By Lucy Jones BBC News Online

How has a Russian nickel company - born out of a former gulag north of the Arctic Circle - come to be a key player in South Africa's gold industry?

Norilsk - a world away from sunny South Africa

There used to be a lot of talk about foreign companies running off with Russian resources.

But as Norilsk Nickel backs a bid by South African miner Harmony to buy rival Gold Fields - a transaction which would create the world's biggest gold producer - there are signs that the tables are turning.

Norilsk's origins in Russia's Arctic north could not be less glamorous.

Banana bribe

The city of Norilsk is built on the bones of former prisoners of Stalin's brutal labour camps.

In December, the city's residents see only one hour of daylight per day, and cars there have triple-glazed windows.

During Soviet times, the only way the state could get people to live in such an inhospitable environment was by bribing them with luxuries, such as bananas, and higher salaries.

Nonetheless, Norilsk Nickel is now a leading metals company selling most of its output to the car industry.

The concern was bought by entrepreneur Vladimir Potanin in the mid-1990s for what some would say was a snip - the company's value had risen six fold two years later.

It now supplies the world with a quarter of its nickel, and with palladium, a valuable metal used in catalytic converters.

The merger offer would create the world's biggest gold company

It has operations worldwide, not only in Russia's far flung corners, but also in Montana and Pittsburgh in the US, as well as in Europe.

The company's interest in South Africa stems from its acquisition of a 20% stake in Gold Fields in March this year.

Analysts say Norilsk's foreign expansion may be a strategy aimed at shifting its assets out of Russia.

There is speculation that Mr Potanin, one of Russia's five richest men, may have been unnerved by Moscow's recent offensive against oil giant Yukos, which now looks likely to be forced into selling some key assets in order to settle a multi-billion dollar tax bill.

Harmony's merger with Gold Fields would conveniently enable many of Norilsk's resources to be moved way out of Mr Putin's grasp, observers say.

Trend

It would not be the first time that Russian assets have been moved abroad.

There has been a flurry of such investments since the confrontation between the Kremlin and Yukos, which some believe is part of a campaign to bring national resources back under Kremlin control.

Chelsea Football Club owner Roman Abramovich, who also controls a large chunk of Russian oil firm Sibneft, is believed to have moved some assets abroad.

Lukoil, another Russian oil firm, has invested heavily in US gas stations, while gas firm Gazprom has funded a large part of a pipeline in Western Europe.

However, analysts also point out that rising commodity prices have made Russian raw materials firms rich, and that most of their wealth is held in dollars.

As there are few investment opportunities at home, it is therefore not unreasonable that many are looking to place their money abroad, they say.