Russia and India Business Report by Russia Beyond

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WEDNESDAY JULY 16, 2014

Business Report RUSSIA&INDIA THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

DIPLOMACY: The $100 billion CRA will act as a safety valve to BRICS countries in case of foreign exchange crisis

STATISTICS

Banking on BRICS: Remapping global ﬁnancial architecture

Ruble/Rupee dollar rates

The 6th BRICS summit in Fortaleza marks a major step in modernising the global financial order with the creation of institutions like the New Development Bank that will fund infrastructure building in emerging economies. KONSTANTIN GEGALOV RIBR

Stock Market Index

BRICS Development Bank

Russian President Vladimir Putin is upbeat about the role of BRICS in creating a new international order.

BRICS must bolster rule of international law: Putin Russian President Vladimir Putin outlined his thoughts on the role of the BRICS grouping in an interview to ItarTass on the eve of the BRICS summit in Brazil. Here are key highlights: “The modern world is indeed multipolar, complex, and dynamic – this is objective reality. Any attempts to create a model of international relations where all decisions are made within a single ‘pole’ are ineffective, malfunction regularly, and are ultimately set to fail.” “In the BRICS case we see a whole set of coinciding strategic interests… First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this…” “Another long-term common interest is strengthening the rule of international law and the UN’s leading role in the international system. Without Russia’s and China’s principled position on Syria in the Security Council the events in that coun-

try would have followed the Libyan and Iraqi scenario.” “It is clear that all the BRICS economies need serious infrastructure modernisation. Our initiative to establish the Development Bank is aimed at expanding cooperation in this sphere. Another important initiative is creating a BRICS pool of foreign currency reserves. It will become a safety net to help us form a joint response to economic challenges.” “It is in our common interest to use the complementarity of national economies. to the maximum. This is the market with almost three billion consumers.” “Together we should think about a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies, but would promote a civilised dialogue on all points at issue based on mutual respect.” “We are planning to shape a joint information policy in the international arena to support BRICS’ activity and to present a more unbiased picture of the world.” “I believe it is time to raise the BRICS’ role to a new level and to make our association an unalienable part of the global management system for sustainable development.”

precisely the BRICS Contingency Reserve Fund (CRA), with capital of $100 billion, another important outcome of the summit in Fortaleza, will provide financial assistance to member BRICS countries that are experiencing balance of payments problems. Given the current global economic volatility and fast flows of capital from developed countries into emerging economies, including the BRICS countries, and back again, may lead to balance of payments problems. The reserve fund may serve as a serious shock-absorbing mechanism in such situations. In the BRICS, the major financial burden will be taken on by China ($41 billion), while Brazil, India and Russia will each provide $18 billion and $5 billion will come from South Africa. The idea of mutual aid is also the basis of another major project, which Russia intends to propose and promote – a BRICS Energy Association, and inside of this – a Reserve Fuel Bank. The fuel bank, say the experts, can be used to strengthen the position of the country in the global market as the largest energy producer. New financial institutions of the BRICS may bring real benefits to Russia. And this is not because Russia needs stabilisation credits, but because it is vital to diversify the country’s markets and strengthen relations with partner countries. “This necessity is dictated by the aggravation of the political situation in the world and the aggressive rhetoric coming from the U.S. and the EU in relation to Moscow,” notes Daria Zhelannova, deputy director of the analytical department at the Alpari Company.

BRICS currency reserve fund

Negative factors affecting business

NATALIA MIKHAYLENKO

he grouping of BRICS countries, which account for 42 percent of the world’s population and 28 percent of the global GDP, until now has been nothing more than a political club of the largest “non-Western” countries, not marked by any significant real deeds or global initiatives. The sixth BRICS summit, being held in Fortaleza, Brazil, aims to change this situation, and start forming not only a “non-Western” agenda, but also international economic institutions. “BRICS is obviously aiming at the modernisation and updating of the global financial architecture,” said Sergey Lusyanin, deputy director of the Institute of Far Eastern Studies of RAS. “The dominance of one superpower, the USA, has led to the results that we have seen in the last 20 years, and these results have brought horrors to the global society. BRICS countries will not be able to drastically change anything, but will be able to make their voices heard.” In this cotext, the BRICS Development Bank (or more formally – the New Development Bank) will coordinate investment policies of sovereign funds of BRICS countries (including Russia’s National Wealth Fund), says Natalia Orlova, chief economist at Alfa Bank. “The task of the IMF is to distribute funds of developed countries among the emerging markets. I think that the aim of the new fund will be to keep the monies invested in the territories of the BRICS countries themselves. In this sense, Russia’s interest lies in the fact that Russia, also, can attract these resources to finance projects on its territory.” The Bank will focus on infrastructure projects, to build ports and roads, as well as telecommunications networks – primarily on the territories of the BRICS countries. One of the first projects of the Development Bank may be the construction of a network of ground stations for the GLONASS system. The goal of the project would be to improve the accuracy of the signals and navigation. The placement of ground stations on the territories of the BRICS countries will make the GLONASS system more competitive. “The creation of a Development Bank – is the start of a serious process of institutionalisation of the BRICS,” opines Professor Vladimir Davydov, director of the Latin American Institute at the Russian Academy of Sciences. The organisation, he says, should push forward in the following areas: banking, stock exchange alliances, foreign currency insurance funds, alternative rating agencies, payment mechanisms in national currencies, etc. A pool of conventional currencies, more

BIG PICTURE

Jointly tackling ISIS extremists in Iraq DEBIDATTA AUROBINDA MAHAPATRA Foreign policy analyst

he rise of the Sunni extremist group in Islamic States of Iraq and Syria, and its control of vast swathes of territory and oil fields in the two countries, have put the greater Middle East region once again on the international stage. The group, by proclaiming the establishment of a Caliph and calling all Muslims to join jihad, has fuelled fears in democratic and multi-ethnic societies. In this backdrop, the role of India and Russia –- both multi-ethnic and pluralistic societies –- is crucial, and coordination of their policies can help address the crisis. India and Russia as individual powers, as well as collectively, have since the beginning of the crisis in the Arab world emphasised on dialogue and political resolution of conflict. The Sunni-Shia schism in Iraq is not

a standalone case; it has links with the sectarian strife in Syria, which in turn has been a battleground of extremist forces, affiliated to Al Qaeda and others. The whole region is not only a sectarian bomb shell with implications far beyond the region. The energy resources and strategic location at the fault lines of some of the major religions has made Iraq subject to complicated geopolitical ambitions between the major players. Between India and Russia, the latter has better geopolitical leverage in the region. New Delhi has sought to use Moscow’s influence to address its concerns, particularly with regard to Indian citizens stranded in conflict zones. Russia’s Deputy Foreign Minister Sergei Rybakov recently asserted that Russia “will not remain passive to the attempts by some groups to spread

terrorism in the region.” President Vladimir Putin assured the Iraqi Prime Minister Nul al-Maliki Russia’s full support to stem the crisis. Russia’s concerns can be explained by two major factors. First, Russia opposes the victory of radical Islam, as it will have global implications, including for Russia. The ISIS, which is exclusivist, anti-democratic and as violent as Al Qaeda in its methods, has not hidden its ambition to craft an orthodox religious regime. Before it controlled vast swathes of territory including cities of Tikrit and Mosul, the ISIS made forays against Syria’s Assad regime. Russia, which has elements of extremism in southern parts, like in India’s north-western part, will not support the rise of extremism. With some Chechen radicals fighting against Assad’s forces, Russia’s concerns about proliferation of these forces is understandable. Juxtapose this to the video released last month by Al Qaeda calling for jihad in Kashmir, and displaying footages from Iraq and Syria as inspiration for Muslims to fight in Kashmir. As members of multilateral bodies like BRICS, India and Russia have opposed violent means of conflict resolution in the Arab world. Through its pronouncements in summit meetings and also in international forums such as the UN, the group has opposed any plan to use force or sanctions against Assad, and harped on political process, in-

cluding the Geneva talks for peace and stability in the region. The forthcoming BRICS summit in Brazil this month will likely reiterate this position, in addition to denouncing extremist organisations like ISIS and their ambitions. Russia’s military power has vaulted it to play a key role in the Iraq crisis. Russia recently delivered Sukhoi 25 fighter planes to the distraught al-Maliki government to fight the ISIS forces. Russia, which enjoys good relations with Iran and Iraq, can use diplomatic resources to bring the two countries closer by encouraging reconciliation between different factions. By enlisting support of Iran, and other partners such as India and China, it can help defeat the extremists. Russia and India can work together towards a political solution of the crisis. Dmitry Rogozin’s visit to India helped promote this joint resolve, and the coming days may witness joint actions in the crisis torn country. Iraq is turning into a humanitarian disaster with more than 1000 people already dead and 1.2 million displaced. India and Russia can play key roles not only to stem the extremist onslaught, but also to promote peace and stability in the region. The views expressed are of the author only.

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ENERGY GEOPOLITICS: 13 percent of the world’s undiscovered oil reserves and upto 30 percent of undiscovered gas reserves are located in the region ALAMY/LEGION MEDIA

Arctic binds leading US, Russia oil ﬁrms Russia’s tensions with the West over Ukraine have not impacted the Arctic joint research project between Rosneft and US oil company ExxonMobil. RIBR

mid the ongoing tensions between Russia and Western countries over developments in Ukraine, it should come as no surprise that the news of an expedition by the Arctic Research and Design Center for Continental Shelf Development has gone underreported. The expedition is worth noting, however, not least because the Arctic Research Center is a joint project of Russia’s oil giant Rosneft and US firm ExxonMobil. The willingness of the center to go ahead with the expedition indicates that the companies continue to maintain business ties despite political tensions, and they intend to scale up cooperation in a strategically important area — the Arctic. According to the US Geological Survey estimates, 13 percent of the world’s undiscovered oil reserves and around 30 percent of undiscovered gas reserves are located in the Arctic. Half of these reserves are located in the Russian Arctic sector. Given the huge stakes, it’s not shocking that political tensions between Moscow and Washington have not disrupted cooperation between leading energy companies in this region. The exploration of the Arctic reserves will require complex technical solutions for the creation of ships, oil rigs and other equipment that can be used in the region. The US and European oil and gas companies have the relevant experience and technology, and cooperation with them allows Russia to capitalise on its Arctic assets. Historically, the Soviet Russia was no less active in the Arctic than the Russian empire had been. On March

10, 1921, Vladimir Lenin signed a decree to set up a floating marine research institute based in the Arctic Ocean. Over the course of 10 years beginning in 1923, 19 polar meteorological stations were built on Russia’s Arctic Ocean coast and islands. In 1939 and 1940, the distance of the Northern Sea Route (NSR) was covered in a single navigation season for the first time ever. The NSR may well be a more significant Arctic asset for Russia than the energy reserves in the continental shelf. This transport corridor, together

with the Northwest Passage located in Canada’s Arctic zone, makes it possible to accelerate trade between Europe and Asia. For example, the distance between Rotterdam and Tokyo via the Suez Canal is 21,100 kilometers (13,110 miles). The Northwest Passage reduces it to 15,900 kms; and the NSR, to 14,100. According to logistics experts, the use of the NSR cuts cargo delivery times by 40 percent as compared with traditional routes, creating considerable savings for shipping companies on fuel, payroll and freight costs. The NSR is going to be more important due

to a growing use of LNG. LNG allows gas producers to sell their product without being tied to the geography of pipelines. The Yamal L.N.G. project, which is being implemented by Russian firm Novatek jointly with France’s Total and China’s CNPC on the Yamal Peninsula in the Russian Arctic, will ship LNG via the NSR. In fact, due to gobal warming and the melting of Arctic ice, which is shrinking at a rate of 5 percent every 10 years, the route could be open yearround shipping as early as the 2020s.

Legal issues Russia is committed to having a demarcation of borders in the Arctic that is in no way ambiguous and is recognised by the international community. Under the 1982 United Nations Convention on the Law of the Sea, a country’s territorial jurisdiction covers only its continental shelf, while the seabed and reserves underneath it belong to no state. Any country can file an application with the UN and other relevant international organizations to develop these offshore reserves. However, the convention also al-

lows states fronting the Arctic Ocean to make a claim for an extended continental shelf. In December 2001, Russia made a claim for an extension of its Arctic territory upto but not past the North Pole and within the Russian Arctic sector. The claim was based on the argument that two ridges, the Lomonosov Ridge and the Mendeleev Ridge, are extensions of the Eurasian continent. Russia has asked the UN Commission on the Limits of the Continental Shelf, which oversees Arctic jurisdiction, to declare the Lomonosov Shelf part of Russia.

A high-stakes game to protect national interest Rich resources of the region have become the zone of competition among foreign powers. ANDREY GUBIN RIBR

he Arctic region has recently acquired a new salience in geopolitics. The loss of the Arctic ice cover has made it possible to drill for previously inaccessible oil and gas deposits and further opened up the Northern Sea Route. This increase of economic activity has intensified competition for control of the region as well. “Russia intends to considerably expand its network of specially protected natural areas in the Arctic and to step up security there,” said President Vladimir Putin in late 2012. The number of foreign military exercises in the Arctic is on the rise, with the US, Canada and Denmark being even more active than during the Cold

War. Russia has, therefore, taken decisive actions in order to solidify its claim over an area of more than 1 million square meters of sea bed stretching to the North Pole as well as upgrading its military hardware in the region. In October 2013, a force of 10 warships headed by the nuclear-powered missile cruiser Pyotr Velikiy, and accompanied by nuclear icebreakers, made a voyage across the Barents, Kara and Laptev seas. The destination of the expedition was the New Siberian Islands in the estuary of the Lena River, where they delivered hardware, fuel and housing modules to Kotelny Island as part of an effort to revive the Soviet-era air base there. Russia is also expanding its Arctic naval capacity. New warships capable of operating in the Arctic zone are currently under development and a

SERGEY KUKSIN / RG

VADIM YERSHOV

Special-purpose military units have performed a number of operations in Northen regions. new class of nuclear submarines is also in production. Russia’s state policy in the Arctic till 2020 and beyond envisages a bolstering of the coast guard and border control functions. Over the next several years, Russia may deploy two brigades

in the Arctic to protect its military facilities and the infrastructure of the Northern Sea Route. The Russian section of the Arctic is under constant foreign watch: NATO aircraft, ships and submarines as well as representatives of various research

bodies and NGOs are actively exploring the region. The situation is being further complicated by the lack of effective international security regimes in the Arctic and a growing number of countries outside the region hoping to work on joint projects in the Arctic with one of the countries bordering the region. The Arctic Council, an intergovernmental body made up of Arctic states and observers, is supposed to address issues related to the Arctic region. However, Russia has a few friends on the Council, whose other permanent members are Canada, Denmark, Finland, Iceland, Norway, Sweden and the US. Given Russia’s strained relations with the West over the Ukraine crisis, Moscow will be looking to retain its economic and strategic position in the region and try to develop cooperation with foreign partners, primarily from among influential states outside the Arctic region.

TECHNOLOGY: Representatives of 15 IAEA member states visit the nuclear icebreaker ﬂeet base and Kola nuclear power plant in the Russian Polar region

Chasing peaceful atom beyond the Arctic Circle ALEXANDER YEMELYANENKOV RIBR

n early July, the Kola Peninsula in the northwest part of Russia – where the nuclear icebreaker fleet base of the RF and the first Russian nuclear power plant built beyond the Arctic Circle operates – is covered in green; and the sun barely sets during the night hours but snow still lies on the mountains and high hills. This is the sublime picture of this region seen by representatives of the International Atomic Energy Agency (IAEA), the global nuclear watchdog, when visiting facilities of Rosatom in the Murmansk region. They came from 15 countries. Ambassador Rajiva Misra, Permanent Representative to UNOV (Vienna) and UNIDO/ Resident Representative to IAEA, represented India. Representatives from Algeria, Vietnam, Egypt, China, Kuwait, Pakistan, Saudi Arabia, Turkey, Japan, and other countries were also part of the delegation. The IAEA Deputy Director General Alexandr Bychkov noted that it is already the second time that official

representatives and experts from the countries that work on a permanent basis at the IAEA headquarters in Vienna have visited, at Rosatom’s invitation, nuclear facilities in the RF. The first such visit occurred last year at the Kalin NPP, said Vladimir Kuchinov, the advisor on international issues to the Director General of Rosatom. But this time it was decided to demonstrate that Atoms for Peace and Russian nuclear technology are working safely and effectively in the challenging conditions of the far north. The Murmansk region faces the serious issue of the safe storage and utilisation of radioactive waste. SevRAO specialists are consequently liquidating the remains of active nuclear activities with the participation of foreign partners. And this activity, judging by the questions and reactions of the IAEA representatives, earned their high approval. The guests toured the new waterfront facility in Saida Bay, where obsolete reactors and decommissioned nuclear submarines are placed in controlled stored-for-long – upto 100 years – periods. Since this specific ac-

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Russia is developing cutting-edge methods of nuclear safety and waste disposal in Murmansk.

Most powerful nuclear icebreaker fleet Russia owns the most powerful icebreaker fleet in the world and has unique experience in the design, construction, and exploitation of such ships. The active nuclear icebreaker fleet currently has 5 nuclear icebreakers, 1 LASH carrier, and 4 technical service vessels. Their task is to ensure the stable functioning of the Northern Sea Route as well as access to areas of the Far North and the Arctic Shelf. The fleet developed

alongside national nuclear energy. The decision to build the ﬁrst nuclear icebreaker ﬂeet was made on 20 November 1953, but its construction began on August 24, 1956 on the building berth of the Admiralty Factory in Leningrad. On December 5, 1959 the icebreaker Lenin was launched. And in 1989 it was decommissioned and placed in “eternal park” in Murmansk. There is now a museum on the icebreaker.

tivity was transferred from the Navy to Rosatom, and particularly her subsidiary company SevRAO’s control, largescale rehabilitation works have been conducted and modern infrastructure for executing complex operations has been created. Valeriy Panteleev, the head of SevRAO, told the touring guests that such a result was possible largely due to the financing and technical assistance of Germany. At the Kola NPP, the first NPP beyond the Arctic Circle, the IAEA delegation visited the reactor and machinery divisions and appraised the work of the staff on duty in the control room. The Kola NPP know-how is a special complex of the processing of liquid radioactive waste (LRW) which was developed and launched here on an industrial scale in 2006. The director of the station, Vasily Omelchuk, said that this method holds serious promise for other nuclear power plants in Russia and abroad. The IAEA representatives saw an “echo of Fukushima” in actions at the NPP. The team also visited the currently active nuclear icebreaker “Yamal.” In the near future, said the Director General of the company Rosatomflot, Vyacheslav Rushka, the volume of work for Arctic “vezdekhodovy” (“go-everywheres”), as the nuclear icebreakers are called, will sharply

increase. The increase of the volume of freight transport from the current 1.5 to 17-18 million tonnes is tied first and foremost to the large-scale production of LNG on the Yamal Peninsula. The second priority for Atomflot, emphasised Rushka, was and will be the development of international transit shipping on the Northern Sea Route through close and mutually beneficial cooperation with ship owners and shipping companies in Europe and Southeast Asia. To guarantee yearround navigation in the Arctic, Russia has begun the construction of new generation nuclear icebreakers. The first of three ships of this series has been under construction since 2013 at the Baltic Factory in Saint Petersburg.

Energy hive for Murmansk Region The Kola Nuclear Power Plant is located 125 miles south of Murmansk on the shores of Lake Imandra. It produces approximately 60 percent of the energy in the Murmansk Region. Three power generating units with VVER reactors are currently in use; each one has a capacity of 440 MW.

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BUSINESS: The ﬁrst phase of Udachny underground mine is poised for launch in July; will more than triple the extraction of diamonds to 480 tonnes

The making of diamond city in Siberia Russia’s Alrosa has been a leader in diamond extraction. Evgeniya Nikolaeva visits Udachny to figure out the art and craft of mining diamonds.

The underground mine can operate for 60 years and is estimated to have total proven reserves of 159 million tonnes. port to reach the bottom of the quarry. In the main shaft, one must always stick close to the guide as it is easy to lose horizons and working faces. Moreover, guests will not be able to see diamonds. As one of the miners admitted, places where valuable stones were found by sight directly in the shaft are rare. He only remembered one time that this happened; a worker sifting through rocks suddenly noticed a sparkle in the wall, which actually turned out to be a large diamond. “I have worked here for 15 years and never seen diamonds,” confessed another miner. Operating principles The technological process for diamond extraction is a multi-step process: geologists determine “where to dig” and the rock is dynamited, clearing the horizon. Then, drillers

Udachny diamond mine owned by Alrosa Mining is located near the town of Udachny in the Republic of Sakha (Yakutia) of Russia.

The world’s largest diamond producers

to develop its jewellery business at this point. But the company does cooperate with many jewellery houses,” she says. Future Plans At present, Alrosa’s principal processing facilities are primarily concentrated in Western Yakutia and the Arkhangelsk region, as well as in Africa – in Angola and Botswana. In total, the

Indian traders want direct imports of roughs With the threat of economic sanctions on Russia, India’s gem and jewellery traders are looking to establish direct contacts with the country to source rough diamonds. Recently, trade sources told an Indian newspaper that the supply of roughs from Russia to Dubai and Belgium could be severely impacted if the US imposes economic sanctions. In 2013, India imported 163.11 million carats of roughs worth $16.3 billion, and exported 36.46 million carats of polished diamonds worth $20.2 billion, the paper said, adding that direct imports of rough diamonds from Russia stood at just $767

company is developing 22 deposits. In October 2013, the company held a successful IPO on the Moscow Stock Exchange, during the course of which 16 percent of the company’s shares were sold. This raised about $1.3 billion. The marketing system is built on the signing of long-term contracts with companies that produce diamonds and articles of jewellery with them.

million. Direct supplies of rough diamonds from Russia to India could boost trade in the industry to $5 billion, the paper said, citing sources. Vipul Shah, chairman, Gem and Jewellery Export Promotion Council, said that that it was in India’s interest to source diamonds directly from Russia. Russia could also be a major retail market for Indian ﬁnished jewellery. The Russian jewellery retail industry is growing with annual turnover estimated to reach around $16 billion. “Indian technology is very advanced; add some Russian quality control and such a joint venture would be successful.

The company’s sales organisations have offices in all of the major global diamond centres – in the US, Belgium, the UAE, China, Great Britain, and Israel. The first phase of the Udachny underground mine is likely to be launched this month, with construction already reaching the final stage. According to the director of the Udachny Mining and Processing

REUTERS

iamonds are forever in this part of Russia. The city of Udachny is located in the north of Siberia, in the Sakha (Yakutia) region, barely 10.5 miles from the Arctic Circle. Today it is one of the major northern diamond-mining cities. During the time of the USSR, large cities were built around major factories that were called city-makers. Life here began in 1954 when Soviet geologist Larissa Popugaeva opened a kimberlite pipe nearby, but the mine was not immediately developed. Then in 1956, another pipe was built just next to it. It is one of the largest in the so-called Diamond Region, and gave its name to the city – Udachny. The Udachny quarry is now 1.3 miles long and has width of 1.1 miles. And it takes at least an hour on special trans-

begin their work. Special underground dump trucks take the rock, hauling the ore to the bunker from which the ore is transferred to the surface and sent to a processing plant. In 2013, more than 4,891,500 karats were extracted here. Identified diamonds are sent to a workshop where they are washed free of impurities by chemical substances. Next the diamonds await a journey spanning more than 310 miles to the capital of the Russian Diamond Region –- Mir. This is the sorting center where diamonds are separated into groups by purity and size. After this they are sent to the Alrosa Unified Sales Organization where they will be prepared for sale to clients. The company has signed about 40 long-term contracts. “Between 2015 and 2017, most likely, we will increase the number of contracts to 50, but we will make our choices very carefully based not only on the financial documentation of the client but also on our previous experiences in working with them and their purchase volumes during periods of a weakened market,” says Evgeniya Kozenko, an Alrosa official. In 2012, Alrosa also signed a longterm contract with the Belgian company, Laurelton Diamonds Inc., which purchases diamonds for the American jewelry company Tiffany & Co. In May 2013, the Russian company and the auction house Sotheby’s signed a memorandum on cooperation. The pact envisages Alrosa supplying large premium-class diamonds produced by the company’s subsidiary Alrosa Diamonds, as well as jewellery with these diamonds, to Sotheby’s auctions. The highest quality diamonds go to Alrosa Diamonds; however, the jewellery business is not a priority for the company. According to Evgeniya Kozenko, in accordance with the company’s development strategy, all business development efforts are focused on diamond mining. “Alrosa’s development strategy stipulates concentration on the core business – diamond mining. Alrosa is a mining company and does not plan

Russian officials are planning to create a fast-track development zone that would establish two exchanges — for raw diamonds and cut diamonds — and an export hub in Khabarovsk. The Russian Far East Development Ministry is developing a plan to transform Khabarovsk — a city of half a million people, located 30 kilometres from China’s northeastern border — into a new Antwerp for the diamond industry. The plan seeks to profit from the geographical proximity of the region, which contains 35 percent of the world’s diamonds, to the expanding Asian market. The plan could generate $2.6 billion annually for the Russian economy. The development strategy would create two industrial clusters. A sorting and laser-cutting centre — would be built in the Republic of Sakha, where the world’s top diamond producer Alrosa is based. The other — a final sorting centre and export hub — would be created in Khabarovsk.

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Specially for RIBR

NATALIA MIKHAYLENKO

EVGENIYA NIKOLAEVA

Building export hub

Moreover, such joint ventures can also export jewellery to CIS countries where the demand for good quality jewellery is growing,” Alex Popov, the president of Moscow Diamond Bourse, told RIBR at an exhibition in Mumbai in late-2012.

Division, Alexander Makhrachev, the company has high hopes for this mine. “If we currently extract 132 tonnes of ore a year, then next year – with the launch of the mine – the planned volume is 480 tonnes. The mine can be worked on for a long time – the projected capacity of the field is calculated at 60 years and proven reserves already total 159 million tonnes,” he adds.

POPULAR CULTURE: Ace Russian choreographer is charmed by India, says she would love to act in Hindi movies and learn kathak, ‘a graceful dance form’

Fusing Bollywood and drama: Russian dancer spices up Indian dance reality show Elena Samodanova has dazzled and won many hearts in India with her spirited performance in the Indian celebrity dance reality TV show. PRIYANKA GERA RIBR

The biggest test for her was to dance to Ganpati Bappa Morya, an ode to the Hindu god. She was struck by the grand scale of the show. we’ve to include the flavour of Indian films and elements of drama. It is important to find the right combination of expressions and dance according to the lyrics. It’s not just about following the beat.” The Russian dancing

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star is using online translation applications and help from her colleagues to understand the rhythms of Hindi lyrics. While observing that Indian audiences want a theatrical experience and not just a show of dancing prowess, she says that Russians have similar tastes. “Dancing with the stars is popular in Russia, and there also people like a bit of drama, although not as much as in India.” Singing and dancing in Indian films is a part of the storytelling. The biggest test for Samodanova was to dance on ‘Ganpati Bappa Morya.’ This song is an ode to the much-revered Hindu elephant-headed god and an inherent part of the Marathi culture. She carried it off with a charged performance, resonating with the religious passion associated with this song. “It was a tough job,” she

show is enhanced by the presence of Hindi film stars. “It is an honour to be performing before Madhuri Dixit,” the Russian star says. “She is so graceful. She often complements me that I look good in Indian outfits. Karan Johar and Remo D’Souza are both amazing judges.” Samodanova, however, was never a stranger to the charm of Bollywood. “I grew up in Russia where the first international movies that were showcased were from India. So honestly it’s not an entirely new experience for me. I am glad that I’ve finally got a chance to work closely with Bollywood.” She is open to take this association forward, “I would love to work in Hindi movies. There is a lot of dancing in Indian films and that is my passion.” Samodanova, who began her dance training with ballet, would love to learn kathak, “a very graceful genre with strong hand movements and a focus on expressions.”

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he latest import in the Indian reality television is from Russia. Elena Samodanova, who has been a regular on the Australian editions of ‘Dancing with the Stars’ and ‘So You Think You Can Dance,’ has been roped in for the ongoing season of ‘Jhalak Dikhhla Jaa,’ a blockbuster reality show that has celebrities battling for the title of the best dancer. Samodanova has been paired with TV star Karan Tacker and assigned the task to groom the amateur dancer into a dancing sensation as the show progresses. After giving award-winning performances the world over in Latin American and ballroom genres, Samodanova now faces a new chal-

lenge —- to fuse technical expertise with Bollywood style moves. “This show is different from the overseas dance shows,” Samodanova tells RIBR. “Over there we need to focus only on the dance form. Here,

confesses. “Karan (Tacker) explained the nature of this dance to me and also its significance to people’s faith. I also got help from an Indian choreographer who is an expert of folk dances.” She now wishes to visit the famous Sidhivinayak Ganesha temple in Mumbai. Taj Mahal is on the list too, if only her busy schedule will permit. “I haven’t seen much yet as there are no off days for us. We are practicing and shooting every day,” Samodanova says. “This place is like a megalopolis. It’s a very unique place. Maybe someday I would love to just walk all around the city amongst all the different people that live here. Mumbai is like a mix of various Indian spices. You can’t separate one flavour from another.” For Samodanova, the biggest surprise was the grand scale of the show. “The set over here is much bigger than any I’ve seen overseas,” she says. The glamour quotient of the

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