For any of you who found the earlier post on Norilsk interesting, a story in last week’s Economist brings us up to date with news of how the metals firm is passing through an ownership struggle, but apparently now in a more transparent and legal way than the manner of its privatisation. Andy and Grigori’s documentary from 2003 ended with a note of optimism, which is uncharacteristic of journalism in general, and particularly of events in Russia. But the article in The Economist does something similar. It has little doubt about the nature by which Vladimir Potanin and Mikhail Prokhorov, two of the protagonists in the current struggle for control, came by the assets in the first place :-

The privatisation was indefensible from almost any point of view—but it worked. Today Norilsk Nickel is more transparent, efficient and profitable than it has ever been. It has a proper board of directors, professional managers and is worth nearly $60 billion.

But if things continue in the way that The Economist is indicating, perhaps we are seeing some echo of the epic journey of Norilsk the place since its inception as a gulag in the 1930s.

The most striking thing about the affair is that a set of business tycoons have, so far, behaved in a way that is a lot more civilised than anything seen from the Russian state. When state firms want a private asset, they send in the tax police, the security services and a few health and safety inspectors, before making an offer. Here, big private firms are dealing with each other mostly using bankers and lawyers.

Admittedly, all of the oligarchs squabbling over Norilsk have powerful friends in the Kremlin, which may be why it has not sided with any of them. Yet if Mr Prokhorov manages to sell his stake in Norilsk, it will strengthen property rights. He will be almost the only tycoon to have cashed out assets privatised in the 1990s. To date, the Kremlin has treated oligarchs like renters rather than owners and no significant sale has been possible without its blessing, even when no foreigners are involved.

The Kremlin certainly wishes to see a large national mining and metals champion, but it does not seem to mind about its exact form. Many combinations are possible and the very fact that the outcome is unknown, and is not being dictated by the state, is a sign of progress.

What matters, in the end, is not just the outcome, but also how it comes about. It is heartening to see a Russian company with professional managers who no longer treat minority shareholders as just an obstacle. When the rule of law is non-existent and the Kremlin often acts like a gangster, it falls to business leaders to work out the rules and abide by them. If they can manage this, they will take Russia forward. If they fail, they will reinforce the worst clichés about its business practices.

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