Page 140 - RusRPTDec22

3Q21.
• _Hydro unit EBITDA is down, but only marginally.
Disappointing figures. RusHydro will need to address the issues of rising fuel costs, as it puts the whole Far Eastern unit at risk. Theoretically liberalization in Far East power market (that is being discussed in the government) will address the problem, as RusHydro will be able to pass through rising costs onto the end users, but that will inevitably lead to higher power prices. At the same time poor hydrology and a small correction in topline are temporary (revenues went a notch down in 3Q22). We think that production wise Siberian output will recover sometime and power prices will also help. Hence topline will start growing again (we remind of 8.5% gas tariff hike from 1 December and approx. 15% capacity tariff indexation from 1 January). But Far Eastern unit becomes a significant problem, unless the company gets respective tariff indexation.
9.2.11 Mines and Minerals - gold & diamonds
Gold production of Russian precious metals producer Polymetal International fell by 2% on the year to 1.014mn ounces in January–September, the company said in a statement on November 2. Silver output decreased by 1% to 13.8mn ounces in the period. Revenue fell by 16% on the year to $1.762bn. The net debt grew to $2.781bn as of September 30 from $1.647bn in the same period in 2021. Polymetal has also confirmed its 2022 output guidance at 1.7mn ounces in gold equivalent, but said there are risks of its non-fulfillment. The plan for 2023 and 2024 was also set at 1.7mn ounces per year.
Russia exported a record 2.156 tonnes of unrefined and semi-refined gold worth $124.58mn to China in October, with the supplies doubling on the year in both physical and monetary terms, as seen by PRIME in the materials of China’s General Administration of Customs on November 22. In October 2021, gold exports to China reached 1.015 tonnes worth $57.686mn. In January–October 2022, Russia exported 5.072 tonnes of gold worth $329.92mn to China, up from 3.039 tonnes worth $182.988mn in the same period of 2021. Previously, Russia exported 2.75 tonnes of unrefined gold to China worth $105.94mn in 2017, 238.95 kilograms of unrefined told worth $9.08mn in 2018, 1.43 tonnes of unrefined and semi-refined gold worth $63.18mn in 2019, 776.9 kilograms of gold worth $43.14mn in 2020, and 3.98 tonnes worth $236.88mn in 2021.
Alrosa to build a new mine within the Mir project with RUB126bn CapEx, Interfax reports, citing the head of Yakutia Aisen Nikolaev. The Mir pipe restoration project involves the construction of a new mine, investments will amount to RUB126bn (c$2bn). Head of Yakutia proposed to MinEc to conclude an agreement on the protection and promotion of capital investments for the duration of the project for 20 years. He also added that Alrosa and EVRAZ are developing Timir project (JVs with Alrosa share of 49%, the rest – EVRAZ) with CapEx of RUB100bn (c$1.7bn). Alrosa to build a new mine within the Mir project with RUB126bn CapEx, Interfax reports, citing the head of Yakutia Aisen Nikolaev. The Mir pipe restoration project involves the construction of a
140 RUSSIA Country Report December 2022 www.intellinews.com