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Rusal is the world's largest producer of the metal and benefited greatly from two EU aluminium import tariff cuts which were made while friend Mandelson was trade commissioner. Since 2001 Russia has commanded first place in the countries investing in Montenegro. But the main source of investment in recent times has been in real estate, mostly along the gorgeous Adriatic coast.There are those cynics who say that much of the Russian property investment is a money laundering operation by criminal elements from the Russian Federation.Of course, there is no suggestion that this might explain Mr Deripaska's interests in the region.But there is undoubtedly one project for which he has particularly-high hopes - or at least had before the credit crunch shrank his £14billion fortune.PM Djukanovic hopes that he can persuade the EU to accept Montenegro as a member by 2012, which should help the Tivat development considerably.Certainly, its tight circle of wealthy backers have much at stake.

After three years of talks Peter Mandelson, the EU Trade Commissoner, has secured a bilateral agreement with the tiny Adriatic nation of Montenegro.BUT why has a tiny state like Montenegro assumed such importance to Deripaska and his business partners?It is no secret that the country has a significant and well-established black economy.If Djukanovic is the political leviathan of this tiny state, then his friend Deripaska, similarly tainted by alleged mafia-links, is his economic equivalent.It is said that Djukanovic personally handled the controversial sale of Montenegro's most important state-owned industrial asset - the KAP aluminium firm - to a subsdidiary of Rusal, Deripaska's aluminium concern. Others resent the way in which Russia has taken such a huge stake in their country.He was advised to invest in Montenegro by the Rothschild family, with whom he has long enjoyed business ties. 'Oleg made the first phone call to the prime minister (Djukanovic) and opened the door for me,' Mr Munk explained.But Munk and Rothschild were not alone in the project.Munk sits on the international advisory board of Rusal, Deripska's metals giant.Nat Rothschild (whose JNR firm advises Deripaska) sits on the equivalent board at Barrick Gold.As one Balkan business analyst said: 'It is the one country in the region that isn't just bedevilled by corruption, it's a kleptocracy.' Montenegro, which broke from a federal union with Serbia two years ago, has been governed by prime minister Milo Djukanovic since 1991. He had long been ' tolerated' by the West for opposing the regime of late Serbian tryrant Slobodan Milosevic.But allegations of links to hugely profitable, mafia-run tobacco smuggling between his country and the EU have seen him repeatedly investigated by Italian prosecutors.


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