Mineral Reserves and Resources Statement

Data for Norilsk Nickel’s mineral resources and ore reserves as of December 31, 2009 are based on the results of the analysis and operating conversion of data on ore and metal balance reserves of Russian operations, accounted as per categories of the Russian classification system, into JORC Code categories. The calculations were conducted in accordance with the principles of the Joint Ore Reserves Committee (JORC) Code of the Australasian Institute of Mining and Metallurgy, using terms and rules, developed in the course of regular reserves’ audit, performed at the Group’s Russian deposits by Micon International Co Ltd.

RUSSIA

The reserves and mineral resources of all deposits, constituting the mineral resources base of  MMC Norilsk Nickel on Taimyr (Polar Division) and Kola (Kola MMC) Peninsulas have changed during the reporting year due to mining, ongoing exploration works, and reclassification to the reserves category in new facilities’ areas.

As of beginning of 2010, the proven and probable reserves of the Taimyr and Kola Peninsulas amount to over 473 million tonnes and contain ca. 5.8 million tonnes of nickel, over 8.7 million tonnes of copper, and ca. 2.6 thousand tonnes (over 80 million ounces) of platinum group metals (PGMs). Furthermore, measured and indicated mineral resources on the Taimyr and Kola Peninsulas aggregate over 1910 million tonnes of ore, and contain over 10 million tonnes nickel, over 16 million tonnes of copper, and over 5,8 thousand tonnes (ca. 182 million ounces) platinum group metals.

In general, the Company’s deposits on the Taimyr Peninsula (Norilsk-1, Talnakh and Oktyabrsky) offer a vast potential and should help to maintain reserves at the required level through exploration efforts at both the current operations and the unexploited deposits. The reserves of rich and cuprous ore from current mines will be replaced mainly with inferred resources on the flanks until rich-ore fields and disseminated-ore horizons are brought online. The prospects for the development of mining shall be attributed to still untapped rich ore deposits, as well as disseminated and cuprous ore horizons, which shall be successively and actively involved into development. Approved projects for preparation of new deposits and horizons of the Talnakh ore field and Norilsk-1 deposit should support a reliable Company’s mineral resources base in the future.

The primary trend in the mineral resources base of the Kola Peninsula includes a detailed exploration of the deep horizons at the existing Zhdanovskoe deposit; audit of its reserves using the new industry approach, and development of it as part of the Severny-Gluboky deposit. At the beginning of 2010, after mining, exploring and reevaluating the resources at Zhdanovskoe, the proven and probable reserves amounted to 92.3 million tones.


Minerals resources and ore reserves of Taimyr and Kola peninsula as of December 31, 2009


Region / Category Ore type Ore Tonnage
000't 		Metal Grade Contained Metal
Ni
Cu
Pd
Pt
Au
6PGM
Ni
Cu
Pd
Pt
Au
6PGM
%
%
g/t
g/t
g/t
g/t
000't
000't
000' ounces

Taimyr Peninsula

Proved ore reserves
Talnakh ore field
Rich
57,858
2.79
3.51
6.07
1.35
0.17
7.90
1,616
2,032
11,324
2,511
319
14,693
Cuprous
33,657
1.05
4.17
9.91
2.36
0.71
12.40
355
1,403
10,719
2,559
772
13,421
Disseminated
37,383
0.46
0.82
3.66
1.35
0.23
5.22
175
309
44,500
1,742
279
6,354
Total Talnakh ore field - combined ore types
129,353
1.66
2.89
6.37
1.66
0.33
8.29
2,146
3,744
66,543
6,812
1,370
34,468
Norilsk-1 deposit (Disseminated ore)
37,096
0.34
0.47
4.11
1.69
0.18
6.11
125
176
4,906
2,016
213
7,282
Probable ore reserves
Talnakh ore field
Rich
79,667
2.57
2.85
4.92
0.91
0.14
6.37
2,044
2,272
12,600
2,328
355
16,326
Cuprous
51,470
0.79
3.48
7.48
1.92
0.55
9.60
407
1,791
12,503
3,185
917
15,886
Disseminated
39,100
0.39
0.63
2.54
0.79
0.16
3.55
151
248
3,195
997
202
4,457
Total Talnakh ore field - combined ore types
170,237
1.53
2.53
5.14
1.19
0.27
6.70
2,602
4,311
28,298
6,510
1,474
36,669
Norilsk-1 deposit (Disseminated ore)
22,309
0.09
0.36
4.28
1.75
0.20
6.37
20
81
3,072
1,257
142
4,568
Proved and probable ore reserves
Talnakh ore field
Rich
137,667
2.66
3.13
5.41
1.09
0.15
7.02
3,660
4,304
23,294
4,838
674
31,019
Cuprous
85,127
0.90
3.75
8.43
2.10
0.62
10.71
762
3,194
23,061
5,744
1,689
29,307
Disseminated
76,938
0.42
0.72
3.09
1.07
0.19
4.37
326
557
7,645
2,643
481
10,811
Total Talnakh ore field - combined ore types
299,590
1.58
2.69
5.67
1.37
0.30
7.39
4,748
8,055
54,630
13,225
2,844
71,137
Norilsk-1 deposit (Disseminated ore)
59,405
0.24
0.43
4.18
1.71
0.19
6.20
145
257
256
105
11
381
Total proved and probable ore reserves
358,995
1.36
2.32
5.42
1.43
0.28
7.19
4,893
8,312
54,886
13,330
2,855
71,518
Measured and indicated mineral resources
Talnakh ore field
Rich
20,470
4.23
5.83
12.95
2.54
0.51
15.91
866
1,194
8,524
1,673
336
10,469
Cuprous
1,150
0.78
2.43
6.96
2.07
0.46
9.27
9
28
257
77
17
343
Disseminated
1,324,511
0.52
1.04
2.88
0.83
0.19
3.89
6,869
13,820
122,851
35,351
7,982
165,603
Total Talnakh ore field - combined ore types
1,346,131
0.58
1.12
3.04
0.86
0.19
4.08
7,744
15,042
131,632
37,101
8,335
176,414
Norilsk-1 deposit (Disseminated ore)
25,525
0.33
0.45
4.21
1.66
0.15
6.25
85
115
3,452
1,359
126
5,132
Total measured and indicated mineral resources
1,371,656
0.57
1.11
3.06
0.87
0.19
4.12
7,829
15,157
135,084
38,460
8,461
181,546
Inferred mineral resources
Total inferred mineral resources
467,089
0.89
1.83
4.41
1.13
0.26
5.77
4,163
8,565
66,209
16,931
3,945
86,630

Region / Category Ore type Ore Tonnage
000't 		Metal Grade Contained Metal
Ni
Cu
Pd
Pt
Au
6PGM
Ni
Cu
Pd
Pt
Au
6PGM
%
%
g/t
g/t
g/t
g/t
000't
000't
000' ounces

Kola Peninsula (Disseminated ore)

Proved ore reserves (Operating mines)
57,493
0.70
0.33
0.03
0.03
0.01
0.06
402
192
59
54
19
118
Probable ore reserves (Operating mines)
56,661
0.77
0.37
0.04
0.03
0.01
0.08
435
208
73
55
24
142
Total proved and probable ore reserves
114,154
0.73
0.35
0.04
0.03
0.01
0.07
837
400
132
109
43
260
Measured and indicated mineral resources
Operating mines
348,988
0.50
0.21
0.04
0.02
0.01
0.06
1,730
729
431
208
77
655
Undeveloped deposits
148,094
0.59
0.30
0.05
0.03
0.02
0.09
877
445
215
136
92
387
Total measured and indicated mineral resources
497,082
0.52
0.24
0.04
0.02
0.01
0.06
2,607
1,174
646
344
169
1,042
Total inferred mineral resources
220,648
   0.51
   0.24
   0.04
   0.02
   0.01
   0.06
 1,134
   522
   283
   159
    74
   461


Notes:
(1) The mineral resources and ore reserves of the deposits of the Taimyr and Kola peninsulas were classified according to the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), developed by the Australasian Joint Ore Reserves Committee (JORC), created by the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia.
(2) The reserves were classified in accordance with the JORC principles by the following competent person: Stanley C Bartlett, PGeo, Managing Director of Micon International Co Limited.
(3) The reserves are based on the current detailed mine production plan for 2007-20 and the base-case conceptual mine plan covering the life of a mine. The life of a mine is based on economically mineable ore in the A, B and C1 Russian categories at the end of a given calendar year.
(4) Subtotal and total figures may differ to the sum of individual numbers due to rounding. Certain values may in some instances vary slightly from previously published values.
(5) The six PGMs are platinum, palladium, rhodium, ruthenium, osmium and iridium. Hereafter in the annual report the troy ounces used as a weight measure for PGM.
(6) Proved and probable ore reserves are not included in mineral resources.
(7) Ore losses applied ranged from 1.6% to 20% and dilution from 6% to 15%. Mining dilution was assumed to have a nil grade.

NORILSK NICKEL INTERNATIONAL

Minerals resources and ore reserves of NN international as of December 31, 2009

Region / Category
Deposit
Ore type

Ore tonnage
Metal Grade
Contained Metal
 
 
Ni
Cu
4PGM
Ni
Cu
4PGM
 
‘000 tonnes
%
%
g/t
‘000 tonnes
‘000 tonnes
‘000 ounces
 
 
 
 
 
 
 
 
Australia
Lake Johnston
Proven and probable ore reserves
2,768
1.35
 
 
37.5
 
 
Measured and indicated mineral resources (resources)
5,628
1.71
 
 
96.0
 
 
Probable mineral resources (resources)
2,814
1.77
 
 
49.7
 
 
Black  Swan`
Proven and probable ore reserves
3,535
0.68
 
 
23.95
 
 
Measured and indicated mineral resources (resources)
4,965
0.89
 
 
44.4
 
 
Probable mineral resources (resources)
1,761
1.27
 
 
22.4
 
 
Waterloo
Proven and probable ore reserves
11
2.37
 
 
0.3
 
 
Indicated resources 
 
286
1.76
 
 
5.1
 
 
Probable mineral resources (resources)
386
2.09
 
 
8.1
 
 
Honeymoon  Well
Measured and indicated mineral resources (resources)
17,3230
0.67
 
 
1163.5
 
 
Probable mineral resources (resources)
15,790
0.75
 
 
118.4
 
 
Cawse
Proven ore reserves (stock)
3,757
0.65
 
 
24.4
 
 
Measured and indicated mineral resources (resources)
55,518
0.72
 
 
397.9
 
 
Probable mineral resources (resources)
117,210
0.68
 
 
799.9
 
 
Jericho
Probable mineral resources (resources)
34,500
0.4
 
 
207
 
 
Botswana
Selkirk
Measured and indicated mineral resources (resources)
124,000
0.23
0.27
0.57
285
335
2,272
Probable mineral resources (resources)
11,300
0.27
0.3
0.56
30.2
34.3
203
Phoenix
Probable ore reserves
 
111,800
0.22
0.18
 
245.6
206.8
 
Measured and indicated mineral resources (resources)
208,900
0.21
0.19
 
435.1
391
 
Probable mineral resources (resources)
9,000
0.23
0.2
 
20.8
18.3
 
South Africa
Nkomati
Proven and probable ore reserves
159,092
0.32
0.12
0.83
509
191
4,245
Measured and indicated mineral resources (resources)
249,480
0.34
0.14
0.87
848
349
6,978

 

Hydrocarbons reserves

Norilsk Nickel currently extracts hydrocarbons (natural gas and gas condensate) at the Pelyatka deposit, owned by a subsidiary of the Company – Taimyrgaz. In addition, OJSC Norislgazprom, an associate of the Group, extracts the hydrocarbons on three other deposits:

  • Severo-Soleninskoye gas condensate field;
  • Yuzhno-Soleninskoye gas condensate field; and
  • Messoyakhskoye gas field.

The gas produced is sold to Norilskenergo, a branch of Norilsk Nickel, as a raw material for heat and power generation and for the Company’s production needs.


Gas and condensate reserves as of December 31, 2009

Deposit

Reserves
(À+Â+Ñ1)

Gas
(billion m3)
Condensate
(‘000 tonnes)
Pelyatka gas condensate field
237
12,347
Severo-Soleninskoye gas condensate field
52
984
Yuzhno-Soleninskoye gas condensate field
18
310
Messoyakhskoye gas field
7
-
TOTAL RESERVES
314
13,641

The Pelyatka deposit is the largest of all gas condensate deposits that Norilsk Nickel is currently developing. The construction and expansion of deposit facilities is currently underway, which includes construction of more than 200 complex technological facilities throughout the production chain, from gas and gas condensate extraction to its preparation for shipment to customers. As of January 1, 2010 Taimyrgaz operates at the Pelyatka gas condensate field 12 development wells, 7 wells being developed after drilling, and 6 suspended wells.

In 2009, the “Project for geological and follow-up exploration of Pelyatka gas condensate field” was developed and assessed by the state geological authorities.

The production volume was 1 402 million cubic meters of natural gas and 66 thousand tonnes of gas condensate. The production increase, as compared with 2008, was 22% and 36% respectively.

In 2010, the planned natural gas production volume shall amount 1 701 million cubic meters (21% increase versus 2009). The planned gas condensate production will amount to 82 thousand tonnes (24% increase versus 2009).

The following activities are planned to be performed in 2010 at the Pelyatka gas condensate deposit:

  • comprehensive gas-dynamic, gas condensate analysis for each well to specify gas-condensate characteristics and reservoir porosity and permeability for each reservoir;
  • field seismic exploration within the license area in amount of 200 km2 with a subsequent processing and interpretation.


Gas and condensate production

Îáúåì äîáû÷è
2009
2008
2007
2006
Natural gas (million m3)
1,402
1,146
898
664
Gas condensate (‘000 tonnes)
66
49
35
32