Ralph Havenstein, CEO, Norilsk Nickel Intl.
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» Norilsk appoints ex-Anglo Platinum CEO
» Norilsk scouts for more Africa projects
» Norilsk to fast-track 80,000t from LionOre
» Norilsk trumps Xstrata's LionOre bid
» Bidding war hots up for LionOre

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Norilsk edges to Africa adieu
Allan Seccombe
Posted: Tue, 03 Mar 2009

[miningmx.com] -- NORILSK Nickel is considering terminating its $6.8bn investment in Africa, a move that could be preceded by the departure of Ralph Havenstein as the head of its international operations.

Havenstein would neither deny nor confirm strong market rumours that he would quit his position within the next six months.

“I’m not going to confirm or reject any comments. I’m not sure if it’s a rumour so I can’t really comment on that,” Havenstein told Miningmx.
not going to confirm or reject any comments
Miningmx understands there is a gaping cultural chasm between Havenstein, the former head of Anglo Platinum, and the largely Russian board of Norilsk, the world’s largest nickel and palladium producer.

Havenstein, who was appointed to the position of chief executive officer of Norilsk Nickel International on 1 September 2008, has been unable to bridge that gap, Miningmx has reliably heard.

Again, Havenstein said he would not comment on his relationship with the Norilsk board.

But there may be more to his departure than just different approaches to running a business.

Rumours of Havenstein’s departure follow speculation that Norilsk is looking to terminate its involvement in Africa, where it has nickel projects in Botswana and South Africa.

Norilsk made a big bang entrance into Africa when it beat out Xstrata in a $6.8bn purchase in July 2007 of LionOre, which owned 85% of Tati Nickel in Botswana and 50% of Nkomati Nickel in South Africa, and produced around 34,000 tonnes of nickel in 2006.

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LionOre CEO Peter Breese was appointed as head of Norilsk’s international operations soon thereafter but he quit after a year.

The Moscow Times reported on 20 February that Norilsk “may review” its African unit, which had production costs of $10,000/tonne, was operating at “virtually zero profitability.”

"If the price falls further, we'll analyse the possible solutions," Oleg Pivovarchuk, deputy chief executive, was quoted by Moscow Times as saying about the African operations that produced 23,410 tonnes of nickel last year.

Havenstein presides over Norilsk’s operations in Finland, where it runs a smelter, Australia and the two southern African countries.

Norilsk has shut its five Australian operations because of the fall in nickel prices to below $10,000/tonne from a record high of $51,800 in May 2007.

It is now reviewing its African investments, which, if they are closed or sold, would leave precious little for Havenstein to manage.

A source outside the company said he would not be at all surprised if Havenstein quit and pointed out foreign managers had very little say and influence within the Russian group.

None of the management who oversaw the purchase of Lion Ore remains within Norilsk.

No firm decision has been made on the African assets yet, but the key focus within Norilsk is to ensure no jobs are lost at the Russian assets, which would be politically difficult to manage.