SMM11, March 27: it was recently reported that Russian businessman Vladimir Potanin, Norilsk's largest shareholder, said on Wednesday that he might increase his stake in the Russian mining giant if he had the opportunity. Potanin currently owns 34.6 per cent of Nornickel, the world's largest palladium producer, with a market capitalisation of US $43.6 billion, and the world's largest nickel producer, along with Brazil's Vale.
"I've always said that Norilsk Nickel's shares are an attractive investment for me, and of course, I'll increase my holdings on a case-by-case basis," Potanin said. Of course, if this happens in the next few months, I will allocate some of my capital to increase my shares. "
He added that Nornickel could decide on a possible initial public offering of (IPO) by the company that will launch its Bystrinsky project in the third quarter of 2020. The project, located in the far East of Russia near the Chinese border, went into production on its copper, iron and gold mines in 2017. The mine will reach full capacity by mid-2020 and is likely to have an initial public offering no earlier than the end of 2020.
Nornickel said on Monday that it would cut dividends for 2023-2025 as its annual capital expenditure peaked at $3.50 to $4 billion in 2022-2025. Potanin has been a supporter of the cut, while EN +, which owns nearly 28 per cent of Nornickel through aluminium giant (Rusal) of Russia, said the plan needed to be scrutinized because reliable dividends were crucial to shareholders.
Potanin said that Nornickel's dividend formula may be discussed in the future. "some shareholders believe that the dividend formula should be linked to EBITDA, while others believe that it should be linked to free cash flow." Our company procedures are well established to address this issue without entering the conflict zone. "
Nornickel's current investment plan does not take into account the Arctic Palladium project, a joint venture with Russian businessman Musa Bazhaev, which will cost $28 to $3.2 billion by 2024. Bazhaev said Bazaev, Russia's RDIF sovereign wealth fund, and VTB Bank were seeking partners in the project from the Middle East. Kirill Dmitriev, head of RDIF, said on the sidelines of the same meeting that investors from the United Arab Emirates and Saudi Arabia were particularly interested in the project.
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