Deripaska says miners' merger off table

Discussion of a Russian mining mega merger that would create a rival to BHP Billiton has been put off for three years because of the crisis, Russian aluminium tycoon Oleg Deripaska told Vedomosti newspaper. Deripaska's Rusal, the world's largest aluminium producer, bought a stake in the world's top nickel and palladium producer, Norilsk Nickel, last year from billionaire Mikhail Prokhorov, leaving Prokhorov's partner, Vladimir Potanin, and his Interros group as the controlling shareholder in the miner. Key shareholders in both companies had expressed cautious interest in an eventual merger of the two companies to create a rival to the world's top miners, but Deripaska told the Russian newspaper talks were now suspended. "We agreed not to bring it up with Interros for three years," Deripaska told the newspaper in remarks published on Monday. An even broader merger involving iron ore powerhouse Metalloinvest and potash miner Uralkali was discussed early in 2009, he confirmed. Several of the potential participants had hefty debts to the state, including Rusal's $4.5 billion loan from lender VEB, and news reports suggested the owners were seeking to hand the state a stake in a new national champion to clear their balance sheets. "The idea was not well developed and everyone was in shock," Deripaska said. "No one wants to try to sunbathe in a storm." Rusal is working on an agreement with 73 banks to restructure $7.3 billion in debt to foreign lenders, who have insisted the deal include a mechanism for clearing the VEB debt. The current standstill expires on Sept. 18. Creditor bank sources have said the draft agreement contains a requirement that Rusal sell the Norilsk stake under a price formula which would allow it to clear its debt to state banks. Deripaska said Rusal had broached the idea of issuing a convertible bond on the stake and would return to it if VEB was interested. Concerning a sale of the stake, he said: "Definitely not below the purchase price". Deripaska paid an undisclosed cash sum, estimated at several billions dollars, plus a 14 percent stake in Rusal for 25 percent in Norilsk. (Writing by Melissa Akin; editing by Simon Jessop)