Russia Transfers Seized Stake In Strategic Metals Firm To State Nuclear Energy Company

Solikamsk, which produces 100 percent of Russia's tantalum and niobium as well as 60 percent of its commercial magnesium, was privatized in the 1990s.

Russia has transferred a majority stake in a strategic metals firm to the state's nuclear energy company after seizing shares from its private owners.

Prime Minister Mikhail Mishustin on December 8 signed an order transferring the shares in Solikamsk Magnesium Plant to Kremlin-controlled Rosatom, according to аn order posted on the government's website.

Russia last year seized an 89 percent stake in Solikamsk, claiming the Urals-based company was illegally privatized in the 1990s.

Russian courts have nationalized dozens of companies -- many strategic -- on that basis since the Kremlin launched its invasion of Ukraine, raising fears in the business community about a larger revision of privatizations.

Russia sold off wide swaths of its economy in the 1990s, including energy and metals companies, often in an opaque and unfair manner that gave rise to the so-called "oligarchs."

Solikamsk, which produces 100 percent of Russia's tantalum and niobium as well as 60 percent of its commercial magnesium, was privatized in the 1990s as well.

Tantalum is used in a variety of commercial and critical defense applications such as mobile phones and turbine engines for aircraft, while niobium is used in the production of high-strength steel alloys used in pipelines and transportation infrastructure.

Magnesium has a variety of industrial uses, including as a reducing agent to separate uranium.

President Vladimir Putin promised in the early 2000s shortly after coming to power that he would not reverse the privatizations if Russia's tycoons stayed out of politics and that agreement had largely been maintained with a few major exceptions before the war.

The series of nationalizations -- many but not all based on alleged illegal privatization -- since the war began has sent a chill through the business community, Aleksandr Shokhin, the head of Russia’s industry lobby, told the RBK news agency in September.

"Nobody knows who will be next," he said.

He said there was concern the assets are being seized to hand over to people who are considered more loyal to the Kremlin.

"If an asset goes into state ownership, where does it go? Is it transferred to the management of the 'right' people, 'good' entrepreneurs from some circle? Or is it being put up for privatization?" he said.

Many Russian tycoons have kept a low profile since the invasion of Ukraine, with some relocating abroad, opening themselves to criticism, especially from pro-war members of the elite.

Russia earlier this year seized a controlling stake in Syas Pulp and Paper Mill, one of the largest manufacturers of toilet paper and napkins, after its owner acquired Israeli citizenship and relocated abroad.

Putin last month met with the country's largest businessmen at his residence outside Moscow to discuss Russia's business climate. The issue of nationalization was expected to be raised.

With reporting by Kommersant, RBK, and Reuters