Russian Oligarchs Struggle Over Nickel

MOSCOW — In a battle of Russian oligarchs, shareholders voted on Thursday to retain the current board at Norilsk Nickel, thwarting an effort by a minority owner to gain more seats and oust the management.

Norilsk, whose Siberian mine far to the north of the Arctic Circle produces about a fifth of the world’s nickel, has become increasingly profitable. Nickel is used in stainless steel, which is in demand in China, and is carving out a new market as an important raw material for batteries used in electric cars.

Oleg V. Deripaska, a Russian oligarch who controls about 25 percent of Norilsk through his aluminum company, Rusal, had hoped to reverse the results of a vote at a shareholder meeting in June. Another oligarch, Vladimir O. Potanin, had gained the upper hand by winning more board seats in the course of that meeting.

Yet Mr. Potanin owns only about 25 percent of Norilsk; executives at Mr. Deripaska’s company are accusing the management of Norilsk of voting shares the company holds in support of Mr. Potanin’s candidates.

Executives at Mr. Potanin’s private equity fund, Interros, meanwhile, have suggested that Mr. Deripaska wants to replace management so he can raise dividends, siphon money from Norilsk and pay down debt at his other companies.

Mr. Deripaska says he is asking for higher dividends because management has not presented a good investment plan for the profits. Norilsk is expected to earn about $7 billion this year before taxes, interest and amortization.

“If you’re not investing and not buying back stock, you are expected to pay it out,” said Rob Edwards, a metals industry analyst at Renaissance Capital in Moscow, describing Mr. Potanin’s position. “That is value management.”

In the short term, the disagreement is not likely to affect global supplies of nickel, or any of the other valuable metals coming out of the mine. Mr. Potanin’s supporters, however, say that paying higher dividends could cut into investments needed to maintain or expand output in the future.

Currently, only about 1.5 percent of the world’s output of nickel is used in the battery packs for electric cars. But demand is expected to grow so quickly that even as more nickel becomes available from new mines, the percentage going into electric cars will rise to about 4 percent by 2020, Mr. Edwards said.

The Norilsk mine, near the city of the same name in Siberia, taps a mother lode. The ore contains gold, platinum, silver, copper and other metals in addition to nickel. It provides half of the global supply of palladium, a metal used in automotive pollution control systems that is expected to be in higher demand as car ownership rises in China.

The Norilsk shareholder dispute would affect purchasers of nickel and other metals, including battery manufacturers in the United States, only if the company is starved of investment and output declines.