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. Last Updated: 07/27/2016

Norilsk Paid To Relocate Staff South

LONDON -- Norilsk Nickel metals group has been given $700 million by the Russian government toward relocating staff from plants in northern Russia, a senior company official said Friday.

Pavel Skitovich, deputy director in charge of corporate structures, said at a conference on the Russian economy that high social costs were hitting Norilsk's profits, although regional authorities were expected to shoulder more of the burden next year.

"The latest development here was the signing by Prime Minister Viktor Chernomyrdin [of an order] to allocate $700 million to relocate people from Norilsk," he said.

Norilsk, one of the largest metals companies in the world in terms of production and reserves, for decades has been responsible for providing social facilities for thousands of workers and their families in frozen northern areas.

Skitovich said the $700 million would be enough to relocate 70,000 people, but it was not clear when the funds would be available and put to use.

"This allocation will be done on the basis of a World Bank loan for the same amount," he said, adding that the World Bank had released $1.5 million for a feasibility study on the project.

Skitovich also said Norilsk may launch a long-awaited issue of American depositary receipts, or ADRs, by the middle of this year and is considering issuing convertible bonds.

He said the issues would help finance an ambitious investment program but the company would probably have to wait for a recovery in the Russian stock market before launching the ADRs.

Skitovich said the convertible bonds might also be issued this year, but he declined to be more specific.