Mining

Alrosa to Hold an IPO Next Year

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Oct. 6 – Alrosa, the world’s largest diamond-mining company, may hold an initial public offering next year that could value the company at between US$7.3 billion to US$9 billion, Vedomosti reports, citing an unidentified company official.

The company may only conduct an IPO after it is converted from a closed joint stock company into an open one, which will require amendments to legislation in Sakha Yakutia Republic in Russian North, where the company is based.

The Republican parliament Il Tumen may approve the necessary amendment during its session in Yakutsk city today. Continue reading…

Russia’s Gold Miners Want More Foreign Investors

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Oct. 1 – Gold miners asked the Russian government to raise its threshold for strategic gold deposits to boost national reserves and production mining, executives said Thursday at the sixth Russia-CIS Mining and Exploration Forum 2010.

Fields with more than 50 metric tons of gold are considered strategic, requiring extra government approvals. The government should raise the 50 ton cap threshold fivefold from 50 tons to 250 tons, conference participants believe. Continue reading…

Canada’s Kinross to Buy Gold and Silver Deposits in Chukotka

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Sept. 8 – Canada’s Kinross Gold Corporation has purchased one of Russia’s largest gold and silver ore deposits in the Chukotka region of the Russian Far East, company press release stated.

Kinross plans to process ore from the Dvoinoye deposit at the existing Kupol mill, pursuant to an ore purchase agreement with Kinross’ 75 percent owned Chukotka Mining and Geological Company. Continue reading…

Indian Iron-Ore Producer to Enter Russian Coal Market

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Jul. 14 – Indian state-owned iron-ore producer, NMDC Ltd., is in negotiations to purchase four coal mines in Sakha-Yakutia from coal company Kolmar.

NMDC is Asia’s third-largest iron-ore producer while Kolmar is owned by the Onexim Group-affiliated mining and exploration company, Intergeo. Talks to buy the Kolmar mines, which have reserves of about 400 million metric tons, are likely to be completed by December, NMDC Finance Director Swaminathan Thiagarajan told Bloomberg. Continue reading…

Russia Sells Uranium Shares to Kazakhstan

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Jul. 6 – Russia is selling 20 percent to 50 percent of its shares in the world’s largest uranium producer, Uralsk Electrochemical Industrial Complex (UEIC), to Kazakhstan in exchange for raw materials for the state-owned company.

The deal was formalized and signed on Monday by the Russian state nuclear energy corporation Rosatom and the Kazakhstani national atomic company Kazatomprom. Almost 50 percent of all Russian uranium is enriched by the Rosatom-controlled UEIC. According to a Rosatom official, Kazakhstan is interested in a 30 percent stake at UEIC that will allow them to enrich around 6,000 tons of uranium annually.  “Rosatom very much interesting in Kazakhstani uranium mining companies.” Continue reading…

Chinese Companies Look to Fund Russian Mining Railroad

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May 31 – China Railway Materials Commercial Corp. and SUYU Railroad Material Co. could get involved in funding a railroad branch line to be constructed to the Ozernoye mining site in the Buryat Republic of Russia.

Conditions of the financing agreement state that the owner of the deposit IFC Metropol will buy construction equipment, railroad cars and locomotives from China. Chinese rail accessories and rolling stocks are several times cheaper than their domestic counterparts, but certificate barriers have prevented Russians from purchasing these in the past. Metropol may now become the very first to bring Chinese manufactured technical equipment to the Russian market, but experts believe that it would be hard to break state resistance. Continue reading…

Russia Gold Producer Polimetall Rakes in First Profit in Three Years

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May 11 – Leading Russian gold and silver producer Polimetall has registered profits for the first time in three years, announcing a US$96 million net income in 2009.

The company’s growth has been brought around by favorable gold prices. According the company’s press release, the company made US$96 million net income in 2009 compared to a loss of US$15.7 billion in 2008. Continue reading…

Foreign Investment Commission Approves Plant, Oil and Gold Mine Deals

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Apr. 14 – Prime Minister Vladimir Putin and the government’s foreign investment commission on Tuesday approved a deal to sell a private insulin plant to Europe’s biggest drug maker, France-based Sanofi-Aventis.

The plant was bought in Oct 2009 from Bioton Vostok in Oryol region of Russian Federation which lies in 382 kilometers to the south of Moscow, in the European part of Russia.

Putin singled out the planned French investment as particularly noteworthy. “Among these, I want to point out one project that is not big but is significant, in my view,” he said, referring to Sanofi’s intention to buy 74 percent of the Bioton Vostok plant in Oryol. Continue reading…

Russian Judicial Loophole May Hamper Foreign Transactions

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Apr. 2 – Any deal to buy a strategic enterprise by a Russian company that has foreign daughter companies may be declared null and void. Blame the broad interpretation by the Federal Anti-Monopoly Service and the courts for their elastic notion of what constitutes a group of persons. Even major Gazprom deals could be contested.

In April 2008, a law on foreign investment in strategic sectors of Russia’s economy entered into force. It applies to foreign investors and groups of persons who seek to buy shares in Russian companies operating in 42 strategic sectors including the oil industry, telecommunications, defense, space industry, and so on.

If you follow the law scrupulously, even domestic companies that have foreign subsidiaries, such as offshore, could be considered a group of persons. It turns out that any deals over they have made over the last two years should have been done with consent of permission from the government commission or else be declared null and void. Continue reading…

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