MOSCOW (Mineweb.com) – There is an old Russian tradition of never speaking ill of the powerful. But in March, when President Vladimir Putin plucked Yury Trutnev from provincial obscurity to become his minister of natural resources, it was far from clear whether Trutnev had been chosen because he was already a powerful figure, or because he could be trusted not to become one. Eight months later, Trutnev, who is in South Africa this week heading the Russian delegation at the annual SA-Russia ministerial conference, has still not demonstrated why he was promoted, and what he intends to do for Russia’s vital mining sector. Those who speak for Trutnev are understandably reluctant to answer questions on his behalf; a couple of weeks ago, Trutnev fired one spokesman, and appointed a fresh one. But Trutnev is no-less tight-lipped himself. For the months since his appointment as the co-chairman of the SA-Russia inter-government committee on trade and economic cooperation (ITEC), he has refused to say anythng at all a out his SA assignment, or about the issues that concern SA mining companies in Russia. He has been too busy, a spokesman said, to indicate whether he favours compensating the SA-Australian partnership that held the mining licence for Sukhoi Log, Russia’s largest gold deposit, before it was illegally revoked by corrupt officials in 1997. On the other hand, Trutnev was not too busy to announce in July in Irkutsk, where Sukhoi Log is located, that he favours accelerating the process of awarding the licence anew, a move that has been lobbied by Norilsk Nickel, Russia’s largest goldminer. Many weeks have passed since then. However, there is no sign of the legislative amendments Trutnev promised to implement his intention. Instead, Norilsk Nickel has run into serious trouble with the Kremlin, and with the President’s advisor on mining policy, Vladimir Litvinenko, one of the leading academic geologists in Russia. Trutnev and Litvinenko do not see eye to eye.
Trutnev is also coy, when it comes to saying how he regards the mineral monopoly over diamond-mining jealously guarded by Alrosa, and that of nickel held by Norilsk Nickel. Asked if he favours legislating a 65 percent cap on the mineral reserves a single company can hold under licence in a single region -a measure favoured not only by Litvinenko, but also by the Federal Anti-Monopoly Service – Trutnev refuses again to answer.
He is not even sure whether foreign mining companies should be permitted to bid for Sukhoi Log, or for the large copper deposit known as Udokan. Litvinenko thinks not, but Trutnev has tried to say both yes and no. “We do not see the necessity to create a distinct ban on foreigners,” he announced in July. “Although there are situations when the state should protect the national interest in the sphere of natural resources usage, such situations should not be resolved by administrative methods, and should be required to be registered in the law.” Regarding the future of Udokan, he said “competition is necessary for us…we say an open and transparent auction for the licence.” The front-runner for Udokan is Ural Mining and Metallurgy, a Moscow group controlled by Iskander Makhmudov, a oligarch-sized figure.
The De Beers dispute with a local businessman over the mining licence to the Verkhotina deposit, in the Arkhangelsk region – a diamond deposit estimated to be worth more than $3 billion – has been running now for six years. But when Trutnev was asked to say what he proposed doing about it, his spokesman told Mineweb there had been a scheduled check of activity at the exploration site. Several technical violations had been found, but the spokesman claimed they were removed, and that “nobody was seriously speaking about taking their license.” That was a mistake. At the Kremlin’s direction, out of reach of Trutnev and his ministry, an order had been issued to stop work at the site, and to press for an end to the licence violations that have been caused by the dispute over the De Beers role. Litvinenko is believed to have been the moving force.
When De Beers managing director Gary Ralfe was in Moscow recently, he met with Prime Minister Mikhail Fradkov. The only foreign miner whom Trutnev has met in his new office is BHP Billiton’s chief executive Chip Goodyear. But Trutnev himself did not admit it, and his spokesman at the time attempted to conceal that the October meeting had actually taken place.
Russians who have been dealing with Trutnev say he is much more commercially minded than his predecessors, and more energetic. Most leading Russian miners say they do not know him directly, nor who was behind his appointment. One believes he may have been the candidate of German Gref, Minister of Economic Development and Trade, whose ministry has often clashed with the Natural Resources Ministry in the past.
According to the official biography Trutnev posted on a personal website, he was born into a family of oil-industry workers living in Perm. He graduated from university as a mining engineer, and after a brief spell working on oilfields, he returned to Perm to work as an administrator of the local sports organization. He was well-known in sports circles as a contestant and instructor in various forms of wrestling. As the Soviet Union crumbled, he and his sportsmen went into business together, creating a company called EKS to import Swiss foodstuffs, pharmaceuticals and other goods on order from the region. Russian press estimates suggest that by the mid-1990s, this had made him a comfortable fortune, and he moved into politics, first as a municipal councilman in Perm city, then mayor, and finally, in the year 2000, governor, replacing the incumbent who fallen out of favour with the Kremlin. It was a narrow victory. EKS, Trutnev’s company, remained a supplier to the region, while LUKoil, the major oil driller n Perm, and Uralkali, the major miner (of fertilizers), were supporters.
To gauge his reputation in Perm today, local elected officials, newspaper reporters, and editors were asked to name three positive things they remember Trutnev as having done when he was mayor or governor, and one negative thing. No-one managed to recall a single negative. But they were almost stumped for positives.
According to the editor in chief of Perm News, Yury Puzniansky: “there were no incidents nor any scandals during the time Trutnev was mayor or governor. He was very silent.” Arkadiy Kamenev, Trutnev’s successor as mayor, said: “I do remember his lobbying of a former army building to pass to a church school, and several things like that. I do not remember any very big faults, or anything like that.” A source in the governor’s office said: “We remember Trutnev as a nice man, very powerful and ambitious. From the positive things I can mention the unification of the Perm region and Komi-Permyak autonomous region. He supported small business in Perm when he was a mayor, and all other ways of personal activity. He was supporting the social sphere of the city, and after that, of the region.”
The unification of two separate units of the Russian federation, Perm oblast and the much smaller, poorer Komi-Permyak okrug, was completed last December. It is one of the type of administrative reforrms which the Kremlin has supported around the country as a way of streamlining central authority and cutting budget costs. According to a publication that appeared a few days after Trutnev’s appointment to Moscow was announced, he and Putin became acquainted during a presidential visit to Perm. The president, claims the report, found that he shared a passion for the oriental martial arts with Trutnev; valued his contribution to the regional unification effort, and was “fascinated” by him on other, not so obvious grounds. The most important of these, according to the report that appeared on the website kompromat.ru, on March 19, was that Putin and his political advisors believe Trutnev would make a suitable candidate to succeed Putin as president of Russia in 2008. “The mysterious successor of President Putin is already chosen,” the publication attributed to Victor Anisimov claims. In Russian, the term kompromat refers to material that is compromising for its target, revealing alleged crimes, vices, and other negatives that, were they to be widely circulated, and believed, would do serious, possibly fatal damage to the reputation and standing of the target. Kompromat may be true, but since there is so much in circulation, the authorities so weak, and the public so cynical, it may have absolutely no effect on the intended victim. Or kompromat may be false. Paying for publication of kompromat is a common business tactic for dealing with all manner of rivals and business competition.
In Trutnev’s case, so little was known about him to begin with that the publication of this particular komproma, predicting that Trutnev will be the heir apparent, seemed anything but compromising. Some think that it is a message from those in the Kremlin, who, having overheard Trutnev dreaming aloud, want to warn him against getting too big for his boots.
No-one in a position to know Putin’s thinking on the subject of his succession believes the President, who keeps these things to himself, would overlook much better tested candidates in favour of Trutnev. But of one point, there is no doubt in Moscow. Putin is planning to arrange his succession, so that, although the Russian constitution limits him to two consecutive terms in office, he can arrange the succession in such a way as to return for a third term, so long as there is a decent interval in between. That may require a new president, who resigns after a year. It may involve a game of musical chairs, so that Putin would move to become Prime Minister (or Governor of St Petersburg), while his stand-in takes the presidency, and they make a further swap after a four-year term. Whatever Putin decides to do, Trutnev has every reason to keep his mouth shut, his fingers clean, and his feet ready to march in the direction the wind is blowing.
Making an enigma out of a riddle is something Winston Churchill once claimed that Russians were good at. The Trutnev mystery is no exception.