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Novatek​ might participate in construction of LNG power generation station in Chukotka. ​The company is participating in a tender for the construction of a power generating facility to supply electricity for the Baimskaya copper project. The project is to be completed by 2024.​ ​According to Novatek’s proposal, it might build a floating LNG power generation plant with capacity of 356MW. The paper estimates capex for this project at RUB 38bn, while an additional RUB 5-22bn might be spent on port infrastructure and dredging. Together with the construction of the electrical transmission line, capex might be RUB 87bn (USD 1.3bn). The project also envisages supplying LNG to KAZ Minerals as an alternative for the diesel which is currently used by the company. The electricity tariff for Novatek’s facility might amount to RUB 10.80/kWh, according to Kommersant. The other two contending projects are a nuclear plant from Rosatom (estimated capex – RUB 200bn, tariff – RUB 10.40/kWh) and the reconstruction of an existing hydropower plant, combined with the construction of a reserve diesel power facility (capex – RUB 30bn, tariff – RUB 11.90/kWh). Novatek is considering including the construction costs in the tariff, the paper writes. However, the capex financing schedule has yet to be determined.
9.2.11 ​Metallurgy & mining corporate news
● Gold & Diamonds
Yuzhuralzoloto becomes a new major shareholder in Petropavlovsk.
According to company a press release, Roman Trotsenko has sold his 22.37% equity stake in Petropavlovsk and 5.97% stake held in convertible bonds to Yuzhuralzoloto. Yuzhuralzoloto is Russia's top-4 gold producer with assets located in Chelyabinsk and Krasnoyarsk regions and Khakasia Republic. The management gave earlier guidance on a 11-18% YoY rise in gold production to 640koz. Being a private company, it is 100% owned by Konstantin Strukov's family. Since 2015 the company has changed major shareholders 3 times (including this precedent), however, this is the first instance of a larger gold producer being a direct owner of the stake.
Russian gold major ​Polyus Gold​ increased its revenues by 20% quarter on quarter under IFRS to $1.28bn in 4Q19​, with Ebitda up by 25% q/q to $883mn and net income up by 24% to $883mn, the company said. As reported by ​bne IntelliNews​, Polyus posted a ​jump in gold output of 26% in 4Q19​, with strong growth reported at all its main mines. Russian gold producers are supported by rising prices, and Polyus Gold, owned by tycoon and senator Suleiman Kerimov, said in September 2019 it would ​use the additional revenues from rising gold prices to deleverage and cut debt​. 4Q19 IFRS results have narrowly beaten the expectations on revenues and earnings, coming in expectedly strong, BCS Global Markets commented on February 11. At the same time the company said it would increase the capital expenditure guidance for 2020 upwards to $700mn-750mn, which could be viewed as sentimentally negative for the name, BCS GM warns.
The diamond sales of Russia’s diamond producing monopolist Alrosa had the second best January in seven ​years after a horrendous 2019. The company’s rough diamond sales were up 11% m/m in January and increased 40% year-on-year the company reported on February 10 to $390mn – its best January in seven years, bar 2018. January saw steady demand for rough diamonds as cutters continued restocking on the back of positive Christmas
102​ RUSSIA Country Report​ March 2020 ​ ​www.intellinews.com