Russia’s Mining And Smelting Company Nornickel To Launch Its Own Crypto Asset Trading Platform
Nornickel, the smelting and mining giants from Russia have announced their plans to launch a digital platform for metals trading by the end of 2019, the company’s senior vice president, Andrey Bugrov, made it public at the global GMIS-2019 production and industrialization summit.
“The preparation process was quite lengthy, but nevertheless we plan to bring this product [digitization of metal trading] to the market by the end of 2019 and begin trading our tokens.”
Norilsk Nickel is headquartered in Moscow and is the world's leading producer of nickel and palladium. It is ranked among the top ten copper producers. It also produces various by-products, such as cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, and sulfur. The company was founded on November 4, 1989, and is headquartered in Moscow, Russia.
Bugrov says that this token trading program could be worth nearly $1 billion, though it is a target figure. A top manager of the company added:
“This is an indicative figure, it will be necessary to feel what kind of appetite on the market there is for this product, there are a lot of factors that are not specifically regulated, but depend on the market situation.”
Intermediaries have long played a key role in these deals because the market for metal concentrates—the raw materials that are refined into metals—is extremely opaque. Refined metals like gold and silver have standard quality and are priced on global exchanges like the London Metal Exchange. Digital trading platforms will solve these problems.
Nornickel has been showing interest in blockchain technology recently. IBM has teamed up with Moscow Institute of Physics and Technology (MIPT) and Nornickel to establish an educational program on blockchain technology. Nornickel will provide financial support to students and open its production site to conduct research and test solutions.
Last year CEO of Nornickel, Vladimir Potanin said that the organization was planning to introduce a new stablecoin into the crypto market that will be backed by metals. The reason why Norilsk Nickel is looking to the crypto market is that they consider it as one of the effective alternative methods of securing affordable financing. Conventional funding techniques have become quite costly and complicated for Russian companies, precisely due to the Western sanctions.