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To: Alex who wrote (14090)	7/3/1998 3:54:00 PM
From: goldsnow	Respond to of 116764

Boris Yeltsin is alive, the Kremlin said yesterday, denying foreign reports that the 67-year-old president had died. Mr Yeltsin had cancelled a foreign trip but was said to be working at his country residence." Chaos as Russian gas giant is told to pay its taxes By Alan Philps in Moscow THE Russian government's economic rescue plan was thrown into chaos yesterday after the prime minister, Sergei Kiriyenko, staged an ambush on the giant gas monopoly Gazprom in an attempt to force it to clear its tax arrears. News of the planned seizure of Gazprom's assets and freezing of its bank accounts swept the stock market and caused uproar in the State Duma, the lower house of parliament, which promptly stopped considering the anti-crisis package. Deputies complained that the government was about to split up the gas company - Russia's biggest and most powerful company - and sell it off to foreigners. They demanded that Mr Kiriyenko, 35, give them an explanation. Gazprom, which exports gas to countries in central and western Europe and the former Soviet Union, should provide up to 20 per cent of Russia's tax revenues. But it is also one of Russia's biggest tax debtors, owing œ1.3 billion to a treasury desperately short of cash. After a cabinet meeting, it was announced that the company's assets would be seized, and that the government would take control of the company from its boss, Rem Vyakhirev, who currently manages the state's 40 per cent share-holding. There were also rumours that Mr Vyakhirev - who was in Austria on business yesterday - would be removed. The tax service issued a hard-hitting statement portraying the Gazprom management as fat cats living at the expense of the state. Local tax authorities were ordered to freeze bank accounts and seize property including "planes, yachts, boats, company cars, dachas, hunting lodges, swimming pools, sports facilities, country residences, mansions and other luxury items owned by Gazprom enterprises". It added that the management's personal taxes would be checked. But the company fought back. Boris Yeltsin's spokesman, Sergei Yastrzhembsky, while endorsing the government's tax-raising drive, said the president had telephoned his prime minister and told him "a strong Gazprom means a strong state". Mr Yastrzhembsky said: "The public is getting incorrect messages, which are being interpreted in ways detrimental to the cabinet itself," he said. There would be no seizure of assets, or personnel changes. The government, which had earlier demanded repayment of all tax arrears by Monday, later worked out an agreement with Gazprom management to repay the debt at œ400 million a month. Any goodwill in parliament towards the prime minister evaporated during the Gazprom fiasco, with almost all factions denouncing the move as dangerous to the state or ill-considered. The Communist leader, Gennady Zyuganov, said: "This is a step towards destroying the systems which hold the country together. There must be other ways to raise taxes than to bankrupt an enterprise which is actually working." Earlier, the Duma had signalled that it would approve half of Mr Kiriyenko's crisis plan. The measures which were nodded through generally concerned reducing or removing taxes on industry. More controversial revenue-raising proposals, such as the new five per cent sales tax and ending exemptions on VAT, were either rejected or postponed. The budget-tightening and tax-raising plan is required to persuade the International Monetary Fund to put together a œ10 billion package to defend the rouble against speculative attacks. telegraph.co.uk

To: Alex who wrote (14090)	7/3/1998 3:58:00 PM
From: goldsnow	Respond to of 116764

Headline: INTERVIEW-Peru pushes mine sales despite Asia woes ====================================================================== By Marco Aquino LIMA, July 3 (Reuters) - Peru's state mine complex Centromin expects its piecemeal privatization to continue unabated despite falling international metals prices caused by Asia's economic crisis, the company president said. "Big investors think in the long term. The Asian crisis is not going to last for years, it is temporary," Jorge Merino told Reuters. Despite a series of postponements spoiling the company's sale plans this year, Centromin aims to auction nearly all its remaining mining units in 1998, with transport services, power stations and the huge Cerro de Pasco mine slated for 1999. The Toromocho polymetal deposit will be the first major deposit for auction, with bid documents going on offer between the end of July and the last week of August, Merino said. Canada's Noranda (TSE:NOR), Luxembourg-based conglomerate Minorco and the United States' The Doe Run company are all eyeing the sale of Toromocho, located in the Andean region of Junin, 140 km (87 miles) from Lima, Merino added. The deposit has proven and probable reserves of 364 million tonnes, with grades of 0.70 percent copper, 0.40 percent zinc and 12 grams of silver per tonne. "It is a project that can perhaps be compared to La Granja," Merino said, referring to potential $2.2 billion project in the northern region of Cajamarca being developed by Cambior Inc (TSE:CBJ). Toromocho, which will have a two-year option for the winning bidder, will be sold in a package with the Morococha zinc mine, which processes 25,000 to 28,000 tonnes of minerals per month. Before Toromocho, the July 10 sale of the smaller Cobriza copper mine, its auction already postponed from June, will be the first in the company's privatizations, with interested bidders including The Doe Run company, Merino said. Cobriza already supplies 40 percent of the La Oroya metallurgical complex, owned by The Doe Run company which bought the former Centromin unit for $121 million in 1997. The mine has proven and probable reserves of 15.78 million tonnes, with output in 1997 at 102,440 tonnes. Centromin will auction the smaller, largely unexplored, copper, silver and gold-rich Puy Puy prospect between August and September. The state miner will privatize the huge Cerro de Pasco mine, the country's biggest zinc producer, in January or February next year, Merino said. The mine, now known by its sale name Paragsha SA and considered Centromin's jewel in the crown, produced 381,497 tonnes of zinc and 117,727 tonnes of lead in 1997. Next year will also see the sale of the state miner's services, including its port facilities and power generation network, Merino said. Centromin has formed a separate private company, Imexcallao SA, serving as an umbrella for the company's various transport facilities. The unit processes between $400 million and $500 million annually. Electroandes SA, consisting of four hydroelectric plants with a total capacity of 183 megawatts (MW), will go on the auction block in 1999. Centromin has assumed $75.7 million in environmental debts, with new unit owners having guaranteed another $40.3 million in environmental clean-up measures, Merino added. The piecemeal sale of Centromin started in 1993 and has already brought in $280 million for the government, with investment guarantees of $2.8 billion from new owners. lima.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Alex who wrote (14090)	7/3/1998 4:49:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116764

ÿFull story Russia palladium producer wants long-term contracts 06:42 a.m. Jul 03, 1998 Eastern By Aleksandras Budrys MOSCOW, July 3 (Reuters) - The group controlling Russia's sole palladium producer, Norilsk Nickel, wants Russia to deposit its stocks of the metal abroad and use them for long-term supply contracts, a senior group manager told Reuters. Term contracts should stabilise the market, which has been highly volatile recently. Under current arrangements, contracts are signed annually, but bureaucratic delays kept supply off the market completely for months in 1997 and again this year. As a result prices soared to over $400 per ounce earlier this year, and Russia is keen to reduce the price instability. The manager at Interros financial-industrial holding group said that Interros was discussing the scheme with Russia's central bank, the only institution which holds palladium stocks. Interros is a major holding company which controls UNEXIM bank, SIDANKO oil company and other companies as well as Norilsk Nickel. ''Although we understand the central bank has a generally positive attitude towards our proposal, we haven't had a definite answer yet,'' he said. The head of the central bank's precious metals department, Sergei Kyshtymov, told Reuters he had no knowledge of the plan. Russia is the world's largest palladium producer, accounting for 66 percent of supply. All exports go through sales agency Almazjuvelirexport, part of the Ministry of Finance. Last Thursday Kyshtymov was quoted as saying that the bank might use some of its palladium reserves for loan collateral rather than direct sales this year. When asked by Reuters whether the bank had concrete plans to collateralise its stocks, Kyshtymov declined to comment. The Interros manager said such a scheme would hardly be profitable. ''If palladium is deposited in a bank, the central bank would not get more than $1 or $2 billion as it would get the lowest price for the collateral, say around $130 per ounce,'' he said. He added the bank would have difficulty marketing the palladium in the event of a default, as few bodies wanted such large stocks. ''It is impossible to sell hundreds of tonnes of palladium in a short period of time, in case of default,'' he said. He said that Interros was trying to persuade the central bank to deposit its stocks in a ''triple-A institution, perhaps a bank in a neutral country.'' If the plan works the central bank could attract credits, backed by receipts for sales agreed but not yet paid for. At the same time Interros expected a steady increase in the price of palladium as stocks were depleted. ''The stock volume should be kept secret, but we would discuss concrete purchase values with concrete consumers,'' he said. Current central bank stocks were estimated to last from two to six years, he said. He added that it was in Russia's interests that the search for substitutes for palladium should stop. The absence of secure palladium supplies from Russia has made markets treat the country as unreliable, and end-users have invested big sums into research for substitutes for the metal. ''We cannot prevent the appearance of cheaper substitutes, but we see no reason for using more expensive alternatives and there is a risk that if the uncertainty with palladium supplies continues, the market will be gone,'' he said. Palladium is used mostly to produce catalysts for cars, as well as in electronics and dentistry. The palladium market only came into existence in the mid-1990s, when catalytic converters for cars were invented. The strong price of palladium is some compensation to Norilsk for the fall in base metals prices, which it also produces. Yuri Filippov, deputy CEO of Norilsk combine, Norilsk Nickel's main unit, said recently that Norilsk planned to raise output of both nickel and copper by eight to nine percent this year and platinum group metals by 15 percent from 1997 levels. The manager at Interros said world palladium demand was currently double the 225 tonnes supplied annually. Norilsk sells all its output, but this was not enough to meet demand, so some had to be sold from central bank stocks. Copyright 1998 Reuters Limited.