Russia’s top gold and silver miner Polymetal is in negotiations with British authorities to keep its London listing in the form of global depositary receipts (GDR) after it moves to Kazakhstan, Reuters has reported. The transition to Kazakhstan would allow the company to spin off its Kazakh business, which accounts for about 38% of revenue and 32% of annual production. The move is being considered due to Jersey, the current domicile, being deemed an “unfriendly” jurisdiction by Russia. However, the decision to change the listing will require approval from 75% of shareholders. Polymetal is counting on clarity within 1-2 months.
According to CEO Vitaly Nesis, cited by Reuters, “We want to take the Kazakh business out of the shadows, out from under the canopy of sanctions. That’s why we have to split up the company first.” The company’s management is in discussions with the London Stock Exchange, the FCA regulator, and service providers about retaining a form of LSE listing after the move to Astana. However, the European Union’s ninth sanctions package bars investment in Russia’s mining industry, leaving many service providers hesitant to engage in dialogue about securing a listing after the move.
The company’s shares have slumped almost 80% in London in the last 12 months. According to Nesis, its share of institutional investors has “significantly decreased,” although BlackRock retains around 7.5%. The outcome of the talks is likely to be a GDR listing, rather than a premium listing. The company will only be able to return to paying dividends once the move to Astana is complete. Polymetal has not been individually targeted with sanctions imposed against Moscow, but has faced hurdles.
Nesis added that sales have already been separated — the business in Kazakhstan sells all its gold to the central bank, while in Russia last year, the majority of metal was sold to Asia. But starting from 2023, Polymetal has returned to Russia’s rapidly growing domestic market with gold sales from its Russian assets, Nesis said, and is not engaged in export. “We are applying maximum efforts to maintain our listing in London, but given the recent, ninth sanctions package…the task is not simple,” Nesis said. 
