Norilsk Nickel group announced preliminary consolidated production results for 9M 2019.

PJSC MMC Norilsk Nickel, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper, announced preliminary consolidated production results for the third quarter and the nine months of 2019.

First vice president and chief operating officer Sergey Dyachenko commented on the production results for the nine months of 2019, “In the nine months of the current year, the output of all of our core metals increased, mainly as a result of productivity improvements. The growth in nickel production was attributed to the increased processing of high-grade matte from the Polar Division, the ramping-up of a refining shop with new chlorine-leaching technology at the Kola MMC (Mining & Metallurgical Company), as well as higher production volumes of saleable metals at the Norilsk Nickel Harjavalta driven by higher processing volumes of Russian material and feedstock from third parties. The increase in platinum group metals (PGM) production was mainly driven by a higher output in the first quarter of 2019 due to a release of accumulated work-in-progress inventory at the Krasnoyarsk Precious Metals Refinery. In addition, the increase of PGM production by Norilsk Nickel Harjavalta was attributed to higher metal content in the Russian feedstock processed. The increase in copper output primarily resulted from the ramping-up of the Bystrinsky project, which was fully commissioned in September 2019. We reiterate our 2019 production targets for core metals.”

Nickel

In the third quarter of 2019, consolidated nickel production increased seven percent quarter-on-quarter to 57 thousand tons (kt), almost all of which was produced from the company’s Russian feed. The growth was mainly attributed to increased production at Norilsk Nickel Harjavalta, as the refinery recovered its capacity utilization rate to normal after scheduled maintenance carried out in the second quarter of 2019.

In the nine months of the current year, consolidated nickel production increased six percent year-on-year to 167 kt, with nickel output from the company’s Russian feed totaling 164 kt, up six percent year-on-year. The growth was attributed to the expansion of carbonyl nickel production at the Kola MMC, an increased refinery utilization rate, and higher volumes of nickel matte shipped to Norilsk Nickel Harjavalta for further processing, as well as the processing of nickel feed supplied by a third party, Boliden.

Copper

In the third quarter of 2019, consolidated copper production decreased three percent quarter-on-quarter to 121 kt, almost all of which was produced from the company’s Russian feed. The reduction was attributed to lower processing volumes of the concentrate purchased from Rostec and trial shipments of copper concentrate from the Kola MMC and Norilsk Nickel Harjavalta to the copper plant at the Polar Division for further refining in the fourth quarter of 2019.

In the nine months of the current year, consolidated copper production increased six percent year-on-year to 372 kt, almost all of which was produced from the company’s Russian feed. The growth was driven by the ramp-up of the Bystrinsky project and higher volumes of copper concentrate produced at the Kola MMC for sale to third parties.

Platinum group metals

In the third quarter of 2019, platinum and palladium (both produced solely from the company’s Russian feed) output amounted to 720 thousand ounces (koz) – down six percent quarter-on-quarter – and 164 koz – down 11 percent quarter-on-quarter – respectively. Lower production was attributed to the commissioning of the new precious metals concentrate production line at the metallurgical shop at the Kola MMC and trial shipments of copper cake (containing precious metals) from Norilsk Nickel Harjavalta to the Polar Division for further processing. The new production line at the Kola MMC is being launched as part of a nickel refinery upgrade to a new nickel electrowinning technology, whereby precious metal concentrates will be produced from chlorine-leaching residue.

In the nine months of the current year, platinum and palladium output amounted to 2,253 koz (up seven percent year-on-year) and 553 koz (up eight percent year-on-year), respectively. The increase of PGM output was attributed to the release of work-in-progress inventory at the Krasnoyarsk Precious Metals Refinery, a higher PGM content in the Russian feed, and the processing of the feed purchased from third parties at Norilsk Nickel Harjavalta.

Russian operations: nickel

In the nine months of the current year, the company’s Russian operations produced all saleable metals from the company’s own domestic feedstock.

In the third quarter of 2019, nickel production at the Kola MMC amounted to 40 kt and remained largely unchanged compared to the previous quarter (minus one percent quarter-on-quarter). In the nine months of the current year, the Kola MMC increased nickel output by seven percent year-on-year to 121 kt. The growth was primarily attributed to increased shipments of high-grade matte from the Polar Division and a gradual ramp-up of refined nickel production using new chlorine-leaching technology. In addition, in line with the diversification of sales into premium products strategy, carbonyl nickel production at the Kola MMC more than doubled to 2.7 kt (plus 104 percent year-on-year).

Russian operations: copper

In the third quarter of 2019, the company’s Russian operations reduced copper output by four percent quarter-on-quarter to 117 kt. The reduction was attributed to lower processed volumes of concentrate purchased from Rostec and trial shipments of copper concentrate from the Kola MMC to the copper plant at the Polar Division for further refining.

In the nine months of the current year, copper output at the company’s operations in Russia increased seven percent year-on-year to 360 kt. The growth was driven by the ramp-up of the Bystrinsky project in Chita and higher volumes of copper concentrate produced at the Kola MMC for sale to third parties. The Bystrinsky project was ramping-up on schedule, having increased production more than twofold to 31 kt of copper concentrate.

Russian operations: PGM

In the third quarter of 2019, the company’s platinum and palladium output in Russia amounted to 707 koz (down six percent quarter-on-quarter) and 162 koz (down 11 percent quarter-on-quarter), respectively. Lower production was attributed to the commissioning of the new precious metals concentrate production line at the metallurgical shop at the Kola MMC.

In the nine months of the current year, platinum and palladium output in Russia amounted to 2,204 koz (up seven percent year-on-year) and 542 koz (up seven percent year-on-year), respectively. The increase of PGM output resulted from the release of accumulated work-in-progress inventory at the Krasnoyarsk Precious Metals Refinery.

Nickel at NN Harjavalta

In the third quarter of 2019, nickel output at the Norilsk Nickel Harjavalta increased 29 percent quarter-on-quarter to 17 kt. The increase was mainly attributed to a low base effect from the second quarter of 2019, when the refinery was undergoing annual scheduled maintenance and repairs. In the nine months of the current year, nickel output increased five percent year-on-year to 46 kt. The increase was attributed to higher processing volumes of Russian feed as a result of the downstream reconfiguration and the processing of nickel feed supplied by Boliden.

Copper at NN Harjavalta

In the third quarter of 2019, copper output at Norilsk Nickel Harjavalta increased 11 percent quarter-on-quarter to 4.0 kt. The increase was mainly attributed to a low base effect of the second quarter of 2019, when the refinery was undergoing annual scheduled maintenance and repairs. In the nine months of the current year, copper output decreased 13 percent year-on-year to 12 kt. The reduction resulted from the high base effect from the first nine-months of 2018, when the company processed work-in-progress concentrate. The figure was also impacted by a trial shipment of copper cake from the Norilsk Nickel Harjavalta to the copper plant at the Polar Division for further refining.

PGM outside of Russia

In the third quarter of 2019, the output of saleable platinum and palladium (both contained in copper cake) amounted to 13 koz (down 10 percent quarter-on-quarter) and 3.0 koz (down 28 percent quarter-on-quarter), respectively. In the nine months of the current year, the output of platinum and palladium reached 49 koz (up 16 percent year-on-year) and 11 koz (up 35 percent year-on-year), respectively. The increase in metals production was attributed to a higher PGM content in the Russian feed processed, as well as in the processing of third-party feed.

Nkomati (South Africa)

In the nine months of the current year, the output at Nkomati (50-percent-owned by Norilsk Nickel) amounted to 5.0 kt of nickel (up six percent year-on-year), 3.0 kt of copper (up 22 percent year-on-year), 26 koz of palladium (up 11 percent year-on-year), and 11 koz of platinum (up 20 percent year-on-year). The increase in metals production was attributed to the higher volumes of the ore mined with higher metal content.

About the company

Norilsk Nickel is a diversified mining and metallurgical company, the world’s largest producer of palladium and high-grade metal nickel and a major producer of platinum and copper. The company also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, sulfur, and other products. The production units of Norilsk Nickel group are located at the Norilsk Industrial District, on the Kola Peninsula and the Chita region in Russia, as well as in Finland and South Africa. Norilsk Nickel’s shares are listed on the Moscow and on the St. Petersburg Stock Exchanges. Norilsk Nickel’s ADRs are traded over the counter in the U.S. and on the London, Berlin, and Frankfurt Stock Exchanges.