If You Think You Have Problems, Consider Norilsk Nickel

If you're a CEO and think you have takeover troubles, consider those of the owners of Norilsk Nickel well above the Arctic Circle in Russia's Siberia.
After more than a dozen years, ownership and management of this hugely rich complex is still in play. The reason is simple: the firm controls the world's largest deposits of nickel, palladium and copper in the world.

I visited Norilsk Nickel in early 1996 when I was a BusinessWeek bureau chief in Moscow. Vladimir Potanin, one of Russia's newly-hatched oligarchs who had seized a chunk of the firm's shares through the country's shaky privatization program, was trying to get rid of leftover Communist era management. By letting us in, he could gain Western favor which meant a lot in the Boris Yeltsin era.

A Russian photographer and I got on a plane for the long flight to the remote site where winter temperatures of 30 or 40 degrees below zero are common and during the winter sunlight lasts for maybe a couple of hours. Aircraft is the only way in. Some product is shipped by a short rail line to a tributary of the Arctic Ocean. Its shipping lane is kept clear of ice via atomic-powered icebreakers.

Mineral exploration started in the 1920s and by the mid-1930s, Norilsk was one of Stalin's showcase projects to demonstrate his at-all-costs industrialization drive. Much of the work was done by "zeks" or political prisoners at local Gulags who died by the thousands.

When we arrived, snowplows ran 24/7 but no restaurants were open. We actually got into the plant thanks to Potanin although my photographer and I were sick with headaches due to the toxic fumes from smelting.

Years later, Potanin is still in at least partial control of Norilsk although he spars with rival tycoon Oleg Deripaksa over complete control. Meanwhile, the tighter government policies of VladimirPutin have made Norilsk a logical target for renationalization. The latest news is that a former top Kremlin official, Alexander Voloshin, has become firm chairman. That's considered a tactical victory for both Potanin and Deripaska because they are still in the picture.

As for me, I regard Norilsk as one of the worst, coldest and most polluted places I have ever been on the planet. Our plane back was delayed for several days because of an ice storm and I nearly ran out of money. Luckily, we found an open restaurant. When we finally got airborne, I can't tell you how happy I was.