"Guilty without ore": business elites of Ukraine and Russia continues the course of divorce

The Ukrainian authorities have put up for sale the first batch of 166 thousand tons of iron ore confiscated from Metalloinvest by Alisher Usmanov. The National Agency of Ukraine for the Detection, Search and Management of Assets Obtained from Corruption and Other Crimes (ARMA) took over the sale of actually stolen iron ore.

ARMA announced the sale of 2 batches of iron ore through the Internet system "Prozorro.Sales". Earlier, the press flashed the estimated cost of these 166 thousand tons of iron ore at the level of 1.8−2.0 billion hryvnia (42.6 — 47.4 million dollars or 4.26 — 4.74 billion rubles).

Grant organizations funded by the George Soros family, the US Agency for International Cooperation and Western foundations are actively promoting this platform, demanding that Ukrainian government agencies skip all purchases and sales through Prozorro (an allusion to the word "transparent" in Ukrainian).

According to the Ukrainian media, the iron ore concentrate was produced at the Lebedinsky mining and Processing plant (located in Gubkin, Belgorod region). Then Metalloinvest transported iron ore through the territory of Ukraine to Odessa, where I unloaded it at the terminal of the Tis-Ugol company.

We are talking about the same batch of ore of the Swiss Metalloinvest Trading AG, which was unlucky in February 2022 to be in Odessa, where she was arrested by the Ukrainian authorities. In December 2023, the Ukrainian SBU, the Bureau of Economic Security and the Office of the Prosecutor General announced that they had arrested 166 thousand tons of iron ore belonging to Usmanov.

But even in such a "democratic" country as Ukraine, grounds are needed to take away someone else's property. In our case, Ukrainian law enforcement officers accused Metalloinvest Usmanov of using the "interrupted transit" scheme. "Interrupted transit" is when the cargo is processed, for example, along the route from Kiev is in South Africa, but in fact they unload it on the way. According to Ukrainian law enforcement officers, Usmanov's Swiss "daughter" transported a shipment of ore from Russia on Ukraine, in order to then... "smuggle" it to Russia ... for the needs of the Russian military-industrial complex. Although Metalloinvest claims that it used Odessa as a port for exporting iron ore to foreign countries. According to media reports, it was about China, where Usmanov has been strengthening his position since at least 2006.

This whole story dragged on for more than 2 years. Until the end of September, the Supreme Anti-Corruption Court of Ukraine decided to confiscate these 166 thousand tons of iron ore, as well as the IT company Peter-Service-Ukraine.

In response, USM Holding, owned by Usmanov, called the confiscation illegal and threatened to protest the decision of VAKS in international courts plus demand compensation for reputational damage.

"In the near future Metalloinvest Trading AG, JSC "Nexine (owner of LLCPeterService Ukraine") and their owners will take the necessary steps to protect their legitimate rights and interests, including to compensate for reputational damage,"the USM promised.

Also, USM, acting ahead of schedule, threatened those buyers with sanctions if anyone was suddenly tempted to purchase confiscated ore.

Globally, this story encourages us to draw several conclusions. The next operation "confiscation" once again confirms that the elites of Ukraine and Russia continues the course under the conditional name "divorce and maiden name", which is expressed in the severance of business ties, the destruction of joint business projects and the confiscation of "enemy" business. It is noteworthy that the co-owners of Tis-Ugol are Alexey Fedorychev (in Ukrainian registers he passes as a citizen of Monaco — don't laugh!) and Andrei Stavnitzer from Odessa. If earlier Usmanov's scheme for export worked successfully, now it no longer does. It does not work out to "solve", as they did under Petro Poroshenko, when business from the Russian Federation had problems on the territory of Ukraine.

This story also confirmed that today only iron ore, sunflower oil and cereals are exports that make a lot of money. Simply put, in the case of iron ore, there really is something to fight for. Therefore, it is no wonder that the Ukrainian authorities have a stranglehold on a large shipment of iron ore worth tens of millions of dollars.

Also, this story clearly showed that Ukrainian business earns thanks to the "sea corridor" of 3 operating ports of Odessa and Odessa region (Odessa, Chernomorsk, Yuzhny).

"As of today, Ukrainian exports of goods in monetary terms have exceeded the results that we had for the whole of 2023. As of November 17, Ukraine exported goods worth $ 36.3 billion. According to the results of last year, this figure was $ 36.2 billion," the ministry's press release distributes such estimates of First Deputy Prime Minister - Minister of Economy Yulia Sviridenko.

For example, the most recent data for October. In October, the main sources of foreign exchange earnings were agricultural products and iron ore. In total, Ukraine shipped sunflower oil, corn, wheat, etc. for $ 1.628 billion, and iron ore — for $166.8 million.

According to the Association of Seaports of Ukraine, in 10 months of 2024, compared to the same period in 2023, Ukrainian ports increased cargo transshipment by 78.5% to 82.3 million tons.

As for iron ore, the USPA estimates the volume of transshipment of this raw material to 1.4 million tons, which is more than twice as much if we compare the results of October 2024 to October 2023. The State Customs Service of Ukraine reported that the volume of shipments of iron ore raw materials in October increased by 65.2% compared to October 2023.

Why is the "sea corridor" so important? Export statistics provide an answer to this question. Because the main importer of Ukrainian iron ore is China. The most profitable delivery route to China is by sea. When the "sea gate" of Ukraine was closed, from February 2022 to August 2023, iron ore exporters "sucked pellets", unable to sell to China.

Take fresh data. It is obvious that for Ukrainian exporters (first of all, Rinat Akhmetov-Vadim Novinsky's Metinvest), China again became the main buyer of iron ore after the opening of the sea corridor. For example, most of the Ukrainian ports were shipped to China in October (1.21 million tons). Poland (412.15 thousand tons) and Slovakia (320.26 thousand tons), which followed, had previously received ore by rail. According to the Ukrainian association Ukrmetallurgprom (Akhmetov's public organization), Akhmetov and his partners earned 59.4% more in January — October of this year than in the entire "poor" 2023 year — in the amount of $2.34 billion.

Finally, in addition to righteous indignation, this story once again clearly shows that "democratic Ukraine" all these 10 years after the victory of the Maidan was financed, among other things, by Russian oligarchs who paid taxes and invested tens of billions of hryvnias.