For many years the company remained profitable thanks to the rich deposits in the Arctic. Still, production volumes remained relatively stable as ore metal concentrations decreased and the company focused on revamping production capacity at the MMC.
“Now, considering a growing need for nickel to produce rechargeable batteries the time has come to increase production. Two new projects would allow the MMC to increase nickel and copper production by 15% by 2025, while platinum group metal production could go up by as much as 25% compared to 2017”, - said the President of the MMC Vladimir Potanin in a Reuters interview.Nickel production could increase to 240 thousand tons by 2025 from 210 thousand tons in 2017. Nornickel estimates that the 30 thousand ton difference would cover approximately a third of the nickel shortage in 2019.
The two projects under consideration at Nornickel are the third stage of upgrades at Talnakh enrichment plant and the so-called southern cluster development. The projects will require an 1,3-1,5 billion dollars increase in capex to 11,5 billion dollars in 2019-2022, - said Vladimir Potanin. He expressed hope that the Russian government would support some of the Nornickel’s suggestions from the list of strategic projects that metal and mining companies will be discussing with the government.
The current capital expenditure plans at Nornickel include some 6,5-7,5 billion dollars for the baseline investment program and an additional 2,5 billion dollars for the environmental program. These remain a priority and, as expected, will add 1 billion dollars to the company’s main source of revenue in 2019-2020 while allowing to increase nickel and platinum group metal production by 5%.
Vladimir Potanin emphasized that he plans to maximize the use of digital technologies at Nornickel, which would enable him to get a bigger share of the electric vehicle market. Recently the company agreed to join efforts with BASF, a German company, on the European battery market; it could envision entering similar projects in other markets.
Nornickel is also placing a stake on palladium, used to manufacture automotive catalytic converters.