Nornickel Q1 results show mixed fortunes for nickel, copper and palladium

Nornickel Q1 results show mixed fortunes for nickel, copper and palladium

Nornickel Q1 nickel production rose year-on-year owing to the recovery of two of its mines after flooding in 2021.  Copper output was flat, while palladium output fell when compared to the high levels produced in Q1 2021.

Blue View

Q1 nickel output increased mainly as a result of the recovery of the Oktyabrsky and Taimyrsky mines, as well as the ramp-up of the Norilsk Concentrator.  The company was forced to partly suspended operations at the mines in Siberia in Feb 2021, after it detected subterranean water flowing into its facilities.  Combined, the mines account for around 35% of the company's primary nickel supply.  The quarterly results point to consolidated nickel output increasing 10% year-on-year to 52kt.  Copper output, meanwhile, remained practically unchanged year-on-year at 91kt.  Copper production at Kola MMC declined following the March 2021 shutdown of the Kola MMC metallurgical shop but was offset by increased output by the Norilsk division, to which the copper concentrate previously sent to Kola MMC was diverted.  PGM production declined owing to the high base effect of Q1 2021 when a large amount of accumulated work-in-progress material was processed.

The market continues to keenly watch developments in Russian commodities, with the possibility of supply risks resulting from the Russia-Ukraine conflict.  In spite of certain challenges in logistics and deliveries of equipment, spares and consumables, due to the geopolitical situation, Nornickel's operations remain uninterrupted. The company is using new logistical arrangements and exploring opportunities with alternative suppliers.