http://biz.yahoo.com/rc/040329/minerals_russia_norilsk_2.html [1]
By Aleksandras Budrys and Mark Bendeich
MOSCOW/LONDON, March 29 (Reuters) -- Russian metals giant
Norilsk Nickel took a bold step outside its homeland on
Monday, buying a fifth of the world's fourth-biggest gold
miner, Gold Fields Ltd, for $1.16 billion.
The purchase of the stake from miner Anglo American Plc
is one of the largest foreign investments ever by a Russian
firm and fuels speculation that the country's top gold
producer might use South Africa's Gold Fields as a
launch-pad for further expansion.
Norilsk said it sought global cooperation with Gold Fields.
"We see this as a beginning of a strong relationship between
our two companies, where we can exploit joint activities
around the world," Christophe Charlier, Norilsk's head of
strategic development and acquisitions, told Reuters.
But he said Norilsk had no immediate plans to increase
the stake. "Not at this time," Charlier said.
Industry analysts said Norilsk, a major player in platinum
group metals that aims to boost its production of precious
metal to 100 tonnes by 2007 from 40 tonnes last year, had
clearly signalled its global ambitions.
"I think it makes their intention very clear," said Leon
Esterhuizen, analyst at Investec Securities in Johannesburg.
"They certainly want to be a very large global gold producer,
and by taking 20 percent of Gold Fields they are preventing
someone else from snatching it. I would think in time they
are definitely going to grow the stake, if not take out the
company."
Daniel Major, London-based analyst at Wall Street investment
bank J.P. Morgan, said Norilsk could later inject assets into
Gold Fields in return for a higher stake and then use the
firm's New York listing to tap into Western capital markets.
Anglo American said it had sold its stake in Gold Fields as
part of a strategy to focus all its gold interests in its 54.5
percent stake in AngloGold Ltd, the world's second-largest
gold producer behind Newmont Mining Corp.
Spokeswoman Anne Dunn in Johannesburg said Anglo had
been waiting for an opportunity to unload its Gold Fields
holding, which it got in December 2000 when it sold most
of its stake in banking group FirstRand to holding company
Rembrandt.
"It was an opportunity to realise value," she said.
Gold Fields said it had been given very little notice of Anglo
American's sale, which is expected to give the global mining
and paper group a gain of about $480 million.
Gold Fields was one of the most actively traded stocks on
the Johannesburg bourse. The shares were up 10 cents at
83.10 rand at 1215 GMT, outperforming the gold mining
index, which was down 1.7 percent.
Traders said the stock was benefiting from removal of the
overhang of a 20 percent holding that could be sold.
The deal also helped strengthen the rand, since Anglo said
it would use the sale proceeds, which totalled 7.631 billion
rand, to pay off debt and finance capital expenditure,
bringing the cash back into the local economy.
Norilsk shares were up 2.7 percent at $75, while Anglo
American's London shares were up 0.9 percent at 12.87
pounds.
This is Norilsk's first investment in South Africa, though it
has ventured outside its homeland before with its purchase of
a majority stake in U.S. platinum and palladium producer
Stillwater Mining Co. last year.
Norilsk, which has been aggressively snapping up gold mines
across Russia, is seen as the most likely winner of an
upcoming tender for rights to develop the giant Sukhoi Log
gold field in eastern Siberia.
Gold Fields said it would make a statement later in the day.
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