Norilsk Nickel creating Global Palladium Fund, limit $200 mln
MOSCOW. Feb 2 (Interfax) - MMC Norilsk Nickel has decided to establish Global Palladium Fund L.P., setting its financing commitment at up to $200 million for potential transactions, the Arctic mining and smelting giant said in a press release.
"Global Palladium Fund L.P. is a new initiative aimed at the strategic palladium market. The strategic objective of the Fund is to create a financial platform for cooperation with major holders of existing palladium stockpile, promotion of the industrial demand for the metal, reduction of overall volatility of the palladium market, and strengthening of the company's leading position in the global palladium industry," Norilsk Nickel said.
The board of directors approved the participation of Norilsk Nickel (Cyprus) Limited in Global Palladium Fund L.P. The subsidiary's charter capital will be increased and Norilsk Nickel will buy supplementary shares in the subsidiary.
Norilsk Nickel said several years ago that it and foreign banks and ETFs intended to form a global palladium fund.
Interros owner and Norilsk Nickel CEO Vladimir Potanin said last spring that Interros may invest $100 million-$200 million in a palladium fund. For its part, Norilsk Nickel may invest $200 million-$350 million in the palladium fund, Potanin said. Firms controlled by Roman Abramovich, which own 5.9% of Norilsk Nickel million are also showing interest, he said, without specifying their potential volume of investment.
The bulk of the palladium fund will consist of stocks Norilsk Nickel wants to buy from the Central Bank of Russia. The organizers will purchase the remainder from others that have large inventories of the metal. Norilsk Nickel planned to buy palladium from the Central Bank for the fund in order to guarantee the availability of stock for long-term customers. The Central Bank has not disclosed how much palladium it holds. Aside from cash, the bank may accept platinum in exchange for palladium.