Norilsk Nickel’s new strategy
- In 2013 investment decreased by $200 mln compared to 2012, a record year, and amounted to 75.4 bln rub or $2.5 bln. Cost-cutting operations enabled this reduction, while maintaining project funding in full. All programs became more targeted and efficient, and thus less expensive.
- Company strategy is grounded in the key principle of more disciplined use of capital. The investment process now entails the following phases: concept, design and implementation. At each stage, there are ways to halt the project if it is not creating value for the company.
- Over the next three years, 2014-2016, Norilsk Nickel MMC plans to shed all non-core assets, as well as a number of assets abroad. These changes will also give the company new geographic focus. Today, Norilsk Nickel’s production units are located on three different continents, in five countries: Russia, Australia, Botswana, Finland, USA and South Africa. Shareholder value is created mostly in Russia, specifically in the Norilsk industrial area. Therefore, more attention will be on the Zapolyarny branch, where the current and potential resource base significantly exceeds the best comparable deposits in the world in terms of size and ore value.
- Norilsk Nickel will renew our focus on geological prospecting, a particularly effective method of business development. Successful prospecting has direct impact on the growth of the company’s resource base and competitiveness on the world’s markets. Under the new strategy, the geological prospecting budget will be doubled.
- Under the new plan, palladium and other platinum group metals will play a more sizeable role in the company’s revenue stream. Copper production increased by approximately 2% in 2013.
- Transparency in relationships with partners is another pillar of the strategy for effectiveness.
Norilsk Nickel owns the following industrial assets in Australia:
- Honeymoon Well (extraction of nickel sulfide deposits)
In Botswana, Norilsk Nickel owns an 85% stake in Tati Nickel Mining Company, which produces nickel sulfide.
In Finland, the Group’s Norilsk Nickel Harjavalta is the only nickel refinery plant in the country.
In South Africa, Norilsk Nickel owns a 50% stake in Nikomati, a nickel production company. African Rainbow Minerals is a partner in the project.
- Hypronickel Research Institute LLC in Saint Petersburg, with two branches in Norilsk and Monchegorsk.
- Norilsk Process Technology, a technology research subsidiary in Australia
Norilsk Nickel has a network of sales offices and representatives in Russia, the United Kingdom, China, the USA and Switzerland.
All of Norilsk Nickel’s products meet global standards. At the end of 2005, Norilsk Nickel MMC passed an audit to certify its integrated quality and environmental management systems as ISO 9001:2000- and 14001:2004-compliant.
In January 2006, Norilsk Nickel received compliance certificates for ISO 9001:2000 and 14001:2004 integrated quality and environmental management systems in Production, Sales, and Product Delivery of Nickel, Copper, Cobalt, Precious Metals, Sulfur, Selenium and Tellurium.
OJSC Norilsk Nickel MMC’s securities are traded:
- In Russia on MICEX (the Moscow Interbank Currency Exchange) and on the Russian Trading System (RTS) Stock Exchange
- Company ADRs are traded over the counter (OTC) in the US, and electronically in over-the-counter trading sections of the London and Berlin stock exchanges.
After a stock split on February 19, 2008, the share-to-ADR conversion ratio was 1:10.
Social and environmental responsibility are pillars of Norilsk Nickel MMC’s strategy of sustainable and efficient business development and the guiding principle in day-to-day operations.
In 2013 19.5 bln rub was invested in environmental programs in the Norilsk industrial area alone. Today the company is focused on preventing atmospheric pollution through emissions reduction programs.
The company’s medium-term strategy is to close down the Nickel Plant while increasing the Nadezhdinsk Metal Plant’s smelter capacity.
The company continues projects that involve recycling sulfur dioxide from rich gas at the Copper and Nadezhdinsk plants in Norilsk. New equipment for the Copper plant will cost Norilsk Nickel MMC 1 bln rub and will allow 99% of all air emissions to be recycled. The technology is unique and has no equivalent in other countries.
An even larger amount will be spent to mitigate the impact of nickel production on rivers and lakes around the Kola Mining and Metal Plant. Once environmental protection measures are implemented, sodium chloride and boron will no longer be released into estuaries, and sodium sulfate discharge will be reduced to one-fourth of the current level.<>Norilsk Nickel’s environmental efforts are not limited to its plants. The company continues to support the Putorana Plateau Birds project to study and protect rare birds in Taymyr.