|Based in||Moscow, London|
|Active in||Burkina Faso, Guinea, Kazakhstan, Russia, Guyana, Sakha Republic, Transbaikal|
|Targeted||base metals, coal, precious metals|
Alexei Mordashov is one of Russia’s leading billionaires. He controls the huge OAO Severstal steel and iron ore mining group – Russia’s biggest of its kind – as well as a number of gold businesses and coal mines.
In November 2008, Severstal took a controlling 50.1% stake in debt-laden, TSE-listed, High River Gold Mines Ltd (HRGM) which has gold mines in Burkina Faso, as well as Russia. Mordashov’s bid to take full ownerhip of HRGM stalled in summer 2009 when a group of remaining shareholders, including Sprott Asset Management (qv) opposed his offer as too low [MJ 28 August 2009].
Having weathered this storm, in mid-summer 2010 Severstal increased its control of High River, by purchasing shares from an affiliate of the Russian investment bank Troika Dialog.
Earlier that year, Severstal also secured a 27% stake in Crew Gold, which then owned a gold mine in Guinea, entitling it to appoint three directors to the mining company's board. At the time, Endeavour Financial Corp had a holding in Crew Gold of 43% [MJ 4 June 2010].
Also around this time, Severstal acquired a coking coal deposit in Russia's Tyva region, in which it was reportedly considering investing nearly US$3 billion [MJ 26 November 2010].
According to the Mining Journal’s Ken Gooding, Mordashov “seems to be regarded internationally as the acceptable face of Russian capitalism” and was named by Business Week in 2003 as one of Europe’s top 25 managers.
The following year, the Leningrad/Newcastle-on-Tyne educated tycoon came under heavy suspicion when an American investigative journalist suggested he had taken over Severstal by stealth and deception – seizing assets which had actually been issued to the company’s staff.
The journalist, Paul Klebnikov, was later murdered - “almost certainly”, says Gooding, “because of his negative writings about Russian oligarchs” [MJ ibid], although there is no evidence Mordashov had anything to do with the assassination.
In 2006, Mordashov had tried to buy Luxemburg steelmaker, Arcelor, but lost out to Lakshmi Mittal. Earlier, his company acquired the Italian steel producer, Lucchini. During the next two years, he acquired 22% of AIM-listed Celtic Resources (Kazakhstan); Neryungi Metallic (in Russia's Sakha Yakuta region); and the Aprelkovo mine in Russia’s Transbaikal: the latter two being acquired from the Arlan Investment company.
In August 2008, Severstal also took over the Balazhal gold mine in Kazakhstan [MJ ibid]. [see also: Oleg Deripaska).
Between 2007 and 2010, Severstal had been building up the strength of its Nord Gold NV subsidiary, which reportedly invested some US$1.3 billion on acquisitions and in capital expenditure during those three years. Nord bought all the shares in Crew Gold that it didn't already own; increased its stake in High River Gold (HRGM); it also acquired a 20% stake in Sacre-Coeur Minerals, which is exploring in Guyana [MJ 21 January 2011].
Then, as the new year opened, Severstal announced the formal IPO of Nord Gold NV on the London Stock Exchange;seeking to sell 25% of new shares at around US$1 billion, to pay down the debt which Nord owed to its parent company, and embark on expansions of its own. [MJ 21 January 2011, ibid].
Nordgold was listed on the London Stock Exchange in January 2012 [MJ 20 January 2012].
About $470 million of Nordgold's investments during 2012 were planned to go mainly on construction work at new mines and on geological studies. The company said it was "mostly interested in high quality deposits in emerging markets such as Russia, Africa, Latin America and South-east Asia" [Bloomberg 12 March 2012].
Then, in February 2013, disaster struck. A methane gas explosion at OAS' Vorkutinskaya coal mine, in northern Russia, killed 18 (sic) out of a 26-strong workforce which had been 800 metres underground at the time.
The company issued a statement saying that it was "working vigorously to understand the cause of this tragic accident" and would pay around 40 million roubles (US$1. 3 million) to families of the victims.