NATURAL RESOURCES IN RUSSIA

NATURAL RESOURCES IN RUSSIA

Russia is probably richer in natural resources than any other country in the world. It has abundant supplies of oil, natural gas, timber and valuable minerals, such as copper, diamonds, lead, zinc, bauxite, nickel, tin, mercury, gold and silver— most of which are located in Siberia and the Far East. The value of Russia's resources is huge.

Russia is the largest country in the world; it covers a vast amount of topographically varied territory, including much that is inaccessible by conventional modes of transportation. The traditional centers of economic activity are almost exclusively located in the more hospitable European part of Russia, which once offered considerable coal and natural gas to drive heavy industry. But the European fuel base was largely depleted by the 1980s, forcing Russia to rely on Siberian deposits much farther from the industrial heartland. [Source: Library of Congress, July 1996 *]

Russia’s raw materials provide significant inputs for an industrial economy. The abundance of oil and natural gas has made Russia virtually self-sufficient in energy and a large-scale exporter of fuels. Oil and gas were primary hard-currency earners for the Soviet Union, and they remain so for the Russian Federation. Russia also is self-sufficient in nearly all major industrial raw materials and has at least some reserves of every industrially valuable nonfuel mineral--even after the productive mines of Ukraine, Kazakstan, and Uzbekistan no longer were directly accessible. Tin, tungsten, bauxite, and mercury were among the few natural materials imported in the Soviet period. The forests of Siberia contain an estimated one-fifth of the world's timber, mainly conifers. *

Many of Russia’s natural resources are located far from industrial processing centers. The fuel resources that supported development of industrial centers in European Russia have been depleted, necessitating reliance on coal, natural gas, and petroleum from Siberian deposits. However, Russia still has an estimated 6 percent of the world’s oil deposits and one-third of the world’s natural gas deposits, making it a major exporter of both commodities. In 2005 oil extraction reached a new post-Soviet high, placing Russia close to Saudi Arabia as the world’s largest producer. Rich deposits of most industrially valuable metals, diamonds, and phosphates also are found in Russia. [Source: Library of Congress, October 2006]

Website: The Mineral Industry of Russia on the Mineral Resources Program portion of the USGS website.

Metals and Minerals in Russia

Russia possesses rich reserves of iron ore, manganese, chromium, nickel, platinum, titanium, copper, tin, lead, tungsten, diamonds, phosphates and gold. The iron ore deposits of the Kursk Magnetic Anomaly, close to the Ukrainian border in the southwest, are believed to contain one-sixth of the world's total reserves. Intensive exploitation began there in the 1950s. Other large iron ore deposits are located in the Kola Peninsula, Karelia, south-central Siberia, and the Far East. The largest copper deposits are located in the Kola Peninsula and the Urals, and lead and zinc are found in North Ossetia.

Russia’s diverse mineral resources have given many of its products a strong position in world markets. Of particular economic importance are diamonds, of which in 2006 Russia accounted for one-quarter of world production; nickel (one-third); cobalt (20 percent); platinum (40 percent); and aluminum (12 percent). The economic slump of the early 1990s caused overall production to decrease and the proportion of exports to increase. [Source: Library of Congress, October 2006 **]

Most metals are found in the Urals and Siberia. At one time it was estimated that Siberia contained almost 20 percent of the world's gold and silver, and about a third of its iron. Many of Russia's mineral resources are located in the remote, freezing north, where isolated industrial cities have grown up around mines and deposits. Miners and workers in particularly remote areas work in shifts in which they spend two weeks living in barracks at the mining site and then are flown in helicopters back to cities.

Oligarchs and Resource Development in Russia

The metal and resource industries in Russian are controlled by oligarchs. The term oligarchs refers to a small group of industrialists and bankers who became fabulously rich during the Yeltsin era in the 1990s. In some ways resembling robber barons like Rockefellers and Carnigies, they are men who carved out empires while in their thirties, forties and fifties in the chaotic period that occurred while Communism declined and capitalism rose to take its place. In the 1990s, organized crime, Soviet-era managers and former security officers were also major players in the Russian resource scramble. In some cases they gained control by seizing the processing facilities and metal stockpiles.

Most of the oligarchs got their start in the late 1980s, when the Soviet economy was liberalizing. The details of how some of them got their assets is still mysterious but many of them had key positions within the Soviet bureaucracy that allowed them to grab property. A few were Communist party leaders that acted quickly to cement control over profitable businesses such as oil, natural gas, precious metals and banking. Others were young upstarts who had more business sense than their Communist Party bosses and were able to take advantage of their boss’s ignorance or disinterest to develop schemes to gain property.

Many Western firms came to Russia hoping to reap huge profits. Few did. They had a hard time navigating through the bureaucracy and dealing with corruption. In the end they were hustled and outflanked by Russians who were more familiar and adept and maneuvering through the Soviet-Russian system.

Russian President Vladimir Putin received a Ph.D. from St. Petersburg Mining Institute in 1996. He did extensive research on Russia’s natural resources. One conclusion he came to was that for Russia to really develop its resources it needed foreign investment. In his first years in office he helped passed legislation that changed the laws for the rewarding of licenses for natural resources and offered incentives to those who developed resources.

Metal Theft in Russia

The theft of copper wire, aluminum cables and other metals from power lines, communication cables, telephone poles, railroad power systems, military complexes and factories was a serious problem in Russia. The metal in some cases was taken by desperately poor people who hadfew other means to make money and sold as scarp through dealers with connections to organized crime. An estimated 15,000 miles of power lines were pulled down in the 1990s with the rate 10 to 20 times higher in the late 90s than in the early 90s. Millions of people lost their electricity.

Towers used for nuclear submarine communications, entire aluminum phone booths, manhole covers, rocket motors and fuel tanks, torpedo parts, and copper shell casings, have all been taken. A nuclear power plant’s aluminum sensors disappeared. In the Kuril Islands, people stole metal slabs from airport runways. The problem of metal theft was particularly bad in coal mining regions, where thousands of people lost their jobs, and military facilities full of underpaid soldiers.

Some stolen metal was melted down into ingots and exported overseas. Between 1995 and 1998 the export of copper scrap increased from 28,600 tons to 356,000 tons and the export of aluminum scrap increased from 11,900 tons to 367,000 tons. Some of it found its way back to the power companies that were ripped off.

In the late 1990s around 700 electrocutions and 500 deaths a year were attributed to metal thefts. Many people were hurt or killed stealing copper wire. In one case five sailors suffocated while trying to take copper cables and metal from inside of decommissioned submarine. The problem of metal theft became so bad that the government placed tight restriction on scrap metal dealers.

One -12-year-old boy who tried to take some copper wire from a coal mine told the New York Times, "The first one was dead, and we cut it and hid it, and we came to take another one, but it turned out to be live." The boy said a "bright explosion" occurred. He managed to pull his hand away and was overcome by the sight and smell of burned flesh. His thumb and forefinger were so badly burned they had to be amputated.

Gold in Russia

At one time Russia was the world's second largest producer of gold after South Africa. By some estimates it contains 6 percent of the world’s gold reserves, including the 1,100-ton Sukhoi log, one of the world’s largest untapped deposits. The Russian production figures are secret but its estimated that about 250 tons are produced each year, about a third of what comes out of South Africa. During the Soviet era, gold and diamonds were tightly controlled by the state. Even today the state is actively involved in both sectors.

The world’s leading gold producers by country in 2007 (in kilograms): 1) South Africa 272,128; 2) United States 252,000; 3) China 245,000; 4) Australia 244,000; 5) Peru 203,26; 6) Indonesia 164,400; 7) Russian Federation 159,340; 8) Canada 103,890; 9) Uzbekistan 85,000; 10) Ghana 66,205; 11) Mali 55,484; 12) Papua New Guinea 50,000; 13) Tanzania, United Republic Of 46,000; 14) Argentina 45,000; 15) Chile 42,100; 16) Brazil 41,154; 17) Colombia 40,000; 18) Mexico 40,000; 19) Philippines 37,500; 20) Mongolia 22,561; 21) Kazakhstan 18,000; 22) Guinea 15,230; 23) Bolivia 14,500; 24) Venezuela 12,000; 25) Zimbabwe 11,354 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Major gold producers (1992): 1) South Africa (19,737,341 troy ounces); 2) the U.S. (10,581,581 troy ounces); 3) former U.S.S.R. (8,101,987) ; 4) Australia (7,716,178); 5) Canada (5,081,393); 6) China (4,501,104); 7) Columbia (1,189,578); 8) Ghana (997,670); 9) the Philippines (771,618); 10) Mexico (321,507); 11) Zaire (257,206).

The oligarch Hazret Sovmen controlled the Olympiad gold deposit and mine near the Siberian city of Krasnoyarsk. A graduate of Magadan’s Polytechnical Institute and the St. Petersburg Mining institute, Sovmen was head of the Adyghea Republic and obtained the Olympiad mine through connections and schemes linked to when he was chairman of Polyus, the Soviet gold-mining cartel. Russia’s leading gold producer, Polyus is now a private company that he founded and for many years was under his control.

Most of Russia’s gold comes from Siberia. There are large deposits in Buryatia around Lake Baikal. In the early 2000s, workers earned $1,500 for six months work, bulldozing stream beds in search of gold in private mines near Komsomolsk-on-Amur.

About 80 percent of Siberia's gold comes from river beds and ancient gravel banks which means that the vines that supply them haven't even been discovered yet. Cyrus Minerals in Colorado pledged $100 million to develop a gold mine in Siberia.

Gold makes up 5 percent of national reserves. Planned to increase to 10 percent.

Platinum and Silver in Russia

According to the Guinness Book of Records, the largest piece of platinum was a 340-ounce nugget found in Ural Mountains of Russia on 1843.

The platinum group of metals (platinum, palladium, rhodium, ruthenium, iridium and osmium) are among the rarest, expensive and useful of all metals. The are commonly found in the same regions, and are used in the automobile industry, mostly catalytic converters (38 percent), electrical and electronic industry (29 percent), dentistry (9 percent) and other (24 percent). Nearly all the world reserves of these metals are in South Africa and the former U.S.S.R.

Siberia contains large deposits of silver. World’s largest silver producers: by country in 2006 (thousands of metric tons): 1) Peru 3,471; 2) Mexico 2,700; 3) China 2,600; 4) Australia 1,727; 5) Chile 1,607; 6) Poland 1,325; 7) Russian Federation 1,300; 8) United States 1,140; 9) Canada 983; 10) Kazakhstan 830; 11) Bolivia 500; 12) Indonesia 377; 13) Sweden 268; 14) Argentina 200; 15) Morocco 195; 16) South Africa 87; 17) Turkey 85; 18) Uzbekistan 83; 19) Congo, The Democratic Republic Of The 68; 20) Honduras 55 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Nickel and Norlisk Nikel

Russia is the world’s largest nickel producer. Nickel is a metal that is essential in the making of stainless steel and other alloys. It is important in the chemical and aerospace industries. Leading producer include the former U.S.S.R., Canada, Australia and New Caledonia. Most of Russia’s nickel comes from a huge mine in Norisk, above the Arctic Circle in Siberia,.

Norlisk Nikel is one of the of he world's largest producers of nickel, cobalt and platinum. Owned by the oligarch Vladamir Potanin, and located in Norilsk, it owns a huge nickel production complex and possesses about 20 percent of the world's nickel reserves.

Norilsk Nickely produces 20 percent of the world's nickel and 20 percent of its palladium as well as significant amounts of copper, cobalt. platinum and rhodium. It has annual sales of around $2.5 billion. In the late 1990s it also had $2 billion in wage, energy and tax debts and created huge environmental problems.

Norilsk Nickely was created by combining six metallurgical facilities. The oligarchs fought for control of the company with Potanin acquiring a 38 percent share for only $170 million in a loans for shares deal in1995 Norilsk has courted investors from Asia and America.

Titanium, Manganese and Potash in Russia

Titanium is an expensive metal prized for its strength and lightness. It is used mostly in jet engines. air frames, and space and missile applications. It is produced in the Ukraine, Russia, Kazakhstan, Japan, the U.S., the United Kingdom and China.

Potash is an important ingredient in fertilizer. The main producers are Canada, Israel, the former U.S.S.R. and Germany. Vanadium is an alloying with steal and aerospace titanium alloys. It is also used as a catalyst in the production sulfuric acid. The world's major producers and the former U.S.S.R. and South Africa.

The major sources of manganese (a metal essential to in steel and iron production) is not found in mineral quantities in the U.S., Western Europe and Japan. South Africa and the former Soviet Union have over 80 percent of the worlds reserves. The world’s leading manganese producers by country in 2007: (metric tons): 1) China 627,000; 2) Russian Federation 37,000; 3) Israel 25,000; 4) Kazakhstan 21,000; 5) Brazil 18,000; 6) Canada 16,300; 7) Ukraine 2,500; 8) Serbia 1,500 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Uranium and Rare Earths in Russia

There is a large uranium mine near Krasnokamensk, in the Altai region about 25 miles from where the Russian, Mongolian and Chinese borders all come together. It is a gigantic hole, nearly mile long, three quarters of a mile wide and 330 yards deep. On the surround steppe are huge hills of tailings and ponds full sulfuric acid (used to separate the uranium from the ore), heavy metals and radioactive uranium.

The uranium mine near Krasnokamensk was once the largest in the world. It now ranks around fifth. It was built around 1980 and is largely depleted. The uranium is expected to give out completely around 2025. The Krasnokamensk mine was the subject of a 1994 Greenpeace documentary and the environment dangers of uranium mining and processing. Water from the pond is leaking into the groundwater, people lived in area with high radiation levels, and workers were exposed unnecessarily high levels of radiation.

Rhenium is a very rare, durable metal used in high-stress environments such as jet turbines, satellite and gas-fired turbines. In the Kuril Islands there is a volcano that emits steam and gas with rhenium sulfate. Geologist have set up filters around gas-emitting events that capture rhenium sulfate.

Rare-earth producing countries include Russia, Malaysia, Kyrgyzstan and Kazakhstan. As of the mid 2000s, ninety-five percent of the world’s rare earths came from China.

Cobalt, Molybdenum and Tungsten in Russia

Cobalt is rare and essential metal used in super alloys for jet engines, chemicals (paint driers, catalysts, magnetic coatings); permanent magnets; cemented carbines for cutting tools; and car batteries, laptop computers and mobile phones. Among the cobalt alloys are carboloy, one the hardest substance known to man; alnico, used to make magnets in loudspeakers; satellites, used to make high-speed metal-cutting tools. Cobalt is also utilized as a catalysts in the synthesis of gasoline and as an ingredient for cobalt blue pigments. Cobalt-60 is a radioactive isotope made by bombarding cobalt with slow neutrons in a nuclear reactor. It is used in cancer treatments and to cause mutations in plants.

World’s largest cobalt producers: by country in 2006 (thousands of metric tons): 1) Congo, The Democratic Republic Of The 28,000; 2) Zambia 8,000; 3) Australia 7,400; 4) Canada 6,976; 5) Russian Federation 5,100; 6) Cuba 3,800; 7) China 2,300; 8) New Caledonia 1,900; 9) Morocco 1,500; 10) Brazil 1,200; 11) South Africa 400; 12) Botswana 303; 13) Kazakhstan 300; 14) Zimbabwe 290 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Molybdenum is used in heat resistant stainless steel and automobile steel. It is often added to steel or other metal alloys to help them withstands heat. It is useful in making machines parts that run at high speeds and build up large amounts of heat from friction. It also has other chemical and industrial application. Molybdenum is used to make cardiograms

World’s largest molybdenum producers: by country in 2007 (Metric tons of contained molybdenum): 1) China 59,800; 2) United States 57,000; 3) Chile 44,912; 4) Peru 16,737; 5) Canada 12,000; 6) Mexico 6,15; 7) Armenia 4,080; 8) Russian Federation 3,300; 9) Iran, Islamic Republic Of 2,600; 10) Mongolia 1,300; 11) Uzbekistan 600; 12) Kazakhstan 400; 13) Kyrgyzstan 250 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Tungsten is used in lamp filaments, steels alloys for high-speed tools, auto parts, drills, cutters, cemented carbide (a supper hard material), superhard tools for manufacturing and processing tools for semiconductors. Twice as heavy as lead, it is resistant to heat, which is why it ideal for lamp filaments, and is resistant to abrasion, oxidization and corrosion, which makes it ideal for high-speed tool steels alloys. Alloys of tungsten carbide with cobalts are among the hardest metals known. Tungsten's name is derived from the Swedish word tung ("heavy") and sten ("stone").

World’s largest tungsten producers: by country in 2006 (thousands of metric tons) World Concentrate Production, By Country (Metric tons, tungsten content, 2007): 1) China 41,000; 2) Russian Federation 3,200; 3) Canada 2,700; 4) Rwanda 1,534; 5) Austria 1,200; 6) Bolivia 1,107; 7) Portugal 846; 8) Korea, Democratic People's Republic Of 600; 9) Brazil 537; 10) Congo, The Democratic Republic Of The 500; 11) Peru 348; 12) Thailand 300; 13) Mongolia 250; 14) Myanmar 183; 15) Burundi 144; 16) Uganda 75 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Zinc, Lead and Copper in Russia

Zinc is used as a protective coating on steel, as die castings, as alloying agent with copper to make brass, and as a component of chemical compounds in rubber and paints. It is mined in over 50 countries. The leading world producers are 1) Canada, 2) Australia, 3) the former U.S.S.R., 4) Peru, 5) China and 6) the U.S.

World’s largest zinc producers: by country in 2006: (metric tons, zinc content of concentrate and direct shipping ore: 1) China 2,600,000; 2) Australia 1,380,000; 3) Peru 1,201,794; 4) United States 727,000; 5) Canada 710,000; 6) Mexico 480,000; 7) Ireland 425,700; 8) India 420,800; 9) Kazakhstan 400,000; 10) Sweden 192,400; 11) Russian Federation 190,000; 12) Brazil 176,000; 13) Bolivia 175,000; 14) Poland 135,600; 15) Iran, Islamic Republic Of 130,000; 16) Morocco 73,000; 17) Namibia 68,000; 18) Korea, Democratic People's Republic Of 67,000; 19) Mongolia 50,450; 20) Turkey 50,000 [Source: United States Geological Survey (USGS) Minerals Resources Program]

In the U.S. about 75 of the lead consumed is used in transportation (batteries, gasoline additives, and another uses). It is also used in batteries, emergency power supply, construction sheeting, sporting ammunition, and TV tubes. The U.S. consumes and uses more than 20 percent of the world production of lead. Other major producers include Australia, China, and the former U.S.S.R.

World’s largest lead producers: by country in 2006 (metric tons): 1) China 1,500,000; 2) Australia 641,000; 3) United States 444,000; 4) Peru 329,154; 5) Mexico 120,000; 6) Poland 85,000; 7) Canada 82,000; 8) India 77,600; 9) Sweden 62,100; 10) Ireland 54,100; 11) Russian Federation 50,000; 12) Morocco 44,800; 13) South Africa 41,857; 14) Kazakhstan 40,200; 15) Iran, Islamic Republic Of 25,000; 16) Korea, Democratic People's Republic Of 20,000; 17) Turkey 20,000; 18) Bulgaria 20,000; 19) Brazil 18,000; 20) Macedonia, The Former Yugoslav Republic Of 17,000; 21) Greece 15,000; 22) Argentina 12,800; 23) Bolivia 12,000; 24) Honduras 10,215; 25) Namibia 10,000 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Russia possesses 10 percent of the world’s copper reserves. The main uses for copper in the U.S. are in building and construction (41 percent), electrical and electronic products (24 percent), industrial machinery and products (13 percent), transportation (12 percent) and consumer and general goods.

World’s largest copper producers: by country in 2006 (metric tons): 1) Chile 3,669,000; 2) Peru 875,026; 3) China 873,000; 4) Indonesia 816,000; 5) Australia 806,400; 6) Russian Federation 725,000); 7) Canada 606,958; 8) United States 594,000; 9) Poland 512,000; 10) Kazakhstan 457,000; 11) Zambia 350,000; 12) Mexico 250,000; 13) Iran, Islamic Republic Of 208,000; 14) Papua New Guinea 194,355; 15) Argentina 180,100; 16) Brazil 143,000; 17) Mongolia 129,693; 18) Uzbekistan 115,000; 19) South Africa 97,000; 20) Sweden 97,000; 21) Bulgaria 84,000; 22) Congo, The Democratic Republic Of The 81,000; 23) Portugal 78600; 24) Lao People's Democratic Republic 60803; 25) Turkey 46000 [Source: United States Geological Survey (USGS) Minerals Resources Program]

World’s largest tin producers: by country in 2006 (metric tons): 1) China 125,000; 2) Indonesia 90,000; 3) Peru 38,470; 4) Bolivia 18,000; 5) Brazil 12,000; 6) Viet Nam 3,500; 7) Niger 3,100; 8) Russian Federation 3,000; 9) Malaysia 3,000; 10) Congo, The Democratic Republic Of The 2,800; 11) Australia 2,000; 12) Nigeria 1,500; 13) Myanmar 700; 14) Rwanda 300; 15) Portugal 230; 16) Thailand 165; 17) Lao People's Democratic Republic 70; 18) Mexico 25; 19) Burundi 4 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Aluminum in Russia

Russia was once the world’s second largest aluminum producer. The aluminum industry in Russia was notorious for its ties with gangsters and violence. In the 1990s, turf battles between gangsters for control of the aluminum industry left more than 30 people dead.

The company Russian Aluminum accounts for 70 percent of Russia’s aluminum output. Owned by the oligarch Oleg Deripaska, it was created from the Trans World Metals, a trading company with reputed ties to organized crime. The company became more transparent and brought Western accountants in the early 2000s, in part so it could attract foreign investors. Its biggest obstacle has been securing a steady, cheap supply of energy, which it desperately need as aluminum production requires a lot of energy to produce.

Krasnoyarsk-based Kraz own the world's largest aluminum plant. In the late 1990s it employed 14,000 people and was hugely profitable. More then 90 percent of its production was shipped overseas in exchange for hard currency.

World’s largest aluminum producers: by country in 2007 (thousands of metric tons): 1) China 19,500; 2) Australia 18,844; 3) Brazil 6,890; 4) Jamaica 3,941; 5) United States 3,900; 6) Russian Federation 3,300; 7) India 2,900; 8) Suriname 2,200; 9) Venezuela 1,900; 10) Ukraine 1,700; 11) Kazakhstan 1,556; 12) Spain 1,400; 13) Italy 1,327; 14) Canada 1,220; 15) Ireland 1,100; 16) Germany 850; 17) Greece 750; 18) Guinea 610; 19) Bosnia and Herzegovina 350 [Source: United States Geological Survey (USGS) Minerals Resources Program]

World’s largest bauxite producers: by country in 2007 (thousands of metric tons): 1) Australia 62,428; 2) China 30,000; 3) Brazil 22,100; 4) India 19,221; 5) Guinea 18,000; 6) Jamaica 14,568; 7) Russian Federation > Russian Federation 6,400; 8) Venezuela 5,900; 9) Suriname 4,900; 10) Kazakhstan 4,800; 11) Greece 2,220; 12) Guyana 1,600; 13) Indonesia 1,251; 14) Sierra Leone 1,168; 15) Ghana 840; 16) Bosnia and Herzegovina 800; 17) Turkey 780; 18) Montenegro 650; 19) Hungary 546.4; 20) Dominican Republic 500 [Source: United States Geological Survey (USGS) Minerals Resources Program]

Aluminum Oligarchs

As of 2002, the oligarchs Roman Abramovich and fellow oligarch Oleg Deripaska controlled 75 percent of Russia’s aluminum industry. Abramovich main source of income is the Sibneft oil company. As of 2003, he wanted to sell his share in Russian Aluminum to Deripaska.

Anatoly Bykov is a gangster and businessman with toes to the aluminum industry. A former boxer from the Siberian region of Krasnoyarsk, he coerned the aluminum British in the 1990s, is known as the “the godfather of Krasnoyarsk” and has been tied to many criminal activities.

In the 2000s, Bykov was charged with the murder of a rival gangster in a Moscow neighborhood. After being sought for years by authorities he was finally brought to court only to be set free. A couple of weeks after the alleged murder the man he was accused of murdering showed up alive even his “dead body” had been shown television as proof that he was murder. Bykov claims the who thing was staged to push him out of the aluminum business.

Bykov owns a huge aluminum plant in Krasnoyarsh. Regarded as Robin Hood figure, he runs an orphanage and pays for worker’s vacation but skimps on paying taxes. His legal problems did not prevent him from keeping his sear in parliament. He is a rival of Deripaska. Bykov reportedly wants Deripaska dead. Some speculate that Deripaska may have been behind the bogus murder.

Oleg Deripaska

Oleg Deripaska is a tough, lanky aluminum baron known for his aggressive and unscrupulous methods of obtaining assets. As of 2002 he had an estimated worth of $1.5 billion and controlled the world’s second largest aluminum company. In the mid 1990s at the tender age of 26 he became the director of a large aluminum plant in Siberia at a time when different groups hired contract killers in their fight to grabs assets. His past has so many black marks the United States will not give him a visa.

Born in Nizny Novgorod, Deripaska has a physics degree from Moscow State University and a degree in economic from the Plekhanov Institute. His wife is Yeltsin’s step-granddaughter. He has been charged in a U.S. district court in connections with allegations made by a former colleague on bribery, racketeering and ordering murders.

Deripaska is good example of how shady banking and predatory instincts were used by the oligarchs in obtain assets. In 2002 he made a “loans for shares” deal in which he made a $10 million loan to a consortium building the 3,000-megawatt, $2 billion Bogichansk power plant in Siberia that was only half finished because it was short of cash. According to agreement if the loan was not paid back the oligarch would acquire 25 percent of the power plant—and that situation occurred.

Deripaska was part of the oligarch group that hired a private army in 2002 to take over a large pulp and paper mill, whose owner at the time had barricaded himself inside with buses and train cars and possessed his own army. The takeover had began halfway across Russia when an unknown person with just 20 shares in the company, Ilim Pulp, filed a suit against it, charging that the company had not complied with all the conditions of its 1994 privatization. Before Ilim even knew about the court case, a Siberian court ordered that two third of the company’s stock to be seized and turned over to a state property committee, which sold it to Deripaska.

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, U.S. government, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

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© 2008 Jeffrey Hays

Last updated May 2016

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