Norilsk Nickel plans to transfer the capacity of the Copper Plant to China. The company plans to transfer the smelting capacity of the Copper Plant, the modernization of which has become more difficult due to problems with Western equipment, to China by concluding a joint venture with one of the Chinese companies, said oligarch Vladimir Potanin.
“The project will allow us to avoid large losses that are caused by the current difficulties with payments, refusals of deliveries, discounts on our metal, and the creation of inventories”: the cost of transactions, various commissions, and payment for intermediary services reach 5-7% of the cost of products.
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 of which the London Metal Exchange (LME) is prohibited from accepting new shipments of non-ferrous metals from Russia.
As a result, the copper products of the joint venture will be sold as a Chinese product, which is more difficult to subject to sanctions, explained the president of the MMC. The problem of mutual settlements, which is the most acute for Russian exporters, is also going away.
“In return, we get the opportunity to extend our value chain and gain advanced competencies that both the company and the country need.”
These competencies are technologies for the production of battery materials, the raw material for which will also be lithium, which Norilsk Nickel plans to produce in its joint venture with Rosatom to develop the Kolmozerskoye deposit.
Norilsk Nickel will receive a share in the joint venture and return a significant part of it in the form of dividends to Russia for investment within the country, he added. Due to income from the joint venture, the elimination of discounts and other losses, as well as future production growth due to the opening of the bottleneck, Norilsk Nickel expects to increase revenue by 20% compared to the situation before the beginning of 2022.
The construction of facilities in China will be synchronized with the retirement of capacity at the Copper Plant, the head of Norilsk Nickel said, and will occur beyond the horizon of 2027.
Copper concentrate in the amount of regarding 2 million tons per year will be delivered to China via the Northern Sea Route, for which the company will expand terminals in Dudinka and Murmansk, having agreed on icebreaker assistance with Rosatom.
“We expect that by mid-2027 we will be able to build a plant in China, having prepared our logistics and everything necessary for the supply of concentrate,” said the president of Norilsk Nickel.
With the transfer of the outdated capacities of the Copper Plant to China, Norilsk Nickel will be able to eliminate the obstacle to the development of the entire Talnakh and Norilsk industrial region.
In addition to the copper chain, separate agreements are possible with other Chinese manufacturers specializing in nickel, cobalt and lithium products, as well as lithium and sodium-ion battery materials.
“Strategically, we believe that such partnerships have an important synergistic effect: we gain access to advanced technologies in industries important to Russia, and our partners have the opportunity to provide their production with raw materials for the long term,” Potanin said.
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2024-04-28 12:56:29
