Russia’s richest man said international investors are coming back to the country and the impact of sanctions has peaked.
“Now it’s getting clear that the situation is more politically stable or predictable,” Vladimir Potanin, who heads Russia’s biggest miner, OAO GMK Norilsk Nickel, said in an interview with Bloomberg Television on Monday. “Nobody wants more sanctions. I think we reached a stable level in terms of tensions.”
Europe and the U.S. imposed sanctions on Russia’s energy and finance industries and dozens of prominent individuals last year after the nation annexed Crimea from Ukraine. The ruble lost almost half its value as the central bank burned through currency reserves in an attempt to slow the collapse.
So far this year, there are signs the situation may be stabilizing. The ruble has rallied to become the world’s best-performing currency in 2015, while President Vladimir Putin last week met U.S. Secretary of State John Kerry for the first time in about two years.
Investors were expecting more sanctions and more problems for the Russian economy, Potanin said. It’s now the “right time” for investors to come back to Russia, he said.
Most of Potanin’s wealth, estimated at $16.7 billion by the Bloomberg Billionaire Index, comes from his 30 percent holding in Norilsk Nickel, which isn’t subject to sanctions.
Norilsk fell 1.8 percent to 10,066 rubles at 2:05 p.m. on Tuesday, paring its gains in Moscow to 52 percent over the past 12 months. The company has a market value of 1.6 trillion rubles ($32.4 billion).
The company benefited last year from increases in the price of both nickel and palladium. It also gained from the depreciation of the ruble, which despite this year’s rally is still down 30 percent against the dollar over the past year. Norilsk pays its local costs in rubles while selling its metal production for dollars.
Potanin, 54, was regarded as one of the Russian oligarchs who wielded power behind the scenes during the administration of Boris Yeltsin, the first post-Soviet president. Potanin denies he ever considered himself an oligarch. While he had influence, he said he never had the power to force someone to do something or to dictate.
Russia has changed a lot since the 1990s and “nobody has political power in Russia except for the president and the government,” Potanin said.
Europe and the U.S. misunderstand Putin and the dynamics of their relationship with Russia by not appreciating that the nation has its own interests as well as being “mentally” European, according to the billionaire.
“We are friends, but we are not pupils in the class,” Potanin said. “Something has been broken since” Russia rallied to support the U.S. after Sept. 11, he said.
Potanin characterizes his relationship with Putin today as that of a businessman discussing issues important to the mining industry. The billionaire shares with the president a common passion for ice hockey. In May, he played against Putin’s team in Sochi in a gala match.
Off the rink, one of Putin’s main challenges is to find a younger leader to succeed him, according to Potanin, who said there needs to be more competition in Russian politics.
“I believe in leadership and competition,” he said. “In order to find the leader, you need people to compete.”
It’s not insulting to describe the nation as “Putin’s Russia,” Potanin said.
“People love him,” he said. “Russia loves strong leaders.”
For more, read this QuickTake: Financial War