Barrick Gold subsidiary Minera ABX Exploraciones S.A. signs deal with Paramount Gold to acquire a 51% interest in the Linda property in Peru. The Veladero gold mine project in Argentina, run by Barrick Gold, begins operations and is expected to produce between 50,000-55,000 ounces of gold annually. Inco and Falconbridge announce a $10.2 billion merger that will create the world's largest nickel producer, surpassing Russia's Norilsk Nickel.

1. IN THE NEWS
BARRICK COVERAGE
• Barrick Gold Corp. Subsidiary Minera ABX Exploraciones S.A. Signs Deal With
Paramount Gold - Reuters
• Argentina: Veladero kicks off – La Nacion
• Inauguran una mina de oro – INFOBAE Diario
• Inauguran mina de oro y plata en Argentina de Barrick Gold – Agencie EFE
INDUSTRY/OTHER
• FOCUS:Mining Cos In Indonesia View Newmont As Test Case - Dow Jones
International News
• Canadian Mining Company Buying Rival for $10 Billion - The New York Times
• Hand must fulfil new Inco's promise - The Toronto Star
• NORILSK NICKEL to Lose Preeminence - Novecon
• Rich rewards for riding rollercoaster - A new model for participation by foreign
companies has been seen in recent months, driven by political priorities -
Financial Times

2. Barrick Gold Corp. Subsidiary Minera ABX Exploraciones S.A. Signs Deal With Paramount
Gold
130 words
11 October 2005
Reuters
Minera ABX Exploraciones S.A., a subsidiary of Barrick Gold Corp., announced that Paramount Gold
Mining Corp. has entered into a Letter of Intent with to acquire a minimum 51% interest in the
Linda property, located in the Department of Ayacucho, South Peru. The agreement calls for a two-
year work commitment including a total of 6000 meters of drilling, of which 2000 meters is a firm
commitment during the first year of the deal. Once Paramount has completed the above
requirements, they will have acquired a 51% interest in the Property and will remain the operator of
the project as long as they maintain a majority interest.
Argentina: Veladero kicks off
98 words
11 October 2005
La Nacion
This week the mining project Veladero starts up, run by Canada's Barrick Gold. The mine is not far
from the Chilean border in the province of San Juan and possesses estimated reserves of 12.8
million ounces of gold. In what's left of 2005, the aim is to extract 55,000 ounces whilst over the
next three years Barrick Gold will move up to 700,000 ounces annually. Veladero becomes the
project number 140 in mining exploration and development in Argentina with sector investment of
US$5bil expected over the next decade.
Inauguran una mina de oro
459 words
12 October 2005
INFOBAE Diario
El ministro de Infraestructura, Julio De Vido, y el gobernador de San Juan, José Luis Gioja,
inauguraron oficialmente ayer la actividad de una mina de oro en Veladero, que producirá durante
este año entre 50.000 y 55.000 onzas, lo que significará ingresos anuales calculados en u$s200 M
de exportaciones. La mina, ubicada en la localidad de Veladero, a 350 kilómetros de la capital
sanjuanina, tendrá 17 años de vida útil. El proyecto se llama Minería Responsable, y es la primera
operación de la compañía Barrick en el país. En el acto de inauguración, De Vido destacó que la
mina, que demandó una inversión de u$s540 M, empleará a cuatrocientas personas en forma
directa y a otras 4.000 de manera indirecta.
En total, el proyecto generó 3.000 empleos directos, y para la etapa de producción estiman otros
setecientos puestos de trabajo en forma permanente. El primer lingote que produjo la mina, de
1.780 gramos, fue donado a la gobernación "como homenaje a los logros de tantas voluntades al
servicio del desarrollo minero y económico del país", indicaron los directivos de la compañía
licenciataria en una carta enviada al gobierno provincial. En su discurso, De Vido dijo que "ya está
en ejecución" el plan para la construcción de 10.000 viviendas en la provincia para los próximos tres
años, junto con obras de cloacas y rutas en todo el distrito provincial.
"La prioridad es el trabajo, la inclusión social y el medio ambiente", aseguró De Vido, en respuesta a
las quejas de un sector de la población que estaba en contra de la implementación de la mina. "Hoy
es un día de fiesta para San Juan y la Argentina, porque este proyecto genera expectativa de más
trabajo y más inclusión social", expresó el ministro. Y agregó: "Esto es posible en el contexto de un
país que se está desendeudando, que tiene superávit fiscal primario y que toma al
desendeudamiento y el superávit como políticas de Estado", destacó el funcionario.
Consideró también que la "Argentina está viva y en progreso, y los anuncios se concretan", y le
pidió a la empresa que "cuide el medio ambiente, pero fundamentalmente al pueblo". Por su parte,
Gioja recalcó que se protegerá el medio ambiente con una ley inviolable y sostuvo que los

3. sanjuaninos encontraron la receta mágica para transformar el oro en progreso. Además del ministro
de Planificación y del gobernador, en la ceremonia estuvieron presentes también el gobernador de
Catamarca, Eduardo Brizuela del Moral; el secretario de Minería de la Nación, Jorge Mayoral, y
directivos de la empresa Barrick, encargada de la explotación de la mina.
Inauguran mina de oro y plata en Argentina de Barrick Gold
267 words
11 October 2005
17:07
Agencia EFE
Buenos Aires, 11 oct (EFECOM).- El ministro de Planificación de Argentina, Julio de Vido, inauguró
hoy las operaciones del proyecto minero Veladero, en el que participa la firma canadiense Barrick
Gold y que demandó una inversión de 600 millones de dólares.
El yacimiento, situado en la provincia de San Juan (oeste de Argentina), a 4.000 metros sobre el
nivel del mar, tiene una vida de unos 17 años de producción y se prevé que genere en promedio
700.000 onzas anuales de oro y plata durante los primeros tres años de operación.
De Vido destacó la importancia del proyecto en cuanto a la "generación de empleo, la preservación
del medioambiente y el desarrollo con inclusión social".
"Para Argentina la minería es una política de Estado", comentó el ministro.
Subrayó que "Veladero aportará ingresos por 200 millones de dólares anuales vía exportaciones y
constituye el primer proyecto minero de tamaño internacional" que se pone en marcha bajo el
gobierno de Néstor Kirchner y el tercero de estas características en la historia del país.
Greg Wilkins, presidente de Barrick Gold, recordó que Veladero fue descubierto hace 10 años "en
uno de los entornos físicos más desafiantes del mundo" y dijo que en la iniciativa se aplican
"tecnologías de última generación en materia de producción y preservación del medioambiente".
El proyecto ha generado 4.000 empleos en su período de construcción y dará trabajo a otras 850
personas en la inminente etapa de producción, cuyo destino será el mercado externo en su
totalidad. EFECOM
FOCUS: Mining Cos In Indonesia View Newmont As Test Case
By James Attwood
Of DOW JONES NEWSWIRES
889 words
12 October 2005
Dow Jones International News
SYDNEY (Dow Jones)--Despite a string of terrorist attacks against western interests in Indonesia,
foreign mining operators and prospective investors in the country are more concerned about legal
uncertainties than security risks, industry participants said Wednesday.
According to multinational mining companies and analysts, a criminal trial involving Newmont
Mining Corp. (NEM), the world's biggest gold producer, is of greater significance to Indonesia's
appeal as a mining destination than terrorism.
In the trial, which reconvenes Friday, Denver-based Newmont is charged with dumping mercury and
arsenic from its Minahasa Raya mine into Buyat Bay, on the northern tip of Sulawesi, making local
villagers sick.
Newmont's Indonesia country manager, Richard Ness, faces up to 10 years in jail if found guilty.

4. "The Newmont case will be a benchmark for current and potential future investors in the resources
sector to gauge what kind of risk they're facing," said Standard & Poor's principal sovereign analyst
for Indonesia, Agost Benard.
Meanwhile, Muslim fundamentalist terrorism against westerners in the country is unlikely to find its
way to remote mine sites staffed mainly by locals, said analysts and miners.
"If we assume it's the same terrorists with the same aims, then I don't think mining interests will be
likely targets," said Benard.
"Although conceivably, mining interests could become targets for other reasons, such as local
interests who for one reason or another are against projects or try to extract some kind of rent from
the operators."
Security Still A Big Risk For Mining Companies
Australia's largest independent gold producer, Newcrest Mining Ltd. (NCM.AU), has firsthand
experience of Indonesian social unrest, with bloody clashes between Christians and Muslims during
the construction of its mine on Halmahera Island, 3,000 kilometers east of Jakarta.
Tensions have eased since then, but according to Tony Palmer, managing director of Melbourne-
based Newcrest, "security remains the greatest challenge in Indonesia. I get concerned for our
people there...Who knows what could happen?"
The recent terrorist attacks and the Newmont case, however, don't necessarily make Newcrest any
less likely to get involved in new projects in Indonesia, he said.
"One of the things we've done to mitigate risk is just to stay as low-profile as possible. If you go to
Jakarta, you won't find a Newcrest office there, and if I go there, I go practically unannounced,"
Palmer said.
But S&P's Benard said the Newmont case, if perceived to be flawed, would have an impact on the
country's investment risk.
Newmont's Australian managing director, Paul Dowd, blames anti-mining NGOs for funding a
campaign that sparked the case. He said scientific evidence shows that tumors, skin rashes and
dizziness among locals are likely the result of poor nutrition and hygiene rather than any poisoning.
No matter the outcome, Newmont is highly unlikely to vote with its feet on the issue, given its $2
billion commitment in the Batu Hijau mine on Indonesia's Sumbawa Island, analysts said.
However, the world's biggest gold miner may be less inclined to get involved in new projects in the
country, especially if Ness is found guilty.
"What sort of mining company wants to put their employees at risk when the evidence is clear that
there has been no breach of environmental laws?" said Haydn Dare, a partner in Freehills, a legal
firm representing Newmont.
Others aren't so convinced Indonesian authorities are acting capriciously in the case.
"It's unfortunate, but I think there is more to that story than we're all hearing from Newmont," said
Milan Jerkovic, chief executive of Australia's Straits Resources Ltd. (SRL.AU), which operates the
Sebuku coal mine in Indonesia.

5. Jerkovic said terrorism and the Newmont case would have little impact on Straits' ability to raise
funds for its Indonesian operations but said the company will look to build its asset base in less
risky Australia before pursuing anything else in Indonesia.
Case Puts Focus On Indonesian Legislation
The legal uncertainties spurred by the Newmont case also put the spotlight on Indonesia's
legislative uncertainties for foreign investors.
Jerkovic and others are looking forward to a long-awaited mining code, still under review, that
would replace the current work contract system with lease status, thereby offering some tenure
certainty.
The current system means some work contracts require foreigners to reduce their ownership in
projects to below 50% after a certain time. Investors also complain of 'nuisance' taxes created by
provincial or local authorities.
The new law, while apparently still at an early stage of the legislative process, is expected to boost
the appeal of mining projects to prospective financial backers and unlock more of the country's
geological wealth.
S&P's Benard said the overall operating environment in Indonesia still compares unfavorably with
that of its neighbors but is slowly improving.
"Legal issues, tax uncertainties, security risks - these things don't change overnight," Benard said.
"Even if you have an administration that is serious about improving investment conditions - and the
current government is - you can't expect fast change."
-By James Attwood, Dow Jones Newswires; 612-8235-2957; james.attwood@dowjones.com
Canadian Mining Company Buying Rival for $10 Billion
By IAN AUSTEN
557 words
12 October 2005
The New York Times
Late Edition – Final
OTTAWA, Oct. 11 -- Inco, a Canadian mining company, said Tuesday that it would acquire a rival,
Falconbridge, to create the world's largest nickel producer in a stock and cash deal valued at 12
billion Canadian dollars ($10.2 billion).
Inco will pay 34 Canadian dollars, or 0.6713 Inco shares and 5 Canadian cents, for each share of
Falconbridge. The transaction apparently thwarts the Swiss company Xstrata's designs on
Falconbridge. Xstrata acquired just under 20 percent of the company in August and said it planned
to increase its holdings.
''For a good part of our shared history, a lot of people have been saying, 'You know, if only these
two Canadian companies could get together, what a great company that could be,''' Scott M. Hand,
Inco's chief executive, said. ''Well, that day has arrived.''
Under the plan devised by the two companies, Inco will receive $320 million from Falconbridge if
the takeover is not completed.

6. While many analysts expect that Inco will ultimately be successful, there was speculation that Inco
may have to increase its bid, which already represents about a 21 percent premium over what
Xstrata paid for its Falconbridge shares.
''Inco is going to get it largely because no other company can offer the same synergies,'' said Greg
Barnes, a mining analyst in Toronto for Canaccord Capital, which is based in Vancouver. ''But could
Xstrata be difficult and force them to pay as much as possible? I don't discount that possibility.''
Mr. Hand, who will be chief executive of the combined company, and Derek G. Pannell, chief
executive of Falconbridge, suggested that they had not been in touch with Xstrata. However, Mr.
Pannell, who will become president, said during the news conference on the deal, ''Xstrata will have
made a lot of money on this deal and they certainly should be very happy.'' A spokeswoman for
Xstrata, which is based in Zug, Switzerland, declined to comment.
The takeover is subject to the approval of two-thirds of Falconbridge's shareholders, but it will not
need ratification from Inco stakeholders.
Stock in Falconbridge, which is based in Toronto, rose 3.77 Canadian dollars, or 12 percent, to
34.59 Canadian dollars a share. The combined company will produce 735 million pounds of nickel
this year, the companies said. Russia's Norilsk Nickel, the current market leader, expects to deliver
540 million pounds.
The two executives said they expected to see immediate cost reductions of at least $350 million a
year. Much of that will come from consolidation in Sudbury, Ontario, where both companies have
their main nickel operations.
In an interview, Mr. Hand, who has been with Inco for three decades, said the traditional
competitive rivalry between his company and Falconbridge probably delayed a merger many
thought was desirable.
''But I don't have that hang-up and neither does Derek,'' he added.
Hand must fulfil new Inco's promise
David Olive
Special to The Star
847 words
12 October 2005
The Toronto Star
The Canadian mining business is reasserting itself as a global player after two decades of
complacency in which one of the few events to command world attention was the Bre-X Minerals
Ltd. scandal.
Teck Corp. and Cominco Ltd. combined in 2001 to create a base-metals giant. Two years later,
Montreal-based Alcan Inc. bought France's Pechiney SA, eclipsing Alcoa Inc. as the world's largest
aluminum producer. Peter Munk has abandoned a disappointing foray in real estate to reclaim for
Barrick Gold Corp. its world-leading status of the 1990s.
Yesterday, decades-old Sudbury neighbours Inco Ltd. and Falconbridge Ltd. announced a proposed
merger worth more than $12 billion, by which the new firm regains the Number 1 ranking in nickel
that the old Inco lost in the 1990s to Russia's OAO Norilsk Nickel.
The proposed deal might not quite be "one of the greatest acquisitions in mining history," as we're
urged to believe by Scott Hand, chief executive officer of the old Inco and expected to retain the
post at the new firm, pending shareholder and regulatory approval of the combination. Hand's
description would better fit the mega-mergers by which the British triumvirate of BHP Billiton PLC,

7. Rio Tinto PLC and Anglo-American PLC consolidated a fragmented industry in the 1990s and now
dominate global mining.
But yesterday's deal, which will likelythwart 20 per cent Falconbridge owner Xstrata PLC of
Switzerland from any further designs on the nickel miner, is a promising combination. Too many
Canadian miners have been on autopilot for years, with historic lows in commodity prices giving
little incentive to expand capacity, and too little capital to participate in the late-1990s consolidation
wave.
Complicating matters were the managerial distractions at Falconbridge and the former Noranda
Inc., of which Falconbridge was a partly owned subsidiary. The process earlier this year by which
Noranda bought out the Falconbridge minority and then took Falconbridge as a name was
unnecessarily complicated.
During that same period, Falconbridge was obliged to help Brascan Corp. (since renamed Brookfield
Asset Management Inc.) find someone to extricate it from a business with fundamentals Brascan
was never able to command, even 24 years after taking control of Noranda in a hostile takeover.
Vancouver's Teck Cominco Ltd., for one, kicked the tires at Noranda but wasn't impressed enough
to buy; China Minmetals Corp. showed an interest in Noranda but was chased away by xenophobes
in Parliament and the financial media before a deal could be consummated.
Inco has its own distractions. For almost a decade, Inco suffered chronic setbacks in bringing its
massive Voisey's Bay project into production, butting heads with the Newfoundland government,
native groups and environmentalists. Meanwhile, the Goro development in New Caledonia was held
up by cost overruns.
But it's funny how the hallmark reassurances that make one gag about better times soon can
sometimes be taken to the bank. In recent years, the booming economies of China and India have
pushed metal prices to record highs. Inco and Falconbridge, long obsessed with cutting costs to
follow the sag in prices and protect dividends, are now scrambling to boost supply. Prices for most
metals, while easing a bit of late from exuberant highs of last year, are forecast to remain strong
enough to justify significant capacity expansion.
"The new challenge is to meet rising demand," Hand said.
Inco finally has begun to generate cash flow at Voisey's Bay, and Goro should be on line by 2008.
Inco now forecasts 35 per cent growth in nickel output to almost 1 billion pounds by 2090, and a
near doubling in copper production to 2.6 billion pounds by 2011. Inco even sees a 14 per cent
jump in nickel production from the venerable Sudbury basin, where nickel lodged between
Falconbridge and Inco properties can be cheaply exploited using existing ventilation shafts and
other infrastructure.
While reluctant yesterday to talk about asset disposals, Falconbridge is a grab bag of assets, a
legacy of Brascan's lack of interest. A global industry still gripped by consolidation fever offers
ample opportunity to shed such operations as a lucrative but peripheral aluminum fabrication
business in the United States.
The focus could be nickel and copper, which would account for 82 per cent of the new Inco's
production and merit management's full attention.
Meanwhile, the widely held new Inco would remain a takeover target, easy pickings for BHP, for
instance, which could buy the merged company with just two years' worth of earnings.
That should be all the impetus Hand needs to get long-stalled projects into production, get a dozen
or so proposed expansion ventures off the drawing board and realize savings at the many sites
worldwide where the old Inco and Falconbridge already operate in close quarters.

8. Hand, 63, has one last shot before retirement or an Inco takeover closes his career to actually
create what he kept describing yesterday as a "powerhouse."
NORILSK NICKEL to Lose Preeminence
99 words
12 October 2005
Novecon
Russia's NORILSK NICKEL will soon cease to be the world's leading nickel supplier now that the
Canadian INCO has announced the purchase of FALCONBRIDGE, another Canadian nickel supplier,
for $10.6 billion.
When the merger is finalised, INCO will become the world leader in nickel supplies and thus push
NORNICKEL to No. 2. The merger is to be finalised by early 2006. Russian NORILSK NICKEL has
targeted a 240,000-245,000 tonne nickel output this year and the integrated INCO LTD. a 333,400
tonne output. Source: VEDOMOSTI, October 12, 2005
Rich rewards for riding rollercoaster - A new model for participation by foreign companies
has been seen in recent months, driven by political priorities
By NEIL BUCKLEY
1,486 words
11 October 2005
Financial Times
Russia's main stock market index celebrated its 10th anniversary last month in appropriate style, by
hitting a new record. Investors who had bought the RTS index at its launch - and held on - would
have increased their money nine times over.
Look at the path of the market's progress, however, and it is clear just what a rollercoaster ride
investing in Russia has been. Few world markets have offered such rewards, yet few have suffered
such reverses.
The two years since Mikhail Khodorkovsky, the former Yukos oil chief, was arrested at gunpoint on a
Siberian runway have been as volatile as any.
Over that time, after all, Russia has sentenced its most successful post-Communist businessman to
eight years in jail and partly re-nationalised his oil company, Russia's biggest; its tax police have
slapped a Dollars 1bn back tax claim on its biggest foreign investor, the TNK-BP oil joint venture,
and pursued many other companies with guerrilla-style tactics; and Russia has signalled restrictions
on international companies investing in its most lucrative field - oil.
Yet the past six months have seen one of those extraordinary mood changes so characteristic of the
Russian market.
President Vladimir Putin has made conciliatory gestures to Russia's remaining oligarchs and
promised to improve the business climate and rein in the over-zealous tax police. TNK-BP's back tax
liability has been slashed by 70 per cent.
With oil at over Dollars 60 a barrel boosting the earnings outlook for Russia's oil companies and
promised moves towards lifting restrictions on foreign investment in the free float of Gazprom, the
monopoly state gas giant, set to bring billions of dollars of new money into the market, the RTS
index is soaring again and broke through the landmark 1,000 barrier at the end of last month.
Robert Dudley, TNK-BP's chief executive, captures the mood. "I feel the situation has improved," he
says. "There is less uncertainty today than there was six months ago. As we are planning for the
next five years, we are not cutting back on investment. This is probably the best indication of our
confidence."

9. So how are investors to make sense of all these contradictory signals?
The trial of Mr Khodorkovsky is now seen as falling within the "rules of the game" Mr Putin
established shortly after he came to power in 2000. By straying too far into politics, Mr
Khodorkovsky breached the president's famous bargain with the oligarchs that he would overlook
the dubious ways they built their business empires in the murky privatisations of the 1990s. In
return, they had to stay out of politics, stop bribing officials and pay their taxes.
The second part of the Yukos attack - the forced sale of its biggest production unit,
Yuganskneftegaz, to state-owned Rosneft - does seem part of something new. That is the move by
the state to reassert control of strategic sectors of the economy - above all energy and natural
resources.
Last month's Dollars 13.1bn deal by Gazprom to buy Roman Abramovich's Sibneft, Russia's fifth-
largest oil producer, is part of the same trend, although Mr Abramovich, who had earlier tried to sell
his company to Yukos, seems a more or less willing seller.
Another manifestation is the draft law restricting participation in tenders to exploit Russia's biggest
oil, gas and mineral deposits to companies at least 51 per cent Russian-owned. Officials say the
number of fields affected would be in single digits. But these are, of course, the most attractive
assets.
Gazprom and Rosneft, the state-controlled twin giants of Russian oil and gas, will have foreign
investors - though in the minority. And that seems to be the rule. Few now believe a 50-50 deal like
that which created TNK-BP in 2003 would be politically acceptable now. Lukoil, where ConocoPhillips
of the US took a minority stake late last year, may be the model.
However, officials and many foreign observers con-
cede that Russia, having had an unusually open oil industry in the past decade, is only moving back
into line with most of the world's biggest oil-producing countries.
"It's just catching up with the bad practice of the rest of the world," says Stephen Jennings, chief
executive of Renaissance Capital, the investment bank.
A bid by Siemens of Germany to buy a big stake in Power Machines, a turbine maker, which was
blocked on national security grounds as Power Machines supplies nuclear submarines, would
similarly have been blocked in the US and many other countries, analysts add.
These, then, are the new rules. Foreign investors look likely to be allowed only minority stakes in oil
and gas, metals and minerals, and some defence and aerospace industries.
But in much of the economy - manufacturing, telecoms and the booming consumer goods, retail
and autos sectors there seem no such barriers.
With those rules in mind, just how attractive a place is Russia to invest?
The picture, as always, is mixed. Record oil prices and the government's fiscal discipline have
transformed public finances.
Seven years after the 1998 financial crisis, Russia has Dollars 150bn in gold and currency reserves,
including Dollars 30bn in a "stabilisation fund" containing windfall revenues from oil taxes. A budget
surplus of 7 per cent is projected this year and one of 3.2 per cent next year.
Economic growth has averaged 6.7 per cent a year over six years, and in spite of lower forecasts
earlier in 2005, many economists now believe it could pass 6 per cent again this year.

10. The downsides include an economic reform programme that has now largely stalled.
Partly that reflects a shift in the balance of power in the president's entourage from liberals to more
conservative former members of the security forces, the siloviki. Partly, it stems from the botched
implementation of social benefits changes that provoked demonstrations by pensioners in January.
With parliamentary elections in 2007, and presidential elections in 2008, Mr Putin's team is
shrinking from further, potentially unpopular, reforms.
"What was done from 2000 to 2002 was genuinely positive and important," says Yegor Gaidar,
Russia's former deputy prime minister. "Now the ability and willingness of the authorities to
promote reform are minimal."
Also with an eye on the elections, the government is increasing spending significantly next year.
While that will see some of Russia's new-found wealth at last being spent on schools, hospitals and
housing, it risks fuelling inflation, still above the government's double digit target.
Corruption and bureaucracy, meanwhile, remain a drag on businesses, particularly small and
medium sized ones.
Yet many investors have decided the rewards outweigh the risks. In addition to the Moscow stock
market rally, foreign investors' appetite for Russian equities has been proved by a wave of highly
successful initial public offerings - mostly on the London and New York stock exchanges. Russian
companies have raised Dollars 4bn in IPOs in 12 months, compared with Dollars 1.3bn in the
previous 10 years.
The latest IPO, a Dollars 1bn offering by Novatek, an independent gas producer, was more than 10
times oversubscribed.
Foreign direct investment in the first half was a record Dollars 9.3bn, against Dollars 11.8bn for the
whole of last year. Coca-Cola and Heineken have made acquisitions in consumer goods;
DaimlerChrysler and Toyota have announced plans to build car assembly plants. Dixons, the UK
electrical retailer, took an option to acquire Eldorado, a Russian chain, for Dollars 1.9bn by 2011.
"You have to really try hard to stop people doing business here," concludes Al Breach, economist at
Brunswick UBS, "because it is just so damned profitable to do it."
Five years into Mr Putin's presidency, Mr Jennings of Renaissance Capital believes the president has
shown himself to be a stabiliser, more than a moderniser. Business, however, has gained a
momentum of its own.
Many Russian companies, he says, are now extremely well run, and there is a growing pool of
talented and internationally trained Russian managers. Young people who were streaming out of the
country after the 1998 financial crisis are coming back.
Ultimately, the developing generation of businesses, not the oligarchic capitalism of the 1990s, and
expanding middle class will bring irresistible pressure for a better business environment - and
perhaps for political loosening too.
"The chances are high that things will keep moving in the right direction, because of the changes in
society," says Mr Jennings. "At some point these conditions will demand a much more liberal and
modernising leader. We just don't know whether that is going to be the next one or the one after."