Meanwhile, the high-grade nickel market saw a moderate deficit as evidenced by a decline in total nickel inventories of the LME and SHFE, which dropped by 49 kt in 2022 to 58 kt at the end of the year, or less than 10 days of global consumption. Norilsk Nickel Group is Russia’s leading metals and mining company, the world’s largest nornikel producer of palladium and refined nickel, and one of the biggest producers of platinum, copper and cobalt. On top of that, the Group produces rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, and sulphur. Bystrinsky GOK processes ores of the Bystrinskoye deposit into copper, iron ore and gold concentrates.

  1. Copper and iron ore concentrates are sold via third parties, while gold concentrates are further processed at the Norilsk Division.
  2. The first batch of converter matte was produced, with Norilsk Plant opening a Nickel Electrolysis Shop in 1943.
  3. Copper Plant processes all of the copper concentrate from the Company’s concentrators, metal-bearing products from Kola MMC and copper cake from Norilsk Nickel Harjavalta to obtain copper cathodes, elemental sulphur and sulphuric acid for the operational needs of the Norilsk Division.
  4. 2019 was another year of growing palladium prices due to the steady increases in consumption from the automotive industry amid tougher environmental standards worldwide.

Moody’s upgraded Nornickel’s credit rating to Ваа3 (investment grade) and raised its outlook to positive. The Company’s credit ratings from all the three international rating agencies (Fitch, Moody’s and S&P Global) currently qualify as investment grade. WWF Russia named the Company among the country’s top 10 environmentally responsible mining companies releasing its first-ever rating of the Russian miners and their impact on the environment and biodiversity. Precious metals produced by Nornickel are refined under tolling agreements at Krastsvetmet, Urals’ Innovative Technologies and Prioksky Plant of Non-ferrous Metals.

The production of nickel cathodes at Tankhouse 1 and Tankhouse 2 also generates primary cobalt cake, which is used by the cobalt section to produce saleable cobalt concentrate and cobalt cathodes. The produced nickel concentrates, including steam-cured sulphide concentrateHydrometallurgical product. The matte produced in flash smelting furnaces is then converted into high-grade converter matte. This increase was driven by the massive growth in the Indonesian NPI capacities (to 1.15 Mt Ni, or up 33% y-o-y) and the continued underlying growth of nickel compounds for the EV batteries sector, mainly fuelled by the launches of new HPAL capacities and NPI-to-matte conversion lines. In April, Nornickel completed an unprecedented operation, having installed the first heat exchangers on the site of the Sulphur Project, the Company’s flagship environmental programme. All in all, the Company built 28 installations over a year to make a single sulphuric acid neutralisation facility.

Foreign assets

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. For several straight sessions, the price fell by the newly established daily limits, and the first settlement price of USD 30,800/t was recorded on 22 March only, but later on, prices steadied at around USD 33,000–34,000/t, albeit at low trading volumes. As at 2020-end, the average monthly salary of employees was USD 1,827, which is 2.5x higher than the average wage in Russia.

Rock mass removal at Bystrinsky GOK totalled 100 mcm, a culmination of the facility’s consistent efforts in line with the mining schedule at Verkhneildikansky and Bystrinsky-2 open pit mines. Nornickel’s Global Palladium Fund issued physically-backed nickel Exchange Traded Commodities (ETCs) on Europe’s largest stock exchanges. Nornickel sold its Honeymoon Well Nickel Project in Western Australia to BHP Billiton Nickel West Pty Ltd. The deal also included Albion Downs North and Jericho Joint Ventures, both being exploration projects where BHP already owned the remaining 50% stake. To assess the impact of the incident on local communities, a special ethnogeographic expedition was carried out, which focused on studies of indigenous peoples of the North living on the Taimyr Peninsula.

The Group’s assets

The shutdown of Kola MMC’s smelting operations in Nikel and metallurgical shop in Monchegorsk resulted in an 85% decline in sulphur dioxide emissions in the Kola Peninsula in 2021 compared to 2015. The Company reinvented its approaches to environmental safety, with USD 5.5 billion out of the USD 27 billion allocated for Nornickel’s investment programme up to 2030 to be directed towards the environmental programme and another USD 1.3 billion towards improving the industrial safety of infrastructure. Nornickel and BASF signed a long-term agreement to supply nickel and cobalt feedstock from Norilsk Nickel’s Harjavalta refinery. The agreement is part of the Company’s ambitious strategy to step up its exports of battery materials to the global market. Copper Plant processes all of the copper concentrate from the Company’s concentrators, metal-bearing products from Kola MMC and copper cake from Norilsk Nickel Harjavalta to obtain copper cathodes, elemental sulphur and sulphuric acid for the operational needs of the Norilsk Division.

This is yet another step in Nornickel’s comprehensive environmental programme designed to significantly reduce the environmental impact of all its production sites. The concentrator produces nickel sulphide concentrate, which is then sold via third parties or partially shipped to the Norilsk Division for further processing. In 2022, the concentrator processed 7.0 mln t of ore, down 0.1 mln t year-on-year due to a decrease in ore production. High-grade nickel is produced in the form of nickel cathodes, briquettes, pellets and powder, rondelles, and other small shapes, as well as chemical compounds, both from sulphide and from more common and available lateritic raw materials. 2022’s leading producers of high-grade nickel were Nornickel, Jinchuan, Glencore, Vale, BHP, and Sumitomo Metal Mining (SMM).

Production chart

Stainless steel remained the key sector of nickel use (about 65% of primary demand) in 2022. Adding nickel as an alloying element to stabilise the austenite structure enhances steel’s corrosion resistance, high-temperature properties, weldability, formability, and resistance to aggressive environments. Nornickel also produces rhodium, cobalt, copper, silver, gold, iridium, ruthenium, selenium, tellurium, and sulfur. Mining began in the Norilsk area in the 1920s.[11] The Soviet government established the Norilsk Combine in 1935 and passed control to the NKVD.

On the other hand, a number of producers in New Caledonia, Brazil, the Dominican Republic, and Colombia were able to ramp up their output and deliver consistent performance. The surplus in the low-grade nickel market resulted in significant discounts for FeNi and accumulation of its stocks. Nornickel boasts a world-class resource base that is unique in many ways, including the amount of valuable minerals in ores, their high content and extensive reserve life. In 2021, the mineral resource estimate was updated, resulting in an increase of total reserves and resources by 225 mln t of ore. The growing popularity of electric and hybrid cars, along with the evolution of cathode technology towards nickel-intensive types, add to the tailwinds for significant growth in primary nickel demand in batteries in the long run. Despite the mounting competition across technologies, high-nickel formulations will remain the preferred option for automakers owing to their higher energy density, longer range and better recyclability.

Norilsk Concentrator processes all disseminated ores from the Norilsk-1 deposit, cuprous and disseminated ores from the Oktyabrskoye and Talnakhskoye deposits, and some metal-bearing products from Talnakh Concentrator to produce nickel and copper concentrates. Its key processing stages include crushing, milling, flotation, gravity concentration, and thickening. In 2022, Norilsk Concentrator increased its ore processing to 7.7 mln t, up 1.3 mln t year-on-year. The resulting thickened concentrates from Talnakh Concentrator and Norilsk Concentrator are transported via slurry pipelines to the metals operations of the Norilsk Division for further processing. Talnakh Concentrator processes high-grade, cuprous and disseminated ores from the Oktyabrskoye and Talnakhskoye deposits to produce nickel-pyrrhotite and copper concentrates, as well as metal-bearing products. 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.

Key trends in the nickel market

However, its growth rates slowed down slightly year-on-year due to both conversion of some furnaces to high-grade matte production and softer demand for stainless steel as well as skilled labour shortages in Indonesia. In addition, strict COVID regulations and more expensive airline tickets made travelling to these projects less attractive for Chinese workforce. Overall, we estimate the total 2022 NPI production in Indonesia at 1.1 mln t (up 33% y-o-y). At the same time, primary nickel demand in the stainless steel sector stayed flat at about 2 mln t in 2022. The overall decline in output was offset by the growing demand for Indonesian NPI, the preferred nickel feedstock for integrated stainless steel producers in China, the world’s largest producer accounting for nearly 60% of global steel output.

About Norilsk Nickel Group

Meanwhile, the high-grade nickel market remained in deficit, particularly as nickel inventories halved in 2022. Nornickel’s strategic goal is to achieve leadership in transitioning to the future green economy and in sustainability. This means not just full compliance with all national technical and legal requirements but also meeting the highest global environmental, industrial safety and climate change management standards. The Talnakhskoye Field, the world’s largest deposit of copper-nickel ores, was discovered giving a new lease of life to Norilsk Plant. The Trans-Baikal Division mines gold-iron-copper ores of the Bystrinskoye deposit through open-pit mining at the Verkhne-Ildikansky and Bystrinsky-2 mines. 2019 was another year of growing palladium prices due to the steady increases in consumption from the automotive industry amid tougher environmental standards worldwide.

Unless otherwise specified or required by the context, the terms “Company”, “Group”, “Nornickel” or “the Group companies” shall mean Norilsk Nickel Group. Quantitative indicators for certain areas of sustainable development pertain to the Group’s specific operations in accordance with the Scope of Data Collection appendix. In 2018, the Company accounted for 0.7% of Russia’s GDP, 2.6% of the national industrial output, 11.4% of metals production, and 2.6% of Russia’s exports. Nornickel and the Government of the Murmansk Region have agreed to partner in implementing local investment and social projects. The relevant memorandum was signed during the St Petersburg International Economic Forum by Andrey Chibis, Governor of the Murmansk Region, and Sergey Dubovitsky, Senior Vice President for Strategy, Strategic Projects, Logistics and Procurement at Nornickel.

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