Norilsk Nickel Takes Measures To Cope With Financial Crisis

Norilsk Nickel is goint to consider offers for its stake of 55.4 percent in Stillwater Mining Company, the only platinum and palladium producer in the United States. It was bought for $257 million in 2003.

Lobanov said Norilsk, the world's largest nickel and palladium producer, expected to finish drafting its investment program for 2009 by mid-December. "We are prepared for a hard year," he said, adding that Norilsk was for now not planning to reduce production but was considering an "optimization" of salary levels.

Prices for palladium have fallen 56 percent in the third quarter, and they dropped 34 percent last month, Bloomberg estimated. Palladium futures for December delivery cost $184 an ounce in New York on Tuesday.

"Stillwater Mining has always been a marginally profitable asset due to its environmental sensitivity and the cost of labor," said Michael Kavanagh, a metals and mining analyst at UralSib. He said Switzerland-based metals giant Xstrata and South Africa's Empala Palladium were potential buyers of Norilsk's stake.

The rest of the Stillwater Mining's shares are free-floated in New York.

As for other Russian metal companies, they are having problems, too.Severstal, Russia's largest and United States' fourth-largest steelmaker, said earlier this month that it was cutting output at its North American plants by 30 percent. It also slashed its production in Italy by 30 percent and at its main Russian mill, in Cherepovets, by 25 percent.

Novolipetsk Steel, another Russian steelmaker, was sued earlier this month for missing a deadline to complete a $3.5 billion deal to buy U.S. steel-tube maker John Maneely Co.

Author: Ksenia Kochneva