the prospect.
"From the point of view of the modern insurance system, the trend toward purchases of Russian insurers by foreigners is absolutely normal," said Alexander Grigoryev, CEO of the Ingosstrakh insurer.
"The important thing is that it should not become a mass phenomenon, like in the Czech Republic, where foreign companies control 99% of the insurance market," he said.
What really worries Russian insurers is the redistribution of the market that could follow the new acquisition.
"The company will not be able to take part in many tenders, because it will now be foreign," Grigoryev said.
