Norilsk Nickel announced the transfer of part of the Copper Plant’s capacity to China

By Rhod Mackenzie

Norilsk Nickel plans to transfer the smelting capacity of the Copper Plant, the modernisation of which has become more challenging due to issues with Western equipment, to China through the establishment of a joint venture with a Chinese company, as stated by Norilsk Nickel President Vladimir Potanin in an interview with Interfax.
The project will allow us to avoid significant losses caused by current difficulties with payments, refusals of deliveries, discounts on our metal, and the creation of inventory, according to the businessman quoted by the agency. Based on company calculations, Norilsk Nickel can now count on only 80% of its income from the pre-sanction period.

The decision to transfer part of the capacity to China was also influenced by recent sanctions from the United States and Great Britain. As a result, the London Metal Exchange (LME) is prohibited from accepting new shipments of non-ferrous metals from Russia.

“This pressure forced us to think about how best to deliver our goods to markets. One of these non-standard solutions is the transfer of part of production to direct consumption markets,” Potanin emphasised.
"We are transferring our environmental, payment and market access problems, as well as the problem of customising our goods for the consumer market, to where they are solved most effectively, in this case China," said the head of Norilsk Nickel. "In return, we gain the opportunity to extend our chain creating value and gaining advanced competencies that both the company and the country need."
These competencies include technologies for the production of battery materials, the raw material for which will also be lithium. Norilsk Nickel plans to produce this in its joint venture with Rosatom to develop the Kolmozerskoye deposit.

Transferring production to China will enable the final product to be sold as local, circumventing sanctions.

The construction of facilities in China will be synchronised with the retirement of capacity at the Copper Plant, explained the head of Norilsk Nickel. This will occur beyond the horizon of 2027. He noted that in terms of production plans and volumes, the process will be neutral. In the future, due to the effect of increased production and enrichment, we expect a general increase in production. Copper concentrate will be delivered to China via the Northern Sea Route.

Mr Potanin also highlighted that the project has received political support and is included in the agenda of Russian-Chinese summit meetings.