https://www.miningweekly.com

Potanin says sanctions constrain Nornickel, force it to adjust strategy

23rd January 2023

By: Reuters

  

Font size: - +

Nornickel boss Vladimir Potanin, one of Russia’s richest men, said on Monday that the metals giant was reworking its strategy and building closer ties with countries such as China, Turkey and Morocco because of Western sanctions on the Russian economy.

Potanin told Russia’s RBC television that the impact of sanctions "does not directly affect the life of the company, its survival, but of course it limits its capabilities, including financial ones, and development of those markets in which it has traditionally been present."

"Keeping them is more difficult, and new ones are expensive to win. We have to deal with all this," added Potanin, who is Nornickel's chief executive and biggest shareholder, owning 36% through his Interros holding group.

Potanin’s comments provided a rare acknowledgement of how Western sanctions over the war in Ukraine are affecting a company of strategic importance to the Russian economy and to global metals markets – even though Nornickel itself is not directly targeted by the measures.

Western governments have refrained from hitting Nornickel, mindful of the disruption to aluminium markets after Potanin's rival Oleg Deripaska and his Rusal group were sanctioned in 2018.

Potanin said his company, the world’s biggest producer of palladium and refined nickel, was nevertheless affected by the "completely destructive" sanctions because of the impact on logistic chains, payment systems and the ability to purchase new equipment.

Nornickel's plans to expand into other markets had been disrupted, he said, forcing it to focus its investment policy on Russia and friendly countries.

"Naturally, we find ways out of this situation. We are restructuring logistics chains to more friendly countries. First of all, to China, Turkey, Morocco and other Arab countries," he said.

Potanin reiterated the view he stated soon after the war began, that Russia should not respond to sanctions by confiscating or nationalising Western assets.

"If some companies leave our country, then instead of applying some kind of confiscation and other harsh measures to them, it is much easier to give the investment community the opportunity to solve this problem on its own," he said.

"The panic exodus of foreign companies from our market led to the fact that such companies could be acquired by domestic investors on very attractive terms," added Potanin, who himself clinched several deals in the early weeks of the war, including the purchase of Rosbank from French lender Societe Generale.

Potanin was placed on a US sanctions list last month as part of wider measures targeting people and businesses close to President Vladimir Putin. He had already been targeted by Britain and Canada.

Edited by Reuters

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION