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*** The state Russian Technologies (Rostekhnologii) corporation wants to obtain shares in MMC Norilsk Nickel that the mining and smelting giant's core owners have pledged as loan collateral with Vnesheconombank (VEB) and VTB, Rostekhnologii Sergei Chemezov told the Vedomosti newspaper this week. VEB holds the blocking stake in Norilsk owned by Oleg Deripaska's UC RUSAL, and VTB holds around 17% that is owned by Vladimir Potanin. Chemezov said Potanin himself had suggested this a few months ago at a meeting with President Dmitry Medvedev. Chemezov also re-iterated his interest in creating a global consolidated mining company around Norilsk and Metalloinvest, VSMPO-Avisma and RusSpetsStal.
*** Mikhail Prokhorov, the billionaire co-owner of Polyus Gold and president of the Onexim Group, has changed his official address from Moscow to a location in the Krasnoyarsk territory, where the No. 1 Russian gold producer's main production assets are located. He will now officially be resident in the settlement of Yeruda and will likely pay income tax there. Meanwhile, the new board at Polyus re-elected Prokhorov as its chairman at its first meeting, held this week.
*** The world's biggest nickel and palladium producer Norilsk Nickel closed 2008 with net losses of $555 million to IFRS, compared with profit of $5.276 billion in 2007. Sales revenue fell 18%. The losses were mainly due to impairment of property, plant and equipment at Norilsk Nickel International and OGK-3; impairment of goodwill; and impairment of refining technology registered under trade mark Activox amounting to $490 million. The board recommended that shareholders waive dividends for 2008 and support management's conservative policy. Norilsk also this week revised its 2009 nickel production down slightly.
*** Russian steel companies stand to benefit from a drastic reduction in scrap metal exports this year as the customs infrastructure needed to handle these shipments shrinks. Scrap exports could fall to 4 million tonnes this year, from 7 million tonnes in 2008, now that the FCS has ordered a reduction in the number of customs offices specializing in scrap metal to ten. Iron and steel scrap is currently trading at 4,000-4,500 rubles a tonne in Russia, but could range from 4,000 to 5,500 rubles in Q3 as the construction season peaks and demand for scrap from other sectors strengthens.
*** Russian civilian nuclear and uranium concerns Rosatom, Techsnapexport, and Atomenergoprom have all voiced intent to increase their presence in international partnerships and projects. Speaking at the Atomexpo-2009 forum in Moscow on May 26, Rosatom head Sergei Kiriyenko said his corporation is seeking to build nuclear fuel production facilities in Ukraine and Europe, and uranium enrichment plants in Asia, Europe and the Americas. He also announced Rosatom is to benefit from a near doubling in government funding in 2009. Meanwhile, Tenex signed a deal to provide uranium enrichment services to the U.S. as it seeks to corner 30% of the global LEU market. Atomenergoprom and Japan's Toshiba are also discussing the construction of a facility that would enrich uranium and produce fuel.
*** Eight top-managers at Kazakhstan's state-owned nuclear and uranium corporation Kazatomprom, including recently removed company head Mukhtar Dzhakishev, were this week charged with embezzlement. They stand accused of inflicting serious economic damage on the state in deals surrounding the country's largest uranium fields, through alienating them to a number of companies registered in offshore zones for small sums. Business leaders have called for transparency in the investigation into the allegations. Vladimir Shkolnik has now replaced Dzhakishev as company head.
TOP STORIES
Rostekhnologii eyes Norilsk Nickel shares pledged with state banks - newspaper
MOSCOW. (Interfax) - The state Russian Technologies (Rostekhnologii) corporation wants to obtain the shares in MMC Norilsk Nickel that the mining and smelting giant's core owners have pledged as loan collateral with Vnesheconombank (VEB) and VTB, Rostekhnologii Sergei Chemezov told the Vedomosti newspaper.
VEB holds the blocking stake in Norilsk owned by Oleg Deripaska's United Company RUSAL (UC RUSAL), and VTB holds around 17% that is owned by Vladimir Potanin.
"I'll be frank: this asset [the pledged shareholdings] interests us. We already have metallurgical assets, for example the RT-Metallurgy holding," Chemezov told the paper.
Chemezov said Potanin himself suggested this a few months ago. "In January, at a meeting with Russian President Dmitry Medvedev, [Potanin] himself said that if he can't repay the loan [to VTB], then the state, to quote his words, could de-privatize the stake. And he named Rostekhnologii as government's agent," Chemezov said.
Chemezov re-iterated his interest in creating a global mining company around Norilsk Nickel and Metalloinvest, whose core owner Alisher Usmanov is also a minority shareholder in Norilsk Nickel.
"We could contribute [titanium producer] VSMPO-Avisma and [special steels holding] RusSpetsStal, for example [to a consolidated mining company]. It's up to our colleagues, and I don't think they've really made their mind up. Potanin gets one idea, then another. And we're waiting all the time to see if the Norilsk shareholders will decide to repay their loans or not. We're patient folk, we're not in a hurry," Chemezov said.
Rostekhnologii plans to get a representative on Norilsk's board of directors, but Metalloinvest, the corporation's partner in the Udokan copper project, "doesn't even have enough to get its own candidate on the board," Chemezov said in the interview.
So VTB and VEB are talking to both of Norilsk's core shareholders about getting a Rostekhnologii representative on the board. "This hasn't been decided yet," Chemezov said, recalling that the corporation put a candidate of its own, Igor Komarov, forward for financial director at Norilsk at the start of this year, but the board didn't back this.
Rostekhnologii owns 66% of VSMPO-Avisma and aims to obtain a loan of $1 billion from the state to refinance the earlier loans it took out to build that stake up back in 2006, Chemezov told Vedomosti.
The state agreed this year to provide 3.5 billion rubles to Rostekhnologii to pay interest on the loans.
But the corporation needs funds to pay the principal off as well, Chemezov said in the Vedomosti interview. "We've agreed to subsidize interest in 2009, but we're also negotiating funds to pay the loans off. This comes to about $1 billion," he said.
Rostekhnologii has not yet received the interest subsidies, Chemezov said. "We haven't got this money yet - just promises. The Audit Chamber is about to check up on how we are disposing of the money, but I'm telling them to wait because we haven't got it yet and there's nothing to check," Chemezov said.
TOP STORIES
Norilsk Nickel posts $555 mln IFRS net losses in 2008
MOSCOW. (Interfax) - MMC Norilsk Nickel closed 2008 with net losses of $555 million to International Financial Reporting Standards (IFRS), compared with profit of $5.276 billion in 2007, the Arctic mining and smelting giant said.
Sales revenue fell 18% to $13.98 billion.
The losses were driven by impairment of non-financial assets amounting to $4.728 billion in 2008, compared to $1.879 billion in 2007. This increase was mainly due to: impairment of property, plant and equipment at Norilsk Nickel International and OGK-3 amounting to $2.481 billion and $157 million, respectively; impairment of goodwill recognized at Norilsk Nickel International amounting to $1.571 billion; and impairment of refining technology registered under trade mark Activox amounting to $490 million.
Costs rose 17% to $5.504 billion in 2008, from $4.719 billion in 2007.
Norilsk Nickel financial highlights to IFRS ($ mln):
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Analysts told Interfax in a consensus-forecast that they thought Norilsk might have slashed net profit to IFRS 36% in 2008 to $3.408 billion before write-downs. They said revenue was likely to have fallen 18% to $14.026 billion and EBITDA - 43% to $5.859 billion.
Norilsk Nickel said revenue from metal sales fell 26% last year to $11.799 billion, due mainly to the drop in nickel prices and lower metal sales in tonnage.
Nickel sales fell 40% to $6.081 billion and copper sales fell 2% to $2.893 billion.
Palladium sales fell 3% to $1.282 billion, due mainly to a 7% drop in revenue from sales of palladium produced in Russia and lower sales in tonnage.
Platinum sales grew, by 12% to $1.42 billion, but gold sales fell 17% to $123 million.
Operating costs grew to $4.41 billion in 2008, from $3.817 billion in 2007.
Loans decreased by $1.632 billion during 2008 to $6.44 billion, including $872 million in short term loans. Most repayments on these loans come due in 2010-2012, the financial report says.
The board of directors at MMC Norilsk Nickel on May 21 recommended that shareholders vote to waive dividends for 2008 at their annual general meeting and "support management's conservative policy on this issue," the company said in a May 21 statement.
Norilsk Nickel paid out a total of 21.35 billion rubles in dividends for 2007, or 220 rubles per share (factoring in interim payments of 108 rubles per share for the first nine months of the year), which is 25% more than the 176 rubles per share the company paid for 2006 (also including interim payments).
The board approved the agenda for the company's annual general meeting on June 30. The agenda will include standard items.
In addition, the board recommended that shareholders elect two independent candidates to the new board - Lonmin Plc CEO Bradford Mills and Rockbury Services Inc. consultant Gerard Holden.
The board also decided to increase the number of members on the company's management board to nine. Yevgeny Muravyov, a new member of the management board, will assume the post of general director of subsidiary Kola MMC on May 26, 2009, Norilsk said.
TOP STORIES
Russian steel companies could benefit as customs lets less scrap metal abroad
MOSCOW. (Interfax) - Russian steel companies stand to benefit from a drastic reduction in scrap metal exports this year as the customs infrastructure needed to handle these shipments shrinks.
Scrap exports could fall to 4 million tonnes this year, from 7 million tonnes in 2008, now that the Federal Customs Service (FCS) has ordered a reduction in the number of customs offices specializing in scrap metal to ten, Oleg Maslennikov, marketing director at Steelway Limited Company, told Interfax.
Maslennikov said iron and steel scrap was currently trading at 4,000-4,500 rubles a tonne in Russia, but could range from 4,000 to 5,500 rubles in Q3 as the construction season peaks and demand for scrap from other sectors strengthens.
Russia started to export large amounts of scrap when customs duties were lifted back in 1997. The Far East was hit particularly hard as scrap is hard to come by there and the extensive Southeast Asian export market is not far away.
Amurmetall, the region's only steel works, has had to ship scrap metal in from East and West Siberia in recent months and the cost of transporting this over such distances has to be added on. At the same time, scrap sourced in the Amur region and Khabarovsk territory has been shipped abroad.
"Customs restrictions on scrap exports are normal safeguard, which are adopted by any country that cares about its own strategic interests. Steel makers will continue to campaign for tight regulation over scrap exports in the Far East, and they'll be seeking a ban on scrap exports not just via local customs houses," Sergei Khokhlov, general director of Amurmetall Management Company, has said.
The Far Eastern port of Petropavlovsk-Kamchatsky is one of the ten customs depots specializing in scrap that have survived since March 30 this year. The others are located in Novomoskovsk (central), Gavan, Kaliningrad and Murmansk (northwest), Rechnoi and Taganrog (south), Samara (Volga), Chelyabinsk (Urals) and Krasnoyarsk (Siberia).
PRECIOUS METALS
Prokhorov re-elected as Polyus Gold board chairman
MOSCOW. (Interfax) - The new board of directors at Polyus Gold re-elected Mikhail Prokhorov, chairman of the Onexim Group, as its chairman at its first meeting on May 27, the No.1 Russian gold producer said.
The new board itself was elected at Polyus Gold's AGM on May 15.
PRECIOUS METALS
Prokhorov to pay tax in Krasnoyarsk, not Moscow
KRASNOYARSK. (Interfax) - Mikhail Prokhorov, the billionaire co-owner of Polyus Gold and [president of the Onexim Group, has changed his official address from Moscow to a location in the Krasnoyarsk territory, where the No. 1 Russian gold producer's main production assets are located.
Mikhail Razvozhayev, spokesman for the Krasnoyarsk territory's governor, told Interfax on May 22 that Prokhorov would officially be a resident of the settlement of Yeruda in the Krasnoyarsk territory's Severo-Yeniseisk (North Yenisei) district. "We learned about this literally a few days ago. It interests...
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