Destination Russia

Over the years, Rio Tinto has built a significant presence in a good number of the world’s great mineral producing areas but its involvement in Russia has been relatively low key. Until now.

Everything changed in January when the company signed a joint venture agreement with Norilsk Nickel, Russia’s largest minerals company. “This joint venture breaks new ground for the mining industry,” says Leigh Clifford, Rio Tinto’s chief executive. “We are the first major mining company to enter Russia on this scale. Combining the skills and resources of our two companies will provide an unrivalled platform for the exploration and development of mineral deposits in Russia.”

Norilsk Nickel’s chief executive, Mikhail Prokhorov, is no less bullish about the joint venture’s prospects. “Russia’s mineral wealth remains untapped in many areas and across many minerals,” he says. “With Rio Tinto, we intend to pursue the development of new discoveries and known deposits with the potential for significant capital investment and attractive financial returns.”

Guy Elliott, Rio Tinto’s finance director, who played a key role in setting up the deal with Norilsk, explains the thinking behind the joint venture: “Nearly 90 per cent of the Group’s assets, and most of our reserves, are in either Australia or North America. This is a source of great strength for Rio Tinto because they are both safe and stable areas. But we have known for some time that it is important strategically for us to cast our nets more widely and we concluded that Russia should definitely have a place in our portfolio.”

About Norilsk Nickel