MMC Norilsk Nickel (MNOD)
NORNICKEL ANNOUNCES CONSOLIDATED PRODUCTION RESULTS FOR 1H2020
29-Jul-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
Public Joint Stock Company «Mining and Metallurgical Company «NORILSK
NICKEL» (PJSC "MMC "Norilsk Nickel", "Nornickel" or the "Company")
NORNICKEL ANNOUNCES CONSOLIDATED PRODUCTION RESULTS FOR 1H2020
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 [1] 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 [1]
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».
NORNICKEL GROUP
Nickel
In 2Q2020, consolidated nickel production increased 8% quarter-on-quarter
(q-o-q) to 56 kt , almost all of which were produced from the Company's own
Russian feed (55 kt, +8% q-o-q). The growth was attributed to the gradual
ramp-up of nickel refinery at Kola MMC using new chlorine-leaching
technology. As part of strategic diversification of sales into premium
products, carbonyl nickel production at Kola MMC increased to 1.6 kt (+3%
q-o-q).
In 1H2020, total nickel output decreased 2% year-on-year (y-o-y) to 108 kt,
almost all of which were produced from the Company's own Russian feed (107
kt, -1% y-o-y). The decline was attributed to hot commissioning of a
refining shop using new chlorine leaching technology at Kola MMC.
In 1H2020, carbonyl nickel output increased 41% y-o-y to 3.2 kt.
Copper
In 2Q2020, consolidated copper production increased 9% q-o-q to 125 kt,
almost all of which were produced from the Company's own Russian feed. The
growth was driven by a temporary increase in processed volumes of
concentrate purchased from Rostec, and copper cake supplied from Norilsk
Nickel Harjavalta to Copper Plant of the Polar Division for further
refining, as well as an increase in copper feed for copper smelting at Polar
Division due to a reduction of copper content in the matte shipped for
further processing to Kola MMC.
In 1H2020, total copper output decreased 5% y-o-y to 240 kt, almost all of
which were produced from the Company's own Russian feed. The decline was
attributed to lower processing volumes of concentrate purchased from Rostec
in comparison to 1H2019, as well as a decrease of copper production at Kola
MMC due the short-term reduction of capacity utilisation rate of its
smelting operations owing to unfavorable meteorological conditions in order
to reduce environmental impact.
Bystrinsky Project was ramping up on schedule, having increased production
of copper in concentrate by 49% y-o-y to 30 kt.
Platinum Group Metals
In 2Q2020, palladium and platinum output amounted to 722 koz (+32% q-o-q)
and 172 koz (+15% q-o-q), respectively. The increase of PGM output was
mostly driven by processing of work-in-progress material at Krasnoyarsk
Precious Metals Plant and shipment of copper cake (containing PGMs) from
Norilsk Nickel Harjavalta to Boliden for further processing under
contractual obligations.
In 1H2020, palladium and platinum output amounted to 1,270 koz (-17% y-o-y)
and 323 koz (-17% y-o-y), respectively. The decrease of PGMs was attributed
mostly to a high base effect of 1H2019, when Krasnoyarsk Precious Metals
Plant processed earlier accumulated work-in-progress inventory.
RUSSIAN OPERATIONS
In 1H2020, all saleable metals were produced by the Company's Russian
operations from their own feed.
Nickel
In 2Q2020, nickel output at Kola MMC increased 12% y-o-y to 39 kt. The
increase was attributed to the scheduled ramp-up of nickel refinery at Kola
MMC operating new chlorine-leaching technology. In 1H2020, Kola MMC
decreased nickel output 7% y-o-y to 74 kt. The decline was attributed to hot
commissioning of a refining shop with a new chlorine leaching technology.
Copper
In 2Q2020, copper output at the Company's operations in Russia increased 8%
q-o-q to 124 kt. The growth was driven by a temporary increase in processed
volumes of concentrate purchased from Rostec, and copper cake supplied from
Norilsk Nickel Harjavalta to Copper Plant of the Polar Division for further
refining, as well as an increase in copper feed for copper smelting at Polar
Division due to a reduction of copper content in the matte shipped for
further processing to Kola MMC.
In 1H2020, total copper output decreased 2% y-o-y to 239 kt. The decline was
attributed to lower processing volumes of concentrate purchased from Rostec
in comparison to 1H2019, as well as decrease of copper production at Kola
MMC due the short-term reduction of capacity utilisation rate of its
smelting operations owing to unfavorable meteorological conditions in order
to reduce environmental impact.
Bystrinsky Project was ramping up on schedule, with copper in copper
concentrate production increased 49% y-o-y to 30 kt.
Platinum Group Metals
In 2Q2020, the Company's Russian operations produced 716 koz (+31% q-o-q) of
palladium and 172 koz (+15% q-o-q) of platinum. The growth of PGMs was
attributed mostly to processing of work-in-progress material at Krasnoyarsk
Precious Metals Plant.
1H2020, palladium and platinum output amounted to 1,264 koz (-16% y-o-y) and
322 koz (-15% y-o-y), respectively. 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.
NORILSK NICKEL HARJAVALTA (FINLAND)
Nickel
In 2Q2020, nickel production at Norilsk Nickel Harjavalta remained largely
unchanged q-o-q at 17 kt. In 1H2020, nickel output increased 12% y-o-y to 33
kt. The growth was attributed to change in the maintenance schedule, with
the scheduled repairs postponed from May to August.
Copper
In 2Q2020, copper output at Norilsk Nickel Harjavalta amounted to 1 kt
(6-fold growth q-o-q). The increase was attributed to the shipment of
salable copper cake to Boliden in line with an existing contract. In 1H2020,
total copper output decreased 82% y-o-y to slightly above 1 kt. The decrease
was due to the scheduled shipment of copper cake from Norilsk Nickel
Harjavalta to Copper Plant of the Polar Division for further refining.
Platinum Group Metals
In 2Q2020, output of saleable palladium and platinum (both contained in
copper cake) amounted to 6 koz (10-fold growth q-o-q) and 1 koz (11-fold
growth q-o-q), respectively. The increase was attributed to the shipment of
salable copper cake (containing PGMs) to Boliden under an existing contract.
1H2020, output of palladium and platinum reached 7 koz (-82% y-o-y) and 1
koz (-85% 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 1H2020, Nkomati (50% - owned by Norilsk Nickel Group) produced 3 kt of
nickel (-31% y-o-y), 1 kt of copper (-42% y-o-y), 13 koz of palladium (-32%
y-o-y) and 6 koz of platinum (-29% y-o-y). The decrease in metal production
was attributed to the decision taken early to put the mine into care and
maintenance and depletion of the existing open pit reserves.
Note: (*) Nkomati production results are not consolidated in the Group's
total operating results.
Production Guidance from the Company's Own Russian Feed 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 GOK (Chita Copper Project) (1)
Cu, kt 55-65
Au, koz 220-240
Note: (1) Nornickel owns 50.01% of Bystrinsky (Chita Copper) Project.
Production results are shown metal in concentrate for sale on 100% basis.
Production results are consolidated in total operational results on 100%
basis. The concentrator at the Bystrinsky project was launched in 2018 as
part of the hot commissioning stage and was fully commissioned in September
2019.
NORILSK NICKEL 2Q 1Q Q-o-Q 1H 1H Y-o-Y
GROUP SALEABLE 2020 2020
METALS
PRODUCTION 1
2020 2019
Total nickel t 55,831 51,757 8% 107,588 109,682 -2%
including from t 55,438 51,133 8% 106,571 107,741 -1%
own Russian feed
Total copper t 124,926 114,987 9% 239,913 251,304 -5%
including from t 124,909 114,914 9% 239,823 251,100 -4%
own Russian feed
Total palladium koz 722 548 32% 1,270 1,533 -17%
including from koz 722 548 32% 1,270 1,531 -17%
own Russian feed
Total platinum koz 173 150 15% 323 388 -17%
including from koz 173 150 15% 323 387 -17%
own Russian feed
Polar Division
and Kola MMC
(Russia)
Nickel t 39,312 35,143 12% 74,455 80,039 -7%
Kola MMC, t 39,312 35,143 12% 74,455 80,039 -7%
including
refined Ni from t 37,940 33,260 14% 71,200 79,525 -10%
own Russian feed
saleable t 1,372 1,883 -27% 3,255 514 533%
intermediate
products from
own Russian feed
from 3d parties t 0 0 - 0 0 -
feed
Copper t 108,611 99,647 9% 208,258 223,160 -7%
Polar Division t 94,251 82,172 15% 176,423 179,722 -2%
Kola MMC, t 14,360 17,475 -18% 31,835 43,438 -27%
including
Cu cathodes from t 13,770 16,940 -19% 30,710 35,828 -14%
own Russian feed
saleable t 590 535 10% 1,125 7,610 -85%
intermediate
products from
own Russian feed
from 3d parties t 0 0 - 0 0 -
feed
Palladium koz 716 547 31% 1,264 1,497 -16%
Polar Division koz 373 177 111% 550 461 19%
Kola MMC, koz 343 371 -7% 714 1,036 -31%
including
from own Russian koz 343 371 -7% 714 1,036 -31%
feed
from 3d parties koz 0 0 - 0 0 -
feed
Platinum koz 172 150 15% 322 380 -15%
Polar Division koz 88 55 62% 143 114 25%
Kola MMC, koz 83 95 -12% 179 266 -33%
including
from own Russian koz 83 95 -12% 179 266 -33%
feed
from 3d parties koz 0 0 - 0 0 -
feed
Bystrinsky GOK (
Russia,
Zabaykaisky
Krai) 2
Copper t 15,119 15,140 0% 30,259 20,253 49%
Gold koz 58 56 3% 114 87 31%
Iron ore kt 491 381 29% 872 505 73%
concentrate
Norilsk Nickel
Harjavalta
(Finland)
Nickel, t 16,519 16,614 -1% 33,133 29,643 12%
including
from own Russian t 16,126 15,990 1% 32,116 27,702 16%
feed
from 3d parties t 393 624 -37% 1,017 1,940 -48%
feed
Copper, t 1,196 200 498% 1,396 7,891 -82%
including
from own Russian t 1,179 127 828% 1,306 7,687 -83%
feed
from 3d parties t 17 73 -77% 90 204 -56%
feed
Palladium, koz 6.1 0.6 968% 6.7 36.3 -82%
including
from own Russian koz 5.9 0.1 5820% 6.0 34.2 -82%
feed
from 3d parties koz 0.2 0.5 -64% 0.6 2.1 -70%
feed
Platinum, koz 1.1 0.1 842% 1.3 8.2 -85%
including
from own Russian koz 1.1 0.0 - 1.1 6.6 -84%
feed
from 3d parties koz 0.1 0.1 -33% 0.2 1.6 -88%
feed
Nkomati (South
Africa) 3
Nickel t 1,337 1,289 4% 2,626 3,792 -31%
Copper t 581 556 4% 1,137 1,971 -42%
Palladium koz 6 7 -15% 13 19 -32%
Platinum koz 3 3 11% 6 8 -29%
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 September 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.: 78815
EQS News ID: 1105213
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July 29, 2020 06:00 ET (10:00 GMT)
