THE palladium price was about 7% higher as the market absorbed the sanctioning by the UK government of Vladimir Potanin, described by Bloomberg News as Russia’s richest man.
Potanin is also the president of MMC Norilsk Nickel (Nornickel) – one of the world’s largest producers of nickel, palladium and copper.
It wasn’t clear whether the sanctions on Potanin would extend to Nornickel, the newswire said. Potanin is the company’s top executive and owns over 30% through his investment company Interros, said Bloomberg News.
Nickel prices jumped 9.2% before paring gains.
On April 8, the London Platinum and Palladium (LPPM) Market suspended two government-owned Russian platinum refiners from its good delivery and accreditation list. This followed a similar ban on certain PGM bands delivered by Russian refiners by the CME Group/NYMEX exchange.
However, Anglo American Platinum (Amplats) CEO, Natascha Viljoen said the previous bans had had almost no impact on the market and that sanctions – even tougher ones – might not stem metal supply.
“Metal continues to flow out of Russia. There’s no sanctions yet on Norilsk,” Viljoen told media on Tuesday. “We don’t see the ban on the good delivery bar by the LPPM has had an effect. We do not see that it has influenced current production.”
“Even with hard sanctions in Europe, they (Russian producers) will continue to move that metal through China and India. There are other routes,” said Viljoen.
Potanin, whose net worth is $37.1bn according to the Bloomberg Billionaires Index, has until now largely avoided western sanctions that have been imposed on other members of the Russian elite. He was sanctioned by Canada in April.
In its updated sanctions list, the UK said Potanin “is obtaining a benefit from or supporting the Government of Russia by owning or controlling Rosbank” – a financial institution that Potanin bought from Societe Generale SA. But it made no mention of Nornickel.
UK government sanctions on individuals automatically extend to any company they own or control, said Bloomberg News.
The efficacy of sanctions on Russian supply of minerals was also questioned earlier this month by Richard Duffy, CEO of Petra Diamonds.
“I don’t share confidence that there will be no Russian supply (of rough diamonds) as we will see it through China and India,” he said at the Junior Indaba, a conference. “But we are seeing some pull-back,” he said of rough diamond supply.