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Kinross in negotiations to sell Russian mines

Kinross already operates Kupol (pictured) and Dvoinoye mines in Russia, which account for roughly 20% of its annual production. (Image courtesy of Kinross | Flickr)

Canada’s Kinross Gold Corp (TSX: K; NYSE: KGC) has entered exclusive negotiations with an unnamed third-party mining company after receiving several proposals to sell all its Russian assets.

As part of the exclusivity agreement, Kinross’ Russian subsidiaries will continue to operate the Kupol mine and other assets to maintain them properly.

Kinross noted in a media release Tuesday afternoon that any potential divestiture or change of control would have to receive Russian government approval.

Kinross will also continue to manage and mitigate the environmental impacts of its Russian operations. This includes overseeing monitoring systems and transporting industrial materials to the Kupol mine that are not allowed to remain at the port to maintain safety and regulatory compliance.

Kinross said it would continue to prioritize the well-being of its more than 2,000 employees in the country as it developed its transition plan.

Kinross will not benefit financially from the Russian operations while the transition plan is finalized. According to Kinross, current activities will be funded through resources already in-country, with no additional investment required by the parent company.

Kinross said it would suspend its Russian operations this month, including the Udinsk development project and Kupol mine. Kinross expects to treat its Russian business as an asset held for sale from an accounting perspective until a change of control is completed.

Several companies with exposure to Russia are taking steps to comply with sweeping Western sanctions against Moscow over its invasion of Ukraine.

Anglo-Australian miner Rio Tinto (LSE: RIO) also said it is cutting ties with Russian businesses, while miner Glencore (LSE: GLEN) sold its stake in Russia’s Russneft in February.