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3
4
01
GREATER NORILSK NORILSK IS THE NORTHERNMOST, THE MOST WINDY AND THE MOST SURPRISING CITY IN THE WORLD
Arctic C ircl e
2,223 км
Norilsk Krasnoyarsk
Moscow
5
01 / GREATER NORILSK
69
The 69 parallel north is beyond the Arctic Circle boundary – here Norilsk is located, amidst the Arctic tundra of the Taimyr Peninsula. th
2,223
Norilsk is 2,223 km from the North Pole. An airplane being the only transport facility covers the distance between Moscow and Norilsk in 4 hours. There is no such thing as railway to the «mainland». Norilsk airport is often closed due to unflyable weather conditions; the longest non-flying period recorded 3 weeks.
5
Voyage aboard a passenger steamer from the port of Dudinka to Krasnoyarsk by the Yenisei River takes 5 days. Navigation lasts only four months.
9
The climatic winter reigns in Norilsk for 9 months.
280
Frosts settle in 280 days, and snowstorms rage 130 days a year.
6
96
The annual variances in temperature is 96 degrees. Late January 2014 was marked with the temperature of –62°C.
30–40
Winds gust to 30-40 meters per second. Norilsk is a Top-5 windy city of the world.
+10.7oC
The average summer temperature in Norilsk is +10.7°C. But occasionally it reaches +30°C. The summer 2016 showed a new record for heat: the temperature +30ºC held up for a month.
45
Polar night lasts for 45 days from November 30 up to January 13. The northern lights represent an exclusively magnificent spectacle. You can enjoy them mostly in autumn or spring.
176,569 According to the latest census, Norilsk population amounted to 176,569 inhabitants. It is the northernmost city in the world with permanent residents exceeding 150,000 people.
180 The distance between two extremes of Norilsk (Taimyrsky Mine in Talnakh and Snezhnogorsk settlement) is 180 km. The aircraft is the only communication between them.
957 The length of the fiber optic line being built by Nornickel is 957 km. The project is challenging, it requires unique engineering. Ultimately high-speed internet is expected to be accessible by the end of 2017.
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01 / GREATER NORILSK
THE CITY ABOVE THE ARCTIC CIRCLE Norilsk takes the 103rd place by population among 1,100 cities and towns of the Russian Federation. Currently, the population of Norilsk is largely represented by people who moved to the city in the second half of the 20th century and their offsprings, the city is also a place of residence for descendants of the prisoners who were granted amnesty in 1953. The name of the city stems from the Norilskaya River, whilst the city is located at the foot of Norilsk Mountains. According to one version, it has derived from «norilo» – a long, thin pole used to drag stake nets under ice between ice-holes. According to the another, the name has originated from the Evenk word «narus», which means «swamps».
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NORILSK TAKES THE 103RD PLACE BY POPULATION AMONG 1,100 CITIES AND TOWNS OF THE RUSSIAN FEDERATION
Large-scale holiday season starts in Norilsk in summer. Half a city departs for the mainland. Norilsk people are easily detected in the airports of the other cities by their neglect of the cold (nobody takes the mainland frost seriously while living above the Arctic Circle), by their bags stuffed with venison sausage and northern fish as gifts to their friends and relatives, by the specific glance they cast at green trees. By the beginning of the school year, all the holidaymakers return home. Norilsk residential blocks are distinguished by a special antiwind layout. The houses are constructed in such a way that every third house is visible from afar through the gap between the two adjoining buildings.
«Аktirovka» (a school-free day) is a favorite word of Norilsk students and pupils. When the weather gets unbearable, the cold and the wind grow stronger, the Education Department announces the «school-free days» – the days when children are permitted not to attend classes. Sometimes pupils of primary school enjoy such forced holidays for months. Meanwhile the adults get to the mines, mills and plants by buses arranged into columns. Norilsk airport was built on the site of a military airfield 52 km far from Norilsk. Some think that the airport was built in the runup to alleged Nikita Khrushchev’s visit, as the rate of construction was unrealistically quick, and the runway was specifically reinforced. 2016 marks the beginning of large-scale reconstruction of the Norilsk airport runway to be completed in 2018. Upon its completion aircrafts of different types will be able to land in strong crosswind which is currently impossible.
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300–500 m deep 300 – 500 метров
01 / GREATER NORILSK
ВЕЧНАЯ МЕРЗЛОТА PERMAFROST
NORTHERNMOST Polar day and polar night are typical phenomena for the geographical location of Norilsk. Polar day starts on May 19 and lasts until July 25. Within that period of time, the sun never leaves the sky and there is no alternation of day and night. Later on, from August 15, white nights take their turns superseded by twilight nights. Polar night begins on November 30 and lasts for 45 days. At that time, the sun never rises above the horizon. Norilsk rests on the permafrost, and hence on piles – conventional construction is inapplicable here. Pile foundations in permafrost were invented in Norilsk. In the 1950s, when the city was out of rocky sites for the construction, civil engineer Mikhail Kim, a former prisoner of Norillag (Norilsk prison camp), proposed a way to build houses on a swampy wasteland.
10
In Norilsk, the utility communications– tubes and cables – are laid on the surface (to prevent frozen ground melting); they often run along the streambed, crossing roads and streets via the portal struts. Most of heating pipelines are thermally insulated with planks. It imparts a pronounced industrial image to the city. Permafrost is a very «delicate» and vulnerable substance. It underlies the soil and penetrates to the depth of 300-500 m. If the upper layer of permafrost thaws, buildings will collapse. Once this thawing caused «tilted» houses to appear in Norilsk. They got uninhabitable. Facades of Norilsk houses, particularly on Leninsky Avenue, are painted in bright colors of lemon-yellow or orange, in order to compensate for the lack of color and light provoked by polar nights, snow and blizzards.
polar day
wh ite nig hts
hts g i n ite wh s t night twiligh
twiligh t night s
alternation day and night
alternation day and night
polar night
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02
YESTERDAY, TODAY AND TOMORROW
THE HISTORY OF NORILSK BEGAN IN 1921 WITH EXCLUSIVELY RICH ORE DEPOSITS DISCOVERED BY EXPEDITION TO THE TAIMYR PENINSULA UNDER THE HEAD OF GREAT RUSSIAN GEOLOGIST NIKOLAI URVANTSEV. THE COMMENCEMENT OF NORILSK MINING & METALLURGICAL COMPLEX CONSTRUCTION IN 1935 FORMED A BASIS FOR THE GLOBAL INDUSTRIAL GIANT NORILSK NICKEL. IN 2015, THE COMPANY CELEBRATED ITS 80TH ANNIVERSARY.
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02 / YESTERDAY, TODAY AND TOMORROW
The most difficult and tragic chapter of Norilsk history relates to Norillag, one of the largest GULAG camps that had existed from 1935 to 1956. An estimated 300-500 thousand people served their sentences within that period including engineering and creative intelligentsia. Those were the courageous people who began to build the Norilsk Complex. The memorial «Norilsk Golgotha» was erected at the mass burial site for many thousands of executed and diseased prisoners at the Schmidt Mountain foot. There is a collection of national memorials to commemorate the victims of repressions. The 514 m Schmidt Mountain is 4 km from the city center. It was named after Fyodor (actually, Friedrich) Bogdanovich Schmidt (1832-1908), a Russian geologist, a member of the Russian Academy of Sciences and a director of the Minerals Museum in St. Petersburg. During the Great Patriotic War the Norilsk Complex got status of particular importance due to its location in the hinterland. In 1942, Norilsk yielded the first metal, and in 1943, produced the first nickel for Soviet tanks.
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In 1959, the invention of ore-thermal smelting in Norilsk made a breakthrough in metallurgy. The proposed technology was 7 times more efficient than all the previous ones. The Old Town is a very special place, an origin of Norilsk. Nowadays it is a non-residential area. Here you can trace the development of civil engineering in Norilsk intended, for instance, to maximize building height and number of floors (given the shortage of land suitable for construction). Norilsk districts could be clearly differentiated by the construction periods. The most outstanding buildings were designed by the architects from Leningrad. That’s why the Norilsk architecture is reminiscent of the Leningrad style. Furthermore, Nevsky Avenue in St. Petersburg and Leninsky Avenue in Norilsk are often called the twins. Today the houses at the beginning of Leninsky Avenue and Gvardeyskaya Square are of great historical value. The Museum of the History and Development of Norilsk is situated in one of the most beautiful city buildings. It was built under the project of a Leningrad architect and a former political prisoner Yekab-Olgert Trushinsh as well as houses in Gvardeyskaya Square and the City Council.
In 1942, NORILSK YIELDED THE FIRST METAL
The Norilsk Museum houses a unique geological collection and gold and silver coins along with a five-carat emerald. In addition there are 2,403 rare books with Slavonic Prayer book of 1815 being the oldest one. The first house of Norilsk is a wooden, treasured building near the museum. The people call it Urvantsev’s House. It was built in 1921 by members of the expedition headed by Nikolai Urvantsev for the first-ever wintering in this area. Decades later, the house «moved» closer to the museum. As for the sports facilities the northernmost swimming pool and «Zapolyarnik» Stadium were opened in 1959 and the ice arena of «Arctic» Sports Palace welcomed its first visitors in 1970. Founded in 1941 Norilsk Polar Drama Theater named after Mayakovsky is the most northerly theater on the planet and one of the most famous in Russia. Such great actors as Georgy Zhzhenov and Innokenty Smoktunovsky used to perform there. It took its current location on Leninsky Avenue in 1986.
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IN 2015, NORILSK CELEBRATED THE 80 ANNIVERSARY OF NORNICKEL. th
02 / YESTERDAY, TODAY AND TOMORROW
In 1957, the opening of exhibition hall at the Copper Plant gave rise to Norilsk artistic life. The northernmost State Art Museum in Russia was founded in 1978. At present, it holds an amazing collection of 6000 exhibits. Norilsk maternity hospital is singular in Taimyr and one of the largest and most advanced in Russia. It deserved the UNESCO title of «Child Friendly Hospital». The grant program «Do not worry, mommy!» is under implementation now. Operating distantly from Russian leading medical centers imposes the particular requirements for quality of healthcare services. In 1945, the local brewery was built in Norilsk. Today Norilsk Brewing Company is a modern enterprise which considered to be an expert in unfiltered brewing and one of the best operations at Krasnoyarsk Territory. The company follows classic Czech recipes using merely natural products: hops, malt and sugar.
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Norilsk Dairy Plant, constructed in the early 1980s by a Finnish company, is the northernmost one in the world too. It renowned for its production with no preservatives or food additives. The plant put into operation the lines to produce icecream, yoghurt-like fermented milk food and low-fat products. «Our Cheer» is the local pet-name of Norilsk orthodox church «Cheer of All Who Sorrow» founded in the very same place where Norilsk prison camp barracks were located. The temple was erected jointly by the whole community. The icon of the Mother of God «Cheer of All Who Sorrow», placed in the icon case in the central part of the church, is especially venerated.
September 2015 was marked with a historic event in Norilsk. The Patriarch of Moscow and All Russia Kirill served the Divine Liturgy at the Cathedral of Norilsk and laid the Foundation stone of a new temple. In 2015, Norilsk celebrated the 80th anniversary of Nornickel. The large-scale festive ocassion included unique performances like 3D light show, unprecedented for the polar latitudes. In the summer of 2016, the 74-year-old Nickel Plant – the oldest operations in Norilsk – was shutdown. The people of Norilsk called this event a landmark as it will serve a starting point for real environmental improvements.
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03
THE COMPANY
NORILSK DIFFERS FROM ALL OTHER CITIES AS HERE, INSIDE THE ARCTIC CIRCLE, THE INDUSTRIAL COMPLEX EMERGED PRIOR TO THE CITY. THE LOCALS JOKE: «THIS CITY IS BUILT OVER THE PLANT». IN 2015, THERE WAS THE 80TH ANNIVERSARY OF NORNICKEL. AND IN 2018 THE CITY OF NORILSK WILL CELEBRATE ITS 65TH ANNIVERSARY.
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03 / THE COMPANY
XVII
century
Copper-nickel deposits on the Taimyr Peninsula have been known since the 17th century.
1935 In 1935, the USSR Council of People’s Commissars adopted a resolution on the Norilsk Industrial Complex construction.
1942 In 1942, the first converter matte was produced and nickel tank-house was put into operation in 1943.
1953 In 1953, Norilsk was granted the status of a town. At the moment the Norilsk Industrial Complex produced 35% Ni, 12% Cu, 30% Сo and 90% of platinum group metals total production in the USSR.
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1960 In 1960, the discovery of the world’s largest Cu-Ni ores deposit Talankhskoye gave a new lease of life to the Norilsk Industrial Complex. There was a beginning of the construction of mines and a settlement of Talnakh on the Taimyr peninsula
1965 In 1965, Oktyabrskoye copper-nickel ore deposit was discovered.
1981 In 1981, Stage 1 of Talnakh Concentrator was completed. Nadezhda Metallurgical Plant was put into operation.
1993 In 1993, under the Decree of the President of the Russian Federation, Norilsk Nickel, the State Concern for precious and non-ferrous metals production, was reorganized into RJSC «Norilsk Nickel», Russian Joint Stock Company for precious and non-ferrous metals production.
1994 In 1994, RJSC Norilsk Nickel were corporatized.
2001 In 2001, The Company was renamed into OJSC «MMC Norilsk Nickel» and the Company’s shares were listed on the RTS and MICEX stock exchanges. In June Level 1 ADR were issued for Norilsk Nickel’s shares.
2006 In 2006, Nornickel was granted a license for further exploration of Maslovskoye deposit and four years later its reserves were recorded in the State Register Book: 728,000 tons of nickel, over 1.1 mln tons of copper, 12.5 mln ounces of platinum, 1.3 mln ounces of gold.
2009
2014
In 2009, the Company built its own icebreaker fleet of heavy-duty vessels ranked as the 7th ice-class ships for the first time in the history of Arctic navigation.
In 2014, the sales of foreign and nonspecialized asserts were in progress (gold assets North Eastern Goldfields Operations (NEGO) and nickel assets Lake Johnston, Cawse, Avalon, Black Swan, Silver Swan in the western Australia) as well as shares of power companies.
2013 In 2013, Vladimir Potanin’s team changed the management structure of Nornickel. The new development strategy was adopted by the Board of Directors. The Company focused on Tier 1 assets of the Polar Division and Kola MMC.
2015
2016 In 2016, Nickel Plant was shutdown. It results in considerable reduction of sulfur dioxide emissions to the atmosphere in Norilsk Industrial Region.
The Company was rebranded: the changes in the Company are reflected in a new sign of Nornickel and in its key concepts – Reliability and Reliance.
In 2015, Nornickel celebrated its 80th anniversary – 80 years of experience in the Russian Arctic.
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04
PJSC MMC NORILSK NICKEL
NORNICKEL RANKS FIRST IN THE WORLD’S PRODUCTION OF NICKEL (14% OF THE WORLD’S OUTPUT) AND PALLADIUM (39%). IT IS ONE OF THE LARGEST PRODUCERS OF PLATINUM AND COPPER. BESIDES, THE COMPANY’S PRODUCTS INCLUDES COBALT, RHODIUM, SILVER, GOLD, IRIDIUM, RUTHENIUM, SELENIUM, TELLURIUM AND SULFUR.
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03 / THE COMPANY
6,250,000 tons
2006
1,000,000,000 ТОNS
2,700,000,000 ТОNS
7,000,000 ТОNS
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2018
Nornickel ore resources are exceptional with its proven and probable reserves approaching 1 bln tons.
Tt’s measured and indicated resources total 2.7 bln tons.
Over the decade Nornickel metals supply has amounted to 7 mln tons exceeding the weight of the Great Pyramid of Cheops estimated to be as heavy as 6.25 mln tons.
2010
2010
The estimated and indicated copper-nickel ore reserves of the Polar Division exceed
255 mln ounces
7,000,000
1,652
tons
22.3 mln tons of copper 11.9 mln tons of nickel
mln tons
Above 50% of all Russian reserves of nickel, copper, cobalt and platinum group metals are concentrated in Taimyr. 2012
2014
2016
Via the proprietary logistics network the Company delivers its products by land, air and water to 33 countries all over the world. Nornickel fleet of 6 heavy-duty ice-class vessels is capable to break the Arctic ice up to 1.5 m thick. The Company’s key assets reside in Russia with Norilsk-based Polar Division being of prime importance. They also include Kola MMC, Harjavalta (Finland) and projected Bystrinsky Mining & Processing Plant (Chita Project). Above 50% of all Russian reserves of nickel, copper, cobalt and platinum group metals are concentrated in Taimyr. The estimated and indicated copper-nickel ore reserves of the Polar Division exceed 1.652 bln tons and contain 11.9 mln tons of nickel, 22.3 mln tons of copper and over 255 mln ounces of platinum group metals.
Nornickel is a holder of licenses to mine the richest Oktyabrskoye and Talnakhskoye deposits. In 2015, the Company was granted a prospecting license for Maslovskoye deposit to start mining after 2020. All the six new licenses allow to enhance the resource potential by 500 mln tons. In 2016, Nornickel announced the establishment of Global Palladium Fund with commitment to invest up to 200 mln US dollars. In 2016, the Company updated the strategy by confirming its policy and proceeded to the next three-year phase of the strategy implementation. Nornickel intends to invest up to 10 bln US dollars into modernization of its production assets within the next three years. Three of the largest strategy investment projects are under realization in the Polar Division: construction of Skalistaya Mine, modernization of Talnakh Concentrator and Nadezhda Metallurgical Plant.
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05 METALS PRODUCED BY NORNICKEL
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05 / METALS PRODUCED BY NORNICKEL
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Ni
58.693
NICKEL. The Company heads the list of nickel producers (14% of global output). The word «nickel» originated from Old Nick who was the spirit stealing copper from miners. Nickel has replaced the silver in coins and given its name to the American 5-cent coin. Jet blade are made of Ni alloys. Ni has a wide range of applicability, for example, nickel-cadmium batteries, dental braces and prostheses, winding of musical instruments strings.
Applications: guitar strings, electric trains, iRobot vacuum cleaners.
78
46
Pd
106.42
PALLADIUM. Nornickel leads the world in palladium production (39% of global output). This precious metal has a unique property: it converts gold into white gold if only one hundredth of palladium being added. The metal is good for coins minting and such rarities like the «Olympic» 25 ruble coins of palladium are worth much for numismatists. Since the palladium is an effective catalyst, it is of use in electronics, capacitors.
Applications: medical instruments, coins, printed circuit boards, autocatalysts and wedding rings.
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Pt
195.08
PLATINUM. It used to be referred as jewelry wastes but nowadays the platinum coins are the pride of any numismatic collection. Platinum is one of the favorite chemists’ metals due to its excellent catalytic properties. Moreover, the platinum compounds made a breakthrough in fighting against cancer. It is cisplatin (a complex platinum chloride ammoniate) that became the first efficient anti-cancer drug.
Applications: submarines, motor vehicles, decorative soldering for wineglass, microscope lenses and fiber optic cables.
77
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Rh
102.906
RHODIUM is a good catalyst like any other platinum group metal. So far, there is no any alternative for rhodium to produce nitric acid from ammonia and air. It is applicable for LCD screens, mirrors for high-power lasers, and jewelry coatings. In the nuclear industry, it is used to manufacture neutron-flux detectors. The price of rhodium is 7 times higher than that of gold. Applications: hydrogen fluoride lasers, spectrometers, LCD screens, nitric and acetic acids production.
Ir
192.22
IRIDIUM is the second densest metal on the Earth (its density is 22 times higher than that of water) and one of the least abundant element. Its annual world output doesn’t exceed 3 tons. However, there is a geological layer where the iridium content is incredibly high. It evidences the fall of the asteroid having killed dinosaurs.
IRIDIUM
Applications: vehicles, spacecraft fuel tanks, fountain pen nibs and the prototype kilogram.
NICKEL
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05 / METALS PRODUCED BY NORNICKEL
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Cu
63.546
COPPER readily radiates the heat therefore it has gained widespread acceptance in radiators and heat exchangers. Copper is contained in bells, cannons and aircrafts, for its content in the «aviation» alloy – duralumin – exceeds 4%, blue vitriol for garden pests poisoning, malachite, wires and copper tubes and pipes for cooling systems, water and gas supply pipelines, vehicles brake systems. Applications: computer coolers, copper vapor lasers, door handles, latches, wind musical instruments.
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Co
44 58.933
COBALT is a multi-use material as well. For instance, the metal has been served as a base for paints since the time of Ancient Egypt. The cobalt is intended to produce permanent magnets, to improve steel heat resistance. Lithium cobaltate could serve as a perfect electrode for lithium-ion batteries and cobalt alloys are excellent materials for cutting tools, milling cutters and drills. Applications: metal drilling, preparations for bee stimulative feeding, blue smalt.
Ru
101.07
RUTHENIUM is Latin for «Russia». It significantly improves the wear resistance of low-current electrical contacts, for this purpose ruthenium-platinum alloy is the best material ever been invented. One thousandth part of ruthenium additive substantially rises the corrosion resistance of titanium. It is a good catalyst, in particular, ruthenium catalyst is used for water treatment at the International Space Station. These are ruthenium compounds which are capable of binding the atmospheric nitrogen at room temperature. Applications: International Space Station, ammonia and hydrocyanic acid production.
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GOLD
47
Ag
107.868
SILVER, apart from the jewelry, is of common use in electrical engineering generally for contacts. Batteries and capacitors are often contain a certain amount of silver. Lapis (silver nitrate) is used as a disinfectant, silver iodide is a reagent to disperse the clouds and silver carbide serves as an explosive for detonators. Being a food additive E174 silver is also used for decoration of confectionery, in liqueurs and vodka production.
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Au
196.967
GOLD is the most pliable and malleable metal. It can be forged into extremely fine gold sheets like the thinnest foil – gold leaf – in the special parchment books. It is mostly used in electronics industry. Besides, neutron bomb casing, a food additive E175 and medicines for arthritis contain gold.
SILVER
Applications: the NICA collider, any goldplated contacts and circuits, ruby-colored glass.
Applications: expensive mirrors, a moon research vehicle, solar panels, laptops, mobile phones.
COPPER
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05 / METALS PRODUCED BY NORNICKEL
16
S
32.006
…AND NON-METALS 52
Те
127.60
SULFUR is one of the most abundant elements in the universe and occurs as a component of numerous minerals. Pure sulfur has no smell, but many of its compounds are odoriferous. For example, sulfur compounds allow skunks to produce an awful odor. Sulfur makes up almost 3% of the Earth’s mass and accommodates mostly in the core of our planet. Its total weight is equal to two moons.
TELLURIUM is a silvery and lustrous element, its name comes from the Latin word «tellus» and means «earth». It is often called as metalloid, semimetal. Tellurium is a rare element; its minor production and keen demand stimulates its high prices – around 200-300 US dollars per 1 kg depending on the grade. However, the application range gets wider. The principal source of tellurium is the slime of Cu electrolytic refining.
Applications: manufacture of insecticides, matches, fertilizers, explosives, paper, polymers, and dyestuffs as well as rubber vulcanization.
Applications: semiconductors, catalysts, special glass, compact disks, and in rubber vulcanization.
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Sе
78.96
SELENIUM is a black non-metal element with brittle and bright fracture. It is named after the Greek word for moon, «Selene». Human body contains 10-14 mg of selenium, and the Earth’s crust has around 500 mg per ton. Native selenium occurs rarely and is mostly originated from the slime of copper electrolytic refineries. In the 1950s the demand for selenium was driven up due to its properties of semiconductor. By that time its price increased tenfold. Application: manufacture of semiconductor rectifiers, photocells, solar panels.
BY THE WAY A new mineral discovered in Norilsk was named in the honor of Gennady Plesin, a deputy chief surveyor of Oktyabrsky Mine, who found the mineral in the sulfide chalcopyrite ore. Genplesite is the thirtieth mineral discovered in Norilsk Industrial Region for the last 75 years and the third one found by Ghennady Plesin, whose seniority at Oktyabrsky Mine had exceeded 27 years.
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COPPER
SELENIUM
PLATINUM
TELLURIUM
SULFUR
33
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06 NORNICKEL STRATEGY
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06 / NORNICKEL STRATEGY
•
In May 2016, an updated development strategy of Nornickel was presented to the investment community. The first three years since the adoption of the strategy proved the correctness of the course chosen.
•
Norilsk Nickel strategy is aimed at priority development of Tier 1 assets, i.e. the projects capable to generate more than 1 bln US dollars annually in revenue with 40% profitability and reserves sufficiency for 20 years and more.
•
In 2015, capital expenditures totaled 1.7 bln US dollars. Investments are primarily made in the modernization of concentrating, smelting and refining operations, as well as in the development of highly profitable mining projects of the Polar Division.
•
Despite the unfavorable raw material market conditions Nornickel has shown industry leading financial results while maintaining a conservative level of debt burden: 4.3 bln US dollars of revenue, 50% of profitability (record high in the industry), 2.4 bln of free cash flow.
•
The strategy for 2016-2018 is focused on the balanced, modern and environmentally friendly production.
STRATEGIC GOALS • • • • •
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To complete the reconfiguration program / Nickel Plant shutdown To implement environmental programs / integrated «Sulfur Project» To reconfigure the copper production To launch a new project – Bystrinsky Mining & Concentrating Complex To develop mining and processing facilities
INVESTMENT PROGRAM CAPITAL EXPENSES FOR THE PRODUCTION DEVELOPMENT AND MODERNIZATION WITHIN 2016-2018 AMOUNT TO 2 BLN US DOLLARS PER YEAR AND COVER THE BASIC INVESTMENT PROGRAM, CHITA PROJECT, STAGE 1 OF THE ENVIRONMENTAL PROGRAM. BASIC INVESTMENT PROGRAM: Total 4.4 bln US dollars for 2016-2018 – including 1.5 bln US dollars in 2016 • 240-270 mln – reconfiguration (Nickel Plant closure, completion of Nadezhda Plant modernization, start of Stage 2 of Talnakh Concentrator) • 330-370 mln - mining projects (development of the existing projects to maintain the level of production) • 140-160 mln - efficiency enhancement projects (IT, automation, exploration, etc.) • 250-290 mln - investments in the fuel & energy and logistics • 430-490 mln - investment in basic productive assets (equipment replacement, compliance with regulatory requirements, and so on) • 500-550 mln – development projects / Chita Project (Tier 1 asset status confirmed, risk reduction strategy implemented successfully – a strategic partner engaged and the project funding received).
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07 POLAR DIVISION OF PJSC MMC NORILSK NICKEL
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07 / POLAR DIVISION OF PJSC MMC NORILSK NICKEL
The total length of its mine workings reaches 1,120 km. It is 3.5 times as much as the Moscow metro tunnels.
1,120
The Polar Division (PD) is a Tier 1 asset of Nornickel that includes a full cycle of metal production: from mining to finished products shipment to the customers. It operates 8 mines, pits and quarries, 2 concentrators, 2 smelters (the obsolete Nickel Plant was closed in 2016 as a part of the Company’s environmental program). According to experts, there are no analogues of Norilsk Industrial Region anywhere in the world. Annually PD excavates 17 mln tons of ore. The total length of its mine workings reaches 1,120 km. It is 3.5 times as much as the Moscow metro tunnels. The PD fleet of the underground self-propelled equipment amounts to 516 units. Taimyrsky Mine is the deepest mine in Russia with the lowest level being 1 km 725 m. Upon construction completion, Skalistaya Shaft (a strategic project of the Company) will appear the deepest in Eurasia - 2 km 056 m. Two concentrators of the
40
km
Polar Division in Norilsk and Talnakh annually process 19.3 mln tons of ore. Another strategic project – extensive renovation of Talnakh Concentrator – increased its capacity. It is unique as a new concentrator was constructed within environment of the operating plant. The reconfiguration phase of the PD metallurgical operations approaches the end. Upon Nickel Plant shutdown the modernized Nadezhda will allow to retain the PD production volumes. The Company expects the overall benefit of the reconfiguration to reach 300 mln US dollars a year after 2018. The Polar Division operates the northernmost railway 319 km long. It is mainly intended for industrial cargo transportation – about 17 mln tons annually, including the finished products of the Polar Division, delivered to Dudinka port to be shipped on board the Company’s vessels.
THE COMPANY EXPECTS THE OVERALL BENEFIT OF THE RECONFIGURATION TO REACH 300 MLN US DOLLARS A YEAR AFTER 2018.
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08 POLAR DIVISION FLAGSHIP PROJECTS
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08 / POLAR DIVISION FLAGSHIP PROJECTS
COMPREHENSIVE PROJECT FOR NICKEL PLANT CLOSURE •
In accordance with the strategy, upon the reconfiguration of metallurgical facilities all nickel-containing materials are to be processed at Nadezhda Metallurgical Plant.
•
Nickel Plant being the oldest asset of the Company (commissioned in 1942), annually emits 400,000 tons of sulfur dioxide. The Plant closure in 2016 allowed to modify the process and to significantly improve Norilsk environment. This project is under implementation in cooperation with the government.
•
In July 2014, Russian Prime Minister Dmitry Medvedev signed a decree to anticipatorily set zero export duty rates on metals, which allowed Nornickel to speed up ecological events realization. The resulted funds – about 11 bln rubles – were entirely spent to the program of outdated operations shutdown and relevant environmental and social issues.
•
From February 1, 2016 the plant operations have been shutdown gradually.
•
In June 10 the sintering plant stopped.
•
In June 27 smelting and roasting shop floors were closed – the last metal was smelted at Nickel Plant.
•
In September 2016, all shop floors of the plant were fully disabled.
•
In 2017, Nickel Plant is subject to conservation and dissolution.
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THE SOCIAL PROGRAM FOR NICKEL PLANT EMPLOYEES •
his project is unique both in its environmental benefits and in employees’ social protection. The Company has spent T 4.4 bln rubles on social actions.
•
For 2,600 employees, the Company has developed an unparalleled social program to re-skill and employ Nickel Plant personnel at the other Nornickel subdivisions as well as to settle to the «mainland».
•
1,673 employees signed labor contracts with other Сompany’s subdivisions
•
570 honored metallurgists of Nickel Plant are participants of a specially developed corporate retirement program «Veterans of Metallurgy». They have received a substantial payment.
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08 / POLAR DIVISION FLAGSHIP PROJECTS
PROJECTS AT NADEZHDA PLANT
MODERNIZATION AND EXPANSION
Target: To increase the annual smelting capacity from 1.85 mln tons to 2.4 mln tons of concentrate annually.
1,850,000 2,400,000 0
FEBRUARY
MARCH
JULY
2016
2016
2016
Construction and installation works were accomplished, the operations is reaching its full capacity.
Nadezhda Plant became a united center of Ni raw material smelting.
500
1000
1500
Nadezhda Plant commenced to process all Ni raw material of the Polar Division
The objects were constructed in the shortest possible terms under environment of the operating plant. Reconstruction of the furnaces as high as 7-storied building has no analogues in the world in terms of its complexity.
46
2000
2500
INTEGRATED «SULFUR PROJECT» •
The unique «Sulfur Project» is Stage 2 of Nornickel global environmental program (Stage 1 is Nickel Plant shutdown).
•
The core of the project is the construction of the converter workshop at the Nadezhda Metallurgical Plant using the new continuous converting technology with sulfur dioxide concentration.
•
Copper production at the Polar Division will also be reconfigured, converting and anode smelting will be switched from Copper Plant to NMP. This will allow to optimize the «Sulfur Project», as the construction of facilities for gas capture at Copper Plant ceases to be necessary. One site solution. Eventually it will improve the efficiency and switch «Sulfur Project» to Nadezhda Plant.
•
In May 2016, a world leading engineering company SNC Lavalin won the tender for the development of design documentation.
•
The total long-term effect of the program is a reduction of sulfur dioxide emissions to one quarter of the current levels.
47
SKALISTAYA SHAFT CONSTRUCTION
08 / POLAR DIVISION FLAGSHIP PROJECTS
PROJECT COST APRX
134
BLN RUBLES
INCLUDING INVESTMENTS IN 2016–2021 APRX
81
58
BLN RUBLES
30
mln tons
HIGH-GRADE ORE RESERVES
500,000
48
2.4
years
HIGH-GRADE ORE RESERVES SUFFICIENCY
tons
150,000
mln tons
ANNUAL HIGH-GRADE ORE PRODUCTION
tons
1,750,000
2015
2016
2017
Capacities commissioned
Next stage launch
Expected ore production
tons
600
UNDERGROUND FACILITIES CONSTRUCTION PROGRESS
NEW JOBS Ventilation&Skip Shaft–1 Skip&Cage Ventilation&Backfill Shaft–1 Shaft–1
Ventilation Shaft–9
Ventilation Shaft–10
Ventilation&Backfill level Phase II
Ventilation&Backfill level Phase II Haulage level
- 980 м Haulage level
- 1070 м
- 630 м
- 850 м Phase IV - 1003 м - 1185 м
- 1650 м - 1160 м - 1550 м
- 1610 м
- 1750 м
- 1756 м
2,056
- 2056 м
- 2052 м Ventilation&Backfill level Phase II Haulage level
m deep
THE DEEPEST SHAFT IN EURASIA
Mine workings constructed earlier Mine workings to be driven in succeeding years Mine workings under construction in 2016
2,400,000
tons
3 2018 Ventilation shaft №10 completion
2020 Skip&Cage shaft № 1 completion
2023 Expected ore production
49
08 / POLAR DIVISION FLAGSHIP PROJECTS
TALNAKH CONCENTRATOR •
Production rate of the modernized concentrator will increase from the current 7.6 mln tons to 10 mln tons.
• Concentration performance will enhance: Ni in nickel concentrate will rise from 9.5 to 13.5%, recovery will improve from 68.5 to 75%. • In addition, the content of sulfur in the concentrates to be further processed at the metallurgical plants will decrease by 12%, and hence atmosphere emissions will be significantly reduced. •
Modernization of the Concentrator will result in 148 new jobs.
•
Total capital investment in the project amounts to 43.386 bln rubles and covers:
Start-up Complex 1 – 3.121 bln rubles; Start-up Complex 2 – 26.114 bln rubles; Tailing dump construction\Stage 1 – 14.150 bln rubles etc.
50
Start-up Complex 1 was put into operation in January, 2015, Start-up Complex 2 was constructed in May, 2016, Stage 1 of the tailing dump construction was introduced in quarter 4 of 2016. The project will eventually meet the challenge to increase non-ferrous and precious metals production.
51
371,000 tons
№1 WORLD PRODUCER OF NI AND PD
Weight of metals produced by Nornickel over a period of 10 years exceeds the weight of the Great Pyramid of Cheops
7,000,000 тоns
6,250,000 тоns
285,000 tons 651,000
2010
2%
NICKEL
14%
PLATINUM
11%
PALLADIUM
39%
troy oz
2,662,000 2005
COPPER
troy oz
2015
Nornickel share (%) in world production of base metals in 2015
Nornickel produced in 2015 Unique ore reserves
1,000,000,000
PROVED AND PROBABLE ORE RESERVES
2,700,000,000
MEASURED AND INDICATED MINERAL RESERVES
NORNICKEL STRUCTURE COMPRISES 78 SUBDIVISIONS
Сore subdivisions – 28 Russian-based subdivisions – 26
KEY ASSETS OF THE COMPANY:
KEY ASSETS OF THE COMPANY:
plants/shopfloors – 7
sea and river ports – 4
fuel and energy companies– 5
sales and marketing offices – 6
production support divisions – 5 concentrators – 3 geology&exploration offices – 5 research and development departments – 3
DU
DI
N
shafts – 9
– as of June 2016 –
– Pasvik and Lapland Nature reserves –
ECOLOGY ON THE KOLA PENINSULA
HUMAN CAPITAL 70
%
NORWAY RUSSIA
ROT
TER
DA
M
male employees
59,824
123 HA territory
96 MLN RUB spent
Bioremediation fulfilled
employees at Taimyr-located operations of the Company
55,000
10 YEARS
children under 15
МURMANSK
SK –
40
old average employee
MA N
employees
DUDINK A – MUR
84,300
HARJAVALTA
1 MLN
ZAVIDOVO
МОSCOW
trees and bushes have been planted – THE COMPANY’S EMPLOYEES AND THEIR FAMILIES CAN ENJOY –
26
45
22,500
2
7
gyms
works canteens
employees and their families can take the advantage of annual leave
summer camps
health resorts
19 SPECIES species of plant and animals are listed in Red Data Book of the Russian Federation
KOLA MMC
ROTTERDAM
mine workings
250 kм
totally mining equipment
«OUR HOME» AND «MY HOME» PROGRAMS – Tver Region, Zavidovo –
2,500
participants
550
apartments annually
147 units SOCHI
KA
51
19
Boeing-737-800 –
scheduled flights
nonscheduled flights
Boeing 737-300 – ATR-42-500 –
FLEET Nornickel owns a unique arctic-class fleet capable to ram though polar ice up to 1.5 m thick without ice-breakers’ escorting
OVER
80 YEARS
908,000,000 TONS
N
–
12 4
Helicopter Мi-8МТV –
5
6
572
vessels The Arctic fleet
vessels The river fleet of the Company
TOTAL LENGTH
319 KМ
17,000,000 TONS
JOINT DIRECTORATE OF NATURE RESERVES 3 nature reserves Taimyrsky Mine
2 wildlife refuges
SPECIES LISTED IN RED DATA BOOK OF THE RUSSIAN FEDERATION
Expedition to fix satellite tracking collars on polar bears
4
ANIMALS
DA M
juvenile Arctic char and Arctic grayling
DU
AIRPORT
26
BIRDS lesser white-fronted geese
Skalistaya Shaft
4,000
200,000
DI
KA
R MU
ROT TER
Helicopter Мi-8Т –
DIFFERENT CARGO ARE TRANSPORTED
TALANAKH
SK –
9 1
ANNUALLY
DIFFERENT CARGO HAVE BEEN TRANSPORTED
ECOLOGY ON THE TAIMYR PENINSULA N MA
NORILSK AVIA
ice reinforced
NORILSK RAILROAD
PLANTS
4
muskoxen
FISH
1
8,500
rebuilt population
annually released into Taimyr water Норильск NORILSK bodies
POLAR DIVISION. TAIMYR TIER 1 ASSET OF NORNICKEL. MORE THAN HALF OF RUSSIAN RESERVES OF NICKEL, COPPER, COBALT, AND PGMS ARE CONCENTRATED ON TAIMYR. THE DEEPEST MINES IN RUSSIA AND EURASIA
Taimyrsky Mine
THE TOTAL LENGTH OF MINE WORKINGS IS 3.5 TIMES AS MUCH AS THE MOSCOW METRO TUNNELS
1,120 km
Skalistaya Shaft upon construction
2,056 m
1,725 m
HI
AIRCRAFT FLEET
70 routes all over the world
DEEP
ОSCOW
NORDSTAR AIRLINES
MINING EQUIPMENT INVOLVED IN MINING / UNITS
516
units of auxiliary equipment
93 90 18 315
MACHINERY OPERATED BY CENTRAL TRANSPORT OFFICE (TSATK) INVOLVED IN PRODUCTION
353
LHDs self-propelled drilling rigs mine trucks etc.
quarry trucks Caterpillar, BeLAZ heavy-load bulldozers Caterpillar, Komatsu, Liebherr, Chetra T-20 large-sized front end loaders Caterpillar, Volvo, Komatsu open-pit shovels EKG and Caterpillar trucks and special vehicles BeLAZ, KAMAZ, KrAZ, Ural etc. NORILSKPROMTRANSPORT trucks road-building machines, lifting machines buses towed vehicles special vehicles etc.
55 44 20 23 77 1,017 423 294 101 172 22
CHITA PROJECT
ZABAIKALSKY TERRITORY THE CORE OF CHITA PROJECT IS BYSTRINSKY MINING & CONCENTRATING COMPLEX. TIER 1 STATUS OF THE PROJECT IS CONFIRMED.
CHITA
annual capacity tons ore reserves tons new jobs
10 mln
December
294 mln
2018
3,115
2015
2020
under the agreement 13% share of Chita Project was acquired by Chinese investors investments in 2015-2018 design capacity will be reached
100 mln $ 65 bln P