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PJSC MMC Norilsk Nickel, the largest palladium and refined nickel producer in the world, announced preliminary consolidated production results for the second quarter and the first half of 2019.
First Vice-President, Chief Operating Officer, Mr Sergey Dyachenko commented on the 1H19 production results that “In 1H19, we increased the output of all key metals delivering most notable growth in copper and PGMs. The increase in PGMs’ production was driven by the release of work-in-progress inventory at Krasnoyarsk Precious Metals Refinery and higher PGM content in processed Russian feed at Norilsk Nickel Harjavalta. The increase in copper output was due to the ramp up of Bystrinsky Project. We reiterate our metal production guidance from own Russian feed for FY2019.”
Nickel
In 2Q19, consolidated nickel production was down 4% QoQ to 54 kilo tonne. Nickel output from own Russian feed decreased 4% QoQ to 53 kilo tonne due to the annual repairs at Harjavalta refinery normally scheduled in May.
In 1H19, total nickel output increased 6% year-on-year (YoY) to 110 kilo tonne, while nickel output from own Russian feed increased 5% YoY to 108 kilo tonne. The growth was attributed to the expansion of carbonyl nickel production capacities at Kola MMC, higher processed volumes of nickel matte produced by the Company in Russia, which were shipped to Norilsk Nickel Harjavalta, and processing of nickel feed supplied by Boliden in accordance with a three-year contract, that enables Norilsk Nickel to utilize Harjavalta refining capacity most efficiently.
Copper
In 2Q19, consolidated copper production was down 2% QoQ to 125 kilo tonne, almost all of which were produced from the Company’s own Russian feed. The reduction was attributed to lower processing volumes of concentrate purchased from Rostec and scheduled annual repairs at Harjavalta refinery.
In 1H19, copper output increased 9% YoY to 251 kilo tonne, almost all of which were produced from the Company’s own Russian feed. The growth was driven by the ramp up of Bystrinsky Project, increased mined ore volumes with higher copper grades at Polar Division and higher volumes of copper concentrate produced at Kola MMC for the sale to third parties.
Platinum Group Metals
In 2Q19, both palladium and platinum were produced solely from the Company’s own Russian feed, with their output amounting to 764 koz (down 1% QoQ) and 185 koz (down 9% QoQ), respectively. The reduction was driven by the annual repairs at Harjavalta refinery normally scheduled in May as well as a seasonal high base effect of 1Q19, when the Company processed in addition to mined feed also the work-in-progress concentrate accumulated in 2018, whereas in 2Q19 only the mined feed was processed. In 1H19, palladium and platinum output increased 10% YoY to 1,533 koz and 16% YoY to 388 koz, respectively. The increase of PGMs output was attributed to the release of work-in-progress inventory at Krasnoyarsk Precious Metals Refinery and higher PGM content in Russian feed processed at Norilsk Nickel Harjavalta.
RUSSIAN OPERATIONS
In 1H 19, all saleable metals produced by the Company’s Russian operations came from their own feed.
Nickel
In 2Q19, Kola MMC increased nickel production at 4% QoQ to 41 kilo tonne, which was driven by higher processed volumes of nickel matte shipped from Polar division. In 1H19, Kola MMC increased nickel output 6% YoY to 80 kilo tonne. The growth was primarily attributed to the expansion of carbonyl nickel production at Kola MMC to 2.3 kilo tonne (up 75% YoY) as part of strategic diversification of sales into premium products.
Copper
In 2Q19, the Company’s Russian operations reduced copper output 1% QoQ to 121 kilo tonne, mainly owing to lower processed volumes of concentrate, which had been purchased from Rostec. In 1H19, copper output increased 10% YoY to 243 kilo tonne. The growth was attributed to ramp up of Bystrinsky Project, increased mined ore volumes with higher copper grades at Polar Division and higher volumes of copper concentrate produced at Kola MMC for the sale to third parties. Bystrinsky Project’s ramp up was on schedule, with a production increase 4-fold to 20 kilo tonne of copper in copper concentrate.
Platinum Group Metals
In 2Q19, palladium output in Russia was unchanged QoQ at 749 koz, while platinum output decreased 9% QoQ to 181 koz. The decline of platinum output owed to a seasonal high base effect of 1Q19, when the Company in addition to mined feed also processed work-in-progress concentrate accumulated in 2018, whereas in 2Q19 only mined feed was processed. In 1H19, palladium and platinum output increased 10% YoY to 1,497 koz and 15% YoY to 380 koz, respectively. The increase of PGM output was due to a release of accumulated work-in-progress inventory at Krasnoyarsk Precious Metals Refinery.
NORILSK NICKEL HARJAVALTA (FINLAND)
Nickel
In 2Q19, nickel production at Norilsk Nickel Harjavalta decreased 22% QoQ to 13 kilo tonne. The decrease was attributed to the annual repairs normally scheduled in May. In 1H19, nickel output increased 6% YoY to 30 kilo tonne. The increase was attributed to higher processed volumes of Russian feed as a result of the downstream reconfiguration and processing of nickel feed supplied by Boliden, in accordance with a three-year contract, that enables Norilsk Nickel to utilize Harjavalta refining capacity most efficiently.
Copper
In 2Q19, Norilsk Nickel Harjavalta decreased copper output 22% QoQ to 3 kilo tonne due to scheduled in May annual repairs. In 1H19, copper output decreased 13% YoY to 8 kilo tonne owing to high base effect of 1H18, when the Company processed work-in-progress concentrate, which had been accumulated earlier.
Platinum Group Metals
In 2Q19, Harjavalta’s output of saleable palladium and platinum (both in copper cake) amounted to 14 koz (down 35% QoQ) and 4 koz (down 22% QoQ), respectively, with a decline owing to scheduled in May annual repairs. In 1H19, output of palladium and platinum reached 36 koz (up 28% YoY) and 8 koz (up 105% YoY), respectively. The increase in PGM output was attributed to higher PGM content in processed Russian feed and processing of feed supplied by Boliden.
NKOMATI (SOUTH AFRICA)
In 1H19, output at Nkomati (50% Norilsk Nickel owned) amounted to 4 kilo tonne of nickel (up 15% YoY), 2 kilo tonne of copper (up 36% YoY), 19 koz of palladium (up 29% YoY) and 8 koz of platinum (up 33% YoY). The increase in metals production was attributed to higher volumes of mined ore with higher metal content.