* Nornickel's fund bought 5 T of palladium in 2016
* Aims to buy not less than 5 T in 2017
* Nornickel could consider a Eurobond issue soon
(Adds details, quotes from CFO)
By Katya Golubkova and Anastasia Lyrchikova
MOSCOW, March 16 A fund created by Norilsk
Nickel (Nornickel) buys palladium from Russia's
central bank reserves to help meet demand from its customers,
the world's largest producer of the metal said on Thursday.
Demand from Nornickel's customers is higher than its
production of palladium, a metal used mainly in
emissions-curbing auto catalysts, Vladimir Potanin, Nornickel's
chief executive and co-owner, told reporters in Moscow.
"The central bank enables us to close this deficit," Potanin
said, adding the company only used the central bank's reserves
to fill orders, and not for stockpiling.
Nornickel's Global Palladium Fund bought 5 tonnes (around
160,000 troy ounces) of palladium in 2016 at market prices,
Chief Financial Officer Sergey Malyshev said.
Purchases were made from Russia's central bank and other
suppliers, he said, adding the Fund would buy at least 5 tonnes
of palladium in 2017.
Nornickel created the fund in 2016 to develop relations with
holders of existing metal stockpiles, with a commitment for
potential transactions of up to $200 million.
The central bank, which holds one of the world's largest
gold and foreign exchange reserves, did not provide an immediate
comment. The size of its palladium stock is a state secret.
"We believe that the fund's activity in future will be
focused on easing of market volatility and increasing of demand
from large industrial consumers," Malyshev said.
Potanin also said Nornickel could consider a Eurobond issue
in near future as the company could restructure a part of its
Talking about other Nornickel projects, Malyshev said
Chinese investor Highland Fund had not used its pre-emption
right to buy a 40 percent stake in the Bystrinskoye gold and
copper mining project in Siberia.
He also said CIS Natural Resources Fund, a Russia-focused
natural resources fund established by Potanin and his partner,
would decide by the end of 2017 whether to go ahead with a
proposed purchase of 39 percent of the project.
(Reporting by Katya Golubkova and Anastasia Lyrchikova;
additional reporting by Polina Devitt and Elena Fabrichnaya;
Writing by Polina Devitt; Editing by Greg Mahlich and Mark