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Russian metals producer Nornickel said on Friday it would spin off its stake in the Bystrinsky copper and gold mine and distribute it among its own shareholders.
Nornickel owns a 50% stake in the mine, which is about 90 km (55 miles) from the Chinese border in the Siberian region of Chita. Another 36.7% of the mine belongs to Nornickel’s largest shareholder and chief executive Vladimir Potanin. Chinese Highland Fund owns the remaining 13.3% stake.
The spin-off is subject to regulatory and corporate approvals and is expected to take two years, Nornickel said in a statement.
The mine currently produces concentrates of copper, gold and iron ore. It fully ramped-up its production around a year ago and generated $717 million in core earnings, known as EBITDA, in 2020.
Nornickel, the world’s largest palladium producer and one of the leading nickel producers, has been considering a possible initial public offering (IPO) of a firm running the Bystrinsky mine for a couple of years.
Potanin and aluminium producer Rusal own 34.6% and 27.8% in Nornickel, respectively.
“We welcome the decision of our major shareholders to support the spin-off of the Bystrinsky project,” Potanin said in a statement.
“The possible Bystrinsky spin-off is a logical continuation of the development of this project, which has significant potential,” Rusal’s deputy chief executive, Maxim Poletaev, said in a separate statement.
(By Polina Devitt; Editing by Louise Heavens and Andrew Heavens)
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