Russia’s Norilsk Nickel to sell Australian, African assets Sep-Dec

MOSCOW, Aug 29 (PRIME) -- Russian metals giant Norilsk Nickel plans to sell Australia’s nickel producer Lake Johnston and two African companies Nkomati and Tati in September-December, Sergei Malyshev, deputy CEO for economy and finance, said late Thursday in a conference call.

The talks on selling Lake Johnston, suspended in March-May 2013, “are now being finalized,” while the company is still in talks to sell Nkomati and Tati. “I hope we will inform you about the results of the deals in September-December,” Malyshev said.

Norilsk Nickel does not plan to speed up the sale of a large non-core asset – a 13% stake in power holding Inter RAO. “We can use the option within 1.5 years. We do not want to depend on market restrictions, which can affect the price of the deal,” Malyshev added.

He also said the company sees no reason in buying its bonds from the market. “We’ve considered the possibility, but our bonds’ price is high and it rarely falls, so there could only be a minor effect on the company from the purchase. This is our conclusion and a result of consultations with banks.”

Last year Norilsk Nickel placed two bond issues: 5-year bonds worth U.S. $750 million and 7-year bonds worth $1 billion.

The Bystrinsky plant, whose launch is scheduled for 2018, will produce 65,800 tonnes of copper concentrate, 6.86 tonnes of gold concentrate, and 2.1 million tonnes of iron concentrate annually. The reserves of the Bystrinsky deposit amount to about 292 million tonnes of ore, containing 2 million tonnes of copper, 236 tonnes of gold, 1,060 tonnes of silver, and 67,700 million tonnes of iron. Investments in the plant stand at 10 billion rubles in 2014 only.

Norilsk Nickel plans to coordinate project financing of the Bystrinsky plant construction “with one of the largest state-owned banks” till the end of the year. The company also plans to diversify financial sources and decrease the plant’s cost by attracting other partners, including Chinese banks.

Vladimir Zhukov, the company’s investor relations head, said Norilsk plans to keep its 2015 capital expenditures (capex) forecast at $2.5 billion. “For now we keep the forecast for 2015 – $2 billion of main capex and $500 million of capex for the Chita project (of constructing Bystrinsky plant) and everything connected with closing a nickel plant,” he said.

Zhukov said that considering the country’s set zero export duties for nickel and copper, the company plans to finance the closure of outdated production lines in Norilsk using 11.5 billion rubles of the windfall funds.

(36.3053 rubles – U.S. $1)

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