Norilsk to Cut 2009 Spending to $1.3Bln

Norilsk Nickel will cut spending on its Russian operations to $1.3 billion next year, a 23.5 percent drop from the $1.7 billion that will be spent this year, the company's deputy chief executive Sergei Batekhin said Tuesday.

"We will cut operation costs by $340 million, decrease overhead and administrative costs by $180 million and cut 220 jobs at the Moscow office," Batekhin said during a conference call.

Norilsk chief financial officer Oleg Lobanov told analysts during the call that the miner had $800 million to repay next year, including $500 million in payments on eurobonds and $300 billion in amortization payments.

Analysts approved of the cost-cutting measures but expressed concern that the company seemed to lack a long-term strategy.

"The company's leadership seems to be concentrating on managing costs and hoping on better commodities prices rather than working out a long-term strategy," said Michael Kavanagh, a metals analyst at UralSib.

Russian Technologies head Sergei Chemezov said Tuesday that the state supported the possible merger of Norilsk Nickel and United Company RusAl and that Metalloinvest might take part in the deal, Reuters reported. Chemezov, who has been proposed as a candidate for Norilsk's board by Vneshekonombank, said the possible merger would be "expedient" but noted that Russian Technologies itself would "unlikely" take part in it.