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. Last Updated: 07/27/2016

Business in Brief

Inflation Slows

MOSCOW (Bloomberg) -- March consumer prices rose at the slowest pace in five months, led by food and services, the State Statistics Committee said Monday.

Prices rose 0.8 percent from February, the committee said in a statement. That's the slowest since September, when prices rose 0.3 percent.

Food prices rose 1.1 percent in March, led by fruit and vegetables. Prices for services increased 0.6 percent, led by railroad transport and medical services. Inflation totaled 3.5 percent in the first three months of the year, the committee said.

Serverstal Triples Profit

MOSCOW (Bloomberg) -- Severstal, Russia's third-largest steelmaker, said Monday that 2003 profit almost tripled as metal prices rose.

Net income rose to 18.8 billion rubles ($659 million), up from 6.4 billion rubles in 2002, the Cherepovets-based company said in a statement. Revenue rose to 81.7 billion rubles, from 60.4 billion rubles, under Russian accounting standards.

The company is proposing to pay dividends of 28 rubles per share from fourth-quarter earnings last year and 42 rubles per share from first-quarter net income this year, said Dmitry Druzhinin, a Severstal spokesman.

Severstal is proposing raising dividends and splitting its stock to create 25 shares for each existing share in order to "boost trading and allow minority shareholders to be more active, leading to an increase in the company's market value," said Dmitry Druzhinin, a Severstal spokesman.

Citibank Backs Norilsk

MOSCOW (Reuters) -- Citibank, part of Citigroup, the world's largest financial services company, has granted metals giant Norilsk Nickel a loan of $800 million for six months, Citigroup said Monday.

"It is an unsecured loan. It is a six-month short-term facility," said Steven Fisher, Citigroup managing director for corporate finance for Russia and the CIS.

Norilsk announced last month the acquisition of a 20 percent stake in South Afica's Gold Fields for $1.16 billion. An article on South African Mineweb ( said Norilsk largely funded its purchase of the stake through an $800 million loan from Citibank using 50,000 tons of nickel as collateral.

3 New IKEA Stores

MOSCOW (MT) -- Swedish home-furnishing giant IKEA will be given the rights to three plots of land in Moscow so it can build new stores, Mayor Yury Luzhkov told an investment forum in the United Arab Emirates.

IKEA confirmed Monday that it is eyeing three plots of land in the capital but declined to identify them, saying negotiations with City Hall were ongoing.

Deputy Mayor Iosif Ordzhonikidze told Vedomosti that one of the plots is located next to Khodynka field in the city's northwest, while another is on Kashirskoye Shosse in the south.

IKEA had originally planned to open a store where Kutuzovsky Prospekt meets the Third Ring Road, but City Hall rejected that proposal over traffic concerns.

IKEA already has two stores on the Moscow region side of the the Outer Ring, or MKAD. It opened an outlet in St. Petersburg in December and one in Kazan last month.

The company has said it plans to eventually open at least one store in every Russian city with a population of more than 1 million.

Japanese Eye Plant

MOSCOW (Bloomberg) -- Surgutneftegaz, the country's fourth-largest oil producer, is talking to Japan's three largest trading companies about building a Siberian polyethylene plant for $600 million to $800 million and exporting the plastics produced.

The company is in talks about offering a 50 percent stake in the venture to Mitsubishi, Mitsui & Co. or Itochu, Surgut CEO Vladimir Bogdanov said Monday. The plant would be in Surgut, the oil producer's hometown, and would use gas extracted at nearby fields after it has been processed at Surgut's local gas refinery.

"With this commodity, we need to enter the Western market, but we aren't expected there" as competition is so strong, Bogdanov said."

Tele2 Network No. 9

STOCKHOLM (Reuters) -- Sweden's second-largest telecoms operator, Tele2, has launched a GSM cellphone network in the city of Kursk, its ninth such network in Russia, the company said Monday.

"The Russian mobile market offers substantial growth potential for Tele2," the company's Chief Executive Lars-Johan Jarnheimer said in a statement.

Last year, Jarnheimer said he saw Russia as a key engine for 2004 growth.

Tele2 said the population covered by the GSM license in Kursk was 1.3 million and the region's cellphone penetration was about 11 percent.

PHM Buys More Gold

MOSCOW (Reuters) -- London-listed gold explorer Peter Hambro Mining extended its reach in Russia on Monday after it bought a gold mine in a sparsely populated region in arctic Russia.

PHM is among a handful of Western gold firms expanding aggressively in the country. Booming gold prices have made foreigners more daring in their attempts to challenge powerful regional bosses and local companies keen to guard their territory.

PHM said in a statement its Russian subsidiary, Pokrovsky Rudnik, bought a 90 percent stake in a Russian firm holding the license to mine the Novogodneye Manteau deposit in the oil-rich Yamal-Nenets autonomous district for $5 million. PHM has a deal with the world's second-largest miner, Rio Tinto, to explore gold in the Far East.

Pipeline Back Online

MOSCOW (Reuters) -- Russia resumed pumping Azeri oil to its key Black Sea port of Novorossiisk after a blast on a pipeline halted deliveries for two days, pipeline monopoly Transneft said Monday.

"We resumed shipments today and are currently pumping at full capacity," said Transneft's vice president Sergei Grigoriev.

The Baku-Novosossiisk pipeline is one of the main Azeri export routes that deliver 2.5 million tons of oil per year (50,000 barrels per day). Azeri light crude is mixed in Novorossiisk with Russia's main export blend, Urals.

Kazakh Forecast Cut

ASTANA, Kazakhstan (Reuters) -- Kazakhstan has cut its forecast for 2004 oil and gas condensate output to 54 million tons to 55 million tons (1.08 to 1.10 million barrels per day) from 58 million tons, Kazakh Energy Minister Vladimir Shkolnik said Monday.

"We are targeting oil output at 60-61 million tons in 2005 and 90 million tons in 2010," Shkolnik told reporters. He declined to give reasons for lower output.