Norilsk Nickel (), or Nornickel, is a Russian nickel and palladium mining and smelting company. Its largest operations are located in the Norilsk–Talnakh area near the Yenisei River in the north of Siberia. It also has holdings in Nikel, Zapolyarny, and Monchegorsk on the Kola Peninsula, in Harjavalta in western Finland, and in South Africa.
Headquartered in Moscow, Norilsk Nickel is the world's largest producer of refined nickel and the 11th largest copper producer.
The company is listed on MICEX-RTS. As of March 2021, its key shareholders were Vladimir Potanin's Olderfrey Holdings Ltd (34.59%) and Oleg Deripaska's Rusal (27.82%).
In December 2010, Norilsk Nickel made a share buyback offer for Rusal's 25% share in the company for $12 billion, but the offer was declined. In 2012, Potanin's Interros holding, Rusal, and Roman Abramovich signed a shareholder agreement on the size of dividend payouts to end a conflict over the matter, as well as issues around the company's broader strategy and management. The agreement expired on 1 June 2023, and the prospects of its extension or suspension were unclear. In March 2019, Abramovich sold a 1.7% stake in the company for $551 million, predominantly to British-based and Russian investors. Potanin and Deripaska's Rusal were blocked from purchasing any shares. In 2021, the company's revenue amounted to 856 billion rubles.
History Mining began in the Norilsk area in the 1920s. The Soviet government established the Norilsk Combine in 1935 and passed control to the NKVD. In 1943, Norilsk produced 4,000 tonnes of refined nickel, and by 1945, it had reached the target figure of 10,000 tonnes. The mining and metal production originally used forced labour from the Gulag system.
In 1993, after the fall of the Soviet Union, a joint-stock company called RAO Norilsk Nickel was created. Two years later, control over the deeply indebted company, which was bleeding cash at a rate of about $2 million a day against the background of falling nickel prices, was sold to a private company, Interros. By the end of privatization in 1997, the company had turned a profit, and workers were being paid. The current average pay exceeds $1,000 per month with an annual paid leave of two to three months. Nevertheless, the working and living conditions in Norilsk remain harsh, although they are improving as the company shuts down old factories that are the source of excessive pollution.
In July 2000, Norilsk Nickel joined forces with the St. Petersburg Research Institute of the Arctic and Antarctic (), to investigate the potential use of decommissioned nuclear powered submarines, both from the United States and Russia, to transport materials along the Northern Sea Route (). Overhaul and refit costs came to $72–80 million per submarine, which included modifying its ice-breaking bow to cut through ice up to 215 cm (85 in) thick in seawater and up to 150 cm (59 in) in the freshwater mouth of the Yenisei. Decommissioned Typhoon submarines were expected to transport up to 12,000 tonnes of supplies and nickel between Dudinka and either Murmansk or Arkhangelsk. In 2000, the Murmansk Shipping Company (MMP or MSCO) () provided icebreaker services at a charge of $11.35 per tonne of cargo. Three submarines - the project feasibility threshold - were scheduled for refit and overhaul between 2000 and 2003.
However, the stakeholders failed to reach an agreement as to who would conduct and cover the refit and overhaul of the submarines. Furthermore, money was not the only issue. Under existing international agreements, decommissioned nuclear-powered submarines from the navies of the two countries had to be dismantled. Should this obstacle be addressed, subsequent ownership of the refitted submarines also remained unclear: whether they would remain the assets of the Ministry of Defense or would be transferred to another governmental agency. One of the options suggested by Nornickel was to establish a joint transportation company that would lease the vessels.
In 2002, Nornickel accounted for most of MMP's shipping along the Northern Sea Route. In 2008, Aker Yards signed a contract with Norilsk Nickel for the delivery of four container/cargo ships for Arctic operations, with an option for a fifth.
In 2002, MMC Norilsk Nickel began purchasing gold mining assets, which were spun off in 2005 as Polyus Gold.
In 2003, the company took control of Stillwater Mining Company, the only palladium producer in the U.S. Stillwater operates a platinum group metals (PGM) facility in Stillwater, Montana. In November 2010, Norilsk Nickel announced the sale of Stillwater.
Throughout 2007, Norilsk acquired a host of mining and metallurgical assets abroad, transforming into a multinational company with operations in Australia, Botswana, Finland, Russia, South Africa, and the United States. Norilsk Nickel signed its key deal on 28 June 2007, acquiring approximately 90 percent of Canada's LionOre Mining International Ltd., the world's tenth-largest nickel producer at the time. This takeover, valued at $6.4 billion, was the biggest foreign acquisition by a Russian company at the time, making Norilsk Nickel the world's largest nickel producer.
On February 27, 2008, Norilsk Nickel diversified into the coal mining industry through North Star LLC by obtaining mining rights to the amount of 33.6 million rubles for the estimated 5.7 billion tonnes of coal at the Syradasai Field near the port of Dikson () in the Taymyrsky Dolgano-Nenetsky District (). In the coal mining industry, it competed with Rio Tinto and BHP Billiton. By the estimates of North Star LLC (), a firm affiliated with Nornickel, developing the field would require an investment of $1.5 billion, which including the necessary expansion of the port of Dikson, another Nornickel asset. The only competitor for the rights to the Syradasai Field was Golevskaya Mining Company LLC (). The Syradasai Field is 105 to 120 km southeast of Dikson in the Taimyr-Turukhansk support zone (). A 120-kilometer road and railway was expected to connect the deep-sea port on Cape Chaika to the massive coal deposit by 2019. CC VostokUgol () or Vostok Coal planned to export up to 10 million tonnes of coal annually from the open-pit mine to Western Europe and the Asia-Pacific regions.
In 2016, Nornickel ranked below 65 other oil, gas, and mining companies in a list of 92 involved in onshore resource extraction above the Arctic Circle, in terms of handling indigenous rights.
In 2018, North Star LLC was acquired by businessman Roman Trotsenko's AEON Group, changing its ownership. Neither Nornickel nor AEON disclosed the terms of the ownership transfer.
In the Arctic Environmental Responsibility Index (AERI), Norilsk Nickel is ranked No. 38 out of 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle.Overland, I., Bourmistrov, A., Dale, B., Irlbacher‐Fox, S., Juraev, J., Podgaiskii, E., Stammler, F., Tsani, S., Vakulchuk, R. and Wilson, E.C. 2021. The Arctic Environmental Responsibility Index: A method to rank heterogeneous extractive industry companies for governance purposes. Business Strategy and the Environment. 30, 1623–1643. https://onlinelibrary.wiley.com/doi/10.1002/bse.2698
In April 2024, the United States and the United Kingdom announced a ban on imports of Russian aluminum, copper, and nickel. Due to sanctions, Norilsk Nickel planned to move some of its copper smelting to China and establish a joint venture with a Chinese company. Finished copper products would be sold as Chinese products to avoid Western sanctions. China is Norilsk Nickel's largest export market since 2023. Nickel is a critical metal in electric vehicle batteries, and palladium is critical element in catalytic converters, a component in natural gas vehicles. This plan was motivated not only by circumventing Western sanctions,Russia's Nornickel moves closer to biggest buyer with plan for copper plant in China. By Anastasia Lyrchikova and Alexander Marrow. 22 April 2024. Reuters. but also China's significantly less stringent environmental standards than those in Russia.
Operations
Nornickel is Russia's largest non-ferrous metallurgy company and one of the 10 largest private enterprises in the country.
In 2019, the company produced 229,000 tonnes of nickel, 499,000 tonnes of copper, 2.9 million ounces of palladium, and 0.7 million ounces of platinum.
Globally, Nornickel ranks: First in nickel production (accounting for 14% of global and 96% of Russian production). Bloomberg hails Nornickel as the world's most efficient nickel producer First in palladium production with a share of 41% Third in platinum production with a share of 10%
Nornickel also produces rhodium, cobalt, copper, silver, gold, iridium, ruthenium, selenium, tellurium, and sulfur.
Proven and possible reserves:
6.5 million tonnes of nickel 11.6 million tonnes of copper 118 million troy ounces of platinum-group metals
The company's revenue in 2020 reached $15.5 billion, with net profits of $3.6 billion.
Formed 250 million years ago during the eruption of the Siberian Traps igneous province (STIP), the Norilsk-Talnakh nickel deposits are the largest nickel-copper-palladium deposits in the world. The STIP disgorged over 1 million cubic kilometers of lava, a large portion of it through a series of flat-lying lava conduits below Norilsk and the Talnakh Mountains. The Siberian Traps are considered to be responsible for the late-Permian mass extinction event.
The district's first mineral resources were discovered in the 1840s when Alexander von Middendorff's expedition found the local coal deposits. In the 1860s, Friedrich Schmidt described the coal and surface copper ore found in the field that would later be called Norilsk 1. In the early days of the Soviet Union, Nikolay Urvantsev's expeditions revealed several industrially significant deposits. The 1930s saw the construction of the Norilsk Mining and Metallurgy Combine, which remains the pillar of local industry to date. The fields are located along the deep Norilsk-Khatanga Fault, and most mining operations employ underground methods. The area is believed to hold around 35% of the world's known nickel reserves, as well as 10% of its copper, 15% of its cobalt, and 40% of its platinum-group metals. The district's fields are divided into two clusters: the Norilsk Cluster in the southwest and the Talnakh Cluster in the northeast.
In 2022, Norilsk Nickel reiterated its output guidance for the year and said that operations remain uninterrupted. In the first update since the invasion of Ukraine, the miner reported that first-quarter nickel production increased 10% year-over-year to 52,000 tons. Palladium output declined 8% to 706,000 ounces and platinum fell by 12% to 163,000 ounces, but only from a higher-than-normal level a year ago.
Norilsk Ore Cluster The cluster is located below Norilsk's city center and to the south of it, in the north-eastern part of the Norilsk Geological Basin. In 2021, Norilsk Nickel estimated the mineral reserves of the cluster at 156.6 million tonnes of ore, 400,000 tonnes of nickel, 600,000 tonnes of copper, and 25.6 million troy ounces of platinum-group metals. The rights to some of the cluster's deposits belong to Russian Platinum. Still, the corporation is unable to start mining because Nornickel, which controls the remote area's infrastructure, is blocking access. The two conflicting parties have a protracted history of negotiating a joint mining enterprise.
Norilsk 1 Field