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Norilsk Will Focus on Acquisitions Abroad as World Crisis Ends
2010-08-05 13:12:48.988 GMT

By Yuriy Humber
     Aug. 5 (Bloomberg) -- OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, will shift its focus to buying
assets outside of Russia as the global economic crisis ends, Chief Executive Officer Vladimir Strzhalkovsky said.
     “The crisis will be ending soon and the company needs to pay more attention to its global strategy” including buying and
selling assets, Strzhalkovsky said in Moscow today after signing a joint venture accord with South African President Jacob Zuma, who is visiting the city with a delegation.
     The venture with South African state companies will produce metals in which Norilsk has experience, the CEO said. Russia’s biggest miner has identified which African and Australian assets it will sell to raise cash for more attractive sites, he said.
     Norilsk has lagged behind rivals in acquisitions since 2007 as its two biggest owners, billionaire Vladimir Potanin and Oleg Deripaska’s United Co. Rusal, wrestle for control. The company hasn’t completed any major mining acquisitions in that period,
while London-based Rio Tinto Group, the world’s third-largest mine operator, has invested about $50 billion.
     Norilsk, which can extract more than 10 metals from the nickel-rich ore of its two main units above the Arctic Circle, this week appointed Andrey Klishas, who worked for Potanin for more than a decade, to oversee strategy and acquisitions.
     The appointment was “an open insult to Deripaska” and may point to the shareholder conflict ending “rather sooner than later with the likely outcome of Deripaska being paid off,” Luis Saenz, London-based director of international sales at Otkritie Securities Ltd., wrote in a note to investors Aug. 3.

                          Buyout Help

     Strzhalkovsky said the company is ready to help a group of investors buy out one of its major shareholders to end the conflict if that option becomes available. Norilsk may use some of the shares from a buyout for later transactions, he said.
     “We’re not actively working on a buyout,” Strzhalkovsky said. “But if the idea of forming a pool of investors arises we can take part” in the process, he said.
     Potanin’s Interros Holding Co., which owns at least 25 percent of Norilsk, said yesterday it was interested in raising its stake. That follows Deripaska’s July 30 offer to buy out Potanin’s shares and install new management at Norilsk.
     Strzhalkovsky confirmed a report from state-run RIA Novosti that Russian President Dmitry Medvedev ordered the General Prosecutor’s Office to review the shareholders’ dispute.

For Related News and Information:
Top Russia news: TOP RUS <GO>
Rusal stories 486 HK <Equity> CN <GO>
Norilsk share performance GMKN RX <EQUITY> GP D <GO>
Global commodity prices, data GLCO <GO>
Today’s top commodity news CTOP <GO>

--Editors: Tony Barrett, Claudia Carpenter

To contact the reporter on this story:
Yuriy Humber in Moscow at +7-495-771-7743 or
yhumber@bloomberg.net

To contact the editor responsible for this story:
Amanda Jordan at +44-20-7673-2144 or
ajordan11@bloomberg.net.