In February, Nornickel’s Global Palladium Fund launched the world’s first Electric Vehicle Metals ETC. The new instrument provides investors with a simple and cost-effective way of accessing these metals, bringing potential diversification and inflation-hedging benefits to portfolios. In June, Nornickel’s Board of Directors approved the Environmental and Climate Change Strategy, which is designed to boost the group’s environmental performance.
Also, 13 thousand employees and their family members benefitted from our health improvement programme. In September 2020, Nornickel successfully placed its 5-year USD 500 million Eurobond offering with an annual coupon rate of 2.55%. In December 2020, Nornickel’s Global Palladium Fund issued its first tokens to put a number of contracts with major industrial partners onto the blockchain.
- Nornickel is Russia’s leading metals and mining company, the largest palladium and high-grade nickel producer in the world, and a major producer of platinum and copper.
- Stainless steel remained the key sector of nickel use (about 65% of primary demand) in 2022.
- The LME introduced new daily price fluctuation limits on nickel contracts based on the previous day’s closing price, allowed nickel position transfers, restricted the opening of new short positions, and resumed trading on 16 March.
- At the same time, primary nickel demand in the stainless steel sector stayed flat at about 2 mln t in 2022.
Deficit was offset by primary production growth and improved recovery of automotive catalysts as supplies from previously accumulated stocks were much smaller. Nornickel is focused on the mining and processing of minerals, as well as the production and sale of non-ferrous and precious metals, as well as exploration. Glencore reported a lower production of cathodes and rondelles in 2022 because of the strikes at its Nikkelverk refinery in Norway and at Canada’s Raglan mine (both conflicts are now resolved). The company, however, increased its production of briquettes and electrolytic powder at its Australian Murrin-Murrin plant after numerous operational disruptions in 2021. Nornickel won the gold award in the Business Transformation Category at SAP Quality Awards 2019 in the CIS region for its project to roll out SAP ERP across its operations in the Norilsk Industrial District.
ABOUT THE REPORT
Division-level investment limits not requiring the approval of the corporate centre were increased. The new division-based system will accelerate decision-making and improve accountability of production site management. The production of nickel https://g-markets.net/ cathodes at Tankhouse 1 and Tankhouse 2 results in semi-finished products with a high content of precious metals. These semi-products are processed at the chemical and metallurgical shop to produce precious metal concentrates.
In 2022, Australian BHP’s briquette and electrolytic powder production decreased due to equipment maintenance on the back of the switch from briquettes to nickel sulphate crystals production, gradually rising following its launch in late 2021. On 8 March, the LME was forced to suspend trading in all nickel contracts after prices jumped to a record USD 100,000/t, allegedly due to a massive short squeeze. Given the extreme price movements and low trading volumes, the LME decided to cancel all trades executed on 8 March and rewound the market to the moment when prices closed on 7 March. In February, the nickel price dynamics were dominated by escalating geopolitical tensions between Russia and Ukraine, which was further exacerbated by the low exchange stocks. As a result, the LME nickel price increased to a new 11-year high of USD 30,000/t during the trading session of 4 March.
Key social and environmental projects
In 1943, Norilsk produced 4,000 tonnes of refined nickel and in 1945 hit the target figure of 10,000 tonnes. The mining and metal production originally used forced labour from the Gulag system. The Company dramatically reviewed its approaches to environmental risk management, water stewardship, biodiversity restoration, and climate change, with clear targets set for each of these areas. The forum participants discussed whether the domestic industry sector had sufficient capacities to meet the needs of Nornickel and Russia’s other large businesses for supplies and equipment. A special focus was made on government measures to support the business, and incentives for entrepreneurs in the Arctic Region.
Nornickel is the leader in Russia’s metals and mining industry and one of the world’s largest metal producer.
Nornickel also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, and sulphur. Nornickel is Russia’s leading metals and mining company, the largest palladium and high-grade nickel producer in the world, and a major producer of platinum and copper. Nornickel also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, and tellurium.
Underground mining is carried out through sublevel caving using front ore passes and self-propelled vehicles. In South Africa, the Group owns 50% of Nkomati, which operates a nickel mine of the same name, put on care and maintenance due to termination of operations following a decision made jointly with African Rainbow Minerals, the Group’s partner in the project, in 2019. Nornickel maintains its focus on growth and is currently at the peak of its investment cycle.
About Norilsk Nickel Group
Kola MMC, Nornickel’s core nickel refining facility, is located on the Kola Peninsula. The Company intends to move towards carbon neutrality so as to maintain its competitive edge in the global market in the longer range. In Finland, Norilsk Nickel operates Norilsk Nickel Harjavalta (part of the Group), the country’s only nickel refining plant. It is the leading industrial facility of the Murmansk Region and is completely integrated into the transport infrastructure of the Northwestern Federal District. In March, an integrated control unit was put in operation at the Buildings and Structures Monitoring Centre of Nornickel’s Norilsk Division. The control unit ensures safe and reliable use of buildings and structures in the harsh Arctic climate.
The Nickel Plant shutdown project was completed, which helped cut sulphur dioxide emissions in Norilsk and thereby mitigate the environmental impact. Norilsk was granted the status of a town, with Norilsk Plant producing 35% of nickel, 12% of copper, 30% of cobalt and 90% of PGM from the Soviet Union’s total metal output. In 2022, total ore production by the Trans-Baikal Division was 15.0 mln t, down 1.6 mln t y-o-y. In addition to the production facilities, the Group operates captive global sales network and owns a wide range of R&D facilities, fuel and energy assets, river fleet, river and sea port terminals, a unique Arctic cargo sea fleet, as well as a number of other auxiliary units. Meanwhile, the waste generated by HPAL projects is becoming a severe limiting factor in terms of potential environmental effects as well as costs required to ensure their safe storage. According to CRU, if all Indonesian HPAL tailings were dry-stacked, the total electricity consumption to achieve that would exceed 300 GWh, primarily through coal combustion.
Norilsk Nickel
In 2022, EV sales (battery electric vehicles and plug-in hybrids) rose more than 60% to 11 million units, growing at a CAGR of over 50% between 2015 and 2022. The impetus for transport electrification comes from government incentives, more stringent environmental regulations, improved battery performance, and lower production costs of battery cells. In the first half of December, the nickel price rebounded to USD 30,000/t amid increased speculative trading, which could augur a new short squeeze attempt, but the price then retraced to USD 28,000/t. In late December, LME nickel prices stayed at USD 28,000–30,000/t in a sluggish market ahead of Christmas and New Year holidays. After a year of significant deficit in the nickel market in 2021, which resulted in a 38% increase in the annual nickel price, the price started the year buoyantly as robust speculative demand and significant spot market tightness had caused exchange stocks to dwindle further. As a result, combined with logistical bottlenecks and geopolitical tensions in Eastern Europe, the price has been pushed to an 11-year high of USD 24,000/t in mid-January, although this price spike was somewhat speculative and was accompanied by massive short covering.
At the Eastern Economic Forum, Nornickel, Rosatom and the Far Eastern Shipbuilding and Ship Repair Centre signed an agreement to design and build an LNG icebreaker to escort ships carrying Nornickel’s cargoes along the Northern Sea Route. Nornickel spent about RUB 12 billion (USD 157 million) to fight COVID-19, directing the funds towards supporting to safeguard the health and safety of its employees and purchasing personal protection equipment, COVID-19 tests, medicines and medical equipment across its footprint. The General Meeting of Shareholders refreshed the Board of Directors, with a majority of the Board comprised of independent directors for the first time in Nornickel’s history. Norilsk Airport completed the runway renovation spanning three summers (2016–2018) amid the airport’s continued operation. This was the first of its kind initiative both in Russia and internationally, with the project delivered on schedule and to the highest quality requirements.
In 2020, the Company signed a four-party agreement on the social and economic development of Norilsk. In 2021, Nornickel signed an agreement on partnership and collaboration with the Kola Sámi Association, and an addendum to its master agreement with the Association of Indigenous Peoples of Taimyr. Along with production enterprises, the Group operates a captive sales network, fuel and energy assets, transport assets, nornikel a range of R&D facilities, as well as a unique Arctic cargo fleet. GRK Bystrinskoye is a mining and processing plant located in a remote area of the Gazimuro-Zavodsky District, the Zabaykalsky Region. Maintaining the high quality of corporate governance is Nornickel’s absolute priority. Its robust corporate governance system has become one of the Company’s key enablers in achieving its strategic goals.
Moody’s upgraded Nornickel’s credit rating to “Baa2”, investment grade, and changed the outlook from “Stable” to “Positive”. Nornickel was commended by experts for its transparent environmental policy along with its environmental protection efforts and highly effective initiatives implemented during the Year of Environment in Russia. Norilsk Nickel celebrated its 80th anniversary marking the 80 years of exploring the Russian Arctic. Russian President Vladimir Putin commended MMC Norilsk Nickel’s team for their valuable contribution to the development of the Russian metals industry and excellent operating performance. The first batch of converter matte was produced, with Norilsk Plant opening a Nickel Electrolysis Shop in 1943. The Norilsk-1 deposit is developed by the Zapolyarny Mine of the Norilsk Division through open-pit and underground mining.