Page 93 - RusRPTFeb20

Siemens Gamesa will acquire 95 wind energy towers from Taganrog-based Bashni VRS​, a joint venture of Spanish Windar Renovables S. L. (51%), state agency Rosnano and steel major Severstal (24.5%) each, Vedomosti d​ aily reported on December 12 citing Rosnano representatives. This makes the first wind towers produced in Russia, under the license of Windar Renovables and with an investment of RUB1bn. The company has already produced over 80 towers for Russian Vestas. The order for Siemens will be completed by the end of 2020. Siemens Gamesa is building two wind generation parks in the Rostov and Murmansk regions, with a capacity of 90MW and 201MW each, to be launched by 2020 and 2021, respectively. To participate in the state programme of renewable generation support that guarantees 12% return, the projects must source 65% of their parts locally.
9.2.11 ​Metallurgy & mining corporate news
● Gold & Diamonds
Russia’s diamond monopolist producer​ A​ lrosa​ says diamond output will fall 15% and sales rise y/y in 2020​. Alrosa will cut diamond production by almost 15% y/y in 2020 to 34-35mn ct, while increasing sales y/y, according to Ria, citing company CEO Ivanov. Diamond production in 2019 exceeded 38mn ct, while sales reached 33mn ct. Alrosa expects to return to production growth in 2021, after market recovery. The production will be limited on alluvial deposits and Zarnitsa pipe. The company accumulated 20mn ct of inventories in 2019.
After a 15% YTD decline in Alrosa’s dollar share price, analysts believe that its period of underperformance is over. ​Despite the remaining headwinds in the diamond market we expect in 2020F, the reduction of rough and polished diamond supply in 2019F was enough to trigger market recovery next year. We reduce our 12-month Target Price for Alrosa to RUB 90, which implies a 27% ETR. Buy reiterated. 2019 rough destocking excessive. We estimate global midstream rough diamond purchases fell almost USD 5.5bn in 2018-2019F, considerably more than the USD 3.8bn reduction in bank financing. As such, we expect the midstream to restock in 2020F, raising rough diamond purchases 5%.
Russia’s largest gold producer ​Polyus Gold​ posted a jump in gold output of 26% year-on-year to 0.8mn ounces​, with strong growth reported at all main mines. Russian gold producers are supported by rising prices, and as reported by bne IntelliNews, 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​. The company’s results in 4Q19 were expectedly strong, but exceeded the expectations on both output and sales, with Natalka mine performance contributing the most to the beat, BCS Global Markets commented on January 28. Sales of the company in the reporting quarter rose by 39%, while the output at Natalka soared by almost 5-fold y/y to 132,000 ounces. Polyus also confirmed its gold production guidance for 2020 at 2.8mn ounces.
Gokhranmaybuyupto$1bnofdiamondsin2020from​​Alrosa​.A​ lrosa may sell diamonds worth $1bn to Gokhran in 2020. The Republic of Yakutia – a major shareholder of Gokhran – proposed that a large part of Alrosa’s rough
93​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com