Russian metals producer Nornickel on Monday said it expected a further decline in nickel and palladium output this year, hit by adverse geopolitical risks and postponed furnace repairs, following on from a drop in production in 2023.
CEO Vladimir Potanin said last year that sanctions had constrained Nornickel’s development, though Western governments have refrained from targeting Nornickel directly in response to the conflict in Ukraine.
Nornickel, the world’s largest palladium producer and a major producer of refined nickel, said its nickel production fell 5% year on year to 209,000 metric tons in 2023. This year, the company expects nickel output at 184,000-194,000 tons.
Palladium output dropped by 4% in 2023 to 2.692 million troy ounces, Nornickel said. This year, palladium output is seen at 2.296-2.451 million troy ounces.
The company had expected output for both metals to drop in 2023, but palladium output came in above forecast.
Nornickel’s senior vice-president and operational director Sergey Stepanov said output of all key metals, except platinum, slightly decreased in 2023 due to lower mined rich and cuprous ore volumes as the company transitions gradually to new mining equipment.
“After testing and gradual roll-out of equipment from new suppliers, our mines recovered to the scheduled mining volumes in the fourth quarter,” said Stepanov.
“In 2024, we expect that risks related to an adverse geopolitical situation will continue to impact our operations,” he said. “Furthermore, this year we are planning capital repairs of the flash smelting furnace #2 at Nadezhda Metallurgical Plant.”
Repairing the furnace, which has been delayed for two years due to issues with the supply of equipment, is now expected in mid-2024, Stepanov said. Nornickel did not say whether it has found equipment suppliers.
Platinum output rose 2% in 2023 to 664,000 ounces and is seen falling to 567,000-605,000 ounces in 2024, Nornickel said.
(By Anastasia Lyrchikova and Alexander Marrow; Editing by Louise Heavens and David Evans)
