A Glencore furnace
(Picture: Glencore)FTSE 100 commodity giant Glencore today cut back its exposure to Russia but stopped short of pulling out of the country altogether as other international businesses have.
Glencore, the world’s biggest commodity trader, said it will not look for new business in Russia but will maintain valuable relationships in the country.
“Glencore will not enter into any new trading business in respect of Russian origin commodities unless directed by the relevant government authorities,” it said in an emailed statement on Wednesday.
Shares in the business gained 3.5% in London.
It came as two London-listed Russian gold producers sought to reassure investors amid plummeting share prices and sanctions on counterparties following the invasion of Ukraine.
Petropavlovsk, a Russian miner, was forced last week to miss an interest payment due to Gazprombank (GPB), its main lender, because of sanctions. It said on Wednesday that it was “in the early stages of discussions with its advisers and GPB relating to a potential restructuring” in respect of $304 million outstanding in notes.
The company has already been ejected from the FTSE 250 index following a collapse in its share price.
Elsewhere, Polymetal’s new chairman defended his decision to join the board of the company while other Western board members quit Russian companies.
Riccardo Orcel said it was a “turbulent time” but the board was committed to “preserving and hopefully rebuilding the value” of shareholders’ investments “as well as protecting the livelihood of thousands of employees, contractors, suppliers and other stakeholders”.
Orcel, an Italian who previously headed global banking at VTB Capital, the investment banking arm of Russia’s second-largest lender, was appointed last week as Polymetal’s new chair.
Polymetal said five new independent directors and a new chairman had been appointed since last week following the resignation of its previous British chair and five other board directors.
Six board members are now independent non-executive directors in compliance with the UK Corporate Governance Code.
Polymetal, previously a FTSE-100 company, operates eight mines and a processing plant in Russia and Kazakhstan. It said its operations in the two countries “continue undisrupted” and that completion of a pressure oxidation plant in the Russian Far East would slip behind schedule slightly but was nonetheless going ahead.
A so-called pox hub allows production of gold from refractory ore, which is difficult to process but abundant in Russia.
Polymetal earlier this month described the Russian invasion of Ukraine as “horrifying and heartbreaking” but said on Wednesday that “sanctions announced in the period between 9 March and 30 March did not have a material impact” on its business.
The company generates a large proportion of its revenue from selling gold to Russian banks, with the central bank viewed as a buyer of last resort.
Norway’s sovereign wealth fund, one of Polymetal’s biggest shareholders, has said it will dump all of its Russian investments.
