Chinese investor waives preferential right to 39% of Bystrinksy project, will buy 2.66%
MOSCOW. March 16 (Interfax) - China's Highland Fund has waived its preferential right to buy a 39% stake in the Bystrinsky project, MMC Norilsk Nickel's (Nornickel) CFO, Sergei Malyshev, said on a conference call.
The Chinese investor will, though, exercise an option on the remaining 2.66% of the 13.3% stake it has agreed to buy in the project.
Nornickel said at the end of January that its board of directors had approved the sale of up to 39.32% in the Bystrinsky project to CIS Natural Resources, a fund founded by Vladimir Potanin's Interros Group and Grigory Berezkin's ESN Group for investment in resource development projects. Highland Fund had right of first refusal to acquire 39.32%, and closure of the deal would depend whether this right was exercised.
"Now we'll be waiting for the reaction of the consortium [CIS Natural Resources] regarding its offer to buy the stake," Malyshev said. The outcome "will be clear before the end of the year," he said.
Highland Fund also has an option on a 2.66% stake in the project and has decided to exercise this, he said. "They'll be closing the deal, they are quite ready to and are waiting for clearance from the anti-monopoly bodies," Malyshev said.
Nornickel said in December 2015 that it had reached agreement to sell 13.3% of the project to Highland Fund. The deal was closed in June 2016 following approval by the government's foreign investment commission. The deal was worth $100 million, based on a project valuation of $730 million, but Highland Fund only paid for 10.67%.
Reports have said Nornickel planned to launch the Bystrinsky mine and processing plant in the Trans-Baikal territory in 2017. With a processing plant with capacity for 10 million tonnes, the project will be able to produce 66,000 tonnes of copper concentrate, 3.1 million tonnes of iron ore concentrate and 219,000 ounces of gold equivalent. The mine life is over 30 years. Capital expenditures on the project will total $1.6 billion.
