Norilsk Nickel may reduce 2015 capex target on devaluation effect - Potanin
MOSCOW. March 23 (Interfax) - Norilsk Nickel may be able to reduce its capital expenditure target in 2015 due to the ruble's devaluation against the dollar, Interros CEO Vladimir Potanin said at a meeting with President Vladimir Putin.
Norilsk Nickel will invest a total of about $2 billion in 2015, Potanin said [the official figure is 105 billion rubles; $2 billion is the annual limit stipulated in the company's shareholder agreement].
"The plan is being refined, because due to the change in the ruble/dollar exchange rate our previous investment volume has become a little cheaper for us. Therefore, this sum could decline," Potanin said.
"We are continuing to increase the pace of our investment and using about two billion a year on average, investing in modernization," he said.
The metals giant is currently investing in modernization of production in order to improve the environmental situation around the city of Norilsk. "We expect in the next five-seven years to reduce harmful emissions 95% and finally rid the air in Norilsk of all the pollution and its bad health effects," Potanin said.
Norilsk Nickel is working to cope with projects in Taimyr and the Transbaikal territory independently, without having to resort to budget money, he said.
"Wherever we are able to manage with our own efforts, we are trying not to resort to regional or federal money," he said.
One example is the situation with the electricity transmission line to the Bystrinsky GOK in Transbaikal, which Federal Grid Co did not have enough money to complete. "We will build this transmission line to the Bystrinsky enrichment plant on our own. In accordance with your instruction, FGC is to subsequently purchase it, but for the time being we are building it ourselves," Potanin said.
"Some projects that it was assumed previously would be completed by state organizations, such as, for example, construction of fiber-optic lines under the program to eliminate the digital divide, we have taken upon ourselves, understanding that this is a burden our company can bear, we can carry it out on our own for the time being," he said.
In addition, "having seen that the territorial budget is experiencing certain difficulties with financing various programs, Norilsk Nickel is moving up payment of its profit taxes in order to stabilize the situation in the region," he said.
Norilsk Nickel is not reducing investment in the social area in the Norilsk industrial district, he said. "We continue work to complete sports facilities, to renovate and rebuild them, to send residents of Norilsk on vacations with subsidized airfares," he said.
