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21 oct. 2008 04:57	Polymetal Cuts Forecast for Silver Output
Polymetal, the country's largest silver miner, cut its forecast for output of the metal on Monday because of a rapid fall in its price and said it would consider revising its investment plan for 2009. The company said its new Albazino-Amursk project in the Far East would take priority when allocating next year's investment budget, although the expansion of its existing Dukat and Vorontsovskoye mines was on track. "Polymetal is reviewing exploration and maintenance capital spending for 2009 to ensure adequate capital availability for Albazino-Amursk as the priority project," the company said. Polymetal cuts its 2008 silver output forecast to between 16.5 million and 17.5 million ounces from a previous estimate of 17.7 million ounces. Its share price fell 7.5 percent, underperforming the MICEX bourse's metals and mining index, which was down 3.6 percent. "If the price falls roughly below $8.50, with all other costs being equal, we will probably take out some high-cost parts of both the Lunnoye and Dukat underground projects from our mining plan," chief executive Vitaly Nesis said.        The Moscow Times
20 oct. 2008 05:27	Norilsk Stops Work at Mine
Norilsk Nickel said Friday that it halted operations at its Cawse mine and ore processing plant in Western Australia as costs rise. Norilsk said it might sell the unit. The decision does not affect Norilsk's other Australian nickel operations at Black Swan, Lake Johnston and Waterloo, which continue to perform well, the company said.       Bloomberg
20 oct. 2008 05:23	Carlyle Sues NLMK Over $3.4Bln Deal
The Carlyle Group is suing steelmaker NLMK to force it to complete a $3.5 billion deal to buy U.S. tubular steel maker John Maneely, one of Russia's biggest merger deals this year. Both sides confirmed in e-mails on Saturday that the suit had been filed and that the deal was not closed. In an Oct. 15 filing with the U.S. District Court for the Southern District of New York, lawyers for DBO Holdings -- a unit of Carlyle -- filed suit against NLMK demanding that NLMK complete the deal and pay damages for backing out of the deal. "In a series of meetings and telephone calls with the company, which occurred between Oct. 2 and Oct. 15, NLMK's authorized representatives stated that changed financial market conditions warranted a reduction in the purchase price or a significant restructuring of the merger transaction," the Carlyle unit's filing said. "During these meetings, NLMK's authorized representatives indicated that NLMK repudiated the merger agreement." For its part, NLMK said in a statement, "There have been disagreements concerning the rights and obligations of the parties under the merger agreement, and at this time NLMK has not closed the transaction." NLMK, majority owned by the world's 21st-richest man, Vladimir Lisin, said it had retained U.S. counsel and would defend itself against the suit. Carlyle bought John Maneely in 2006 for $568 million and in August 2008 agreed to sell it to NLMK, also known as Novolipetsk Steel, for $3.53 billion. The deal amounted to 12 percent of total U.S. M&A activity in August, according to Thomson Reuters data. The price tag of the deal is now equal to two-thirds of NLMK's own stock market capitalization. NLMK's share price has fallen nearly 80 percent since the deal was announced. It fell nearly 20 percent on Friday alone. Mergermarket earlier in the week listed the John Maneely takeover as Russia's second largest deal this year and, at $3.5 billion, it made up the vast majority of the deal flow for the third quarter. For 2008, it was outstripped only by billionaire Mikhail Prokhorov's sale of his share in investment vehicle KM-Invest to business partner Vladimir Potanin in a messy divorce that left Potanin in effective control of metals giant Norilsk Nickel, Mergermarket said. "Although effective Oct. 1, 2008, NLMK's lenders entered into a binding agreement to provide the financing necessary to enable NLMK to consummate the merger transaction, and NLMK refused to take steps -- steps entirely within its control -- to draw upon that financing," said the Carlyle unit's filing. NLMK did not comment on the financing arrangements for the merger in its statement. Steel companies' market value has been savaged in a global stock sell-off that hit the makers of construction inputs harder than others, largely on fears that declining real estate prices and lower economic activity would hit demand for their products.        The Moscow Times
17 oct. 2008 04:07	Mechel increases steel production
Mechel's steel production grew 4 percent to 4.745m tonnes in the first nine months of 2008 compared with the same period of the previous year, the Russian steel producer's press office reported today. Coal output went up 54 percent to 20.702m tonnes. Specifically, coking coal production surged 95 percent to 12.409m tonnes and steam coal output rose 17 percent to 8.029m tonnes. Iron ore concentrate production edged down 2.5 percent to 3.62m tonnes, whereas nickel output increased 6 percent to 14,000 tonnes and rolled products output climbed 11 percent to 4.313m tonnes.        RBC-News
17 oct. 2008 04:06	RusAl Sees End to Profitability
United Company RusAl said Thursday that 75 percent of aluminum producers in China, Europe and the United States were unprofitable after the price of the metal fell on slowing demand. The proportion of unprofitable producers will "inevitably lead to fundamental changes in the global aluminum industry," chief executive Alexander Bulygin said in a statement. Aluminum has fallen 36 percent since July on concern that a global economic slowdown will cut demand. RusAl pays less for electricity than some of its rivals because the company has its own supplies of hydropower. Energy accounts for about 40 percent of the cost of aluminum smelting. Rival companies will be forced to cut output and expansion plans, Bulygin said. Rio Tinto Group, the world's second-biggest producer after RusAl, said Wednesday that it idled some sections of its highest-cost plants. RusAl will "take advantage of this challenging time," Bulygin said. "In this environment, even if the global economy falls into the recession during the coming year and in the worst-case scenario, the demand for aluminum drops by 10 percent, supply will still be far behind demand in the medium term," he said. That will secure "sustainable growth" for the aluminum price, Bulygin added. RusAl, controlled by Oleg Deripaska, said Tuesday that it applied to Vneshekonombank for a loan to refinance credits from foreign banks used to build and modernize plants.        The Moscow Times
17 oct. 2008 04:04	Mandelson Scolded Over Deripaska
Former European Union Trade Commissioner Peter Mandelson has been criticized for maintaining "unwise" private contacts with Russian billionaires after it emerged that he vacationed in August on the yacht of metals magnate Oleg Deripaska. Mandelson, who quit his job in Brussels this month to become Britain's business secretary, oversaw two significant cuts in European aluminum duties during his four-year tenure as commissioner but denies any conflict of interest. Deripaska was a major beneficiary of those cuts, since his United Company RusAl is the world's biggest aluminum producer. British newspapers reported this week that Mandelson visited Deripaska's mega-yacht Queen K while it was anchored off the coast of the Greek island of Corfu this August. Mandelson's former Brussels spokesman Peter Power said Mandelson had been in Corfu to attend a birthday party for Elisabeth Murdoch, the daughter of media magnate Rupert Murdoch. "He does not see why more importance should be attached to Mr. Deripaska than any other guest," Power said in a statement. The newspapers said Mandelson had visited the yacht on two other occasions, including for a weeklong vacation. His partner Reinaldo Avila da Silva was also reported to have been a guest. A spokesman for Deripaska said he would not comment on the businessman's private life. Edward McMillan-Scott, a conservative member of the European Parliament and a long-standing member of its Foreign Policy Committee, said it was unwise to maintain close ties with the Russian elite. "In any dealings with members of Russia's current political or financial hierarchies, any politician should be extremely cautious and dubious," he said by telephone from London on Thursday. McMillan-Scott said exceptions were "genuine reformists" such as opposition leader Garry Kasparov, "who may have money, but they also have values." A senior official in the EU's Directorate-General for Trade, which was led by Mandelson from November 2004 until his resignation this month, said there was nothing improper about the contacts with Deripaska. "The trade commissioner naturally is in constant contact with the business community, in this case with oligarchs," he said on condition of anonymity, because he was not authorized to speak to the media. EU officials also said the tariff cuts of January 2006 and May 2008 were unrelated to Mandelson's relationship with Deripaska. The 2006 decision, which scrapped a minimum price requirement for a RusAl unit, was taken by lower-level commission officials without any involvement by the commissioner, said Denis Daniilidis, spokesman for the EU delegation to Moscow. "Any allegation of conflict of interest simply does not arise," Daniilidis said. "Mr. Mandelson has made it clear that he has met Mr. Deripaska socially through mutual friends. Mr. Deripaska has not raised any commercial interest on a single occasion in any of these contacts." The decision last May, when the EU halved import duty on nonalloyed raw aluminum from 6 percent to 3 percent, was the result of lobbying by some member states, not foreign business people, a source in the delegation said. "As trade commissioner, Mandelson responded to constant requests by member states to eliminate or reduce aluminum tariffs," the source said, speaking upon condition of anonymity because of the sensitivity of the matter. "The tariffs created divisions between member states, with a minority opposing their elimination. As a compromise, Mandelson cut tariffs by half." RusAl spokeswoman Yelena Shuliveystrova declined to comment on tariff issues.        The Moscow Times
16 oct. 2008 04:12	Novolipetsk Steel Slashes Forecasts
Novolipetsk Steel cut its revenue forecast on Wednesday as it prepares to join rivals in reining in production because of a global slowdown in demand for steel products. The steelmaker expects full-year revenues of $12.5 billion and core earnings of $5 billion, below previous forecasts, and said it would bring forward maintenance work at its main Russian plant as the global economic slowdown hit fourth-quarter demand. "This may result in a decrease in 2008 output compared with forecast output," Novolipetsk, or NLMK, said in a statement. NLMK is the latest Russian steel major to feel the effects of the global financial crisis, after rivals Magnitogorsk Iron & Steel Works and Severstal announced output cuts. NLMK had previously forecast a rise of up to 70 percent in full-year 2008 revenues and 60 percent in earnings before interest, taxation, depreciation and amortization.        The Moscow Times
15 oct. 2008 04:30	Gubakhinsky Coke increased the output
Gubakhinsky Coke (Permsky reg., included into OMC) increased the output 49% to 46.3ths ton in Sep. 2008 against prior year figures, the company informed.        Over the Jan.-Sep. Period 403.3ths ton of coke were produced. The Company is included into Joint Metallurgic Company. The share capital is worth 130.316mln rub. split in 1303160 common stocks of 100 rub. par each. In 2007 the net losses (RAS) reached 5.474mln rub.; revenues - 814.44mln rub.       OMK includes 6 larges metallurgic plants. OMK involves Vyksunsky Metyallurgic Works, Almetyevsky Pipe Plant , Trubodetal, Chusovskoy and Schelkovsky Metallurgic Works and Gubakhinsky Coke.In 2007 it provided 18% of the pipes production in Russia. The consolidated net profit rose 35% to 16.48bn rub. in 2007; revenues being up to 107.83bn rub. from 81.418bn rub.; EBITDA - to 25.204bn rub. from 19.75bn rub. prior year.       AK&M
14 oct. 2008 12:41	RusAl Investigation
United Company RusAl is being investigated by the Federal Anti-Monopoly Service after a complaint by Eurocement Group, the country's largest cement producer, that RusAl curbed raw material shipments. Eurocement said RusAl crimped deliveries of nepheline sludge to one of its plants, the watchdog said Monday. The case will be heard Oct. 30. "RusAl didn't violate Russian antitrust laws" and is "actively cooperating" with the investigation, RusAl said.       Bloomberg
14 oct. 2008 12:41	Polymetal's New Chairman
The board of silver and gold miner Polymetal has elected former anti-monopoly service head Ilya Yuzhanov as its chairman, Polymetal said Monday. Yuzhanov is a board member of top-30 Russian bank Nomos-Bank, potash producer Uralkali, independent gas producer Novatek and electricity company MRSK Holding.        Reunters