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. Last Updated: 07/27/2016

Business in Brief

PM Inflation Alert


Prime Minister Mikhail Kasyanov was quoted as saying Tuesday that January’s jump in consumer prices of 2.8 percent was a worrying sign that the state may lose control over inflation in coming months.

Interfax quoted Kasyanov as saying the government should take necessary measures to rein in the money supply: "Otherwise, inflation would be out of control as early as the second quarter."

Russian consumer prices in January rose 2.8 percent in month-on-month terms, the biggest monthly jump since July 1999, compared with a 2.3 percent increase in January last year. Kasyanov said the annual inflation target for this year was 12.4 percent. Consumer prices rose 20.2 percent in 2000.

Analysts have said high January inflation, largely fueled by money supply increases, could endanger the government’s annual inflation target.

Kovykta PSA Approved


President Vladimir Putin has signed into law a bill to include the Kovykta gas deposit in a production-sharing agreement involving BP Amoco, the presidential press service said Tuesday.

The license to develop the deposit, located in Irkutsk near Mongolia, is currently held by Rusia Petroleum, of which BP Amoco owns over 30 percent. Other shareholders in the project are Interros banking and industrial group, Sidanko and Tyumen Oil Co., or TNK.

The Kovykta field has 340 billion cubic meters of proven gas reserves and 1.2 trillion to 1.5 trillion cubic meters of potential reserves. It has the potential to export up to 20 bcm a year to China and 10 bcm a year to South Korea.

Capital spending on Kovykta is estimated at $5.5 billion to $6 billion, and it would cost another $6 billion to $6.5 billion to build an international gas pipeline to carry its gas to Southeast Asia.

Mad Cow Fears

The Associated Press

Russia’s checks for beef tainted with mad cow disease are inadequate, Itar-Tass quoted a top Agriculture Ministry official as saying Monday.

Nikolai Yaremenko, the ministry’s senior veterinary official, said the fact that Russia so far has registered no cases of the disease could reflect only that the testing regime is insufficient, the report said.

The news agency said that according to the ministry, only 400 samples a year are obtained from cattle to test them for the presence of bovine spongiform encephelopathy, or mad cow disease, which has been linked to a similar brain-wasting disease in humans.

Russia has banned imports of beef from Britain, where mad cow disease is believed to have originated, and from three states in Germany, where the disease has been registered.

However, the head of the National Consumer Advocacy Fund, Alexander Kalinin, said that recent raids on markets around Moscow showed that 60 percent of the beef sold there "came from nobody knows where," Itar-Tass said.

Alrosa Target: $2.1Bln

The Moscow Times

Russian diamond giant Alrosa Group plans to extract $1.8 billion worth of raw diamonds and sell $2.1 billion worth of raw and polished diamonds this year, the company said in a statement this week.

Alrosa, or Almazy Rossii-Sakha, said it would invest 12.4 billion rubles ($432 million) in upgrading its facilities and equipment next year, the statement said.

Alrosa, which is composed of about 40 companies in several countries around the world, expects to extract a total of $8.6 billion worth of raw diamonds and have sales of more than $9 billion between 2001 and 2005.

Alrosa also said it considers its operations in Angola a priority.

Used-Car Imports Soar

The Moscow Times

Russia imported 15 percent fewer new automobiles last year, while second-hand imports soared 93 percent, Interfax reported Russian Automobile Dealers union secretary Natalya Konstantinova as saying Monday.

Only 47,851 new vehicles were imported in 2000 compared with 56,147 in 1999, Konstantinova said. Second-hand imports increased from 80,000 in 1999 to 154,500 last year.

Just 4.7 percent of the total 1.16 million new light automobiles bought last year were imported, compared with 1.01 million in 1999, of which imports made up 5.5 percent, she said.

Power Price Surge


Moscow power monopoly Mosenergo will raise tariffs for consumers in the Moscow region as of Thursday, the first deputy head of Moscow’s Regional Energy Commission said this week.

"Originally, it was planned to hike tariffs by 40 percent, but thanks to the commission’s tough stance, [electricity] tariffs in the Moscow region will be up by an average of 23 percent," Viktor Pronin told a news conference.

Heat tariffs were to be raised by an average of 24 percent.