Prokhorov and Potanin Swap Stocks – With a Twist

Consolidation is the word – at least where Russia’s mining assets are concerned. It has just emerged that billionaires Mikhail Prokhorov and Vladimir Potanin have agreed to swap 16.7% of Norilsk Nickel for 35% of Polyus Gold, with both subsequently increasing their already-substantial holdings in the companies. The news signals an apparent hiatus in the ongoing dispute between the pair, who just last month looked set to become embroiled in a legal battle over Prokhorov’s Norilsk Nickel stake. Bloomberg has the story, complete with a little Kremlin twist:

The deal between Prokhorov and Potanin may be part of a plan endorsed by Prime Minister Vladimir Putin to create a diversified mining company big enough to compete with BHP Billiton Ltd., said Stanislav Belkovsky, an independent political analyst who advised the Kremlin during Putin’s presidency.

The article suggests that Oleg Deripaska could also become involved in the consolidation project, and that he may be struggling to “preserve Rusal as a separate entity.” Rusal is currently the largest aluminum producer in Russia, and all three of these companies are publicly owned. But given this article’s suggestion of Kremlin involvement in the Norilsk swap, you might wonder what that classification actually means… Read the full article here.