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MMC Norilsk Nickel (MNOD)
MMC Norilsk Nickel: NORILSK NICKEL ANNOUNCES PRELIMINARY CONSOLIDATED
PRODUCTION RESULTS FOR 4Q AND FY2018, AND REITERATES PRODUCTION OUTLOOK FOR
2019
30-Jan-2019 / 13:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
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PRESS RELEASE
30 January 2019
Public Joint Stock Company "Mining and Metallurgical Company "NORILSK
NICKEL" (PJSC "MMC "Norilsk Nickel", "Nornickel" or the "Company")
NORILSK NICKEL ANNOUNCES PRELIMINARY CONSOLIDATED PRODUCTION RESULTS FOR 4Q
AND FY2018, AND REITERATES PRODUCTION OUTLOOK FOR 2019
Moscow - PJSC MMC Norilsk Nickel, the world's largest refined nickel and
palladium producer, announces today preliminary consolidated production
results for the fourth quarter and the full year of 2018 and reiterates its
production outlook for the full year 2019.
First Vice-President - Chief Operating Officer, Sergey Dyachenko commented
on the 2018 production results,
«In 2018, the output of all our key metals, especially copper, exceeded our
production guidance owing to an increase in processed volumes of concentrate
purchased from Rostec and productivity improvements. Following the
completion of downstream reconfiguration program we stopped low-margin
processing of the third-party feed and increased the production of nickel
from own Russian feed by 3% and copper by 19%. The output of platinum group
metals from own Russian feed remained practically unchanged, but was also
above our production guidance.
In 2018, Bystrinsky GOK (Chita Copper Project) started the production
ramp-up. Unfortunately, owing to the issues with the equipment at the
concentrator, metals' output was slightly below the production guidance.
Most of these issues had been fixed by the end of the last year, and in 2019
we are planning to ramp up production to 40-46 kt of copper (in
concentrate).
We reiterate our production guidance from own Russian feed for FY2019
announced at the Capital Markets Day in November 2018».
NORILSK NICKEL GROUP
Nickel
In 4Q18, consolidated nickel production increased 16% quarter-on-quarter
(q-o-q) to 62 kt, almost all of which was produced from own Russian feed.
The growth was attributed to expansion of carbonyl nickel production
capacities at Kola MMC and increase in production of nickel concentrate for
sale to third parties.
In 2018, consolidated nickel production increased 1% year-on-year (y-o-y) to
219 kt. Nickel output from the Company's own Russian feed amounted to 217
kt, up 3% y-o-y and above the 210-215 kt production guidance.
Copper
In 4Q18, consolidated copper production increased 3% q-o-q to 124 kt, almost
all of which was produced from own Russian feed. The growth of output owed
to an increase in processed volumes of ore with higher copper content.
In 2018, consolidated copper production increased 18% y-o-y to 474 kt,
almost all of which was produced from own Russian feed. The growth was
driven by the ramp up of Bystrinsky Project, increase in processed volumes
of concentrate purchased from Rostec and reduced metal losses in recovery of
copper into copper concentrate as a result of Talnakh Concentrator reaching
its design parameters after modernization. Copper output from own Russian
feed (excluding Bystrinsky Project) amounted to 454 kt, above the 400-420 kt
production guidance mostly due to an increase in processed volumes of
concentrate purchased from Rostec. Copper output at Bystrinsky GOK amounted
to 19 kt, which was slightly below the 20-25 kt production guidance due to
equipment issues at concentrator during the ramp up.
Platinum Group Metals
In 4Q18, both palladium and platinum were produced solely from the Company's
own Russian feed, with their output amounted to 632 koz (-10% q-o-q) and 140
koz (-22% q-o-q), respectively. The decrease of PGM output was attributed to
a build-up of work-in-progress inventory at Krasnoyarsk Precious Metals
Refinery.
In 2018, both palladium and platinum were produced solely from the Company's
own Russian feed. Palladium output amounted to 2,729 koz (-2% y-o-y) above
the 2,630 - 2,725 koz production target, while platinum output reached 653
koz (-3% y-o-y), which was also above the 600-650 koz production target. The
slight decrease of PGM output resulted from the reduction of third parties
feed, which the Company almost ceased processing in 2018. PGM output from
the Company's own Russian feed remained practically unchanged y-o-y.
RUSSIAN OPERATIONS
In 2018, all saleable metals were produced by the Company in Russia from its
own feed.
Nickel
In 4Q18, nickel output at Kola MMC increased by 22% q-o-q to 45 kt. In 2018,
nickel output at Kola MMC amounted to 158 kt, which was slightly above the
previous year level. Substantial increase of nickel output in 4Q18 was
attributed to expansion of carbonyl nickel production capacities at Kola MMC
and increase in production of nickel concentrate for sale to third parties.
Copper
In 4Q18, copper output at the Company's operations in Russia increased 3%
q-o-q to 119 kt. The growth was attributed to an increase in processed
volumes of mined ore with higher metal grades and an increase in high copper
content Polar Division's nickel matte volume, which was processed at Kola
MMC. The decrease of copper output at Bystrinsky GOK was due temporary
production stoppages at the concentrator due to technical issues with the
ramp up of equipment. In 2018, the Company's copper output in Russia
increased 18% y-o-y to 456 kt. This increase was mainly attributed to the
ramp up of Bystrinsky Project, increase of processed volumes of concentrate
purchased from Rostec and Talnakh Concentrator reaching its design
parameters after modernization.
Platinum Group Metals
In 4Q18, palladium and platinum output of the Company in Russia decreased
10% q-o-q to 616 koz and 22% q-o-q to 137 koz, respectively. In 2018,
palladium and platinum output decreased 2% y-o-y to 2,671 koz and 3% y-o-y
to 642 koz, respectively. The PGM production volumes reduced primarily owing
to the reduction of third party feed, processing of which was ceased by the
Company at its Russian plants as a low-margin business, and a build-up of
work-in-progress inventories at Krasnoyarsk Precious Metals Refinery.
NORILSK NICKEL HARJAVALTA (FINLAND)
Nickel
In 4Q18, nickel production at Norilsk Nickel Harjavalta increased 2% q-o-q
to 17 kt. Nickel output from the Company's own Russian feed also increased
3% q-o-q to 16 kt. The increase was attributed to higher processing volumes
of Russian feed. In 2018, nickel output at Harjavalta increased 2% y-o-y to
61 kt, almost all of which were produced from the Company's own Russian
feed. The growth was attributed to the increase in processed volumes of
Russian feed as a result of downstream reconfiguration and processing of
accumulated work-in-progress inventories.
Copper
In 4Q18, copper output at Norilsk Nickel Harjavalta increased 1% q-o-q to
5kt. In 2018, copper output at Harjavalta increased 34% y-o-y to 18 kt,
almost all of which were produced from the Company's own Russian feed. The
increase was attributed to higher processing volumes of Russian feed
(concentrate made from nickel matte produced at the Polar division)
following the completion of downstream reconfiguration as well as processing
of accumulated work-in-progress inventories.
Platinum Group Metals
In 4Q18, output of saleable palladium and platinum (both contained in copper
cake) amounted to 16 koz (up 14% q-o-q) and 3 koz (down 25% q-o-q),
respectively. The increase in palladium and decreased in platinum output
were attributed to higher palladium content and lower platinum content in
processed Russian feed in the reported quarter. In 2018, output of palladium
and platinum increased 39% y-o-y to 58 koz and 10% y-o-y to 11 koz,
respectively. The growth of PGM output at Harjavalta was attributed to the
increase in processing of Russian feed as a result of downstream
reconfiguration.
NKOMATI (SOUTH AFRICA)
In 2018, output at Nkomati (50% - owned by Norilsk Nickel) amounted to 7 kt
of nickel (down 18% y-o-y), 3 kt of copper (down 32% y-o-y), 33 koz of
palladium (down 28% y-o-y) and 13 koz of platinum (down 35% y-o-y). The
decrease was attributed to lower metal grades in the mined ore as well as
temporary production stoppages due to labor strikes at contractors.
2019 Production Guidance from Russian feedstock:
Metals Volume
Norilsk Nickel Group (excluding Chita)
Ni, kt 220-225
Cu, kt 430-450
Pd, koz 2,770-2,800
Pt, koz 646-670
Bystrinsky (Chita) Copper Project (1)
Cu, kt 40-46
Au, koz 192-212
Note: 1.Norilsk Nickel owns 50.01% of Bystrinsky (Chita Copper) Project.
Production results are shown on a 100% basis and are fully consolidated in
the Company's financial and operating results.
NORILSK NICKEL GROUP 4Q 3Q Q-o-Q FY FY Y-o-Y
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