Bloomberg 3 March 2014

OAO GMK Norilsk Nickel, Russia’s largest mining company, may be the least affected among its peers by the Ukraine crisis because of its dominant position in global nickel and palladium supplies and financial strength.

Norilsk’s position is fortified by its 17 percent share of worldwide nickel output and 41 percent of palladium, Dmitry Kolomytsyn, a Moscow-based analyst at Morgan Stanley, said by phone. The metals are priced in dollars, which reached a record high against the ruble today.

“Norilsk is too large a company to be seriously affected by any possible trading sanctions,” said Kolomytsyn. “It has the strongest financial balance, especially after the ruble weakened, with almost all of its revenue coming from exports.”

The U.S. is weighing sanctions against Russia after President Vladimir Putin got lawmakers to rubber-stamp troop deployments. The move prompted U.S. President Barack Obama to protest Putin’s “clear violation” of Ukraine’s sovereignty n a 90-minute call yesterday.

Ukraine yesterday mobilized its army as gunmen surrounded military installations in Crimea. The Black Sea region of Crimea, where Russian speakers comprise the majority, has become the focal point of Ukraine’s crisis after an uprising that triggered last month’s overthrow of President Viktor Yanukovych.

Norilsk dropped 3.2 percent to 5,798 rubles by 1:17 p.m. in Moscow trading, while the benchmark Micex Index fell 8 percent. The ruble, which has weakened 9.9 percent against the dollar this year, reached a record 36.49 per dollar today.