Norilsk Nickel to cut 2012 budget 10% to 95 bln rubles - Strzhalkovsky
MOSCOW. Sept 24 (Interfax) - OJSC Norilsk Nickel will be cutting its budget for this year by 10% to 95 billion rubles, company chief Vladimir Strzhalkovsky said during an interview given to Interfax.
The board of directors will look at proposals to curtail the investment program at a meeting on September 27, the mining and smelting giant said on Friday.
Norilsk Nickel asked management in June to draft proposals to curtail operating and investment expenditure in the event of a severe downturn in the market situation. UC Rusal, a Norilsk Nickel shareholder, suggested reducing expenditure and adjusting the company's strategy.
Vladimir Strzhalkovsky, in response to a proposal by Maxim Sokov, a board member representing UC Rusal, has warned against radical initiatives to cut expenditures on investment and current operations.
Strzhalkovsky proposed that the board authorize management to draft proposals to reduce investment in 2013. He believes that, based on the results of 2012, it is possible to assess whether the company's strategy should be adjusted taking into account the current market situation and the outlook for the global mining and metals sector. A draft of such changes could be reviewed by the board's strategy committee.
Norilsk Nickel has not disclosed the scale of its investment program for 2013. The 2012 investment program for the company's Russian assets exceeds $3 billion and focuses on the development of mining, enrichment and smelting. The company planned to invest $10 million in its foreign assets in 2012.
Norilsk Nickel's development strategy for the period to 2025 calls for investments of $37 billion, including $4 billion in gas assets to 2025, $1.1 billion for the Bystrinskoye deposit to 2016, and about 2 billion rubles in cobalt production to 2014. Norilsk Nickel also estimated that the development of nickel deposits in the Voronezh Region would cost 50 billion rubles, but the company lost a tender for the licenses to these deposits to Ural Mining and Metallurgical Company in May.