Iron ore reserves at the Putu Range field (Liberia, West Africa) have doubled to 1.08 billion tonnes as a result of new geological exploration, Mano River Resources reported. This company is a minority shareholder of Severstal in this project. Severstal owns 61.5%. Although based on estimated reserves, it seems that the purchase of the Liberian asset is one of Severstal's most successful buys in recent years. The company did not spend much money on it - the field cost $30 million, and now it is confirmed that it is worth the money. On the other hand, Severstal spent around $3.5 billion on the purchase of North American plants, but because of the economic crisis, most of these plants are not in operation and are loss-making. It is true that Severstal bought the field in Liberia in order to supply its American plants, but the American plants will most likely resume production while the Liberian field is being developed. In a worst case scenario, the ore could be sold on the spot market.
Government inspects Perekryostok
It seems that Prime Minister Vladimir Putin has started a new trend among his subordinates - visiting the Perekryostok supermarket on Osenny Boulevard. In June, in the middle of a meeting on retail trade law, Mr Putin and his First Deputy Prime Minister Viktor Zubkov got in their cars and went to see for themselves what retail mark-ups were really like. The mark-ups turned out to be rather large. Perekryostok would not reduce prices and turned the visit into an advertising campaign. A number of different kinds of merchandise now bear the sign "The Premier's mark-up" - less than 5%, explained the press service of X5, Perekryostok's parent company.
No less news-making were the results of a visit by Andrei Krainy, head of the Federal Agency for Fisherн, and Gennady Onishchenko, head of the Federal Service for Supervision of Consumer Protection and Welfare, to the fish department of the Perekryostok on Osenny Boulevard (the store is on the way to work for most government officials, which explains the agency representatives' attraction). It came to light that the store was selling pollock and striped catfish under the guise of the more expensive perch, up to 50% of the weight of the fish was ice and the mark-up on fish was as big as the mark-up on pork, which had so shocked Mr Putin.
X5 CEO Lev Khasis told Vedomosti that he considers Krainy's statements "extremely populist and inadequately substantiated."
"Lobbying for the private retail chain Ocean looks very strange from an official of such stature," added Khasis. "We will carefully analyse the situation, and will possibly sue."
"We are only too happy to have a court case show how Perekryostok is bamboozling people," said Alexander Savelyev, head of Federal Agency for Fishery's public relations centre.
Which of the country's leaders will be the next to visit Perekryostok on Osenny? The show must go on.
A New Broom
Alrosa has returned to the diamond market. As of December, it had been supplying gems only to the State Repository for Precious Metals and Gems because it did not want to reduce prices, but yesterday the company announced that it would resume retail sales, having sold more than $150 million worth of raw diamonds. These diamonds were sold according to existing contracts, but the very fact that Alrosa has returned to the market says that the company listened to its clients and is ready to offer discounts. Just last week, several of Alrosa's clients told Vedomosti about the change in Alrosa's sales policy. Smolensk-based Kristall, the largest Russian polisher, even disclosed the amount of the possible discounts - down to 25% off pre-crisis levels.
All of this has to do with a change in management. Previous Alrosa President Sergei Vybornov sacrificed sales in order to keep the prices up (in the 1st quarter, sales fell 93%), but such conservatism did not justify itself. The government appointed a new Alrosa president - Fyodor Andreyev, the former chief financial officer of Russian Railways (and the Alrosa CFO in 2002-2003). Now he is vindicating his position as "anti-crisis manager". The question is how this will affect Alrosa's bottom line and how many more anti-crisis measures Andreyev have planned. Experts have advised Alrosa to sell all of its unprofitable assets, close its loss-making mining and beneficiation plants and cut staff.
Udacha Mordaschova
