LEX As the world economy sinks into the abyss, the shenanigans of the Russian and central Asian miners are a welcome distraction. This week they have been particularly active. The Kazakh copper producer Kazakhmys appealed to the UK’s Takeover Panel to flush out compatriot Eurasian Natural Resources Corporation, which last month said it was evaluating “potential combinations”. Meanwhile, over the border, Rusal’s attempt to take control of Norilsk Nickel, Russia’s biggest mining company by market capitalisation, hit a snag. In a victory for minority shareholders, all motions for a meeting that would have helped Rusal were defeated.
Ironically, the fun and games may mark a new seriousness for governance. Sure, Russian oligarchs fighting to create and then control a potential national champion is a messy business. Rumours are flying on permutations between Norilsk, Rusal and Metalloinvest, an iron ore producer. But at least it seems that business forces are forging the new order, not politics. And that Norilsk’s minorities helped see off (for now) Oleg Deripaska, one of Russia’s richest men and owner of two-thirds of Rusal, is no mean feat.
The Kazakh mining sector is also maturing. It is easy to think that ENRC and Kazakhmys are on best behaviour partly because they have primary listings in London. ENRC’s founding trio still owns 44 per cent of the shares and the Kazakh government has a quarter. The state is also keen to own a chunk of Kazakhmys, which itself has a 15 per cent stake in ENRC. So bashing together a national champion would be easy if the government really wanted it. Yet the two FTSE 100 miners are playing it by the book.
Of course, so long as just a few individuals control these companies, there will always be risks for minorities. A prolonged resources boom may cause greed to bubble over. Equally, a downturn might lead to some panicked decision-making. But so far, so good.
