January 27, 2016 / 2:13 PM / a year ago

Russia's Norilsk to consider participating in Global Palladium Fund

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MOSCOW, Jan 27 (Reuters) - Russia's Norilsk Nickel said on Wednesday it would consider participating in a "Global Palladium Fund L.P." at a Feb. 1 board meeting, signalling it could potentially move nearer to a palladium stock deal with Russia's central bank.

Since 2014, Norilsk Nickel, the world's largest palladium and nickel producer, has had a proposal open to acquire some of the palladium in the Russian central bank's stock through a fund of investors led by Norilsk.

Norilsk, which made the announcement in a regulatory disclosure, declined to elaborate on the board meeting on Wednesday nor say whether its participation in this fund would mean that it was closer to the deal with the central bank.

In autumn 2015, a source familiar with the talks told Reuters that the negotiations with the central bank had been put on hold due to a plunge in global palladium prices.

The central bank also declined comment on Wednesday. The volume of palladium in its stock is a state secret. The bank holds one of the world's biggest gold and foreign exchange reserves.

In March 2015, Norilsk said the central bank had agreed "in principle" to the proposed deal, and its board was going to consider an approval of interest holding in this Global Palladium Fund. However, the disclosure of that meeting made no mention of any decision on the palladium fund.

Norilsk said last March that it was ready to invest between $200 million and $350 million in the deal, and Interros, which manages assets of Norilsk's co-owner Vladimir Potanin, was ready to contribute a further $100 million to $200 million.

Another shareholder in Norilsk - Russian billionaire and Chelsea Football Club owner Roman Abramovich - could also take part in the deal.

Norilsk Nickel had originally proposed this deal to the central bank as part of its efforts to guarantee stock availability for long-term customers and to increase market transparency. (Reporting by Polina Devitt and Elena Fabrichnaya; Editing by Mark Heinrich)

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