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THE WALL STREET JOURNAL.
A8 | Monday, January 26, 2015
WORLD NEWS
U.S., EU Warn Russia After Ukraine Assault
Killing of 30 Civilians Prompts Talk of New Sanctions and Peace Talks Amid Defiance From Kremlin, Continued Shelling
BY GREGORY L. WHITE
AND LAURENCE NORMAN
300 miles
B E L A RU S
POL.
RUSSI A
Kiev
U K RA I N E
Donetsk
Mariupol
M O L D OVA
ROM A N I A
CRIMEA
B l a ck S e a
European Pressphoto Agency
U.S. and European leaders
threatened
new
sanctions
against Moscow after a missile
attack blamed on pro-Russian
separatists killed 30 civilians in
the eastern Ukrainian city of
Mariupol, the latest escalation in
violence that has brought Kiev’s
fight with rebels back toward
full-scale war.
Russia reacted with defiance,
blaming Kiev and its Western
backers for the surge in fighting,
but it also called for urgent talks
on implementing a September
cease-fire. Separatists backed off
earlier threats of a broad offensive on Mariupol and other targets, but shelling along the contact line between the two sides
was extremely heavy over the
weekend, Ukrainian military officials said.
U.S. President Barack Obama
said he was deeply concerned
about the latest break in the
cease-fire and escalating separatist aggression, saying he
would continue to ratchet up
pressure on Russia. “I will look
at all additional options that are
available to us short of a military
confrontation in trying to address this issue,” the president
said at a Sunday news conference in New Delhi.
The European Union, saying
the rebels “bluntly refuse to observe” the cease-fire, called an
emergency meeting of foreign
ministers for Thursday to discuss
a response.
Diplomats said it isn’t yet
clear whether the West is unified
enough to agree on substantial
new sanctions against Russia.
The latest explosion in violence
came as a surprise, just as the
EU had begun considering the
conditions under which it could
start to ease some limits on Russia. The U.S., meanwhile, is wary
of taking major new steps without Europe’s support.
Publicly, the Kremlin remains
defiant, appearing confident that
A girl joins adults in lighting candles during a mourning ceremony in Kiev Sunday for people who died during shelling in Mariupol.
the Russian public will blame the
West for the worsening economic pain caused by sanctions
and the fall in oil prices. Kremlin
insiders say the leadership is
giving mixed signals on whether
it is seeking to win an easing of
sanctions by pressuring Kiev into
a truce or preparing for further
escalation.
At the World Economic Forum
in Davos, Switzerland, last week,
a top Russian official suggested
the standoff with the West could
last decades and said the government was looking at the experience of regimes that suffered
years of international isolation,
such as South Africa’s apartheid
government. Moscow’s apparent
resilience amid a 50% drop in the
value of its currency and an
economy pushed into recession
has left Western capitals struggling to find effective levers to
get the Kremlin to change direction.
“The question is going to be
whether they continue to pursue
a path where that not only is bad
for the people of Ukraine but is
bad for the people of Russia, and
are we able to continue to raise
the costs even as we’re creating
an off-ramp diplomatically that
eventually the Kremlin starts
pursuing a more sensible policy
in resolving this issue,” Mr.
Obama said on Sunday.
The EU’s foreign-policy chief,
Federica Mogherini, warned on
Saturday that increased violence
in eastern Ukraine “would inevitably lead to a further grave deterioration of relations between
the EU and Russia.”
German Chancellor Angela
Merkel separately spoke by
phone with Russian President
Vladimir Putin and Ukrainian
President Petro Poroshenko Sunday. She urged both sides to implement the peace agreement
reached in Minsk, Belarus, and
demanded Mr. Putin avoid escalating the conflict, her spokesman said.
Ukrainian officials say they intend to defend their territory
and to counter separatist attacks. Starting fresh peace negotiations now, one official close to
Ukrainian President Poroshenko
warned, would play into Russia’s
hands by forcing Ukraine to
make new compromises.
Several senior EU diplomats
on Sunday said there were no
concrete ideas on the table yet
for fresh Russia sanctions and
the discussion of options was
only starting.
Among the steps the EU and
U.S. could take is widening the
net of companies frozen out of
Western financial markets to in-
clude more state-run firms or
private companies. They could
also ban exports of technology
related to the gas industry in addition to measures against Russia’s oil sector.
One measure that has been
discussed previously is whether
to seek to knock Russia off the
so-called Swift network, which is
key to making global financial
transactions. In the past, diplomats have said that would likely
be a last resort.
Any fresh measures must be
backed by all 28 EU member
countries and could face stiff resistance from Hungary, Cyprus
and Greece, which have repeatedly expressed concerns about
the measures.
In separate phone calls on
Sunday with Ms. Mogherini and
U.S. Secretary of State John
Kerry, Russian Foreign Minister
Sergei Lavrov laid the blame for
the latest surge in violence on
Kiev. He called on his Western
counterparts to push Kiev back
into negotiations.
Mr. Poroshenko denied violating the cease-fire and said he remained committed to the September agreement. But some in
Kiev are wary that with rebels
advancing, talks are likely only to
cement separatist gains.
On Sunday, Ukrainian military
spokesman Col. Andriy Lysenko
said elsewhere on the front, rebels were “shelling our forces
with extraordinary intensity using artillery, mortars, grenadelaunchers, tanks and ‘Grad’ missile launchers.”
—Colleen McCain Nelson
and Matthew Dalton
contributed to this article.
As Kerry Ties Aid to Peaceful Nigerian Vote, Militants Strike
LAGOS, Nigeria—Secretary of
State John Kerry, moving to prevent another key U.S. counterterrorism ally from collapsing under a militant insurgency,
warned Nigeria’s top two presidential candidates that future
military assistance will depend
on February’s election being
peaceful and transparent.
Mr. Kerry’s separate meetings
in Nigeria’s financial capital with
President Goodluck Jonathan
and his political opponent, retired Gen. Muhammadu Buhari,
coincided with the launch of a
major offensive by Islamist insurgency Boko Haram in Maiduguri, the largest city in Nigeria’s
northeast.
At least 100 suspected Boko
Haram terrorists were killed as
the country’s military fought to
repel the assault, a local vigilante and a military official said.
Mr. Kerry’s trip came amid a
new wave of global uncertainty
stemming from instability in Yemen, civil war in Iraq, renewed
fighting in Ukraine and an historic governmental transition in
Saudi Arabia, which is nervously
watching security crises on its
borders.
Mr. Kerry traveled to Nigeria
from a meeting in London at
which world leaders grappled
with the military effort against
Islamic State extremists who
have seized control of territory
Agence France-Presse/Getty Images
BY JAY SOLOMON
AND GBENGA AKINGBULE
Secretary of State John Kerry with Nigerian President Goodluck Jonathan, second right, in Lagos on Sunday.
across Iraq and Syria.
During the visit, Mr. Kerry
stressed that the U.S. is committed to help the government fight
Boko Haram, which has steadily
gained territory in northeastern
Nigeria. But he said Washington’s assistance would be limited
if the Feb. 14 presidential election is deemed to be flawed.
“We want to do more. And
that was part of my message to
both President Jonathan and
Gen. Buhari today,” Mr. Kerry
said following his meetings with
the politicians. “Our ability to do
more will depend…on the full
measure of credibility, accountability, transparency and peacefulness of this election.”
The secretary of state also
said the Obama administration
would deny visas to any Nigerian
viewed as contributing to the unrest.
Mr. Kerry said he was con-
cerned that Boko Haram’s advances were part of the broader
spread of extremism in Africa.
He specifically mentioned signs
that Islamic State was trying
build alliances in the region.
“There’s no specific declaration by Boko Haram of an affiliation with Daesh,” Mr. Kerry said,
using an Arabic word for Islamic
State. “But there is evidence that
Daesh is making an effort to
spread its tentacles.”
Zambia Election Extends Mining Dispute
Mr. Lungu, a former defense
and justice minister, won 48.3%
of the votes cast, the southern
African country’s electoral commission said on Sunday.
He was chosen to lead the Patriotic Front party after former
President Michael Sata died in
office in October, following a
long illness.
Mr. Lungu won the tight race
by a margin of around 27,000
votes, one of the narrowest wins
in the country’s electoral history.
He must now chart a fresh
course for a divided country
Composite
By Patrick McGroarty
in Johannesburg
and Nicholas Bariyo
in Kampala
struggling under the burden of
suppressed global commodity
prices, amid a row with mining
companies over a litany of tax
disputes.
Mr. Sata was elected in 2011
on a populist pledge to recover
more mining revenue and counter tax evasion. He also attacked
the practices of Chinese miners
in Zambia. But in office Mr. Sata
warmed to Chinese investors and
endorsed a flurry of contradictory mining policies.
“Inconsistency in the mining
policy of this government has
frustrated a lot of investors,”
said Nevers Mumba, a former
pastor and vice president who
came in fourth in this week’s
elections with just a fraction of
the votes that Mr. Lungu secured.
Mr. Lungu won with 807,925
votes while his main rival
Hakainde Hichilema of the opposition United Party for National
Development received 780,168
votes, the electoral commission
said. Counting took longer than
planned because voting was interrupted by heavy rains. Mr. Hichilema accused Mr. Lungu of
having “stolen” the election and
called him an “illegitimate president.”
But a team of observers led
by South Africa’s Foreign Minister Maite Nkoana-Mashabane endorsed the election as “peaceful,
transparent, credible, free, and
fair, thus reflecting the will of
the people of Zambia.”
Alfred Ndhlovu, a spokesman
for the ruling party Patriotic
Front campaign team dismissed
Mr. Hichilema’s accusations, describing him as a “bad loser.”
“Mr. Hichilema should demonstrate educated and scholarly behavior by conceding defeat,” Mr.
Ndhlovu said.
Mr. Lungu’s victory offered an
unsettling prospect to some investors who say the party’s frequent policy changes have made
tapping Zambia’s ample deposits
of copper and cobalt a losing
prospect. In January, the government raised mining royalties to
as much as 20% of revenue, from
6%. At the same time, global
copper prices have tumbled to
five-year lows on waning demand from China. Zambia’s currency has plummeted to record
lows as a result.
Zambia’s Chamber of Mines
said last week that nine of the
country’s 11 top copper mines
are operating at a loss because
of low prices and the anticipated
impact of the higher revenue
royalties. The Chamber urged
the government to scrap the
higher levies.
Ahead of Tuesday’s vote, the
Patriotic Front-led government
agreed to discuss changing the
royalty rules. “We are listening,”
Rayford Mbulu, Zambia’s deputy
labor minister and a Patriotic
Front leader, said Monday.
“Nothing is beyond revision at
this stage.”
Toronto-based Barrick Gold
Corp. has said it may close its
tack.
Chris Olukolade, a spokesman
for Nigeria’s military, said Boko
Haram had attacked in two
places in Borno state, Maiduguri
and Monguno, the seat of the local government. “But we are repelling the terrorists,” he said.
“We are using both land and air
operations on the terrorist
group.”
On Saturday, Mr. Jonathan
told a crowd of supporters in
Maiduguri that the government
was committed to end terrorism
in Nigeria, and pledged that
those abducted by Boko Haram
would be rescued.
In April, militants raided a
boarding school in Chibok and
kidnapped nearly 300 schoolgirls; some escaped but most remain hostages of Boko Haram.
Mr. Buhari, a former military
ruler, is due to visit Maiduguri in
the coming week.
Boko Haram has killed nearly
8,000 people since 2011, according to a recent estimate by the
Council on Foreign Relations in
New York.
Although Boko Haram didn’t
comment on the timing of the attack, some Maiduguri residents
said they believed it was no coincidence the simultaneous attacks
early Sunday followed the president’s pledge to end terrorism.
“Boko Haram just wanted to
prove a point to President Jonathan that his assurance to end
terrorism is not feasible,” said a
local trader, Mallam Bunu Komi.
Mineral Wealth
Zambia is one of the largest copper producers in the world, with the
mineral accounting for more than 70% of its exports.
SHARE OF ZAMBIA’S
EXPORTS
73.0% Raw/
refined copper
5.5 Corn
4.9 Raw
tobacco
2.5 Raw
cotton
14.1 Others
TOP COPPER PRODUCERS, 2013
IN MILLIONS OF METRIC TONS
Chile
China
Peru
U.S.
Australia
Russia
D.R. Congo
Zambia
Canada
Mexico
Zambian copper operations in
March because of falling prices
and higher taxes. First Quantum
Minerals Ltd. has also halted
plans to double the size of its
smelter in northwestern Zambia,
squeezing the country’s inadequate capacity to treat the minerals unearthed there.
First Quantum spokesman
John Gladston said political uncertainty and rising taxes are
straining the industry that gen-
P2JW026000-0-A00800-1--------XA
Zambians elected ruling party
stalwart Edgar Lungu their next
president, setting the stage for
more haggling between a mercurial government and the powerful mining firms that drive the
economy.
Nigeria’s latest election, in
2011, was seen by observers as
the most credible in its five decades of independence. But this
year’s ballot poses far more difficulties.
With only three weeks remaining, Boko Haram still occupies a large swath of Nigeria’s
northeast. Nigeria’s electoral
commission will try to allow citizens of those communities to
vote by putting polling booths in
camps for the displaced. It also
has to find a way to distribute 20
million voter cards before midFebruary.
“We’re trying to make the
best out of a bad situation,” said
Nick Dazang, the deputy director
of Nigeria’s Independent National Electoral Commission.
Highlighting how difficult the
election will be, Boko Haram
staged an attack on Maiduguri
on Sunday, a day after a visiting
Mr. Jonathan pledged to vanquish terrorists who are taking
over the region’s towns and villages and killing thousands.
Several attempts by militants
to penetrate Maiduguri drew a
land and air response from the
military.
“We started hearing gunshots
from the outskirts,” said Ahmed
Abdullahi, a member of a local
vigilante group in Maiduguri that
has frequently fought Boko
Haram insurgents. He said the
militants “were chanting ‘Allahu
akbar’ before we quickly mobilized our members” to counterat-
5.70
1.65
1.30
1.22
0.99
0.93
0.90
0.83
0.63
0.48
Sources: MIT Observatory
of Economic Complexity;
U.S. Geological Survey
The Wall Street Journal
erates more than 70% of Zambia’s exports. “The new system
doesn’t incentivize investment in
new capital projects,” Mr. Gladston said.
Glencore PLC suspended
some expansion projects last
year in a dispute over $600 million in value-added taxes that
the government has alternately
pledged to refund to mining
companies, then stated it has a
right to keep.
MAGENTA
BLACK
CYAN
YELLOW