Russian copper firm in talks to acquire state-seized gold miner

Russian copper producer UMMC is in talks with the government to acquire a majority stake in the gold mining company UGC, which was seized by the state in July, according to Reuters. The sources confirmed an earlier report by the Izvestia newspaper, which said that a firm called Atlas Mining that holds some UMMC assets, is negotiating with the Finance Ministry regarding the acquisition.

In July, Russia’s general prosecutor’s office won a lawsuit to transfer ownership of the majority stake in UGC, Russia’s fourth-largest gold producer, to the state, alleging it was obtained “through corruption.” The stake now held by the Finance Ministry was previously owned by Russian billionaire Konstantin Strukov, who acquired gold-producing assets at a bargain price in 1997 from a bankrupt Soviet-era enterprise.

Since the start of the military action in Ukraine, the state has seized over $50 billion worth of assets from Western firms and Russian owners, marking the largest redistribution of property in Russia since privatisation in the 1990s. The government and courts have cited reasons for these seizures ranging from national security to illegal acquisitions. The government has promised to sell some of the assets. Earlier, there had been other bidders for UGC assets, but they were no longer interested. Of course, there will be a formal bidding process, but its outcome is predetermined.