Norilsk Nickel, MMC

Norilsk Nickel is the world's largest producer of nickel and palladium, one of the largest producers of platinum and copper. In addition, Norilsk Nickel produces side metals: cobalt, rhodium, silver, gold, iridium, ruthenium, as well as selenium, tellurium and sulfur. The main activities of the group's enterprises are the search, exploration, extraction, enrichment and processing of minerals, the production and sale of non-ferrous and precious metals. The company's production divisions are located on three continents in five countries of the world: Russia, Australia, Botswana, Finland and South Africa.

The main production units are located on the Kola Peninsula and in the Norilsk Industrial Region. The head office is located in Moscow.

Owners

At the end of May 2010, nominally

• 31% of the company owns The Bank Of New York International Nominees,
• 25% of the plant's shares in LLC United Company RUSAL Investment Management,
• 15% owned by Bonico Holdings Co. Limited,
• 7 % — в Montebella Holdings Limited,
• the remaining 22% is in the hands of individuals.

Actual owners of the company at the end of December 2008:

• 29.9% of the shares belonged to the president of the Interros holding Vladimir Potanin,
• 25% - Oleg Deripaska's UC Rusal,
• 5% - Alisher Usmanov

Capitalization at RTS as of September 20, 2010 - 941 billion rubles.

Board of Directors

Main article: Norilsk Nickel Board of Directors

Areas of activity

The main activities of the group's enterprises are:

• prospecting, exploration, extraction, enrichment and processing of minerals,
• production,
• marketing and
• sales of non-ferrous and precious metals.

Aktivs

The Group's production units are located on three continents in five countries - Russia, Australia, Botswana, Finland and South Africa.

Norilsk Nickel has its own global network of representative and sales offices in Russia, the UK, China, the USA and Switzerland.

Russia

The main Russian production units of the Group are vertically integrated and include:

• Polar Division of OJSC MMC Norilsk Nickel (hereinafter referred to as the Polar Division);
• OJSC Kola Mining and Metallurgical Company (hereinafter referred to as Kola MMC);
• Research Institute LLC Gipronickel Institute, located in St. Petersburg with branches in the cities of Norilsk and Monchegorsk.

The polar branch is located on the Taimyr Peninsula, which is part of the Krasnoyarsk Territory, completely beyond the Arctic Circle. Transport communication of the branch with other regions of the country is carried out along the Yenisei River and the Northern Sea Route, as well as through air communication.

Kola MMC, located on the Kola Peninsula, is the leading production complex of the Murmansk Region and is fully integrated into the transport infrastructure of the North-West Federal District.

Australia

In Australia, Norilsk Nickel owns:

• Norilsk Nickel Cawse, a laterite nickel ore mining and leaching company;
• Black Swan, Lake Johnston, Waterloo nickel mining facilities;
• a large project for the extraction of nickel sulphide ores Honeymoon Well.
• Norilsk Process Technology R&D in Australia.

Botswana

Norilsk Nickel owns an 85% stake in Tati Nickel Mining Company in Botswana.

Finland

Norilsk Nickel Harjavalta, part of the group, is the only nickel refining plant in Finland.

REPUBLIC OF SOUTH AFRICA

Norilsk Nickel owns a 50% stake in the nickel mining company Nkomati in South Africa, developed jointly with African Rainbow Minerals (ARM).

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Actions

In Russia, MMC Norilsk Nickel shares are traded on the Moscow Interbank Currency Exchange (MICEX).

ADRs for the company's shares are traded on the US OTC market, in the electronic trading system of the OTC sections of the London and Berlin stock exchanges.

As a result of the crushing since February 19, 2008, the conversion of the Company's shares into ADR is carried out in a ratio of 1:10.

Click multiple times to zoom in. Source: Info-step

Digitalization

Main article: Information technologies at MMC Norilsk Nickel

Performance indicators

2023

Revenue decline by 15% to $14.41 billion

Norilsk Nickel's revenue at the end of 2023 amounted to $14.41 billion (according to IFRS), which is 15% less than a year earlier. Net profit decreased even more - by 51%, to $2.87 billion. Such data are provided in the statements that the company disclosed in February 2024.

A significant decrease in Norilsk Nickel's revenue, as explained in the statements, was due to a drop in sales prices for nickel (by 16%), palladium (by 36%), rhodium and copper. An additional negative factor was the expected decrease in the production of all metals, except platinum, due to a temporary decrease in ore production due to the transition to new mining equipment.

Norilsk Nickel revenue in 2023 amounted to $14.41 billion

It also follows from the materials of Norilsk Nickel that the group's net debt by the end of 2023 amounted to $8.09 billion, which is 18% less than a year ago. Net working capital in comparison with these periods decreased by 23%, to $3.09 billion.

Norilsk Nickel's capital expenditures decreased by 29% - from $4.3 billion in 2022 to $3.04 billion a year later. The reduction was due to the weakening of the ruble and optimization of settlements with contractors, as well as a revision of the schedules of a number of investment projects, due to voluntary sanctions from a number of foreign suppliers for the supply of imported equipment and technologies.

The net profit of Norilsk Nickel under RAS in 2023 amounted to 283 billion rubles, which is 58% more than in 2022. The dynamics is explained by an increase in income from participation in other organizations (336 billion rubles compared to 365 million rubles a year earlier), which was partially offset by the comparative effect of foreign exchange expenses.

Revenue for 2023 increased by 5%, amounting to 877 billion rubles. The growth was due to the weakening of the effective ruble exchange rate by 24% in 2023, but offset by a decrease in world average prices for certain metals.

As Interfax notes, Norilsk Nickel's RAS reporting is unconsolidated and reflects the performance of only the company's Polar Branch (without Kola MMC and Bystrinsky GOK).^[1]

Increase in platinum production by 2% to 664 tons

On January 29, 2024, Norilsk Nickel published the results of its production activities for the previous year. The company reduced the output of most metals, except platinum, whose production in 2023 increased by 2%, to 664 tons.

Nickel production by the group in 2023 amounted to 209 thousand tons, which is 5% less than a year earlier. Norilsk Nickel reduced its annual copper output by 2%, to 425 thousand tons, due to a decrease in ore production, as well as by adjusting technological processes to improve the quality of copper cathodes in order to meet the requirements of new consumers. Excluding the Trans-Baikal Division in 2023, copper production from its own raw materials amounted to 356 thousand tons, in accordance with the forecast (353-373 thousand tons).

In addition, Norilsk Nickel during the reporting period reduced palladium production by 4% to 2.69 million ounces, and platinum production increased by 2% to 664 thousand ounces.

Such multidirectional dynamics was associated with a change in the ratio of platinum group metals in the structure of processed raw materials, the materials of Norilsk Nickel say.

Sergey Stepanov, Senior Vice President and Production Director of the company, told reporters that in 2023 Norilsk Nickel reduced production volumes of all metals except platinum due to a temporary decrease in production of rich and copper ore, which was associated with the transition to new mining equipment.

According to Stepanov, after testing and gradual commissioning of mining equipment from new suppliers, the mines reached the planned indicators for ore extraction in the fourth quarter. He also noted that at the end of 2023, the company produced nickel and copper in accordance with annual forecasts, and palladium and platinum - above forecasts.

NORNICKEL ANNOUNCES 2023 PRODUCTION RESULTS

Decrease in revenue by 20% in the first half of the year to $7.2 billion

In early August 2023, Norilsk Nickel published financial results for IFRS the first half of 2023:

• Revenue: $7.2 billion (-20% YoY)
• EBITDA: $3.4 billion (-30% YoY)
• Net income: $1.1 billion (-79% YoY)
• Net debt: $9.1 billion (-8% YoY)
• Net Debt/EBITDA: 1.2x

History

2024

Launch of the Battery Technology Center in St. Petersburg

In September 2024, Norilsk Nickel announced the opening of the Battery Technology Center in St. Petersburg. This step is aimed at creating batteries for electric vehicles and developing new technological competencies in the production of battery materials. The new center will be an important element of the company's strategy to expand the research base for the development of cathode active materials (CAM), which are key components of modern batteries. Read more here.

LME refuses to accept nickel from the company's factory in Finland

In July 2024, it was announced that LME was suspending nickel supplies from a plant in Finland owned by MMC Norilsk Nickel, whose products continue to be supplied despite Western sanctions on Russian metal.

LME will not accept nickel deliveries from the Harjavalta plant from October 3.

2023

Approval of an investment program for $3.6 billion

At the end of December 2023, the Board of Directors of Norilsk Nickel approved the company's budget for 2024. It includes capital expenditures of $3.6 billion.

According to the press service of Norilsk Nickel, within the framework of the investment program, the company will continue to implement a strategy of moderate growth and sustainable development, which includes investment growth projects in the field of production and processing, modernization and replacement of equipment, aimed at improving the level of industrial safety and labor protection, updating energy and fuel infrastructure, as well as reducing harmful impact on the environment.

Among other things, in 2024, it is planned to replace mining equipment for the Norilsk Division and an important repair of the suspended smelting furnace at the Nadezhdinsky Metallurgical Plant. In addition, Norilsk Nickel intends to continue the implementation of a comprehensive plan for the renovation of the Norilsk Industrial District and other social tasks.

The company continues to respond to new challenges in the field of sales of finished products, supply of resources and equipment, inflationary pressure, increasing tax burden and managing the loan portfolio, Norilsk Nickel said in a statement.

In 2023, Norilsk Nickel's capital expenditures amounted to $3.5-3.8 billion. The initial estimate was $4.7 billion, the revision was caused by the weakening of the ruble and a change in the schedules for the implementation of a number of projects. According to the results of the first half of 2023, the volume of capital investments of Norilsk Nickel was measured at $1.5 billion.

In November 2023, Sergey Malyshev, Senior Vice President and Financial Director of Norilsk Nickel, said that the company's total investments in 2018-2022. exceeded 800 billion rubles. He also noted that the volume of the investment program for 2023 is more than 300 billion rubles.^[2]

Progress on projects in the IC "Metallurgy"

On December 18, 2023, Nornickel presented progress on projects at the Metallurg IC and a brand for its products. Nornickel took responsibility for 3 key mining projects at Metallurg. GGIS - Mining and Geological Information System. GP - mining planning. DGR - dispatching of underground mining operations.

For their implementation, a separate IT company Norsoft was created. Read more here.

Withdrawal from Nkomati capital

On November 24, 2023, Nornickel announced the sale of its 50% stake in the South African company Nkomati, whose assets include a deposit of interspersed copper-nickel sulfide ores, an underground mine mothballed in 2015, as well as a quarry. After production ceases in 2021, Nkomati is under conservation and remediation. Read more here.

Sale to Norilsk Nickel USA

On July 6, 2023, Norilsk Nickel announced the sale of Norilsk Nickel USA, its sole supplier of nickel, platinum and cobalt in the Americas, to the American TMP Metals Group. Read more here.

2022

Nickel export growth by 190% to $5.8 billion

In 2022, Norilsk Nickel delivered nickel abroad in the amount of $5.8 billion, which is 190% more than a year ago. This is evidenced by the data of the Federal Customs Service (FCS), which became known in mid-October 2023.

According to Forbes, at the end of 2022, the company's nickel exports to the EU countries increased by 4.3% compared to the previous year (to 61.3 thousand tons). This region also accounted for the bulk of Norilsk Nickel's sales (47%). The company's sales to Asia amounted to 31%, to North and South America - 15%, to Russia and the CIS countries - 7%. Domestic demand has increased due to import substitution, which is carried out by Russian manufacturers, said Anton Berlin, vice president of sales at Norilsk Nickel, during the presentation.

Due to Western sanctions against Russian companies and goods that do not directly concern Norilsk Nickel, the company is forced to reorient part of its supplies to the markets of Asia and other friendly countries, said Vladimir Potanin, the largest co-owner and president.

In order to fight this sanctions headwind, as I have repeatedly said, the so-called plan B is needed, that is, the reorientation of our supplies, our partnerships to the so-called friendly countries, he said.

As noted in Norilsk Nickel, the company's reorientation to Asia is due to the fact that it has practically ceased cooperation with Western investors and international banks.

{{quote 'Dialogues are conducted, but by inertia. From this point of view, of course, our focus is still within the country. But we are trying to look at the opportunities that are in the Asian market, primarily in China, "said Vladimir Zhukov, vice president of investor relations and sustainability at Norilsk Nickel. ^[3]

Revenue decline by 5% to $16.88 billion

At the end of 2022, Norilsk Nickel raised $16.88 billion, which is 5% less than a year earlier. Net profit of the world's largest producer of palladium and high-grade nickel decreased by 16%, to $5.85 billion. The Russian company disclosed such data on February 10, 2023.

The main revenue in 2022 fell on the MMC group ($12.24 billion; + 3%). Revenues of the southern cluster increased by 27%, to $972 million. The revenue of the GC "Bystrinskoye" fell by 2%, to $1.33 billion, according to the reporting.

According to Norilsk Nickel, the positive effect of rising prices for nickel and cobalt, as well as the recovery in production volumes after eliminating the consequences of accidents at the Oktyabrsky, Taimyr mines and the Norilsk enrichment plant, was offset by lower prices for copper and MPG, as well as a reduction in sales volumes due to lengthening supply chains and reorientation to new sales markets, which requires additional time.

The company's net debt in 2022 increased 2 times to $9.8 billion due to a decrease in free cash flow, as well as dividend payments. At the same time, the ratio of net debt to EBITDA as of December 31, 2022 amounted to 1.1x.

The volume of capital investments increased by 55% to a record $4.3 billion due to the planned growth of investments in flagship environmental and mining and metallurgical projects, as well as capitalized repairs aimed at improving industrial safety and reducing the physical risks of production assets.

The free cash flow (FCF) of Norilsk Nickel at the end of 2022 amounted to $437 million, which is 10 times less than a year earlier. The Company attributes this to a decrease in EBITDA, an increase in working capital and an increase in capex during the reporting period.

NORNICKEL ANNOUNCES AUDITED CONSOLIDATED FINANCIAL RESULTS UNDER IFRS 2022

Growth in nickel production by 13%

On January 24, 2023, Norilsk Nickel published the results of its production activities for 2022. According to the results of this 12-month period, nickel production increased by 13% compared to 2020 and amounted to 219 thousand tons, of which almost the entire volume was produced from the company's own raw materials (218.7 thousand tons, + 15% year-on-year).

The growth in production in 2022 was associated with a low base in 2021, when the Oktyabrsky and Taimyr mines, as well as the Norilsk enrichment plant, were temporarily suspended due to the accident. At the end of 2022, nickel production from its own raw materials amounted to 218.7 thousand tons, which is higher than the forecast in the amount of 205-215 thousand tons, according to the materials of Norilsk Nickel.

At the end of 2022, the group increased copper production by 6% to 433 thousand tons. The reasons for the change in copper production in the reporting period are similar to nickel and are described above. Excluding the Trans-Baikal Division, copper production from its own raw materials in 2022 amounted to 366 thousand tons, which corresponds to the forecast of 365-385 thousand tons.

In 2022, palladium and platinum were produced only from the company's own raw materials, respectively, 2,790 thousand ounces (+ 7% yoy-yoy) and 651 thousand ounces (+ 2% yoy-yoy). The reasons for the increase in palladium and platinum production during the reporting period are similar to nickel and are indicated above. At the end of 2022, the company exceeded the forecast for the production of palladium from its own raw materials in the amount of 2,451-2,708 thousand ounces and remained within the framework of the declared forecast for platinum (604-667 thousand ounces^[4]

"In 2022, Nornickel fully fulfilled its production program. We increased production of all metals, with copper and platinum output matching forecasts, and nickel and palladium production volumes exceeding them. The main reason for the higher than expected results was the postponement of the repair of the suspended smelting furnace (PVP-2) of the Nadezhda Metallurgical Plant to 2023, "said Sergey Stepanov, Senior Vice President and Production Director of Norilsk Nickel.

Sale of a 100% stake in AK Nordstar to the management of the airline

MMC Norilsk Nickel, a global producer of palladium and high-grade nickel, as well as one of the largest producers of platinum and copper, on March 25, 2022 announced the sale of a 100% stake in AK Nordstar to the airline's current management. Read more here.

2021

Revenue growth by 15% - $17.85 billion, profit by 92%, to $6.97 billion

At the end of 2021, Norilsk Nickel earned $17.85 billion in revenue, which is 15% more than a year earlier. The rise was primarily due to an increase in exchange prices for metals and an increase in sales of palladium from reserves accumulated in 2020, which compensated for the decrease in production caused by incidents in the first half of 2021, the company said on February 10, 2022.

Norilsk Nickel's net profit in 2021 reached $6.97 billion, an increase of 92% compared to the previous year. Net debt for the year practically did not change and amounted to $4.9 billion. Net working capital in 2021 rose to $1.3 billion, mainly due to an increase in the value of reserves due to an increase in the rate of tax on the extraction minerals of useful, as well as changes in income tax debt.

It also follows from the company's report that its capital investments in 2021 increased by 57% to a record $2.8 billion due to strategic growth in investments in key projects. The costs of the sulphur program, the implementation of which entered the active phase, exceeded $500 million, and investments in the Southern cluster and the expansion of the Talnakh enrichment plant increased by 3 and 4 times, respectively. Expenses on capitalized repairs, industrial safety and modernization of fixed assets of the group's enterprises increased by more than 40%, exceeding $800 million.

Thanks to the revival of the global economy after the economic recession of 2020 caused by the coronavirus epidemic, the consumption of Norilsk Nickel products in 2021 grew rapidly, says the president of the company Vladimir Potanin, commenting on the financial performance of the producer of nickel and palladium. - Demand for metals needed to transition to a green economy also increased.[5]

A fine of 146 billion rubles for a fuel spill in Norilsk

On February 5, 2021, the Arbitration Court of the Krasnoyarsk Territory issued a ruling according to which NTEK, a member of Norilsk Nickel, will have to pay more than 146 billion rubles for a fuel spill in Norilsk. Thus, the record claim of Rosprirodnadzor is almost completely satisfied. Read more here.

2020

Revenue growth by 15%, to $15.5 billion, net debts - $4.7 billion

In 2020, Norilsk Nickel received consolidated revenue of $15.5 billion, which is 15% more than a year earlier. This rise in the company was associated with an increase in exchange prices for palladium and rhodium, as well as a planned increase in production at Bystrinsky GOK. Norilsk Nickel's net profit in 2020 decreased by 39% compared to 2019, to $3.63 billion.

Norilsk Nickel ended 2020 with net debts of $4.7 billion, which are a third less than a year ago. Norilsk Nickel's net working capital in 2020 decreased by 28% to $712 million. This decrease in the company was associated with the weakening of the ruble exchange rate and a change in income tax debt, which was partially compensated by the accumulation of stocks of finished products.

Nornickel's capital investments in 2020 increased by 33% on an annualized basis, to $1.8 billion, due to the implementation of mining projects at the Talnakhskoye field, the development of the Southern Cluster project, an increase in overhauls of energy infrastructure facilities, investments in industrial safety, as well as the start of the active phase constructions of the Sulfur Project.

It also follows from the financial statements of Norilsk Nickel that the revenue of the Russian mining and metallurgical company from the sale of metals in 2020 amounted to $14.98 billion against $12.85 billion a year earlier. In Russia and the CIS countries, sales decreased from $639 million to $556 million.

Revenues from nickel sales in Russia and the CIS in 2020 reached $241 million, surpassing the one-year-old figure of $233 million. Copper sales decreased from $220 million to $202 million, palladium - from $80 million to $5 million. Norilsk Nickel earned about $27 million in gold in Russia and the CIS at the end of 2020, while in 2019 revenue was measured at $19 million.^[6]

Chairman of the Federation Council Matvienko criticizes the company for "slums" in Norilsk

Norilsk Nickel is responsible for turning Norilsk into a "slum" and cannot be considered "socially responsible," said Federation Council Chairman Valentina Matvienko in October 2020.

The largest environmental disaster in the far north since the 1990s with a spill of 20 thousand tons of oil products on the TETs-3 owned by Norilsk Nickel showed "continuous cynicism" and "absolute indifference to the Fatherland."

The municipal authorities were "in the pocket" of the company, and the Krasnoyarsk Territory needs an urgent "restoration of the vertical of power."

She recalled that during the year, Rostekhnadzor gave almost two thousand orders for violations by Norilsk Nickel structures, which for years ignored investment in infrastructure.

Both factories and environments for life were left without money. Norilsk was a "garden city," and now it has turned into a "slum" with absolutely worn out urban infrastructure, networks, water utility, roads, housing, Matvienko listed.

Since 1996, not a single school has been built in Norilsk. "For them to build a school, two kindergartens is a cup of coffee, go to a restaurant twice, excuse me," she said, referring to the shareholders of Norilsk Nickel in the person of Vladimir Potanin, Roman Abramovich.

There are abandoned workshops in the city, "as if the war was over yesterday," Matvienko continued, adding that Norilsk Nickel should be given a maximum year to improve and put infrastructure in order.

During the privatization of the 1990s, according to the list, the authorities hoped that "serious investors, serious people would come, production modernization would begin."

"They believed that serious people would come and eliminate the accumulated huge environmental damage. And they not only did not eliminate, but aggravated the situation. Because you need to invest a lot of money in clean technologies, but nothing like that happens, "Matvienko concluded.

Plans to invest 11 billion rubles to ensure industrial safety in 2021

11 billion rubles will be invested by Norilsk Nickel to ensure industrial safety in 2021. This became known on July 2, 2020.

This was announced by the first vice-president of the company Sergey Dyachenko during a meeting of the Security Council on the conduct of the Krasnoyarsk Territory. The company has developed a program of urgent measures for 2020 and 2021 to improve the level of safety, to strengthen protective structures around hazardous facilities. About 2.5 billion rubles will be spent on these purposes in 2020, 11 billion are planned for 2021, respectively.

Norilsk Nickel also says that they have drawn conclusions from the accident at the TETs-3 of the Norilsk-Taimyr Energy Company (NTEK) and will make every effort to prevent a repetition of such a situation in the future.

The accident at the Norilsk Nickel facility occurred on May 29, 2020. As a result of the depressurization of the tank, about 21 thousand cubic meters of diesel fuel got into local reservoirs. It poured into the rivers Ambarnaya, Daldykan and the Bezymyanny stream. The damage from the accident was estimated at more than 6 billion rubles^[7].

Allocation of 10.5 billion rubles to fight the COVID-19 coronavirus pandemic

On April 13, 2020, Norilsk Nickel announced the allocation of 10.5 billion rubles to combat the COVID-19 coronavirus pandemic. The money provided by the Russian mining and metallurgical giant will go to the purchase of medical equipment, medicines and personal protective equipment for medical institutions, enterprises and employees of the company.

Norilsk Nickel purchased medicines, medical equipment necessary to treat the consequences of the virus, including for diagnosis, emergency care and resuscitation, equipment was purchased for repurposing medical institutions.

 In the Murmansk region, the Kola corporate dispensary for 120 places was allocated for observation, and an infectious diseases department for 54 patients was created on the basis of the Monchegorsk hospital. In Norilsk, under an unfavorable scenario, the number of beds can be quickly brought to 1000. In addition, it is reported that 2 stationary and 5 mobile laboratories will be deployed in the Norilsk industrial region and on the Kola Peninsula to detect COVID-19.

At the end of April 2020, Norilsk Nickel is going to spend about 3 billion rubles on the purchase of medical equipment, protective equipment and the development of medical infrastructure.

By April 13, 2020, all Norilsk Nickel employees, with the exception of those whose absence from the workplace may affect the continuity of the divisions, were transferred to remote work with the preservation of 100% of wages. Employees of the continuously operating divisions of Nornickel receive additional payments. 

Norilsk Nickel approached this crisis with a sufficient margin of safety to ensure the maximum possible protection of our employees and all residents of the cities where the company's enterprises are located, support small and medium-sized businesses, and lend a shoulder to local administrations, "said President Vladimir Potanin.

TAdviser interview with Vladimir Trapezin, Director of Automation and Information Transformation of Production

In February 2020, in an interview with TAdviserVladimir Trapezin, director of automation and information transformation of Norilsk Nickel's production, said that Norilsk Nickel, which is completing the introduction of "hygienic" IT, is launching a continuation of the technological development program in 2020 - "Technological Breakthrough 2.0." Read more here.

2018: Palladium production decreased by 1.83%

According to the results of 2018, the Russian producer of palladium - MMC Norilsk Nickel - reduced palladium production by 1.83% compared to a year earlier - to 2.729 million ounces (84.9 tons)^[8]

2008: UC Rusal's entry into the company's capital and shareholder conflict

In April 2008, Mikhail Prokhorov, who was along with Vladimir Potanin the largest co-owner of the company, sold his 25% stake plus 1 share of the world's largest aluminum company, Russian Aluminum (UC Rusal), controlled by Oleg Deripaska. According to the terms of the deal, Prokhorov should receive 14% of Russian aluminum and about $7 billion for the package sold. The management and co-owners of Russian Aluminum intended to start negotiations with other shareholders of Norilsk Nickel on its merger with UC ^[9]

During the conflict, Interros made an offer to Rusal to redeem its stake in Norilsk Nickel for $9 billion. Later, Norilsk Nickel itself offered to buy this package for $12.8 billion. Oleg Deripaska's company refused all proposals.^[10] In August 2011, Norilsk Nickel again offered Rusal to buy out its stake, this time for $8.75 billion ^[11] = 2012-02-04}}.

In the spring of 2011, according to Vedomosti, Potanin already received an offer from businessmen Viktor Vekselberg and Leonid Blavatnik to buy out his stake in the company. The amount of the proposal, according to the newspaper, amounted to $19.2 billion; the entrepreneur refused ^[12] archivedate = 2011-08-25}}.

2002-2006: Purchase and allocation of Polyus CJSC

In October 2002, Norilsk Nickel acquired the Polyus Group, thereby becoming the largest gold producer in Russia. All gold mining assets of Norilsk Nickel were transferred to Polyus. On January 1, 2006, Polyus was separated from MMC Norilsk Nickel into a separate joint-stock company Polyus Gold.

1997: Onexim bank buys out state package, audit of Accounts Chamber

• On August 5, 1997, a commercial tender with investment conditions was held, at which the state stake in RAO Norilsk Nickel was acquired by CJSC Swift, representing the interests of ONEXIM Bank Group. Winner paid state for 38% stake in RAO over US $270 million (80% excess of the starting price) and, in accordance with the investment conditions of the commercial tender, transferred 300 million US dollars to RAO accounts for the development of the Pelyatkinskoye gas condensate field, 400 billion rubles for the maintenance of the social infrastructure of the Norilsk industrial region (on the territory of which 300 thousand people live) and to pay off the debts of RAO enterprises to the Pension Fund of the Russian Federation.

In 1997-2000, the Accounts Chamber conducted an audit of the privatization of Norilsk Nickel. The Report on the results of the audit of the privatization of the federal stake in RAO Norilsk Nickel dated June 9, 2000 indicates that privatization was carried out in full compliance with Russian law. The report says that the initial price of the stake in RAO Norilsk Nickel, put up for a pledge auction and a commercial tender, was set in accordance with the regulations of the Russian Federation and was determined by the high debt of RAO Norilsk Nickel at that time, as well as the high social obligations of the enterprise. Similar conclusions were reached in the General Prosecutor's Office and the Government of the Russian Federation, where appropriate checks were also carried out.

At the same time, there is another point of view described in the book of the former Deputy Chairman of the Accounts Chamber of the Russian Federation Yu. Yu. Boldyrev "On barrels of honey and spoons of sweet." It indicates that Norilsk Nickel was by the time of the pledge auction a monopolist in the nickel market (more than 90% of Russian production) and copper (more than 60%), had an ore supply of 95-100 years, an annual profit of $1.5 billion and production profitability of more than 70%. Therefore, the real value of Norilsk Nickel was significantly higher than the $180 million for which it was sold. In addition, Yu. Yu. Boldyrev cites a number of facts that indicate the feigned nature of transactions with collateral and credit auctions (including Norilsk Nickel), which the Government of the Russian Federation concluded in 1995 in order to privatize the most valuable state assets bypassing the privatization law. The book also contains a letter sent by the Accounts Chamber to the General Prosecutor's Office demanding that Yu. I. Skuratov come forward in court with claims in defense of the interests of the Russian Federation and immediately terminate fictitious transactions with collateral auctions. Still, the Attorney General did not. ^[13]

Subsequently, the Accounts Chamber^[14] published many facts that testified to the illegal privatization of state. property. However, already in 2000, the Accounts Chamber provided a new report, which, according to Yu. Yu. Boldyrev, was "sewn with white threads" and aimed at some "rehabilitation" of the new owners of Norilsk Nickel, headed by O. V. Potanin. Despite this, the report was approved by the College, but Yu. Yu. Boldyrev left in connection with him his Dissenting Opinion^[15]

A version similar to Boldyrev about the transition of NorNickel from the state to the structures of ONEXIM Bank with details and interviews of auction participants is described in David Hoffman's book "Oligarchs" ^[16].

• Since 1997, all enterprises that are part of RAO Norilsk Nickel have regularly and fully fulfilled their current tax obligations to budgets and extra-budgetary funds. The debt to budgets of all levels on the principal debt, as well as on the salary of RAO employees, has been fully repaid. By the end of 1998, the monthly income of employees of RAO Norilsk Nickel enterprises increased by more than 2.2 times.

• The need to improve the financial and economic situation of RAO required some structural transformations. In 1997, the stake in Krastsvetmet JSC (Krasnoyarsk Non-Ferrous Metal Processing Plant) was transferred to the ownership of the administration of the Krasnoyarsk Territory on account of debts to the budget. In the same year, in order to increase the investment attractiveness of RAO enterprises and the introduction of modern management models, OJSC Kola Mining and Metallurgical Company and OJSC Norilsk Mining Company were created.

1994: Corporatization: controlling stake at Onexim Bank

In 1994, the enterprises of RAO Norilsk Nickel were corporatized. In accordance with the privatization plan, part of the shares of RAO was transferred to the labor collective, part of the shares were put up for sale at check auctions. More than 250 thousand people became the owners of the shares of Norilsk Nickel. A controlling stake in RAO (38% or 51% of the voting), fixed in federal ownership, was put up for pledge auction in November 1995. According to its results, Onexim Bank became the nominal holder of a controlling stake in RAO Norilsk Nickel.

The conclusion that the price at which Norilsk Nickel was privatized corresponded to its value is contained in:

• conclusion submitted by Academician-Secretary of the Department of Economics of the Russian Academy of Sciences D. S. Lvov No. 14300-2113/91;

• conclusion submitted by the Rector of the Financial Academy under the Government of the Russian Federation A. G. Gryaznova No. 93-1.

1993: Birth of RAO Norilsk Nickel

On June 30, 1993, by the Decree of the President of the Russian Federation, the State Concern for the Production of Precious and Non-Ferrous Metals Norilsk Nickel was transformed into the Russian Joint Stock Company for the Production of Precious and Non-Ferrous Metals (RAO) Norilsk Nickel.

2000-2006: Restructuring of RAO Norilsk Nickel

No company can stay the same over the years. The business environment, market conditions, legislation are changing; there are changes in the company itself: production is expanding, the production of new products is being mastered, new divisions and subsidiaries are emerging. Following external changes, the company itself is forced to change. In the conditions of the modern market, companies carry out structural transformations every 7-10 years.

The restructuring process was carried out not only by foreign, but also by large domestic companies - Yukos, Surgutneftegas, Sibneft and others.

In 2000, in the interests of all its shareholders, Norilsk Nickel also began restructuring. The restructuring was aimed at improving the efficiency and investment attractiveness of the Norilsk Nickel Group and was intended to:

• • Provide direct access to shareholders in the capital of the company, which is the owner of the products sold and the main profit center in the group
  • Significantly increase transparency of the group's corporate structure for shareholders
  • Increase economic efficiency in dividend distribution
  • Integrate the sales and distribution network abroad into the corporate structure
  • Improve management system efficiency

In February 2001, OJSC Norilsk Nickel was renamed Norilsk Nickel Mining and Metallurgical Company (MMC Norilsk Nickel) through an additional issue of OJSC MMC Norilsk Nickel with a closed subscription placement among shareholders of RAO and payment of outstanding shares of OJSC MMC Norilsk Nickel with shares of OJSC RAO Norilsk Nickel.

As a result of restructuring in 2001, 96.9% of the shares of RAO Norilsk Nickel were exchanged for shares of OJSC MMC Norilsk Nickel. At 15% of the shares of RAO Norilsk Nickel, Level 1 American Depositary Receipts (ADRs) were issued, which during the restructuring process were automatically re-registered for shares of OJSC MMC Norilsk Nickel. Later in 2004, permission was obtained to appeal outside the Russian Federation up to 40% of the company's shares.

The next stage of restructuring was the liquidation of the "cross-ownership" of shares, namely the share in the authorized capital of OJSC MMC Norilsk Nickel, controlled by RAO Norilsk Nickel and accounting for 17.62% of the authorized capital of the company. In order to eliminate the "cross-ownership," the Board of Directors of OJSC MMC Norilsk Nickel proposed to shareholders to reduce the authorized capital of OJSC MMC Norilsk Nickel by acquiring and repaying 38,761,525 shares controlled by the group. At the extraordinary general meeting of shareholders of OJSC MMC Norilsk Nickel on December 24, 2001, amendments to the company's charter were approved, which are necessary for carrying out measures to eliminate "cross-ownership" of shares. As the next step in the liquidation of "cross-ownership," on March 29, 2002, an extraordinary General Meeting of Shareholders by a majority vote approved the proposed reduction in the authorized capital of OJSC MMC Norilsk Nickel by acquiring part of the shares placed by the company.

As of July 1, 2006, OJSC MMC Norilsk Nickel owned more than 95% of the total number of shares of OJSC RAO Norilsk Nickel. In accordance with the current legislation, a person who, as of July 1, 2006, owned more than 95% of the total number of shares of an open joint-stock company, has the right to demand the redemption of shares of such company owned by other persons by sending a demand for the redemption of securities to the owners of securities (the Demand for redemption). This buyout request was sent to shareholders of JSC RAO Norilsk Nickel. As a result of the share repurchase, OJSC MMC Norilsk Nickel's share in RAO Norilsk Nickel increased to 99.999 percent.

1989: Establishment of Norilsk Nickel Concern

• On November 4, 1989, the Council of Ministers of the USSR adopted a resolution on the creation of the State Concern for the Production of Non-Ferrous Metals Norilsk Nickel. This decision was dictated by the need to carry out structural restructuring of the country's industry. The concern included the Norilsk Combine, the Pechenganikel and Severonikel plants, the Olenegorsk Mechanical Plant, the Krasnoyarsk Non-Ferrous Metal Processing Plant and the Gipronikel Institute (St. Petersburg). These enterprises were merged into a single concern on the basis of a general technological scheme for the processing of sulfide copper-nickel ores.

1930-1940: Creation of copper-nickel industry on the Kola Peninsula

On the Kola Peninsula there are two enterprises producing copper and nickel products.

Severonickel Plant was created in 1935. It is located in Monchegorsk, Murmansk Region.

The Pechenganikel Mining and Metallurgical Plant is located in the northwestern part of the Kola Peninsula at two industrial sites in Zapolyarny and the village of Nickel. The plant was built in 1940 by the Inko company in that part of Finland, which after the Great Patriotic War went to the USSR.

1930s: Development of Norilsk deposits

Copper-nickel deposits on the Taimyr Peninsula have been known since the 17th century, but active research of these deposits began only in the 20s of the 20th century.

• On June 23, 1935, the Council of People's Commissars of the USSR adopted the Decree "On the Construction of the Norilsk Combine" and on the transfer of Norilskstroy to the NKVD of the USSR, which marked the beginning of construction on Taimyr, almost 2,000 kilometers north of Krasnoyarsk, the country's largest mining and metallurgical complex.

• On March 10, 1939, the first copper-nickel matte was obtained at the Small Metallurgical Plant, and three months later, on June 16, the plant issued the first feinstein. On the eve of World War II, the Norilsk Combine included small metallurgical, oxygen, coke and mechanical repair plants, a temporary power plant, three coal and three ore adits, sandstone and limestone quarries, a railway, an airport, and a port in Dudinka.

• In 1953, the Taimyr mill produced 35% nickel, 12% copper, 30% cobalt, and 90% platinoids from the total production of these metals in the Soviet Union.

Notes