Mining Activities

[Ethyl]

METALS
The year in mining: Only a taste of what's to comeRising commodity prices and takeovers look to flavour the active sector in 2006

Monday, December 26, 2005 Page B1

MINING REPORTER

VANCOUVER -- After a year of mining mega-deals, there is no reason to expect a lull.

Strong commodity prices, a dearth of advanced development projects and the shuffling that follows a consolidation binge mean the mining scene is apt to be just as active in 2006.

This year, Barrick Gold Corp. snagged Placer Dome Inc. and no challengers have emerged to threaten Inco Ltd.'s friendly takeover of one-time rival Falconbridge Ltd.

There will be more to come. Take the gold sector, which stands to be reshaped if Barrick completes its $10.4-billion (U.S.) takeover of Placer -- a result much more likely now that Barrick has sweetened its bid and Placer's board has endorsed the deal.

The Placer takeover will reorder the top end of the industry, putting the combined company ahead of Denver-based Newmont Mining Corp. in terms of annual production.

But it will also have a ripple effect among the mid-sized and junior producers, especially if gold prices maintain their momentum.

"Placer has been a big participant on Canadian capital markets, and with them removed, presumably gold investors are going to look for other places to invest," says Tye Burt, chief executive officer of Toronto-based Kinross Gold Corp. "And we hope some of that investment demand will reflect itself in our stock."

Kinross is emerging from a lengthy accounting review that has weighed on its shares.

It will be trying to position itself to appeal to institutional investors looking to get gold exposure in their portfolio. Junior producers are also jostling for position, some striking mergers to boost production and others hunting for partners.

On the base metals side, next year could see Inco digesting its $12.5-billion takeover of Falconbridge. That bid, announced Oct. 11 and originally scheduled to close in December, has been extended to Jan. 27 to provide more time for regulatory approvals.

That still allows time for Swiss-headquartered miner Xstrata PLC to spoil the party. Xstrata, which acquired 19.9 per cent of Falconbridge in August for $2-billion, was believed to be angling for all of Falconbridge, especially as Xstrata CEO Mick Davis said in August that his company had no intention of remaining a long-term minority shareholder.

Since Inco and Falconbridge hatched their plan to create the world's biggest producer, there has been widespread speculation Xstrata would mount a rival offer for Falconbridge. To date, however, it has not done so. Some observers believe Xstrata could bide its time and bid for the merged company.

That would be a big bite -- a combined Inco-Falconbridge would have a market value of more than $20-billion -- but not an inconceivable one, given the outlook for metals and the push by major firms to lock down future supplies.

The story of rising metal prices over the past two years has primarily been a story about China, where rapid industrialization and an emerging middle class has created a market that's gobbling up copper and nickel.

That market isn't going away, and India isn't far behind.

"The hundreds of millions of Chinese and Indian new middle-class members coming in the next two decades need steel, copper, nickel, aluminum, lead and zinc to achieve their dreams," Donald Coxe, Bank of Montreal global portfolio strategist, wrote in a December report.

"It is this sustained, non-cyclical growth in metal demand that has already become a major factor in global metal pricing and will be the dominant factor in coming decades."

An average car contains about 25 kilograms of copper, Mr. Coxe added. An average house has 180 kg.

Meanwhile, copper supplies are limited and many proposed new projects are years away from production. In a Dec. 21 report, the Asia Pacific-Australia research team for Credit Suisse First Boston described the outlook for base metals as "effervescent," noting in particular that "the global copper market is facing a significant supply constraint that seems to be unlikely to be resolved in the near term."

Copper, the workhorse of the metals market, may be a leading economic indicator and, for the next few years at least, a cash cow for the companies that produce it.

Lesser-known metals are also shining. Prices for zinc, long the market's ugly ducking, are improving. Vancouver-based Teck Cominco Ltd., which last year used some of its cash to invest in the oil sands, is getting a boost from indium, used in coating flat-screen televisions. Uranium prices are soaring, thanks to limited supply and hopes of a nuclear building boom.

The next year will also see miners struggling with rising costs for fuel and materials, which hit many producers last year, and an industry-wide labour crunch.

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20051226/RMINERS26/TPBusiness/TopStories

[Ethyl]

Venezuela's Chavez lauds mullah leader's guidelines


Venezuelan President Hugo Chavez in Caracas on Tuesday praised the concepts and guidelines of mullahs' regime supreme leader mullah Khamenei.

During a meeting with Iranian Ambassador to Caracas Ahmad Sobhani, the president said he will never forget the wise remarks of the mullah Khamenei on the power of morality and example set by rulers to their nations.
He said he was always reminded of mullah Khamenei's words:

"The power of morality, spirituality and ideology is far stronger than thousands of missiles and planes. Leaders should, therefore, pay attention to their behavior and set a good example to their nations." Acknowledging the help of several countries in Venezuela's advancement, Chavez said that Iran was at the top of the list with its transfer of technology.

Chavez has paid four visits to Iran so far in his six-year term as president.


Iran and Venezuela, during their third Joint Economic Commission session last month, signed 21 documents for cooperation in various fields including gas, petrochemicals, aluminium, brick manufacture and construction of a second Iranian cement plant in Venezuela.

The session was held in Caracas attended by Iranian Minister of Industries and Mines Ali-Reza Tahmasbi and Venezuelan Minister of Basic Industry and Mining Victor Alvarez on December 1-2.

Tehran and Caracas have signed nearly 50 documents for cooperation since 2004.

Iran-Venezuela joint ventures are currently valued at some 850 million dollars.



http://www.iranian.ws/iran_news/publish/article_11815.shtml

[Ethyl]

German envoy lauds Kerman potentials
LONDON, December 22 (IranMania) - German Ambassador in Iran said that Kerman province has ample potentials, according to IRNA.

Baron Paul Von Multzahn in a meeting with Kerman Governor General Abdolmajid Raufei-Nejad said,"In my previous visit to the province I witnessed the signing of agreements between German car manufacturing company Volkswagen and Kerman-Khodro Company which was to herald hopes for the city of Bam."

He said he will travel to Bam again this time and visit humanitarian projects underway in the area.

He said handicraft industry, underground resources and agriculture are among the investments priorities in the province.

The German ambassador also expressed his countries readiness to invest in the province.

"Suitable investments opportunities should be identified to me," he said.

Raufei-Nejad said that assistance to the Bam residence are serious and continuous.

"We are witnessing the assistance by many nations in reconstruction of Bam including Germany."

He said Iranian government with a fresh outlook to economic policies and development has ceded many prerogatives to the provinces.

The provisions have authorized the governor generals to make contact with foreign countries.

"We have many projects for the German investors and preliminary feasibility studies have been positive for investments.

We are also interested in building oil refineries, steel mill complexes and petrochemical factories."
The province ranks highly in reserves of copper, coal, iron, decorative stones and gold in the Middle east.

He said that a comprehensive campaign has begun to identify sources of expatriate and foreign capital.

He stressed on the need for implementing economic reforms which will have significant effects on domestic and foreign investments.

Investments are carried out in various sectors including services, mining, industry, petrochemicals, chemicals and foodstuffs.

He said that foreign investments centers have been set up throughout 30 province.

The reform of foreign investments law in the country has led to 100 percent growth in the number of approved foreign investments projects in recent years.
http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=39001&NewsKind=Current%20Affairs

[Ethyl]

Indonesia threatens second US mining company with lawsuit
David Shucosky at 11:23 AM ET



[JURIST] Indonesia has threatened legal action against US mining company Freeport-McMoran Copper & Gold [corporate website] if it does not improve environmental conditions near its gold mine in Papua. For the past few days, protestors have called for the government to take action against the mine in order to control the production of waste ore called tailings that could cause landslides or flooding. A landslide [Reuters report] near the plant on Thursday killed three workers and injured four others, but Freeport says the cause of the landslide was not related to its operation [PDF press release].

Indonesia earlier this year settled [JURIST report] a civil suit for environmental damage against Newmont Mining Corporation [corporate website; JURIST news archive] for $30 million. Criminal charges are still pending against Newmont's top executive in the region. Indonesia set a timetable of two to three years for Freeport to action and avoid litigation. AP has more. The Jakarta Post has local coverage.

http://jurist.law.pitt.edu/paperchase/2006/03/indonesia-threatens-second-us-mining.php

Weren't the militants in Nigeria asking for the same thing - environmental damage compensation?

[Ethyl]

Copper hits all-time high

TOKYO - Amid growing global demand and persistent supply concerns, Japan's domestic benchmark price of copper has hit an all-time high, breaking the record for the first time in nearly 32 years.

The recent uptrend is hitting manufacturers of copper products hard, with some unable to fully pass higher copper prices on to their customers.

Nippon Mining & Metals lifted its copper price - widely used as the industry's yardstick - to a record 910,000 yen (US$7,950) per ton Thursday, up 70,000 yen on the day, surpassing the 890,000

yen record marked in May 1974. Three-month copper futures rose to 7,300 dollars per ton Wednesday on the London Metal Exchange.

Copper prices are soaring because global demand for the metal has increased. Yet supply is not keeping up with demand, as it has suffered a series of labor disputes and mining accidents in Indonesia and Central and South America. In addition, the influx of speculative funds into the commodity market is exerting upward pressure.

Surges in copper prices are dealing a severe blow to manufacturers of electrical wire, which are responsible for roughly 60% of Japan's total annual copper ingot consumption of 1.2 million tons. They have been able to pass copper price increases on to their customers in the public sector and the power industry, but are having a hard time doing so with construction companies, with which prices have to be negotiated separately.

"It is difficult to fully pass the burden on to these clients," an official at Furukawa Electric said.

Matsushita Electric Works and others have won agreement from some of their customers to raise the prices of processed copper products used for wiring of printed circuit boards by about 15%. In turn, producers of these boards are negotiating price hikes with consumer electronics manufacturers.

"If negotiations fail, our pretax profit will drop by some 10%," a CMK official said.

Makers of air conditioners are also scrambling to raise prices to reflect higher copper prices. With the prices of copper wire used to enhance air conditioners' cooling function rising, Daikin Industries, Mitsubishi Electric and others have lifted prices of commercial-use air conditioners since 2004.

But copper wire prices have jumped 30% so far this year, increasing the burden on these air conditioner manufacturers.

http://www.atimes.com/atimes/Japan/HD29Dh02.html

[Ethyl]

U.K. Stocks Climb, Paced by Anglo; Alliance & Leicester Rises

U.K. Stocks Climb, Paced by Anglo; Alliance & Leicester Rises
May 5 (Bloomberg) -- U.K. stocks rose for a second day, paced by mining shares including Anglo American Plc as gold reached a 25-year high and copper and zinc climbed to records.

Alliance & Leicester Plc jumped after a newspaper said Spain's Santander Central Hispano SA may buy the bank for more than 6.5 billion pounds ($12 billion). Vodafone Group Plc advanced amid speculation it may seek to buy Vivendi SA's stake in their SFR wireless venture.

Cable & Wireless Plc gained after the Independent said O2 Plc may acquire a U.K. Internet service provider. 3I Group Plc, Europe's largest publicly traded buyout firm, rose after Merrill Lynch & Co. added the stock to its ``Europe 1'' list.

The FTSE 100 Index added 54.8, or 0.9 percent, to 6091.7. The measure has risen 1.1 percent this week. The FTSE All-Share Index rose 1 percent to 3114.59. Ireland's ISEQ Overall Index gained 0.9 percent to 7961.02.

Anglo American, the world's second-largest mining company, advanced 3.2 percent to 2,476 pence. Antofagasta Plc, the London-based owner of three copper mines in Chile, rose 3.6 percent to 2,544 pence. Shares of Xstrata Plc, owner of the world's largest zinc smelter, gained 5 percent to 2,254 pence.

Gold in New York moved past $680 an ounce as increased tension between Iran and the U.S. spurred investors to buy the precious metal as a haven and a hedge against inflation.

The prices of copper and zinc rose as threats to supply fueled buying by investment funds.

Takeover Speculation

Copper for delivery in three months on the London Metal Exchange increased as much as 2 percent to $7,800 a metric ton.

Alliance & Leicester jumped 7 percent to 1,200 pence, its steepest climb in almost four years. Santander, Spain's largest bank, is in exclusive talks to buy Britain's eighth-largest bank, the London newspaper City A.M. reported, without saying where it got the information.

Alliance & Leicester doesn't comment on market rumors, said Mark Jones, a spokesman for the bank. Santander declined to comment, said a spokesman who asked not to be identified.

Vodafone, the world's largest mobile-phone company, rose 2 percent to 128 pence. The company owns a 44 percent stake in SFR, France's second-largest wireless operator. Vodafone spokesman Ben Padovan said rumors of a bid for the whole company were without foundation.

``It is purely a rumor as Vivendi has said it is not a seller,'' said Renaud Berenguier, head of hedge-fund equity sales at Aurel Leven SA in Paris. ``The management seems to be adamant that keeping SFR is their strategy.''

Cable & Wireless, 3i

Cable & Wireless, Britain's second-biggest phone company, advanced 1.2 percent to 104 pence. O2, the mobile-phone operator purchased by Spain's Telefonica SA, may consider buying a U.K. Internet service provider, though no advances have been made, the Independent said, citing an unidentified O2 spokesman.

O2 may be interested in Cable & Wireless's Bulldog Communications Ltd. unit and Tiscali SpA's U.K. broadband unit, the newspaper said.

3I Group jumped 4.8 percent to 936.5 pence. Merrill said it added the stock to the list because it's trading below the brokerage's price estimate of 1,080 pence.

``3i has lagged the market,'' analysts wrote in a note to investors. ``This unjustified performance has turned a cheap share into a clearly undervalued one.''

The following stocks also gained or fell in the U.K. market. Stock symbols are in parentheses.

Central African Mining & Exploration Co. (CFM LN) added 4.75 pence, or 5.2 percent, to 97 pence. The company said it has raised 100 million pounds for expansion.

Constellation Corporation Plc (CST LN), which offers human resources consultancy services, added 0.01 pence, or 7.7 percent, to 0.07 pence. The company said it was ``cautiously optimistic'' for the current quarter.

Filtronic Plc (FTC LN) surged 29.5 pence, or 17 percent, to 206.5, the most in the All-Share Index. The shares had their biggest gain in nine months after the maker of semiconductors and mobile-phone antennas said it's in talks with U.S.-based Powerwave Technologies Inc. about selling two units.

Greene King Plc (GNK LN) jumped 74.5 pence, or 10 percent, to 826.5 pence, its steepest advance in at least 14 years. Merrill Lynch & Co. upgraded its recommendation on the shares of the U.K. brewer and pub company to ``buy'' from ``neutral,'' citing the company's improved business outlook. The brokerage's price estimate is 913 pence.

Millfield Group Plc (MIL LN) slumped 3.53 pence, or 47.5 percent, to 3.88 pence. The independent financial adviser on pensions and mortgages plunged after the company said talks on a potential takeover failed to yield an agreement.

Mitchells & Butlers Plc (MAB LN), which runs about 2,000 U.K. pubs and bars in chains including All Bar One, fell for a second day, losing 16.5 pence, or 3.3 percent, to 477.5 pence. The company yesterday rejected a 2.8 billion-pound ($5.1 billion) bid from a group led by billionaire real-estate investor Robert Tchenguiz.

Tchenguiz offered 550 pence a share in cash, the same as an informal bid on April 13 by his investment company, R20 Ltd.

``The share price is drifting off as the market comes to terms with the view that the proposed bid at 550 pence is unlikely to be successful, as management has put up a robust defense,'' said David Pope, an analyst at Brewin Dolphin Holdings Plc. ``Without a higher bid around 600 pence or a second bidder, the share price is likely to drift in the short term.''

Northgate Information Solutions Plc (NIS LN) gained 4.5 pence, or 5.4 percent, to 87.75. The U.K.'s biggest supplier of payroll systems said pretax profit and cash flow for fiscal 2006 will be at the upper end of analysts' expectations. Business has been ``strong,'' the company said in a statement.

NWD Group Plc (NWD LN) slumped 20 percent to 1 pence. The marketing services company, with clients including Vodafone Group Plc and Telecom Italia SpA, fell the most in a month after reporting a loss for 2005.

Richmond Foods Plc (RFD LN) climbed 40.5 pence, or 5.8 percent, to 742 pence. Oaktree Capital Management LLC, a Los Angeles-based buyout firm, agreed to buy the U.K. ice cream maker for 182.2 million pounds to gain a greater share of the European frozen dessert market. Oaktree will pay 750 pence a share for the company.

Robotic Technology Systems Plc (RTS LN), a supplier of automatic assembly systems, gained 50 pence, or 0.8 percent, to 65 pence. The company published details of the proposed separate public listing of its nuclear services division.

THB Group Plc (THB LN) advanced 4 pence, or 4.4 percent, to 94. The insurance broker for sports said fiscal-year profit and revenue will exceed analysts' estimates after the company improved its performance in the second half.

http://www.bloomberg.com/apps/news?pid=10000102&sid=a1me4.bsx248&refer=uk

[Ethyl]

Malaysia's exports surge to record high

KUALA LUMPUR - Malaysia's exports in March this year jumped 21.3% from the preceding month to a record value of RM51.28 billion (US$14.3 billion) due to strong shipments of electrical and electronic products (E&E) and crude petroleum, the Statistics Department said.
It was the first time that exports exceeded RM50 billion in any month and marked the highest monthly growth over the last 12 months, the department said in a statement on May 8.

Compared with a year ago, exports in March this year was 9.5% higher.

During the month, exports of electrical and electronic products were valued at RM24.53 billion or 47.8% of total exports. Crude

petroleum exports were worth RM3.11 billion or 6.1% of total exports while liquefied natural gas exports amounted to RM2.29 billion or 4.5% of total exports.

The department said Malaysia's total trade in March this year registered a new high of RM92.97 billion, surging by 20.5% from the preceding month.

Total trade was boosted by the strong import performance, which expanded by 19.5% from a month ago to RM41.69 billion. Compared with March 2005, imports increased by 14%.

A trade surplus of RM9.59 billion was registered in March this year, an increase of 29.9% month-on-month, making it the 101st consecutive month of trade surplus since November 1997.

During the first three months of this year, total trade amounted to RM247.63 billion. Exports were valued at RM136.71 billion, an increase of 11.5% from the first quarter of last year, while imports expanded by 13.7% to RM110.92 billion, resulting in a trade surplus of RM25.79 billion.

http://www.atimes.com/atimes/Southeast_Asia/HE10Ae03.html

[Ethyl]

Value of gold soars, but supplies remain stagnant

With the price of oil soaring to new highs and the U.S. dollar back down, investors are looking to the usual haven: gold.

Prices for gold, much of it mined in Africa, are hitting 26-year highs, letting mining companies post surging revenue as they search for new ways to extract every nugget from the ground. Yet they say they can't substantially increase production -- a limitation that could keep prices high for years.

Compared with oil, increasing gold supply is a much more costly -- and lengthy -- process.

"Gold mining is not the kind of situation where just because of the higher price you can turn on the tap and get more gold the next day," said Vince Borg, a spokesman for Barrick Gold Corp., the world's largest gold producer.

Newmont Mining Corp. President Pierre Lassonde said the company would need two to three years to increase exploration and cannot quickly increase supply at existing mines.

"We wouldn't change our budget based on six months of price movement," Lassonde said by e-mail.

Gold jumped from about $450 an ounce in November to $732 in electronic trading Friday on the New York Mercantile Exchange, a surge analysts attribute to investors looking for a safe asset amid worries about Iran's nuclear program, a weak dollar and inflation tied to high oil prices.

A.G. Edwards analyst Dan Vaught said the price tends to be driven by investor beliefs about the stability of financial markets.

"If you think the world's going to end, you buy gold," Vaught said. "It protects against a major breakdown in equity markets."

Jeffrey Christian, managing director of commodities research firm CPM Group, said the investor-driven model means prices could also dive quickly if political tides shift -- regardless of actual demand for the metal.

"Gold prices can stay high as long as the world seems to be going toward World War III," Christian said.

http://www.freep.com/apps/pbcs.dll/article?AID=/20060514/BUSINESS07/605140641/1020/BUSINESS

[Ethyl]

Mining stocks outdo metals
BLOOMBERG NEWS AND THE ENQUIRER
Gold-mining companies are outperforming the commodity they sell as their profits rise faster than the metal's price. An index of producers including Glamis Gold Ltd. and Goldcorp Inc. exceeded returns on gold in four of the past five years, as bullion this week hit a 25-year high.

"If you feel cautious, invest in bullion; if you feel brave, go for gold equities," said Graham Birch of Birch's Gold & General Fund in London. "Gold bullion is more a safe-haven investment. The extra volatility that you get from investing in gold shares can be very attractive."

However, local financial advisers are skeptical the gold boom will continue. They urge caution before plunging headfirst into gold as an investment.

"Gold is getting set up for a sell-off in the future," said Pete Sorrentino, chief investment officer at Bartlett & Co. downtown, noting that inflation is helping push up the price but that speculators have moved it much higher. He said gold and other precious metals have been a traditional savings haven for Asian investors.

Bloomberg data show the total market value of the world's 640 publicly traded gold mining companies is about $205.5 billion, four times as much as the spot gold market.

In other markets, owning the commodity has been a better bet.

Copper's 141 percent gain in the past year exceeded the 113 percent increase for producer Phelps Dodge Corp.

Aluminum's 65 percent gain outpaced the 20 percent for Alcoa Inc. Crude oil outperformed the Amex Oil Index of 13 producers and refiners, including Exxon Mobil Corp., in three of the past four years.

As investors allocate billions of dollars to commodities, the superior returns from gold shares are renewing a debate over the best way to profit from rising metal and energy prices. Fund investments in commodities may top $120 billion by 2008, up from $80 billion last year, according to estimates from Barclays Plc.

SUPPLY AND DEMAND

Gold, after slumping to a 20-year low of $253.20 an ounce in 1999, has rallied to its highest price since 1980.

Yet mining companies say they can't substantially increase production - a limitation that could keep prices high for years.

Compared to oil, increasing gold supply is a much more costly - and lengthy - process.

"Gold mining is not the kind of situation where just because of the higher price you can turn on the tap and get more gold the next day," said Vince Borg, a spokesman for Barrick Gold Corp., the world's largest gold producer.

Newmont Mining Corp. President Pierre Lassonde said the company would need two to three years to increase exploration and cannot quickly increase supply at existing mines. "We wouldn't change our budget based on six months of price movement," he said by e-mail.

Gold producers are benefiting from limited global supplies after a five-year slide in prices through 2000 curbed investment in new mines. At the same time, companies such as Johannesburg-based AngloGold Ashanti Ltd., the world's third-biggest gold producer, abandoned contracts that locked in sales prices, enabling them to benefit from the rally.

FAITH IN BULLION

Marc Faber, founder and managing director at Hong Kong-based Marc Faber Ltd., has been urging investors to buy commodities since 2001 and holds 10 percent of his personal assets in gold in a bank vault. The holding has earned 59 percent in the past year, trailing the gain from gold stocks.

"In a bull market for metals, you will make more money by being in equities," Faber said earlier this month.

Faber, who told investors to bail out of U.S. stocks a week before the 1987 Black Monday crash, said he prefers to hold bullion because the metal will outperform stocks longer term. Mining companies also may get squeezed by governments seeking a bigger share of the profit from natural resources, he said.

The Philadelphia Stock Exchange Gold & Silver Index of 16 companies has jumped 89 percent in the past 12 months, and the index has failed only once to outperform the commodity on an annual basis since 2001.

Not everyone is convinced mining companies are a better bet. Equities carry management risks, the threat of currency losses and political risks.

"As good as mining shares are, they're just paper," said Jon Nadler, an investment-products analyst at Kitco Inc., a gold-trading company in Montreal. "People are pulling money off the table and saying 'I need asset preservation now.' "

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060513/BIZ01/605130344/1076/BIZ

[Ethyl]

Russia to take control of key mineral titanium

The huge new Airbus A380 cannot take off without it, nor can Boeing's 787 Dreamliner - titanium has become an essential component in modern aircraft.

The Urals contain much of the world's reserves of this metal, and the Russian company VSMPO-Avisma, as the world's largest producer, has closed lucrative contracts with the aerospace sector in the West.

The fact has not gone unnoticed in Moscow. After recovering control of oil and gas, Russia is now looking at retaking control of the metal industry.

Aircraft manufacturers in Europe and North America are visibly concerned. They fear Russia could exert influence in the way it has recently in energy politics.

But at VSMPO-Avisma the concern is that circles around President Vladimir Putin are less concerned about national strategy than about personal gain.

With every billion dollars that flows into the Russian state coffers as a result of the continuing high energy prices, the Kremlin's confidence in its economic policy grows.

A few months ago Putin announced the formation of a state holding company for the decaying Russian aircraft construction sector. It is to fall under the arms exporter Rosoboronexport.

Rosoboronexport head Sergey Jemesov, a close Putin associate, made it clear to the titanium producer while on a visit to the Urals that the state would not tolerate an independent concern in a key strategic area of this kind.

VSMPO-Avisma, which produced around 30,000 tonnes in 2005, also supplies titanium for submarines, rockets and nuclear power stations.

VSMPO-Avisma general director and major shareholder Vladislav V Tetiyukhin believes it's only a matter of months before the company is sold to the state.

"We are currently in talks about deadlines, price and the extent of the future state holding," the 73-year-old businessman says.

Speaking at the company's headquarters in Verknyaya Salda near Yekaterinburg, Tetiyukhin says that neither the clients such as Boeing and Airbus nor the company's employees need be concerned about the future.

Western aircraft manufacturers could also find that nationalisation could have unfortunate consequences for them.

There are fears that Rosoboronexport could make deliveries of the strong and light metal dependent on Western countries buying Russian aircraft in return.

The current owners of VSMPO-Avisma have made the responsibilities clear to Rosoboronexport.

"If the new managers make just one mistake, they will pay heavily for it," says one of the main shareholders, who put the value of the concern at two billion euros.

VSMPO-Avisma is unusual among Russian commodity producers, as it does not export the raw materials but actually processes them.

With an annual turnover of $400 million, the company supplies around a third of world titanium demand. Almost 75 percent of its production goes to exports.

In an attempt to allay the concerns of the company's staff, Tetiyukhin says it is not yet clear whether the Kremlin will take a majority shareholding.

But the alarm bells started ringing when the tax authorities began taking a keen interest in VSMPO-Avisma and the prosecution services began making ominous visits.

Tetiyukhin sees the threat to his company as not yet serious.

But precisely these agencies - tax officials and the prosecutors' office - acted as the long arm of the Kremlin in destroying what was the largest Russian oil concern and then selling it to the state-owned competition.

http://timesofindia.indiatimes.com/articleshow/1550077.cms

[Ethyl]

Gold-Forex-Rates
Thursday's edition of the Persian language daily `E'temad' gives the latest open market (unofficial) rates for major foreign currencies and prices of gold as follow:
Currency Rate
--------
----
US Dollar 1 = 9,204 Rls
(EU) Euro 1 = 11,561 Rls
British Pound 1 = 16,788 Rls
Saudi Riyal 1 = 2,455 Rls
UAE Dirham 1 = 2,509 Rls
Canadian Dollar 1 = 8,181 Rls
+++ +++
Gold Coin Price
--------- -----
Full Bahar-e Azadi 1 = 1,630,000 Rls
Full Bahar-e Azadi (New) 1 = 1,430,000 Rls
Half Bahar-e Azadi 1 = 725,000 Rls
Quarter Bahar-e Azadi 1 = 370,000 Rls
+++ +++
Gold Price
---- -----
(0.750 or 18 ct) `methqal' 1 = 679,800 Rls
(0.750 or 17 ct) `methqal' 1 = 639,000 Rls
NB: 217 methqals = 1 kg

http://www.irna.ir/en/news/view/line-18/0607203358091447.htm