Russian watchdog seeks nearly $3B in damages over Arctic fuel spill in Siberia

Russia's environmental watchdoghas asked a power subsidiary of Russian mining giant NorilskNickel to pay almost 148 billion rubles, or $2.8 billion Cdn,in damages over an Arctic fuel spill in Siberia.

Rosprirodnadzor, the Federal Service for Supervision of Use of Natural Resources,said in a statement on Monday that it hadalready sent a request for "voluntary compensation" to thesubsidiary, NTEK, after calculating the damage caused by the May29 fuel spill.

Norilsk Nickel's Moscow-listed shares fell by 3 per centafter thewatchdog's statement.

A fuel tank at the power plant lost pressure and released21,000 tonnes of dieselinto rivers and subsoilnear the city of Norilsk, 2,900 kilometres northeast of Moscow.Russian President Vladimir Putin subsequently declared a state of emergency in the region, and investigators detained three staff at the power plant.

At the time of the spill, a company statement said it was concerned about facilities constructed on sinking soil above permafrost.The company did not immediately reply to a request forcomment.

Norilsk, a remote city of 180,000 people situated 300 kilometres inside the Arctic Circle, is built around Norilsk Nickel, the world's leading nickel and palladium producer, and has a reputation for its pollution.

Rosprirodnadzor said the damages included the cost fornearby water bodies, estimated at147.05 billion rubles, $2.8 billion Cdn,andfor subsoil,estimated at 738.62 million roubles, $14 million Cdn.

Greenpeace has compared the incident to the devastating 1989Exxon Valdez oil spill off Alaska.

"The amount of the damage to Arctic water resources isunprecedented. The sum corresponds to it," Russia's natural resources and environment minister, Dmitry Kobylkin, said in aseparate statement.

"If one remembers the Exxon Valdez tanker accident off thecoast of Alaska, the amount of the damage and charged fines [inthat case]was over $5 billion," the minister added.