No strangers to complex solutions (don’t forget the proposed six-way merger for Russian metals producers!), Norilsk Nickel CEO Vladimir Strzhalkovsky and Rusal’s Oleg Deripaska hatched a plan last year that’s receiving serious consideration from the Russian government.
After a combined proposal from Norilsk, the largest mining company in Russia, and billionaire Deripaska, the controller of Russia’s largest aluminum producer, the Russian government is now considering buying more metals to help support the country’s struggling domestic producers. These metals would include nickel, aluminum, and copper, and each metal would be used to support infrastructure projects and stimulate the metals industry.
“It’s a perfectly good idea,” Arkady Dvorkovich, economic advisor to President Dmitry Medvedev, told Bloomberg. “If the budget has such opportunities, then it will be done. Whether there will be such opportunity is not yet clear.”
As Russia prepares for a recession, the government plans to avoid any federal borrowing this year, which could make the buy-out plan impossible — unless the funds are somehow found.
“Russia is revising its 2009 budget based on an average price of $41 a barrel for Urals crude, Russia’s export blend, from $95,” Bloomberg shares. “Priority in the budget will be given to fighting inflation and stimulating the economy.” Aiding the metals industry could then have that stimulating effect, especially since no new merger plans have been submitted to the government. But how many of these stimulus measures can the world really take? What do you think?