MMC Norilsk Nickel (MNOD)
NORNICKEL ANNOUNCES CONSOLIDATED PRODUCTION RESULTS FOR 1Q2020:
30-Apr-2020 / 13:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
PRESS RELEASE
30 April 2020
Public Joint Stock Company «Mining and Metallurgical Company «NORILSK
NICKEL» (PJSC "MMC "Norilsk Nickel", "Nornickel" or the "Company") the
world's largest of palladium and high-grade nickel and a major producer of
platinum and copper.
NORNICKEL ANNOUNCES CONSOLIDATED PRODUCTION RESULTS FOR 1Q2020
Moscow - PJSC MMC Norilsk Nickel announces preliminary consolidated
production results for the first quarter of 2020.
First Vice-President, Chief Operating Officer, Sergey Dyachenko commented on
the 1Q2020 production results:
«First of all, I would like to highlight that COVID-19 outbreak has not had
any material adverse impact on Company's operating activity so far.
Nornickel is making significant arrangements to protect the health and
safety of its employees [1], while maintaining business as usual in all
operating sites.
Therefore, we reiterate our production guidance from own Russian feed for
FY2020 announced at the Capital Markets Day in November 2019 [2].
In 1Q2020, the Company increased mine output 5% compared to last year.
However, the volumes of saleable metals were affected by the
pre-commissioning of the new chlorine leaching refining shop at Kola MMC. As
a result, the Company built up temporarily nickel and (to a lesser extent)
PGMs work-in-progress material inventories. In addition, PGMs' volumes
reduced relative to last year due to a high base effect of 1Q2019, when a
substantial amount of earlier accumulated work-in-progress PGM inventory was
released. Whereas the decrease in copper output was attributed to scheduled
reduction in processing volumes of concentrate purchased from Rostec and its
lower metal grades. At the same time, Bystrinsky project continued its
ramp-up delivering a record 15 kt of copper in copper concentrate, up 21%
from the fourth quarter 2019 and 51% higher than a year ago.
We expect that saleable metal production volumes to recover during the rest
of this year as the accumulated work-in-progress inventory will be released
following the gradual ramp-up of the new refining shop at Kola MMC».
NORILSK NICKEL GROUP
Nickel
In 1Q2020, consolidated nickel production decreased 7% year-on-year (y-o-y)
to 52 kt. Nickel output from the Company's own Russian feed decreased 7% to
51 kt. The decline was attributed to accumulation of work-in-progress
inventory owing to the pre-commissioning of the new chlorine leaching
refining shop at Kola MMC and a build-up of semis inventories at Norilsk
Nickel Harjavalta to ensure uninterrupted production during a navigation
break. As part of strategic diversification of sales into premium products,
production of carbonyl nickel increased 39% y-o-y to 1.6 kt.
Copper
In 1Q2020, consolidated copper production decreased 9% y-o-y to 115 kt,
almost all of which was produced from own Russian feed. The decline was
attributed to lower processing volumes of concentrate purchased from Rostec
and its lower copper content. This reduction was partly offset by increased
mined ore volumes at Polar Division and expansion of copper production at
Bystrinsky (Chita) Project to 15 kt (+51% y-o-y). This growth owed to the
improvement of the grinding equipment productivity as the concentrator
having been reaching its design parameters.
Platinum Group Metals
In 1Q2020, palladium and platinum output amounted to 548 koz (-29% y-o-y)
and 150 koz (-26% y-o-y), respectively. The decrease of PGMs was attributed
mostly to a high base effect of 1Q19 when the Company processed earlier
accumulated work-in-progress inventory. The pre-commissioning of the new
refining shop at Kola MMC, where precious metal concentrates are extracted
from residue of chlorine leaching, has led to an increase of PGM
work-in-progress inventory, which also contributed negatively to PGMs
output.
RUSSIAN OPERATIONS
In 1Q2020, all saleable metals produced by the Company's Russian operations
came from their own feed.
Nickel
In 1Q2020, nickel output at Kola MMC decreased 10% y-o-y to 35 kt. The
decline was attributed to accumulation of work-in-progress inventory owing
to the pre-commissioning of the new chlorine leaching refining shop at Kola
MMC and semis inventories build-up at Norilsk Nickel Harjavalta to ensure
uninterrupted production during the navigation break.
Copper
In 1Q2020, copper output at the Company's operations in Russia decreased 6%
y-o-y to 115 kt. The decline was attributed to the scheduled reduction in
processing of concentrate purchased from Rostec, its lower copper content,
as well as scheduled reduction of metal produced for the sale to third
parties.
Bystrinsky Project's ramp up was on schedule, where production increased 51%
y-o-y to 15 kt of copper in copper concentrate. The growth has been achieved
as a result of productivity improvement of the grinding equipment and full
ramp-up of the concentrator.
Platinum Group Metals
In 1Q2020, the Company's palladium and platinum output in Russia amounted to
547 koz (-27% y-o-y) and 150 koz (-25% y-o-y), respectively. The decrease of
PGMs was attributed mostly to a higher base effect of 1Q19, when the Company
processed work-in-progress inventory accumulated earlier at Krasnoyarsk
Precious Metals Refinery.
The pre-commissioning of the new refining shop at Kola MMC where precious
metal concentrates are extracted from residue of chlorine leaching has led
to an increase of work-in-progress inventory, thus having an additional
negative impact on PGMs output.
NORILSK NICKEL HARJAVALTA (FINLAND)
Nickel
In 1Q2020, nickel production at Norilsk Nickel Harjavalta remained largely
unchanged y-o-y at 17 kt.
Copper
In 1Q2020, copper output at Norilsk Nickel Harjavalta decreased 95% y-o-y to
200 tones. The decrease resulted from the scheduled shipment of copper cake
from Norilsk Nickel Harjavalta to Copper Plant of the Polar Division for
further refining.
Platinum Group Metals
In 1Q2020, output of saleable palladium and platinum (both contained in
copper cake) amounted to 0.6 koz (-97% y-o-y) and 0.1 koz (-98% y-o-y),
respectively. The decrease was attributed to the scheduled shipment of
copper cake from Norilsk Nickel Harjavalta to Copper Plant of the Polar
Division for further refining.
NKOMATI (SOUTH AFRICA) (*)
In 1Q2020, Nkomati (50% - owned by Norilsk Nickel) produced 1.3 kt of nickel
(-43% y-o-y), 0.6 kt of copper (-44% y-o-y), 7.1 koz of palladium (-33%
y-o-y) and 2.7 koz of platinum
(-38% y-o-y). The decrease in nickel and palladium output and increase in
copper and platinum output was attributed to the decision to scale down ore
mining in 2020. In the future, Norilsk Nickel and its operating partner
African Rainbow Minerals are planning to put the mine on care and
maintenance.
*Note: Nkomati production results are not consolidated in the Group's total
operating results.
Production Guidance from the Company's Russian feedstock for 2020:
Metal Volume
Norilsk Nickel Group (excluding Chita)
Ni, kt 225-235
Cu, kt 420-440
Pd, koz 2,648-2,777
Pt, koz 611-675
Bystrinsky (Chita) Copper Project (1)
Cu, kt 55-65
Au, koz 220-240
Note: Nornickel owns 50.01% of Bystrinsky (Chita Copper) Project. Production
results are shown metal in concentrate for sale on 100% basis and fully
consolidated in total operational results. The concentrator at the
Bystrinsky project was launched in 2018 as part of the hot commissioning
stage and was fully commissioned in 2019.
NORILSK NICKEL GROUP SALEABLE METALS 1Q 1Q Y-o-Y
PRODUCTION 1 2020 2019
Total nickel t 51,757 55,915 -7%
including from own Russian feed t 51,133 54,832 -7%
Total copper t 114,987 126,765 -9%
including from own Russian feed t 114,914 126,651 -9%
Total palladium koz 548 770 -29%
including from own Russian feed koz 548 769 -29%
Total platinum koz 150 204 -26%
including from own Russian feed koz 150 203 -26%
Polar division and Kola MMC (Russia)
Nickel t 35,143 39,265 -10%
Kola MMC, including t 35,143 39,265 -10%
refined Ni from own Russian feed t 33,260 38,983 -15%
saleable intermediate products from t 1,883 282 568%
own Russian feed
from 3d parties feed t 0 0 -
Copper t 99,647 112,307 -11%
Polar division t 82,172 90,569 -9%
Kola MMC, including t 17,475 21,738 -20%
Cu cathodes from own Russian feed t 16,940 17,648 -4%
saleable intermediate products from t 535 4,090 -87%
own Russian feed
from 3d parties feed t 0 0 -
Palladium koz 547 748 -27%
Polar division koz 177 186 -5%
Kola MMC, including koz 371 562 -34%
from own Russian feed koz 371 562 -34%
from 3d parties feed koz 0 0 -
Platinum koz 150 199 -25%
Polar division koz 55 44 25%
Kola MMC, including koz 95 155 -39%
from own Russian feed koz 95 155 -39%
from 3d parties feed koz 0 0 -
GRK Bystrinskoye (Zabaykaisky Krai) 2
Copper (in copper concentrate) t 15,140 10,030 51%
Gold (in copper & gold concentrates) koz 56 43 31%
Iron ore concentrate (66%) kt 381 254 50%
Norilsk Nickel Harjavalta (Finland)
Nickel, including t 16,614 16,650 0%
from own Russian feed t 15,990 15,567 3%
from 3d parties feed t 624 1,082 -42%
Copper, including t 200 4,428 -95%
from own Russian feed t 127 4,314 -97%
from 3d parties feed t 73 114 -36%
Palladium, including koz 0.6 22.0 -97%
from own Russian feed koz 0.1 20.8 -100%
from 3d parties feed koz 0.5 1.2 -57%
Platinum, including koz 0.1 4.6 -98%
from own Russian feed koz 0 3.8 -100%
from 3d parties feed koz 0.1 0.8 -88%
Nkomati (South Africa) 3
Nickel t 1,289 2,245 -43%
Copper t 556 989 -44%
Palladium koz 7.1 10.7 -33%
Platinum koz 2.7 4.4 -38%
Notes:
1) Totals may value from the sum of numbers as a result of rounding. The
production results of Nkomati is not reflected in totals of Norilsk Nickel
Group.
2) Norilsk Nickel Group owns 50.01% of Bystrinsky GOK (Chita Copper
Project). Production results are shown metal in concentrate for sale on
100% basis and fully consolidated in total operational results. The
concentrator at the Bystrinsky project was launched in 2018 as part of the
hot commissioning stage and was fully commissioned in 2019.
3) Norilsk Nickel Group owns 50% of Nkomati. Production results report
metal contained in saleable concentrate on a 50% basis and are not
consolidated in the Group's total operating results. In 2019, the Group
and its operating partner, African Rainbow Minerals, reached an agreement
to scale down production at Nkomati Nickel Mine during 2020. As part of
this process, the partners will elaborate in due course a plan
contemplating the cessation of the mining operations and the placing of
the mine in care and maintenance.
This announcement contains inside information in accordance with Article 7
of EU Regulation 596/2014 of 16 April 2014.
Full name and position of person making the announcement - Vladimir Zhukov,
Vice - president, Investor Relations
ABOUT THE COMPANY
MMC Norilsk Nickel is a diversified mining and metallurgical company, the
world's largest producer of palladium and high-grade nickel and a major
producer of platinum and copper. The company also produces cobalt, rhodium,
silver, gold, iridium, ruthenium, selenium, tellurium, sulphur and other
products.
The production units of Norilsk Nickel Group are located at the Norilsk
Industrial District, on the Kola Peninsula and Zabaykalsky Krai in Russia as
well as in Finland and South Africa.
MMC Norilsk Nickel shares are listed on the Moscow and on the
Saint-Petersburg Stock Exchanges, ADRs are traded over the counter in the US
and on the London, Berlin and Frankfurt Stock Exchanges.
Media Relations: Investor Relations:
Phone: +7 (495) 785 58 00 Phone: +7 (495) 786 83 20
Email: pr@nornik.ru Email: ir@nornik.ru
ISIN: US55315J1025
Category Code: MSCH
TIDM: MNOD
Sequence No.: 61343
EQS News ID: 1033831
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