Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Russia’s Nornickel, the world’s largest palladium producer and a major producer of high-grade nickel, said on Monday its third-quarter nickel production was 21% higher than in the previous quarter at 53,945 metric tons.
Unlike many Russian companies, Nornickel has not been directly targeted with Russian sanctions over its actions in Ukraine, but Western suppliers staying away from the Russian market may pose operational challenges for Nornickel’s production in the longer term.
For January-September, nickel production was 9% lower year-on-year at 145,271 metric tons. In that period, palladium and platinum output rose by 1% and 7%, respectively, to 2.15 million troy ounces and 528,000 ounces.
Palladium production in the third quarter was down 13% quarter-on-quarter to 0.66 million troy ounces.
Nornickel CEO Vladimir Potanin, who holds a 36.6% stake in the company through his Interros holding group, has said Western sanctions, though not directly affecting the company, had limited its capabilities and forced it to pivot towards Asia with restructuring its logistics chains.
Asia became Nornickel’s largest market in terms of revenue in H1 2023 and in July, it said it had started replacing its old mining equipment with supplies from so called “friendly” countries – those that have not imposed sanctions on Moscow.
Sergey Stepanov, Nornickel’s head of production, said in a statement on Monday that testing of new equipment was continuing and that its successful implementation was important for achieving operational targets.
Stepanov confirmed that the company was still on track to reach its 2023 production forecast of nickel output at 204,000-214,000 metric tons and palladium output of 2.41-2.56 million troy ounces.
(By Anastasia Lyrchikova and Alexander Marrow; Editing by Gareth Jones and David Evans)
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