Proposals on swapping debt for a stake in a new big company a “Russian BHP Billiton”, as it was described by Larisa Zelkova, spokeswoman for Potanin’s company, Interros are stymied.

Russia’s steel and mining giants, which enjoyed record profits as commodity prices boomed, were left exposed to massive debt repayments as the global financial crisis reversed demand. Many have refinanced their loans with state-owned banks.

The proposed national company, in which the state would have taken a blocking stake of at least 25 percent plus one share, was to be formed by merging Norilsk Nickel with several steelmakers, local press reported. Deputy Prime Minister Igor Shuvalov said “Just because the enterprise is important and has several tens of thousands of workers, we do not simply intend to give out resources and wait for them to come for more later.”

“The shareholders and heads of these enterprises must for themselves look at their own personal responsibility,” he said. Deripaska last year used his 25 percent stake in Norilsk Nickel, the world’s leading producer of nickel and palladium, as collateral for a $4.5 billion loan from VEB.

Norilsk Nickel expects revenue to fall to $8 billion this year, CEO Vladimir Strzhalkovsky said.

The company will work on lowering costs and cutting investment project spending this year by 50 percent, the CEO told reporters in Krasnoyarsk.

Magnitogorsk Iron and Steel Works, or MMK, has said it is ready to pay its 801 million ruble debt to Mechel, signaling an end to a major dispute. MMK forecast production of 800,000 tons of steel in March, nearly double December’s production, and that February sales to FSU states would surpass exports to other countries for the first time since the crisis broke out. “We think the hardest period of the crisis has passed,” an executive said. He said MMK, Russia’s third-largest steelmaker, expected to post a profit this year. Meanwhile Sberbank will provide MMK two lines of credit, for 12 billion rubles and four billion rubles, and VTB agreed to lend the company four billion rubles for one year.

Novolipetsk Steel, NLMK expects full-year revenues of $11.6 billion in 2008 and earnings before interest, taxation, depreciation and amortization in the $4.7 billion to $4.8 billion band.