THE head of Russian mining giant Nornickel, Vladimir Potanin, has said he is ready to discuss a merger with aluminium group Rusal to create a juggernaut capable of resisting the effects of Western sanctions, according to an interview published today.

“I sent a letter (Monday) in which I indicated our agreement to start the discussion process for a merger with the Rusal group,” he told Russian business paper RBK.

According to Potanin, it would be possible to create a “national champion” in metals capable of facing ecological challenges in a very polluting industry, as well as broadening the shareholder base and “acquiring the capacity to resist sanctions.”

The proposal comes as a deal between major Nornickel shareholders expires in January 2023.

Potanin had always opposed a merger of the world leader in nickel and palladium with the aluminium giant in a context of a conflict with Rusal, which already owns 25.25% of Nornickel. 

But both companies are affected by Western sanctions targeting Russia over its military campaign in Ukraine.

Potanin has also been hit by UK sanctions.

A large number of key Russian companies are facing serious problems in the supply of equipment and spare parts, the sale of which to Russia has been banned.

They are also struggling to import or export, as international logistics and financial chains have been partially paralysed by retaliatory measures imposed by Europe and the United States. – AFP, July 5, 2022.