Norilsk Nickel, the world’s largest refined nickel and palladium producer, hosted its annual strategy day. The management reported on the main results of the completed strategic cycle of 2013-2015 and set key goals and priorities for the next strategic cycle of 2016-2018.
In 2013-2015, a significant progress was achieved in transforming Norilsk Nickel into a world-class run organization, having built an efficient business platform enabling full development of the company’s best-in-class mining assets. The company has successfully rolled out stringent investment governance discipline, refocused its asset portfolio on tier-1 assets and executed on a large portion of non-core and non-tier 1 asset disposals.
Over the past 3 years Norilsk Nickel delivered a 39% reduction of cash nickel-equivalent unit costs in USD terms; $3 billion release of unproductive capital; and optimization of mandatory capex to industry benchmark levels.
Over the same period, despite extremely challenging commodity markets Norilsk Nickel demonstrated a superior financial performance relative to its global peers, reporting one of the industry’s lowest leverage levels and highest profitability, while also being the only global mining major generating positive total shareholder return.
Having realized what the management considers as the ‘quick wins’, the company sets its priorities for the next three years with a focus on further downstream modernization, identification of growth opportunities in upstream and a major effort to advance with an improvement of its environmental footprint.
Norilsk Nickel continues to strive for making its production assets clean and safe operations. An HSE strategy approved by the board in 2014 has already resulted in a major progress in health and safety as independently verified by an international audit. Full elimination of workforce fatalities remains the key priority for the management.
In 2016, the company is planning to complete the first phase of its environmental program. The phased out shutdown of Nickel Plant is on track and scheduled for the full completion in October, that should result in a significant reduction of overall SO2 emissions (by 15%) and emissions within the Norilsk city boundaries by 35%.
The company has also engaged into the second phase of the environmental program, having launched active preparations for the construction of the ‘sulfur project’ with an ultimate goal to decrease the overall SO2 emissions by 75% at the Polar division. The sulphur project design for Nadezhda plant has been completed and approved by the Russia’s regulatory body (Rostechnadzor). Construction site preparations have started and one of the leading engineering and industrial construction firms, SNC Lavalin, has been commissioned to prepare a detailed engineering project. (Norilsk Nickel/Ukrainian metal)