Russian watchdog seeks $2 billion in damages from Nornickel over Arctic fuel spill

Most of the amount is calculated based on damage to nearby water bodies.

By Reuters - July 6, 2020
Russia’s President Vladimir Putin takes part in a video conference call with representatives of environmental and animal protection public organizations, at the Novo-Ogaryovo state residence outside Moscow, Russia June 5, 2020. (Alexei Nikolsky / Sputnik / Kremlin via Reuters)

MOSCOW — Russia’s environmental watchdog has asked a power subsidiary of Russian mining giant Norilsk Nickel (Nornickel) to pay almost 148 billion rubles ($2 billion) in damages over a fuel spill in Arctic Siberia.

Rosprirodnadzor said in a statement on Monday that it had sent a request for “voluntary compensation” to the subsidiary, NTEK, after calculating the damage caused by the May 29 fuel spill.

Nornickel’s Moscow-listed shares fell by 5 percent after the watchdog’s statement.

Nornickel said it had not yet received the watchdog’s documents and would be able to comment on them only after it has studied them.

[The massive Norilsk fuel spill could be linked to permafrost thaw, a growing threat to Arctic infrastructure]

The spill followed a loss of pressure in a fuel tank, and 21,000 tonnes of diesel was released into rivers and subsoil near the city of Norilsk. Environmental pressure group Greenpeace has compared the incident to the devastating 1989 Exxon Valdez oil spill off Alaska.

Rosprirodnadzor said the damages included the cost for nearby water bodies, estimated at 147.05 billion rubles, and for subsoil, estimated at 738.62 million roubles.

“The amount of the damage to Arctic water resources is unprecedented. The sum corresponds to it,” Russia’s natural resources and environment minister, Dmitry Kobylkin, said in a separate statement.

“If one remembers the Exxon Valdez tanker accident off the coast of Alaska, the amount of the damage and charged fines (in that case) was over $5 billion,” the minister added.

Reporting by Anastasia Lyrchikova and Polina Devitt; Writing by Polina Devitt.