Moscow, 29 July, 2020 — Nornickel, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper, announces preliminary consolidated production results for the second quarter and the first half of 2020.
First Vice-President, Chief Operating Officer, Sergey Dyachenko commented on the 1H2020 production results:
“First of all, I would like to reiterate that a reduction of environmental impact remains our absolute strategic priority and confirm our commitment to radically improve the environmental situation in the regions of our operations.
The Company is applying its maximum efforts to mitigate the impact of the fuel spill at the HPP-3. To date, the clean-up of the Ambarnaya River and the collection of contaminated soil have been practically completed and the most complex and labour-intensive work on cleaning and rehabilitation of soil has been launched. We have started construction of a temporary pipeline for the transportation of the collected water-fuel mixture to a special treatment and disposal site. Jointly with the government and independent consultants Nornickel is exploring the most effective solutions for the disposal of contaminated soil and the restoration of disturbed ecosystems. The Company is engaged into an active dialogue with all stakeholders and will continue to update regularly the investment community on the remediation efforts of the fuel storage incident at HPP-3.
As part of the long-term planning of our operations in permafrost conditions and mitigation of environmental risks, Nornickel is developing a real-time monitoring system of the soil conditions and the foundations’ stability of the main production facilities. We expect that this programme will be designed and rolled out by the end of 2021. Meanwhile, the capabilities of the existing permafrost diagnostics center will be enhanced already this year, alongside an additional comprehensive audit of hazardous production facilities.
In its fight against the spread of the COVID-19, the Company is taking maximum precautions to protect the health and safety of its employees and providing full support to the regional communities and authorities, which helps to maintain production processes without any interruptions. I would like to confirm that the COVID-19 outbreak has not had any material adverse impact on our operations.
In 2Q2020, the output of all key metals have increased against the previous quarter. However, 1H2020 production of saleable products have declined year-on-year primarily due to hot commissioning of a nickel refining shop with new chlorine leaching technology at Kola MMC. The decrease of PGMs output was attributed mostly to a high base effect of 1H2019, when Krasnoyarsk Precious Metals Plant processed earlier accumulated work-in-progress inventory. The decline in copper production was driven by lower processing volumes of concentrate purchased from Rostec as well as the short-term reduction of capacity utilisation rate of our smelting operations at Kola MMC owing to unfavorable meteorological conditions in order to reduce environmental impact.
At the same time, Bystrinsky GOK continued to ramp-up to designed capacity, having increased production of copper in concentrate by almost 50% year-on-year.
Overall, we reiterate our production guidance for FY2020”.