By Evgeniy Zainullin
(kommersant.ru) - The world's fourth-largest platinum producer Norilsk Nickel may begin the production of this metal in Bahrain. Agreements on this matter could have been reached during negotiations between Russia’s president and the King of Bahrain, Hamad bin Isa al-Khalifa. Market participants believe that this agreement could involve establishing a joint venture with a local partner to avoid association with platinum from the Russian Federation.
Norilsk Nickel plans to build a platinum production plant in Bahrain, Russian Deputy Prime Minister Alexander Novak said. He did not provide details of the project.
On May 23, Russia’s president held talks in Moscow with the King of Bahrain. According to TASS, the business part of the meeting was attended by the president of Norilsk Nickel Vladimir Potanin. Nornickel declined to comment.
The company owns a single foreign asset: the Norilsk Nickel Harjavalta plant in Finland. In November 2023, the company transferred a 50% share of its Nkomati operation in South Africa to local partner African Rainbow Minerals. At the time, Norilsk Nickel reported that the company was committed to a strategy of exiting foreign assets that did not meet first-class criteria, and focused on ensuring reliability and developing the mineral resource base and facilities in Russia.
A Kommersant source in the industry believes that Norilsk Nickel’s possible plans to build a plant in Bahrain may be related to the desire to solve the problem of a number of consumers refusing to purchase Russian metal.
A partner may be found in Bahrain, and Norilsk Nickel will supply concentrate for the plant, Kommersant’s source says.
In March, Anton Berlin, vice president and head of the sales division of Norilsk Nickel, said during an investor call that the company had to rebuild its entire sales system due to a large number of external restrictions. According to him, some of Norilsk Nickel's buyers, primarily European, voluntarily refuse to buy Russian metals and products made from Russian raw materials. Meanwhile, some buyers are ready to purchase Russian metals, but only from structures not related to Russian businesses. In addition, he noted, Russian metals are sometimes sold at a discount.
In April, Vladimir Potanin said in an interview with Interfax that Norilsk Nickel would move its copper smelting production to China from Norilsk, creating a joint venture with a local partner. As Mr. Potanin noted, this should solve the problem of Western sanctions, which create difficulties with payments and lead to discounts in sales even to China. “One of these non-standard solutions is to transfer part of production to direct consumption markets,” he said.
The chief strategist of the investment company Vector X, Maxim Khudalov, notes that the potential platinum production project in Bahrain could be implemented in hopes that the EU will not allow the United States to impose sanctions on a supplier of catalyst material vital to the automotive industry.
But in general, the expert argues, platinum and palladium are easily transported by plane due to small production volumes, so there is no such need to build a plant in Bahrain. Rather, Mr. Khudalov believes, the project may be aimed at improving relations between Russia and Bahrain.
