Nickel is no more

Ufaleynickel will halt its production indefinitely from April 1.
OAO Ufaleynickel (MC Rusnikel) on April 1 will completely stop the production indefinitely. Resuming would be possible after the recovery in prices of nickel, says the plant. On February 1, 700 out from 2100 workers were idle due to the stop of one of the furnaces. Authorities in the region have found nine investors who are willing to implement projects in the territory of the plant. Ministry of Economic Development plans in early March to visit the plant together with the investors. The trade union of the enterprise says they are ready to go to a rally, if the workers' rights are violated.

Ufaleynickel's shareholders decided to indefinitely halt  the production from April 1 due to unfavorable financial and economic situation. According to Kommersant-Southern Urals, the press-service of the company said the plant employees would be sent idle on the initiative of the employer with 2/3 of the average wage. "Resumption of the work of the enterprise may is possible on conditions of stable and relatively high prices for products produced by OAO Ufaleynickel on the London Metal Exchange, and lower cost of coke, which forms the purchase cost of finished products," explained the plant. It noted that there's no risk of bankruptcy of the enterprise, reducing staff is not planned. The plant added that the company;s boiler would operate in normal mode while continuing to fulfill its obligations to provide heating of the Nikelschiki district. 

The capacity of Ufaleynickel is 15 thousand tons of nickel per year. In 2016 it produced about 10.2 thousand tons, more than 90% were exported. The revenue of the enterprise in the first nine months of 2016 amounted to 4.8 billion rubles, the losses were 1.4 billion rubles, long-term debt amounted to more than 13 billion rubles. According to, the enterprise has five mortgage loans in Binbank.

One of the three operating furnaces was stopped on February 1 on the decision of the Board of Directors. In this regard, 703 out from 2100 workers were turned idle with 2/3 of the wage. In the same group with Ufaleynickel are Rezhnikel, which produces raw materials for the plant, and Serovsky mine (both in the Sverdlovsk region). Since the end of 2011, these assets have belonged to Highmetals KDS owned by the Timofeyev brothers (who bought them from PMH owned by the Zubitsky family), but in 2015, a source told Kommersant-Southern Urals, the enterprise was transferred to the entities acting in the interests of BIN due to the debts. At the end of 2016 98.71% stake in the plant belonged to four Cypriot companies whose beneficiaries are not disclosed, but its board of directors, for example, includes Eriskhan Kurazov, CEO of MLP logistics group owned by Safmar. The management company for all three nickel assets is Rusnikel LLC with nominal shareholder-natural persons (periodically changed). Also, Rusnikel in January decided to suspend the activities of Rezhnikel in the Sverdlovsk region.

In early February, the governor of Chelyabinsk region Boris Dubrovsky held a conference in Verkhny Ufaley, where it became known that the company's territory is claimed buy nine investors. The two companies are planning to expand existing production capacities. These are MetMashUfaley (manufacturer of the equipment and spare parts for steel production, as well as general-purpose machinery, steel and cast iron, steel) and OAO Dormash Plan" (produces systems for the production of materials for road construction, as well as various construction equipment spare parts to it).

Seven investors are ready to create new businesses. These are projects related to the organization of machining foundry, production of steel products, export-oriented, development and industrial production of tin extraction, zinc, lead from the non-core products smelters, mining enterprise, cutting granite and production from it curbs, paving stones, slabs and non-standard products, the production of asphalt concrete modifiers, a plant for the production of products made of granite, the production of milled micro-calcites plant. All projects will be included in the application to create the Upper Ufaleya territory of advanced social and economic development. "We understand the conditions under which the investors are willing to implement projects. Relevant ministries are directed to their needs. In early March, we go in Verkhny Ufaley, where together with investors will visit the site of the plant, to discuss possibilities and conditions,"- said the Minister of Economic Development Sergey Smolnikov. Binbank previously refused to talk about the negotiations with any of the investors, noting that "all options are being worked out to help the enterprise in the current situation."

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Chairman of the trade union Ufaleynickel Alexander Sadyrev reported that staff have not yet received notification on goind idle since 1 April. "The mood of the workers is bad. In our city, it is difficult to find a new job. Those who could, have long been found it; those who can not because of the nature of their profession, are in anticipation. So far no protests are planned, but if needed, we will do it," said he. According to his information, there are no backdated salaries. He believes that the plant might be saved by a strategic investors, but so far, as he knows, there are no exact persons willing to invest.