Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Prokhorov Quits as Norilsk Nickel CEO

VedomostiDenis Morozov
Mikhail Prokhorov is stepping down early as CEO of Norilsk Nickel to focus on energy projects, the company said Thursday.

Prokhorov's departure had been expected under an agreement with business partner Vladimir Potanin to divide the business empire they control through their Interros holding company, but its timing was a surprise.

The breakup is expected to transfer to Potanin Interros' 54 percent stake in Norilsk, which has a market capitalization of $32 billion and mines one-fifth of the world's nickel.

Prokhorov wants to build Norilsk's energy assets and, according to media reports, assume control of Polyus Gold, the mining company spun off from Norilsk last year.

In a statement, Prokhorov said staying on as Norilsk CEO while working on his energy venture was impossible.

"A clear conflict of interests arises," Prokhorov said.

"Because work on forming the new business has already begun and is actively under way, I have decided to leave my positions at Norilsk earlier than expected."

Norilsk said Denis Morozov, its deputy CEO and a board member at Polyus Gold, would be proposed to succeed Prokhorov.

The Norilsk board meets Friday to discuss his candidacy.

Norilsk's shares gained 2.2 percent, outpacing the 1.2 percent rise by Russia's benchmark RTS share index.

Mikhail Prokhorov.
"This brings clarity earlier," said Rob Edwards, a metals and mining analyst at Renaissance Capital. "For [Prokhorov] to stick around while everyone knows he is leaving isn't very good for management."

Edwards is bullish on Norilsk, and recently recommended that investors buy the stock following weak share price performance.

"Norilsk is a cash machine -- it was last year and it should be again this year," he said.

Prokhorov said he would not sever his ties with Norilsk, however, and will continue to work on an alternative energy project the company undertook after its purchase last year of a stake in U.S. fuel cell maker Plug Power.

He has also signaled his intent to be a major player in reforms to create a competitive power market in the country with Norilsk's purchase of effective control in wholesale generating company OGK-3 last week for $3.1 billion.

Prokhorov and Potanin shared the ranking of fourth-richest Russians in the Forbes magazine listing released earlier this month. Each has a fortune estimated at $13.5 billion.

They also control Rosbank, Russia's seventh-largest bank by assets. France's Societe Generale owns 20 percent of Rosbank and has an option to buy a majority stake by the end of 2008.