Norilsk Nickel, the largest refined nickel and palladium producer in the world, announces preliminary consolidated production results for the first quarter of 2017.
First Vice-President – Chief Operating Officer, Sergey Dyachenko commented on the Q1 production results: “The decline in metal production volumes in the first quarter was scheduled as it was resulting primarily from the reconfiguration of downstream production facilities progressing to its completion. We expect that the quarterly metal production volumes will recover as the Talnakh Concentrator reaches its design parameters as well as the built-up of work-in-progress materials in both base metals and precious metal production flows finishes by Q3. This year, we are also planning to complete processing of previously stored pyrrhotite concentrate, utilizing the oldest part of this material from the bottom of the concentrate pond. Taking into account its natural dilution, which has already negatively affected the first quarter production results, we see a downside risk to our annual production guidance for nickel and PGMs by up to 3% of their total volume. Overall, we consider that the processing of stored pyrrhotite concentrate was a successful commercial project for the company, with over 5.3 million tons of concentrate used as a feed to production since 2010. Management team is looking at ways to mitigate these risks and confirms 2017 production guidance”.
Q1 consolidated nickel production amounted to 53 thousand tons decreasing by 16% YoY. Nickel output from the company’s own Russian feed reached 49 thousand tons, down by 5%. The decrease was attributed to decommissioning of Nickel Plant, scheduled ramp up of the upgraded Talnakh Concentrator, increase in shipments of nickel feed for processing to Kola MMC and Norilsk Nickel Harjavalta and resulting increase of work-in-progress material, as well as the dilution of stored pyrrhotite concentrate feed.
Q1 consolidated copper production amounted to 94 thousand tons increasing by 8% YoY. Copper output from the company’s own Russian feed reached 92 thousand tons, up by 8%. The increase was attributed to higher copper content in feed and processing volumes of concentrate purchased from Rostec.
Consolidated palladium and platinum output amounted to 553 thousand ounces, down by 14% YoY, and 130 thousand ounces, down by 24% respectively. Palladium output from the company’s own Russian feed reached 521 thousand ounces, down by 17% and platinum output reached 118 thousand ounces, down by 28%. The decrease of palladium and platinum output was attributed to the increase of work-in-progress materials in transit from Polar to Kola division (material amounts of PGMs are contained in the nickel matte, which is shipped for processing from Polar to Kola division), the dilution of stored pyrrhotite concentrate feed and a longer refining processing time of the precious metal concentrate, produced from the slag of Copper Plant, at Krasnoyarsk Non-Ferrous Metals Plant (Krastsvetmet).
Due to the shutdown of Nickel plant in Polar division, since Q3 2016 saleable nickel has been produced only at two production sites: Kola MMC in Russia and Norilsk Nickel Harjavalta in Finland. Q1 nickel output in Russia amounted to 37 thousand tons decreasing by 28% YoY. The decrease owed to the decommissioning of Nickel Plant, increase of work-in-progress inventories and increase of shipments of the company’s Russian feed to Norilsk Nickel Harjavalta for processing in line with the reconfiguration of downstream production facilities. Since Q4 2016 all nickel matte produced at Nadezhda Metallurgical Plant has been shipped for processing to Kola MMC, which refines a larger part of it, with the remainder after being processed into nickel concentrate has been shipped to Norilsk Nickel Harjavalta in Finland for refining. (Nornickel/Ukrainian metal)