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March 3 (Bloomberg) -- OAO GMK Norilsk Nickel, Russia’s biggest mining company, will end a four-year exploration joint
venture with Rio Tinto Group and review a similar accord with BHP Billiton Ltd. as it focuses on existing projects.
     “We’re exiting the venture with Rio,” Deputy Chief Executive Officer Oleg Pivovarchuk said in an interview yesterday in Moscow. “We have enough of our local concerns.”
     The venture with London-based Rio was established in 2006 to explore for iron-ore and copper in Siberia. Since then, the
government has curbed foreign companies’ access to the country’s natural resources, Moscow-based Norilsk’s management was
replaced following a shareholder dispute, and the company’s earnings shrank as commodity prices plunged.
     “Norilsk has significantly cut its investments with the crisis and new projects are not on the agenda,” said Denis
Nushtaev, an analyst at Metropol, a brokerage in Moscow. “They want to focus on modernizing their home facilities, which are
not in the most up-to-date shape.”
     Rio and Norilsk are in discussions about the future of their venture, said Nick Cobban, a spokesman for Rio in London.
     Norilsk, the world’s biggest producer of nickel, is focusing on the development of mines close to its main Arctic
operations, which are located on the Kola peninsula and in the Taimyr region, Pivovarchuk said.
     The Syradasaiskoye coal deposit in the Arctic, which is being explored in a venture with Melbourne-based BHP, is under
review because the project “lacks prospects in the short-term,” he said.

                         Diamond Search

     Norilsk had planned to explore with BHP for nickel in the Krasnoyarsk region in Russia’s north, for diamonds in the
Murmansk and Arkhangelsk regions, and to examine Syradasaiskoye.
A lack of infrastructure and the “massive” investment needed to develop the coal field have delayed work indefinitely on the
projects, Pivovarchuk said.
     Illtud Harri, a spokesman for BHP in London, declined to comment.
     Separately, Norilsk has no current plans to reactivate its Australian assets, mothballed last year after an earlier plunge
in nickel prices, Pivovarchuk said. The assets have a breakeven point of between $20,000 and $24,000 per metric ton, he said.
Nickel has averaged $19,036 per ton this year in London.
     “We’ll be looking at some new ways” to operate the assets in Australia, Pivovarchuk said. “The issue needs serious
study.”
     Instead, Norilsk plans to start exploration near its Botswana operations, where its deposits have as few as five
years of mining life left, Pivovarchuk said. It expects results from exploration in Cuba by the end of the year, he said.
     Norilsk is also making an “extra effort” to promote the use of palladium, where it accounts for half of the world’s
supply, Pivovarchuk said. The company is also starting to offer more high-value products such as nickel salts and nickel powder
for use in nanotechnology industries, he said.