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. Last Updated: 07/27/2016

Long-Term Platinum Quotas on the Table

Russia may issue platinum group metals export quotas for 2001 and beyond before the end of the year, Deputy Finance Minister Valery Rudakov said Wednesday.

Rudakov is also head of state precious metals and gems repository Gokhran. He told reporters that Gokhran had sent the government a draft of a presidential decree on PGM export quotas proposing issuing long-term quotas for some holders of the metals instead of quotas for 2001 only.

"This year we are trying to issue documents that regulate [PGM exports] for 2001 [and beyond]," Rudakov said.

"That means [PGM] stock holders will be able to enter the new year with all the necessary rights, possibilities and capacities."

But he would not say when exactly the quotas would be issued.

"I can’t elaborate on that, until the government takes the decision. We have just made a proposal," Rudakov said.

Export licenses for PGMs, used in autocatalyst production, jewelry and electronics, can only be issued after the president has signed a decree on quotas prepared by the government.

The nation’s major PGM producer, Norilsk Nickel, is the only company with a 10-year quota and the necessary license for exports of palladium. But it doesn’t have a long-term quota for other platinum group metals, such as platinum and rhodium.

Other holders of the metals are the Central Bank, Gokhran and Vneshtorgbank, which is owned by the Central Bank. All three have to obtain quotas and licenses every year.

Delays in issuing quotas and licenses at the beginning of the year have caused PGM price rallies on the world’s markets for the past three years.

But Gokhran wants to change this practice and it has proposed issuing long-term quotas, Rudakov said.

"There should be long-term quotas for other holders, such as the Central Bank, which holds substantial stocks," he said, although he added that Gokhran does not need long-term quotas.

Rudakov said Gokhran had no plans to export platinum group metals this year or in 2001.

"The state sells precious metals in order to cover its budget deficit. As no deficit is seen [for the 2001 draft budget], there is no need to sell," he said.

"And anyway Gokhran does not hold sufficient stocks to have any serious influence on the market," he added.

Rudakov said that the state still planned to control volumes of sales.

"This is a very delicate market. We have to regulate volumes in order not to influence it negatively," he said.

All exports of Russian PGMs are executed through the country’s sole agency, Almazjuvelirexport, a state enterprise subordinate to the Finance Ministry.

Norilsk Nickel took a guarded attitude to the 2001 quotas.

"I can’t tell precisely when the quotas will be issued. It will all depend on the government," said Yury Kotlyar, Norilsk’s chairman.

"Government structures are undergoing a reform. And all will depend on the bureaucrats put in charge of these issues."

But he added Norilsk was in a better position than other holders of PGM stocks.

"We have to do everything to prevent a [PGM] vacuum, which is normally created in January and February on the markets. Otherwise Russia will suffer, not Norilsk," he said.

But he said Norilsk had requested long-term quotas for platinum and rhodium exports.

"In autocatalysts palladium, platinum and rhodium are used simultaneously. If a car producer buys palladium from us, but there still are no quotas for platinum and rhodium, what does the producer do? He buys platinum and rhodium in South Africa or elsewhere," he said.

"That’s why we need long-term quotas for platinum and palladium. We want them for a minimum of five years."