According to a survey carried out by the Federal Statistics Service of Russia, the entrepreneur confidence indicator fell in the manufacturing sector in December 2011 to –6% and in the mining and quarrying sector to –3%. In contrast, the industrial production index (IPI) rose 2.5% in December 2011 versus the same month of the previous year. Different causes are attributed to such versatile dynamics. The seasonal effect exacerbates the negative results. Entrepreneur confidence tends to decline towards December and rise towards July. December 2010 showed similar dynamics in entrepreneur confidence, and December 2011 posted no change from the previous year figures.

Metals and Minining in the CIS was the subject of a discussion today at the 2012 Russia Forum in Moscow. While discussing the lessons learned from the crisis, the speakers agreed that liquidity management was key to helping companies successfully weather the crisis and create value. The speakers also shared a positive view of the world economy and the prospects for both base and precious metals. For Russia, resolving infrastructure bottlenecks was key to realizing the value of its mineral endowment. 

Mechel's 3Q11 US GAAP financials were strong in terms of P&L, but liquidity management ended up worse than we (Troika Dialogue team) expected. Profitability recovered somewhat, with EBITDA at $678 mln, though net debt continued to climb, reaching $9.0 bln as working capital swelled further and capex remained elevated. Despite measures to improve the funding status, which will bear fruit in 4Q11-2012, the company seems poorly prepared for a potential downturn, given its debt load. We retain our HOLD recommendation on the stock.

Peter Hambro, Chairman of London-listed Russian gold  miner Petropavlovsk plc, was awarded the accolade of Mining Legend of the Year at the Minex dinner in Moscow on Thursday. The Daily Telegraph reported that after receiving the award Mr. Hambro said, "Now that I appear to be a legend in my own lifetime, I'm thinking of changimng my name to Jason.... and (in the context of these turbulent markets)continuing my search for the golden fleece."