Russia 100723 Basic Political Developments

Russian steel makers fail to move to long-term contracts - Kommersant

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Russian steel makers fail to move to long-term contracts - Kommersant
09:33 23/07/2010

Russian steel makers have not fully complied with instructions given by Prime Minister Vladimir Putin to move to long-term contracts with consumers due to a fall in metals prices since May, Kommersant business daily said on Friday.

Putin called for the shift to long-term contracts following a series of complaints made by Russian Railways, various automakers and other major consumers about unreasonably high prices. The prime minister is to hold a meeting in the Russian Urals city of Chelyabinsk today to discuss the shift towards long-term contracts.

Kommersant said that long-term contracts have only been concluded with the companies that made the complaints.

Metal companies MMK and Severstal have agreed to long-term contracts with the auto industry, but with the option of correcting the prices every quarter, the Federal Antimonopoly Service (FAS) told Kommersant.

Steel company Evraz signed a contract with machine building company Uralvagonzavod on a fixed price until the end of the year (price in the second half will be 17 percent higher than in the first half), a source close to the company said. It has also agreed on pricing with Russian Railways until 2012. The price will be pegged to the cost of scrap metal, plus about 9 thousand rubles per ton and will be reviewed every quarter, Kommersant said.

Smaller consumers are refusing to go onto long-term contracts because of price volatility, a source from one of the companies told Kommersant. Since May, the price of steel has dropped more than 20% and it continues to fall, the source added.

The FAS is continuing to investigate unreasonably high steel prices. Next week the service is planning to announce the results of an audit on Severstal and MMK, a source in the service said. Signs of violations, he said, are that MMK worked with an unreasonably high return of 80% and Severstal was selling one type of product at different prices.

MOSCOW, July 22 (RIA Novosti)

Russian RUSAL restarts alumina refinery in Jamaica
Fri Jul 23, 2010 5:16am GMT

MOSCOW July 23 (Reuters) - The world's top aluminium producer Russia's UC RUSAL (0486.HK) (RUAL.PA) said on Friday it had restarted operations at its Windalco Ewarton alumina plant in Jamaica mothballed in 2009 due to the economic crisis.

RUSAL said in a statement it plans to refine by the end of the year around 321,000 tonnes of alumina, an intermediate product for aluminium smelting, at the refinery, which has an annual capacity of 650,000 tonnes. (Reporting by Aleksandras Budrys)

Rusal resumes operations in Jamaica

      RBC, 23.07.2010, Moscow 10:25:36.Rusal, the world's largest aluminum producer, said it would resume operations at its mine and alumina plant of Ewarton, part of Windalco, in Jamaica.

      The company's press office cited positive trends on the aluminum market and agreements reached with Jamaica's government and subcontractors as factors that contributed to an improvement in Ewarton's economic standing and permitted Rusal to resume operations. Rusal's Deputy General Director for alumina business Yakov Itskov praised the decision since the mining industry, in his opinion, played a crucial part in Jamaica's economic and social life. He also said that the resumption became possible largely due to a constructive stance and assistance on the part of Jamaica's government and partners.

Russia's Mobile Power Trio Fights For 4G Exclusivity –Vedomosti

First Published Friday, 23 July 2010 02:23 am - © 2010 Dow Jones


The heads of Russia's three biggest mobile providers have urged government leaders not to award next-generation frequencies to inexperienced upstarts, business daily Vedomosti reports Friday.

In a letter to Prime Minister Vladimir Putin last week, the chief executives of OAO Mobile TeleSystems (MBT), VimpelCom Ltd. (VIP) and OAO Megafon said granting frequencies to "newly formed small companies" would bring "negative consequences for the vast majority of the population of Russia, our companies and the state as a whole."

The Big Three singled out Osnova and Red Telecom for criticism, arguing that neither has enough capital at its disposal to ensure timely build-out of a so-called 4G network. The market leaders say Osnova and Red would have to spend as much as $7 billon over five years or more on their part of a national 4G network.

MTS, VimpelCom and Megafon insist they alone have the experience and deep pockets to handle the task and should be awarded 4G frequencies through the government's competitive auction. According to their argument, if newcomers get the frequencies, they're likely to resell them to the big operators anyway, which would delay delivery of 4G services to users. With that in mind, they asked Putin to order "further work to develop a precise, transparent approach to the allocation of radio frequencies."

Putin's spokesman Dmitry Peskov told Vedomosti on Thursday that he couldn't comment on the matter.

Also called LTE, for Long-Term Evolution, 4G is a mobile-network standard that's more advanced and up to 10 times faster than conventional third-generation technology.

The authenticity of the letter from CEOs Mikhail Shamolin of MTS, Yelena Shmatova of VimpelCom and Sergei Soldatenkov of Megafon was confirmed by all three companies. A representative of one of them said the Big Three is stepping up efforts to draw attention to the issue by appealing to Russia's leadership.

The CEO trio sent a similar missive, dated July 6, to the minister of communications and mass media, Igor Shchegolev. That appeared to be a response to news that Defense Minister Anatoly Serdyukov had asked President Dmitry Medvedev in late May to support the formation of Osnova as a privately held mobile-broadband operator using the 4G standard across Russia. Medvedev replied by instructing subordinates "to make all necessary decisions in conjunction with the Communications Ministry in the prescribed manner."

In Russia, slices of the cellular spectrum are allocated by the State Commission for Radio Frequencies, an interagency body that Shchegolev heads. A week before the commission's most recent meeting, on July 15, the Defense Ministry proposed that the Communications Ministry consider behind closed doors "questions related to carrying out … the instruction of the president." But the request couldn't be taken up: By law, the commission's agenda had been set three weeks before the meeting. Shchegolev said his ministry continues to discuss 4G-frequency allocation and "will see what happens with Defense."

The matter of 4G frequencies will be decided by August, Shchegolev has said.

Newspaper website:

-Dow Jones Newswires; 212-416-2900

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