The proprietors of Rezhnickel and Ufaleynickel are planning to convert their companies into state-run enterprises so as to avoid production stoppage and insolvency.

Both plants are now struggling with financial troubles due to dropping global nickel prices.

A meeting was held in the Representation of Russian Federation President in Ural Federal District yesterday where the owners Alexei Timofeyev and Artem Timofeyev asked for support. A discussion was held on whether the enterprises could be handed over to the government authorities ‘not for the money but in order to save the enterprises’.

‘We asked for short-term 300m RUR loans so that we could pay our workers’ wages and settle things with our suppliers. Rezhnickel and Ufaleynickel are very good businesses, and if it wasn’t for the recession in Europe, we wouldn’t be in a situation as bad as this,’ Timofeyev said.

It was decided in the course of the meeting that a work team would be set up, comprising people from the Representation of Russian Federation President in Ural Federal District, Governors of Sverdlovsk and Chelyabinsk Regions, and representatives of the Mid-Urals Development Corporation. Within a week, the team should come up with an action plan for saving the plants.

‘Banks refused to give us the loans because nickel prices plummeted, so we have to ask for state support in order to avoid stoppages. One cannot close the companies down now because they are located in small towns and the closure would leave their entire population jobless,’ Timofeyev explained.

He noted that the companies were expected to undergo upgrades later so that, if nickel prices should decrease again, there wouldn’t be another floating capital shortage.

According to Rezhnickel and Ufaleynickel Managing Director Eduard Karpenko, the prime cost of the plants’ produce comes to about $19,000 per ton, while nickel is now available for about $16,000 per ton at the bourse.