The palladium price has jumped during the past week over the possibility that the world’s top producer – MMC Norilsk Nickel which is listed on the London Stock Exchange – could be affected by the latest round of US sanctions imposed on Russia.
Norilsk is also the world’s second largest producer of nickel and fourth largest producer of platinum and rhodium which are mined as by-products from its huge mining operations in the Taimyr and Kola peninsulas in northern Russia. Norilsk is also a 50/50 partner with African Rainbow Minerals in the Nkomati nickel/platinum operation in Mpumalanga.
According to John Meyer of UK broker SP Angel, palladium is up 9% – to $986/oz from $975/oz last week – “on the back of supply concerns as the world’s top producer – Russia – faces fresh sanctions imposed by the US. Despite production not being directly hit by the sanctions, the market has been rattled by the inclusion of Russian magnate Oleg Deripaska on the trade blacklist.”
As of late Monday the palladium price had risen further to $999/oz. Deripaska owns some 25% of Norilsk and jointly controls the group with another Russian oligarch – Vladimir Potanin – who holds 33%. A third oligarch – Roman Abramovich – owns a minority stake in the group.
The Norilsk share price has been on a roller-coaster ride since the end of February which began because of an apparent bust-up between Potanin and Deripaska over control of the group. Norilsk shares plunged from $21,19 on February 26 to $14.94 before recovering to current levels around $16.07 on the back of the rising palladium price.
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