VTB might provide Norilsk Nickel up to $1 bln for Bystrinskoye field, receive 25% in project
MOSCOW. May 18 (Interfax) - VTB might provide MMC Norilsk Nickel with $1 billion in project financing to develop the Bystrinskoye gold and copper field in Zabaykalsky territory, Norilsk Nickel First Deputy CEO and Executive Director Pavel Fyodorov told reporters.
"We received VTB's proposal on providing project financing for up to $1 billion. This concerns a medium-term loan," he said.
Norilsk Nickel is also in ongoing talks with Vnesheconombank (VEB) on long-term project financing. "We are hoping that the talks with VEB will be successful in one way or another in the coming quarter. We have nonetheless gotten the green light from VTB to move forward with carrying out this project today on the basis of project financing," Fyodorov added.
The deal with VTB might also include the bank acquiring an option for 25% of the project company, he said. The board of directors will consider this over the next few weeks.
"We also are in talks at a rather advanced stage with investors from the target market on acquiring minority stake. We're also hoping to bring this project closer to the Asian market. Norilsk Nickel has also confirmed its strategic interest in remaining the operator and will consolidate this in our results," Fyodorov noted.
Norilsk Nickel is planning to sell concentrate from Bystrinskoye without building metallurgical facilities, he said. "The Bystrinskoye project is a good illustration of the fact that at every stage of the process we are considering the optimal way of to sell products. We don't need to build metallurgical facilities here, but selling concentrate makes sense," Fyodorov noted.
Norilsk Nickel is preparing to commission the Bystrinsky mining and processing complex in 2017. Capex was previously estimated at $1 billion.
"In Zabaykalsky territory, we have also acquired new licenses - three licenses at the Shakhtaminskaya and Chingitanskaya locations with very significant resource potential of over 6.5 million tonnes of copper. This is an early estimate, but given the potential of the entire cluster, we are talking about this project being of the same caliber as some of the largest projects of the copper industry," he said.