The head of Russian mining giant Nornickel, Vladimir Potanin, has said he is ready to discuss a merger with aluminum group Rusal to create a juggernaut capable of resisting the effects of Western sanctions, according to an interview published Tuesday.

"I sent a letter (Monday) in which I indicated our agreement to start the discussion process for a merger with the Rusal group," he told Russian business paper RBK.

According to Potanin, it would be possible create a "national champion" in metals capable of facing ecological challenges in a very polluting industry, as well as broadening the shareholder base and "acquiring the capacity to resist sanctions."

The proposal comes as a deal between major Nornickel shareholders expires in January 2023.

Potanin had always opposed a merger of the world leader in nickel and palladium with the aluminum giant in a context of a conflict with Rusal, which already owns 25.25% of Nornickel.

But both companies are affected by Western sanctions imposed after Moscow sent troops into Ukraine on Feb. 24.

Potanin has also been hit by U.K. sanctions.

A large number of key Russian companies are facing serious problems in the supply of equipment and spare parts, the sale of which to Russia has been banned.

They are also struggling to import or export, as international logistics and financial chains have been partially paralyzed by retaliatory measures imposed by Europe and the United States.

Ruble tumbles

Following Potanin’s statements, the country’s currency, and ruble tumbled to a three-week low on Tuesday, sliding past 58 to the dollar, while shares in Rusal leaped.

Rusal's Moscow-listed shares leaped more than 20% before settling around 4% higher. Shares in En+, Rusal's majority shareholder, were 8.2% higher in Moscow. Nornickel shares fell 5.7%.

Russian stock indexes were lower.

Investors were looking for clues on when Russia may intervene in the currency market, something Finance Minister Anton Siluanov said Russia could turn to as it tries to keep a lid on the ruble’s strengthening.

The central bank did not immediately respond to a request for comment on what caused the ruble’s sharp drop on Tuesday.

The Finance Ministry said it did not plan to use extra budget revenues to buy foreign currency or gold, as it eyed increased budget revenues this month thanks to higher oil prices.

By 9:04 a.m. GMT the ruble was 5.4% weaker against the dollar at 58.18, its weakest point since June 14. The unit had lost 3.5% to trade at 59.77 versus the euro, earlier slipping to a three-week low of 59.95.

The ruble’s recent slump from more than seven-year highs hit last Wednesday is just a correction on the market, said Alor Broker in a note.

"It is too early to talk about a break in the ruble’s strengthening trend," Alor Broker analysts wrote. "Russia's balance of payments will continue to remain very strong, importers will not recover their positions quickly.

"Only by introducing a new budget rule can the situation on Moscow Exchange's currency market change radically."

The ruble is still the world's best-performing currency this year, boosted by measures - including restrictions on Russian households withdrawing foreign currency savings – taken to shield Russia's financial system from Western sanctions.

Proceeds from commodity exports and a sharp drop in imports are further factors behind the currency's gains. But the ruble has now lost the support of last week's tax-driven dollar and euro sales.

Expectations of the imminent launch of currency interventions may continue to pull support from the ruble on Tuesday, said Promsvyazbank analysts.