Hydrogen fuel is the way ahead, says oligarch

Mark Leftly
Sunday 23 March 2008 01:00 GMT

Mikhail Prokhorov, Russia's sixth-richest tycoon, has claimed that the UK is "missing a trick" in its search for clean energy and vowed to "invest billions" in hydrogen fuel cells.

Mr Prokhorov told The Independent on Sunday that the UK's commitment to a nuclear energy programme overlooked research that suggests hydrogen technology could be a more efficient option.

"So often," he said, "alternative energy sources, such as solar and wind energy, have failed two fundamental tests: being able to both store the raw energy and handle peaks of consumption."

Mr Prokhorov's main investment vehicle is Onexim Group, a $17bn (£8.6bn) private investment fund that he launched in May last year.

"As well as investing in more traditional industries [such as mining and high technology], it is our intention to invest billions in hydrogen technology," said the oligarch.

He added: "A compelling advantage of energy produced from hydrogen fuel cells is that it can, thanks to nanotechnology advances, be stored. It can therefore be produced to coincide with consumption peaks."

Mr Prokhorov is currently locked in negotiations to sell a 25 per cent plus one share stake in Norilsk Nickel, one of the ventures that earned him his $19.5bn fortune. According to Forbes magazine, he is the world's 24th- richest person and one of seven Russians in the top 25.

He holds the key to the takeover battle for Norilsk, the world's biggest producer of nickel and palladium. United Company Rusal, a Russian peer, has sent him the documents to purchase the stake, but it is understood that Mr Prokhorov is also in talks to sell the stake to his former business partner and Norilsk co-owner Vladimir Potanin. If, as expected, Rusal secures the stake, it would give the company negative control of Norilsk, with the power to veto any significant corporate move. Decisions must be approved by 75 per cent of shareholders.

This would ruin Norilsk's option to merge with Gazmetall, the iron and steel company owned by Alisher Usmanov, the Uzbek billionaire who is famous in the UK for owning a stake in Arsenal Football Club.

A banking source confirmed reports that a third option is under consideration at the board of Norilsk: merge all three companies, creating a $150bn Russian mining champion.

The British mining banking community has picked sides in the fight for Norilsk. Rusal has appointed six investment banks, led by Merrill Lynch and Credit Suisse; Dresdner Kleinwort is thought to be representing Mr Usmanov; and UBS is said to be advising Norilsk.

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