Rusal acquires 25 per cent stake in Norilsk

25 April 2008

The ongoing battle between two oligarchs for control of one of the country's largest mining companies took a fresh twist when the world's largest aluminium company, Rusal, said it had bought a 25 per cent stake plus one share in the world's leading producer of nickel and palladium Norilsk Nickel, paving the way for the creation of a Russian mining giant headed by the country's richest man, Oleg Deripaska.

After the collapse of Communism and the breakup of the erstwhile USSR, many of the state's more expensive assets were sold at throwaway prices to a select few, who quickly  became billionaires. These oligarchs are  among the richest in the world, and wield enormous influence within the  Russian state.

United Company (UC) Rusal is the world's largest aluminium company, accounting for almost 12.5 per cent of the entire global output of primary aluminium and 16 per cent of the world's alumina production. The company operates in 17 countries on 5 continents and employs 100,000 people across its international operations and offices.

The company is not traded publicly but analysts estimate its value, post the latest acquisition, at $45 billion. Rusal is controlled by Russian billionaire Oleg Vladimirovich Deripaska, the richest man in Russia today with an estimated fortune of $28.6 billion.

MMC Norilsk Nickel is the world's leading producer of nickel and palladium and is Russia's leading gold producer. It also ranks among the first four platinum producers and top ten copper producers in the world. Its operations account for as much as 1.5 per cent of Russia's gross domestic product (GDP). 

Production assets of the company are located in Russia, Australia, Botswana, Finland, South Africa and the United States. The shares of MMC Norilsk Nickel are traded on MICEX and RTS in Russia, and the company's ADRs are traded in London, New York and Berlin. The current market capitalization of Norilsk is around $55.7 billion.