President of Russia Dmitry Medvedev: Alisher Burkhanovich, I know that your team is engaged in a number of large investment projects both in Russia and abroad. Please tell me about what is being done.
General Director of Gazprominvestholding Alisher Usmanov: Metalloinvest’s enterprises [mining and metallurgical holdings] produce a huge number of iron ore resources, with which we supply Russia’s entire steel industry and we export more than half of our products. And I can report that this year we completed one of the largest investment projects to build a new, technologically innovative hot briquetted iron plant.. We did not just set up a large plant, we created the largest facility in Europe and Asia: 2.5 million tons.
Dmitry Medvedev: Where is it?
Alisher Usmanov: It is located in the city of Gubkin in the Belgorod Region. We are setting ourselves the challenge of making this facility the largest in the world, bringing production up to 5–6 million tonnes. This product is in great demand because of its environmental cleanliness — both as products and semi-finished products for the metallurgical industry, and as a mode of production.
In addition to this plant we have several international projects in which we are also primarily setting ourselves the task of exploring new technologies. For example, our holding company holds shares in a unique company called Nautilus Minerals, which is developing technology to extract non-ferrous and precious metals on the seabed. In addition, we have tried to develop a niche in the Latin American region which supplies the main consumer of metallurgical raw materials, namely the People's Republic of China. We are trying to enter one of its enterprises in Peru. It is the biggest iron deposit in Peru; we have already received a certain amount of shares and are waiting for permission to further increase this amount.
With respect to the main task of our company, I would simply like to report to you today that we fully oversee the provision of raw materials to Russian consumers; all the needs of Russian companies are fully provided for and with a substantial discount relative to world prices. In this respect we apply the same principle that applies in my native Gazprom: equal profitability, but a transition in the long-term to world prices. And in addition to this, all of our exports are governed by long-term contracts with major world leaders such as ArcelorMittal — for ten years, US Steel — for ten years, and other companies in western Europe. These are our fundamental performance indicators. Our revenues reached 12 billion rubles this year, quite a high profitability rate. We are also paying due attention to social problems, both in regions where our enterprises are located, and in relation to the industry as a whole.
Dmitry Medvedev: When you make investments in other countries, what are your relationships there, do you not sense any problems?
Alisher Usmanov: You know, I do not think that these problems will have any strategic consequences for our investments because it is impossible to deceive the economy. If something is beneficial to those nations where we invest our money… Here we are now very far advanced and deeply involved in the negotiations on the consolidation of our assets and enterprises with the mining and metallurgical sectors of our former neighbours, fraternal states.
Dmitry Medvedev: Not our former neighbours, but our ex-Soviet republics?
Alisher Usmanov: Our former Soviet republics, that’s right. In this case, enterprises in Kazakhstan and Ukraine. Naturally, there are always problems, but they are all surmountable, and I think we will prove that Russian investments will always be effective and supported politically by our leadership.
Dmitry Medvedev: I have already talked about this and would like to say again that the Russian state will provide political support for Russian businesses when they decide to make investments outside of the Russian Federation.
Alisher Usmanov: Thank you. I would like to take this opportunity, Dmitry Anatolyevich, to report that my partners and I want to respond to the events which have affected our country, and we want to participate in the process that our neighbours — the people of South Ossetia — have to survive. We want to establish a fund to support all those who are affected by this enormous political and military crisis on the territory of South Ossetia. We want to establish this fund by using a large amount from our group — a billion rubles — and encourage our business community to help in rebuilding the state.
Dmitry Medvedev: This is a good initiative. I think we could discuss it during the forthcoming meeting with business that will take place next week.
Alisher Usmanov: We will be waiting for you. Thank you.
Dmitry Medvedev: I will definitely come.