Nornickel moves to ditch Western tech

Unlike many of Russia’s other major companies, Nornickel is not subject to international sanctions.

By Atle Staalesen, The Independent Barents Observer - October 26, 2022
Nornickel has a major part of its industrial activities in Monchegorsk, on the Kola Peninsula. (Atle Staalesen / The Independent Barents Observer)

The Russian mining company Nornickel, the world’s largest nickel producer, says it intends to acquire new equipment from “friendly countries.” The company, which has the lion’s share of its industrial activities in the remote Russian Arctic, says it is determined to reduce dependency on western equipment and technology.

According to Production Director Sergei Stepanov, there are now major risks related with the supply of spare parts for the company’s existing equipment.

“At the moment, risks related to the punctual deliveries of spare parts to imported mining machinery and equipment, as well as the more complicated supply logistics, are of major importance,” Stepanov said in a comment published in the company’s recently issued Q3 report.

New logistical routes and supply channels for spare parts are now being identified and applied, the company leader explains. In the medium and long-term perspective, Nornickel intends to replace its current equipment. It will come from “friendly countries,” Stepanov said.

“Already in the near future we plan to start testing of new mining equipment provided by producers from friendly countries,” he says.

Unlike many of Russia’s other major companies, Nornickel is not subjected to international sanctions lists.

The company’s Q3 report shows a significant 22 percent increase in nickel production compared with the same period in 2021. However, the increase comes after a similar production drop in 2021 following a collapse of a processing plant in Norilsk.

Three people lost their lives and production came to halt when one of the buildings that houses an ore reloading facility collapsed in February 2021. It took several months to get production back on track. A similar halt in production could come in the last part of 2022 following the major fire at the company’s nickel electrolysis workshop in Monchegorsk in mid-September.

Nornickel in Q3 2022 produced a total of 59,000 tons of nickel. In addition comes 113,000 tons of copper, 712 ounces of palladium and 171,000 ounces of platinum.

In the course of the first 9 months of the year, production of copper increased by 10 percent, palladium by 11 percent and platinum by 8 percent.

Nornickel has the lion’s share of its mining and metallurgy industry in the far northern Taymyr Pensinula and Kola Peninsula. The company runs major logistical operations across the Arctic waters separating the two production regions. Major investments are now made in Dudinka, the seaport and terminal on the Yenisey River.

According to Nornickel owner Vladimir Potanin, up to 26 billion rubles (€300 million) is to be invested in the modernization of the local infrastructure. The modernized seaport will be of key importance for a hike in industrial activities in the Taymyr area, the company explains.

Nornickel is Russia’s largest producer of non-ferrous metals and one of the 10 largest private enterprises in the country. Profits are huge, and in 2021 the company’s owners cashed out more than €2.9 billion in dividends.