Gennadiy Bogolyubov

Hi All,

This is an old article (2011)  but will give us some info of our new investor.

...... Even Africa is becoming a more attractive place to do business, he suggests.....

......"Australia is a good country but production has become more expensive. So my investments will concentrate more to Africa. Maybe capital will move from here to there.".....

......"You cannot find natural resources and think you have a business -- you must first have a port allocation......

This has indicated how confident Mr Bogolyubov is that our rail and port will be built to bring our natural resources out to the market.

All looking good.

Cheers.

Pikapika


Ukrainian billionaire sees limited future in Australia

• The Australian
• September 24, 2011 12:00AM

Gennadiy Bogolyubov inspects the new Greensnake pit in Western Australia, which produces high-grade manganese at his Woodie Woodie mine. Picture: Nirme Marie Source: The Australian

GENNADIY Bogolyubov, the globe-trotting Ukrainian billionaire who controls Australia's biggest manganese mine, recalls an austere childhood in the former Soviet Union when electricity and new clothing were considered luxuries.

Those Communist-era hardships were a distant memory when the oligarch shelled out millions this week to charter a 250-seat Boeing 767 to fly to Australia to assess new investment opportunities.

He and his right-hand man, Oleg Sheiko, had plenty of leg and elbow room on the flight from London: they were the only passengers on the Ukraine International Airlines plane.

In Perth, the pair jumped on a 10-seat luxury jet and headed for the Woodie Woodie manganese mine, which Bogolyubov picked up for a boomtime price of $1.3 billion after a fierce bidding war with former BHP Billiton chief Brian Gilbertson in 2007.

London-based Bogolyubov, 49, who is married with three young children, spends most of his time travelling as he keeps an eye on a growing global business empire that spans mining, metals, oil, banking, construction and agriculture across four continents.

The Weekend Australian travelled with the media-shy Ukrainian to Woodie Woodie, in the heart of the Pilbara, on his first trip to Australia since he visited in the weeks just after his Palmary Enterprises acquired Perth-based Consolidated Minerals -- a purchase designed to increase his exposure to the global manganese market at a time when the crucial steelmaking ingredient is in demand. The ultra-orthodox Jew was relaxed as he toured his mine, inspecting a new workshop and being briefed on productivity improvements at the open pit operation.

Bogolyubov says he has ploughed plenty of money into the mine since buying it.

Production has virtually doubled since the takeover and the mine's new Greensnake pit, which produces high-grade manganese, is expected to underpin further production growth over the next few years.

But the Ukrainian's foray into Australia hasn't all been rosy.

Earlier this month, ConsMin, which owns both Woodie Woodie and a manganese mine in Ghana, reported a $US20.7 million ($21m) net loss for the half-year to June 30, blaming the high Australian dollar and a stubbornly soft manganese price for the disappointing result.

Bogolyubov has a take-no-prisoners approach to business and has made a bitter enemy in local manganese miner OM Holdings, after merger talks with ConsMin collapsed last year.

Insults about governance and ethical standards were traded and the prospect of a deal with OMH that would allow the Ukrainian to boost his local manganese portfolio now appears more remote than ever.

Last year, the billionaire also infuriated investment bankers at JPMorgan by refusing to pay a $50m bill sent to ConsMin for takeover advice (the outrageously high bill even included an expense of $6.32 for a Big Mac that a hungry JPMorgan operative had bought overseas while on business).

Many still believe Bogolyubov paid far too much for ConsMin, in a deal that was consummated immediately before the global financial crisis struck.

Healthy egos were at the heart of the bidding war with Gilbertson, which culminated in Bogolyubov paying double his initial offer price.

Over the course of a day in the Pilbara, Bogolyubov shuns the meals served to him and eats only a few small pieces of fruit, spending most of his time on the plane to and from Woodie Woodie reading a Russian version of Ken Follett's historical novel The Pillars of the Earth.

In his first interview in Australia, he warns the Gillard government that investment in the resources sector is being held back by difficulties in accessing the railways and ports needed to export commodities, and that the nation's reputation for suitability is being damaged by the planned mining and carbon taxes.

Even Africa is becoming a more attractive place to do business, he suggests.

Asked whether he plans further investments in the Australian resources sector to add to his ownership of ConsMin and stakes in OMH and iron ore miner BC Iron, Bogolyubov says he would like to do more business in Australia "but to do business in Australia you have to start from the end".

"You cannot find natural resources and think you have a business -- you must first have a port allocation.
"You can find a billion tonnes of iron ore in the desert but you can't do anything with it. You have to go to BHP or Fortescue (to enable rail and port access). That is why for us, as a foreign investor, it is difficult."

Bogolyubov says investing in Australia is very expensive, but until recently it was at least viewed as a relatively stable investment destination.

"Up to now I felt (it was stable). But now everyone is talking about the new (mining and carbon) taxes and about big changes.

"How can you talk about stability if you don't know the financial situation?

"Australia is a good country but production has become more expensive. So my investments will concentrate more to Africa. Maybe capital will move from here to there."

Bogolyubov also tries to deflect speculation that he is planning an initial public offering of ConsMin that would involve him selling down a big chunk of his stake, potentially valuing the company at up to $2bn.

He says recent market conditions, combined with a manganese price that is is hovering close to $US5 a tonne compared with $US18 a tonne before the global financial crisis, means a decision on an initial public offering may take time.
"Everything is possible, but we are cautious about the market," he says. "If we do it, we do it at the right time."

Bogolyubov flew from Perth to Sydney in the middle of the week to talk to lawyers and bankers about the possibility of an IPO.

The trip was also seen as important because the frequent flyer had never set foot in Sydney and was said to be impressed with the city. On his last trip to Australia, the tennis fanatic headed to Melbourne to watch the Australian Open.
Bogolyubov grew up in Ukraine during the Soviet era and went on to study construction engineering at university, graduating in 1984 and moving straight into a job with the state.


"We were not hungry but it was difficult to even buy clothes," he recalls of his childhood and youth.
"It was a very different time. It was not a matter of money -- there was nothing in the shops."
The event that shaped his life was the collapse of the Soviet Union in 1991 and Ukraine's subsequent embrace of free-market capitalism.

Bogolyubov quickly moved into business with fellow Jewish-Ukrainian Igor Kolomoysky, who remains his business partner. The pair established PrivatBank, which now ranks as Ukraine's biggest commercial bank.

"We started a small business and it got bigger," is how Bogolyubov sums up his career, which has delivered him wealth that would have been unimaginable in his younger days.

His net worth was estimated at $US6bn before the global crisis.
For now, the man known as Mr Manganese is happy to put his faith in the prospect that China's continued growth will deliver strong commodity prices.

"The price of manganese is quite low but if you believe in steel production I think it will grow," he says.
"I have been to China a couple of times and it's very difficult to imagine they can slow down their industry because otherwise it becomes a big problem."