Mining Exploration News

YURY Trutnev, the Russian minister in charge of economic relations with SA, may be replaced soon, say ministry sources and a Moscow newspaper report.

Trutnev has served just two years as the federal natural resources minister. His removal follows the start of sweeping personnel changes ordered by President Vladimir Putin in the security ministries, customs, the general prosecutor’s office and the federation council, Russia’s equivalent of the parliamentary upper chamber.

Four cabinet ministers are believed to be next. They include Economic Development Minister German Gref, who advocated Trutnev’s appointment in March 2004.

At the time, Trutnev was governor of Perm, a region in central Russia where his close ties with LUKoil, one of Russia’s largest oil producers, and Uralkali, a leading fertiliser producer, made him an obvious choice for the resources post.

A former senior ministry official told Business Day the likelihood of Trutnev’s departure was “serious” but Trutnev’s spokesman said: “We have no information about the possibility of the replacement of Minister Trutnev.”

By coincidence, two of Trutnev’s South African counterparts at the minerals and energy department, Minister Lindiwe Hendricks and Deputy Minister Lulu Xingwana, were recently replaced and awarded other portfolios.

Trutnev and Xingwana have used sessions of the SA-Russia Intergovernment Commission for Trade and Economic Co-operation to promote the bid by Russian magnate Victor Vekselberg to explore for manganese in SA.

One of the candidates to replace Trutnev is his old rival Vladimir Litvienko, who is well known to South African mining companies, such as De Beers, BHP Billiton and Anglo American.

Litvinenko is the rector of the St Petersburg State Mining Institute, one of the leading training academies for Russian geologists and miners.

Litvinenko is positioning himself as an advocate of the new nationalism in the development of Russia’s energy and mineral resources by Russian companies. Trutnev has tried to catch up, but possibly too late to convince his Kremlin bosses.

The strategy of restricting mineable resources to Russian companies, and excluding international miners, has been taking shape ever since Trutnev took his post. But in recent weeks there has been a noticeable acceleration behind the scenes.

At the end of last month, Trutnev’s ministry accepted a report from the Russian Academy of Natural Sciences claiming that production-sharing agreements (PSAs) for oil and gas projects being developed by Shell and Exxon on the far eastern island of Sakhalin ought to be cancelled.

Trutnev’s spokesman, Rinat Gitazulin, said: “We believe Russia is losing money as a result of this.”

He promised to review the recommendations but passed the buck to the industry and energy ministry, which is in charge of PSAs and the oil and gas sector. No one had delivered the report there.

On Monday, Trutnev appointed a subordinate, Anatoly Potemkin, to let the word out that the strategic targets were being expanded, raising the barrier for foreign entry into oil and gas, and extending it to cover nickel, copper and possibly gold as well.

While platinum has not been mentioned, its inclusion could doom Anglo Platinum’s long-time venture to develop the first foreign-owned platinum and palladium mine in Russia — unless the mineable reserves are too small to be of interest to domestic miners.

“We are considering including more natural resources in the strategic exclusion list. It may be nickel,” said Potemkin.

This is a markedly different approach from Trutnev’s past efforts to help the principal producer of nickel in Russia, Norilsk Nickel.

Litvinenko told Business Day he favoured permitting foreign-owned companies in both the energy and mineral sectors to develop greenfield projects — if they did not derive a benefit from Soviet-era exploration at no cost.

He conceded that the high development costs of offshore continental shelf exploration might be beyond the means of Russian companies. However, that was before Rosneft took over Yukos and Gazprom Sibneft; and before oil prices jumped to $70 a barrel.

He did say last week, however, that he would resist US and other foreign pressures to include major foreign-owned stakes in the Barents Sea gasfield project, known as Shtokman.

“Today, Russia can fill its domestic needs and export contracts entirely using its continental gas resources. That’s a fact,” Litvinenko said. “We need to perfect the conception of the entire project, and only then should foreign partners be announced.” [source:http://allafrica.com/]

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