Nornickel plans to increase employee stake in mining giant, major shareholder says

Nornickel plans to increase employee stake in mining giant, major shareholder says

MOSCOW (Reuters) – The Russian company’s largest shareholder, Vladimir Potanin, said the company intends to increase the equity stakes of employees and other individuals to make up a combined 25% of the company, up from 10% now.

Nornickel, the world’s largest producer of refined palladium and nickel, was one of the post-Soviet prizes for Russian industry in the 1990s, and currently employs 72,000 people.

“When Norilsk Nickel (Nornickel) was privatized, about 25% of the shares were owned by employees,” Potanin said in an interview broadcast on Saturday. “I would like to restore this historical justice and make sure that 25% of Nornickel’s shares are returned to the people, including employees.”

Potanin said the change will be incorporated into a 10-year program called the โ€œDigital Investorโ€ that will start in 2023, and will include digital financial assets and lockout periods. He did not elaborate on the plan or how to increase stock holdings.

Potanin’s company, Interros, owns 36% of Nornickel.

Aluminum producer Rusal, which owns 26% of the company, did not immediately respond to a Reuters request for comment.

Potanin in July floated the idea of โ€‹โ€‹a $60 billion Nornkle-Rusal merger as a way to mitigate potential sanctions risks, but said on Saturday that the idea had been put on hold.

“I think the idea is still interesting, and it’s still alive, but we have to postpone it to a later time, when our colleagues are ready to talk about it,” Potanin said.

He also said that a 10-year shareholder agreement to protect Nornickel’s dividend payments was on track to expire at the end of 2022.

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The agreement ended a dispute between Interross and Rusal in 2012. Sources told Reuters earlier this month that there were no talks to renew the agreement.

Potanin also said that Nornickel was preparing to reorient itself further towards Asian markets, to guard against any change in Western sanctions policy or clients trying to “slide our arms”.

Western sanctions against Moscow have not directly targeted Nornickel since it sent thousands of troops to Ukraine on February 24.

โ€œSome of our partners are trying to revise the terms of the existing contracts in their favor, trying to reduce the volume of purchases for the coming period, impose some kind of self-punishment on themselves, and move away from goods of Russian origin as much as Potanin said.

He added that in the first seven months of this year, Europe accounted for the usual 50% of Nornickel sales and the United States about 20%.

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