Polymetal's boss, Vitaly Nesis, predicts three-year wait for FTSE return

The chief executive of Polymetal International, the Russian gold producer which exits the FTSE 100 this month, has warned that it could take three years for it to re-enter the blue-chip index.

The weakness in the commodities markets has seen Polymetal's shares decline in value to the extent that the St Petersburg-based group and steelmaker Evraz will also lose membership of the elite list of biggest public companies. The housebuilder Persimmon and builders' merchant Travis Perkins will replace them.

Polymetal's chief executive, Vitaly Nesis, told The Independent: "Membership of the FTSE 100 is not predicated on [financial results], the share price reflects expectations – and the gold and silver prices have fallen off. I believe the recent drop has heralded the start of an adjustment in the commodity cycle."

He said that this cycle would last two to three years, and the only way Polymetal could regain its former market value ahead of an upswing would be through acquisition.

Mr Nesis said that he would be looking at all-share deals of up to $1bn (£640m) by the fourth quarter, when he expects good mining assets to be available at reasonable prices.

However, he also plans to woo back Russian investors in the business through a secondary listing on the Moscow stock exchange.

Mr Nesis said this move was "imminent" and would "recapture some of the loyal investors" who held shares in Russia before Polymetal became one of the first two Russian groups on the FTSE 100 in 2011.

The other group was Evraz, in which Chelsea FC's owner, Roman Abramovich, has a stake. At that point, Polymetal was valued at more than £3.5bn, but today is worth less than £2.5bn following a sharp decline since the start of the year.

Mr Nesis also argued that around 15 per cent of gold mines globally would have shut down as they are grossly inefficient.

"They were built on hype," he said. "They were financed by stupid equity money and now they have to be closed to restore a healthy balance [to the gold industry].

"Their real margin can be around minus 20 per cent."

Polymetal was founded by Mr Nesis's billionaire older brother, Alexander, through his investment vehicle, ICT Group.

PROMOTED VIDEO
Life and Style
food + drink
Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
News
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments