http://www.businessday.co.za/a…..?id=144025

By John Helmer, Moscow

South African James Nieuwenhuys has taken over as chief operating officer of Moscow-based Polyus Gold, Russia’s largest goldminer. The mining company, owned in roughly equal parts by Mikhail Prokhorov and Suleiman Kerimov, has been unsuccessful in months of effort to find a major international mining company to partner, or to take over and buy the oligarchs out.

Market sentiment has been negative as production growth at Polyus’s three Russian mines has been sluggish, and a merger with a Kazakhstan gold company generated recriminations in the courts. Polyus Gold’s share price has been falling even as the price of gold has gone up. For 2010, the company has reported sale revenues up 43% to US$1.7 billion; net profit was up 91% to $356 million. Current market capitalization is $12.8 billion, down 7% in the year to date.

Nieuwenhuys has been managing director of the South African subsidiary of Canada’s SNC-Lavalin, an engineering and mine design consultancy. Sources at his Johannesburg office confirm that he wound up there early this month, and has now moved to Moscow.

The Nieuwenhys appointment, which Polyus Gold confirmed today, signals that Prokhorov, who took over the CEO position last December, has run into trouble with his public promises to list Polyus Gold directly on the London Stock Exchange by August; the company shares are listed on the Moscow stock exchange and traded in depositary receipt form in London. Prokhorov has also said he is trying to sell a strategic stake in the company to an international miner, although North Americans Kinross Gold, Barrick Gold, and Newmont have proved reluctant, and Anglo American Ashanti has not been tempted.

Prokhorov’s running of Polyus Gold has been criticized by mine sector analysts for exaggeration of the company’s reserves and reluctance to invest in costly new mine projects. He and co-director of Polyus Gold, Maxim Finsky, are currently under investigation by the Canadian stock market regulator after complaints by minority shareholders in junior goldminer, Century Mining, that the two have acted improperly as they acquire mining company assets for a Toronto IPO of their new mining company called Intergeo. A formal application for a ruling was issued on May 25.

Kerimov, an investor for syndicates of silent Russian partners, is reported to be under investigation in India at present in connexion with money-laundering and tax evasion charges against Hassan Ali Khan, a hawalla money-changer. Kerimov’s spokesman told Business Day the two had a business relationship before 2004. “We deny ever having strong ties to Hasan Ali Khan. Indeed, we have had no dealings with him since that introductory period over 7 years ago,” the spokesman, Eliot Lauer, said, adding “the reports that appeared in the Indian media last month contained unverified and untrue statements regarding Mr. Kerimov.”

Brian Gilbertson was the last of the well-known South Africans to have been engaged by Russian oligarchs to lift their financial performance and corporate transparency, and pilot IPO attempts in London. Gilbertson was CEO of Victor Vekselberg’s SUAL aluminium concern, before it was merged on Kremlin order with Oleg Deripaska’s Rusal in 2006. Deripaska then put Vekselberg in Gilbertson’s seat at the head of the Rusal board, but the Russians failed in their attempt at listing on the London Stock Exchange in 2007. Rusal finally listed on the Hong Kong Stock Exchange in January 2010. The only foreigners in senior management at Rusal are Australian salesmen.