MOSCOW: Russia plans to extend 6.5 percent export tax, currently set on platinum group metal ingots and sponge to other, related products, Vladimir Potanin, Norilsk Nickel’s (GMKN.MM) chief executive said.
As a major exporter, Norilsk has benefited from a fall in the rouble against the dollar since mid-2014 as its costs declined in dollar terms and its products became more competitive on global markets.
Norilsk, the world’s largest palladium producer and a large platinum producer, expects the government to sign the necessary documents in the near future, Potanin said.
Russia’s Economy Ministry has been expecting to receive an additional $157 million to the budget thanks to the application of the tax to chemical compounds and anodes of platinum group metals, Interfax added.
Norilsk is in a good financial condition and has not been lobbying against this decision, Potanin, also its co-owner, said: “We assumed that we can afford paying (the new) tax without hurting our production or social commitments.”
The company plans to buy back up to $500 million of its shares in 2015 as its 2014 core earnings jumped.
The new tax, if approved by the government, will be a temporary measure because Russia, as a member of the World Trade Organization, should cancel its export duties on platinum group metals from 2016.
Palladium and platinum are used by the automobile industry in catalytic converters and by the jewellery industry.
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