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assets to shield them from possible US sanctions. In August 2018 Abramovich cut his stake in Crispian Investments that holds a stake in Russian metals Norilsk Nickel by 0.05% to 49.95%. Analysts surveyed by Vedomosti daily believe that Abramovich could be responding to the prospect of US sanctions pressure and cutting his largest stakes in major assets. The Evraz sale would bring his stake from 30.52% to 29.71%. In October 201, Russian steel and mining major Evraz said it planned to boost capital spending by 1.5-fold in 2019-2022 to $830mn-$990mn annually. The company plans four large projects in Russia and North America worth about $1.3bn in total. Investors have not welcomed the new strategy of the company, with the shares of Evraz in London falling over 5% on the announcement, even despite a pledge to increase dividends by 64% to $1.2bn for 2018. The CEO of the company Alexander Frolov told investors in London that Evraz plans to invest in producing rails in Russia, as well as to double the output of rails in the US state of Colorado, arguing that it was one case where new steel tariffs in the US could play to company's advantage.
Norilsk Nickel announced the start of two growth projects: expansion of the Talnakh Concentrator and development of a deposit called South Cluster. The expansion of the Talnakh Concentrator aims to increase ore throughput by 80% to 18 mtpa and add new, more efficient enrichment technology. It is to be commissioned in 2023. The company expects it to contribute to a planned increase in nickel production to 240 ktpa by that time, up 8-9% versus the 2019 guidance, and in copper production to 460 ktpa, up 10% versus the normalized production level of 420 ktpa excluding Chita (taking into account the completion of the processing of Rostec concentrate). In addition, capacity should be freed up at the Norilsk Concentrator to process ores from South Cluster. Total capex is guided at RUB40bn ($615mn). South Cluster is set to become one of the largest PGM projects globally, with a maximum projected capacity of around 20 tonnes per annum of PGMs (640 koz of PGMs per annum including 500 koz of palladium, assuming the current average Norilsk Nickel palladium/platinum output ratio of around 4:1). The mine's ramp-up is planned to start in 2021-22 and full capacity reached in 2027. Its life is guided at around 20 years (including the ramp-up stage). Capex is guided at R45bn ($690mn). South Cluster is very important for the global palladium market, as its volumes should ensure long-term palladium availability and reduce the chances that platinum will replace palladium in both gasoline and hybrid cars.
9.2.13 Other sector corporate news
Net profit of Russian chemical major Acron declined by 7% in 2018 to RUB13.3bn ($212mn), the company said on March 26, attributing the decline to one-time currency losses on asset revaluation. At the same time the company's revenues gained 15% year-on-year in 2018 to RUB109bn or up by 7% to $1.72bn in US dollar equivalent. Ebitda was up by 24% to RUB37bn or 16% to $591mn, with Ebitda margin up by 2pp to 34%. VTB Capital expected Acron to deliver strong results for the fourth quarter of 2018, on the back of stronger sales trends for nitrogen fertilisers The bank has "a moderate outlook on 2019, as we expect incremental demand to be covered by additional Chinese exports, while the high cash cost of urea production in China using antracite will prevent prices from falling any further." In October 2018 Fitch Ratings revised Acron's Outlook to Stable from Positive, while affirming the company's long-term Issuer Default Rating (IDR) at 'BB-'.
121 RUSSIA Country Report April 2019 www.intellinews.com