Could the Russian industry town Nikel reinvent itself as a tourism hub?

By Atle Staalesen, The Independent Barents Observer - January 27, 2020
A nickel smelting plant in Nikel that is a major regional employer is due to fully close in course of 2020. (Atle Staalesen / The Independent Barents Observer)

Russian metal producer Nornickel might invest up to 10.5 billion rubles (€153 million) in the development of a tourism cluster in Pechenga, a municipality located along border to Norway and Finland, as part of a larger initiative to develop a post-industrial economy in the area.

The company is closing a nickel smelter in Nikel, a major town in the region, a move which has fueled a sense of crisis there, where most men and women have for the past three generations had their lives closely connected with the plant.

Several hundred people will be dismissed in the course of the year, and locals fear that Nikel will be abandoned and turned into a ghost town.

However, local authorities and the company have offered assurances that there will be new industries created and that locals can be re-trained and re-employed in new jobs.

“Nobody will abandon Nikel,” regional Governor Andrey Chibis said after signing an agreement with Nornickel in late 2019.

The town has “a serious future,” the regional leader said and invited locals, companies and investors to take part in a discussion about strategic developments.

The agreement between Chibis and Nornickel leader Vladimir Potanin is reported to include about 140 billion rubles (€2 billion) for investments and developments in the region over the next five years.

Included in that sum is a substantial amount of money for the development of tourism. According to regional Deputy Governor Olga Kuznetsova, Nornickel could invest 10.5 billion rubles (€153 million) in the development of a tourism cluster in the area.

The mining and metallurgy company is ready to invest the money in cooperation with local partner Port Liinarkhamari, news agency Interfax reports.

The project was discussed in a regional government meeting on January 9. No information about specific plans under the initiative was presented, but Port Liinarkhamari could potentially be granted major tax benefits as part of the establishment of free economic zone in Murmansk.

At the same time, local authorities are reaching out to neighboring Norwegians for assistance. In a meeting with a delegation from Sør-Varanger, the nearby Norwegian municipality, representatives of Nikel expressed hopes that the Norwegians will assist in the process.

Several joint working groups are to contribute with ideas that ultimately will be included in a local action plan, according to the local Russian municipality.