PJSC MMC Norilsk Nickel, the largest refined nickel and palladium producer in the world, announces preliminary consolidated production results for the second quarter and the first half of 2017.
First Vice-President – Chief Operating Officer, Sergey Dyachenko commented on the production results: “In Q2 our platinum group metals (PGMs) production increased substantially owing to the processing of built-up work-in-progress material which enabled us to offset the previous quarter decline. A minor reduction in nickel production volumes was due to scheduled annual repair works at Harjavalta nickel refinery in Finland. In addition, in Q2 we significantly decreased low-margin processing of third party nickel feed at Harjavalta. In May Talnakh Concentrator reached its design parameters in terms of nickel and copper recovery rates into collective concentrates as well as the metal content in nickel-pyrrhotite and copper concentrates. At the same time, we were still experiencing certain issues with lifting and processing previously stored pyrrhotite concentrate and also had to run some short-term suspensions of our smelting operations in the Polar division due to unfavorable meteorological conditions to keep the pollutant concentrations in Norilsk’s residential area within the limits. Our management team is doing their best to minimize the negative impact of the above on current year production targets through more efficient ore processing and optimization of smelting capacities utilization and we thus confirm initial 2017 metal production guidance”.
Q2 consolidated nickel production amounted to 49 kt decreasing by 8% QoQ. Nickel output from the company’s own Russian feed reached 48 kt, down by 2% QoQ. The reduction was driven by scheduled annual repair works at Harjavalta refinery in Finland and termination of processing of Nkomati concentrate.
Overall in H1 nickel output amounted to 103 kt decreasing by 15% YoY driven primarily by the reduction of low-margin processing of third parties feed. Nickel output from the company’s own Russian feed reached 98 kt, down by 1% YoY. The decrease was attributed to the ongoing reconfiguration of downstream production facilities at the Polar division, including modernization and capacity expansion at Talnakh Concentrator, shut down of Nickel Plant in Q3 2016 and, as a result, increase of work-in-progress material.
Q2 consolidated copper production amounted to 101 kt, up by 7% QoQ. Copper output from the company’s own Russian feed reached 100 kt, up by 9% QoQ.
In H1 copper output amounted to 195 kt, up by 10% YoY driven mostly by the processing of concentrate purchased from Rostec and reduced metal losses in recovery of copper into copper concentrate as a result of modernization of Talnakh Concentrator.
Q2 consolidated palladium and platinum output amounted to 781 koz (up by 41% QoQ) and 190 koz (up by 46%), respectively. Palladium output from the company’s own Russian feed reached 759 koz, up by 46% QoQ, and platinum output reached 183 koz, up by 55%.
The increase of palladium and platinum output was attributed to processing of precious metal concentrate accumulated in Q1 as work-in-progress material (PGMs contained in the nickel matte, which is shipped for processing from the Polar to Kola division) and at Krasnoyarsk Precious Metals Plant.
In H1 palladium and platinum output amounted to 1,334 koz (flat YoY) and 320 koz (down by 4%), respectively. The decline was attributed to lower metal content in mined ore and substitution of feed purchased from third parties by Russian material with lower platinum content. (Nornickel/Ukrainian metal)