100%
self-sufficiency
from ore to finished
products
Annual
Report
2023
Contents
ABOUT NORNICKEL
STRATEGIC REPORT
BUSINESS OVERVIEW
4 Company profile
6
Footprint
8
Performance highlights
10
Investment highlights
12 Our history
14
Business model
18 Chairman’s letter
20
President’s letter
22 Commodity markets
38 Our strategy
48 Mineral resource base
57 Operational performance
64
Logistics and distribution
74
Energy assets
76
Innovation and digital
technology
Financial performance
(MD&A)
84
1 2 3 4 5 6 7
SUSTAINABLE
DEVELOPMENT
CORPORATE
GOVERNANCE
SHAREHOLDER
INFORMATION
96
102
Strategic approach
Employees
119 Health and safety
127
139
Environment and climate
Social policy
146 Chairman’s letter
148 Corporate governance
system
157 General Meeting of
Share capital
224
228 Dividend policy
231 Debt portfolio management
233
Shareholder relations
160
Shareholders
Board of Directors and
Board committees
Executive bodies
178
185 Control system
199
202
Remuneration report
Risk management
About the Report
We are pleased to present to you the Annual
Report of MMC Norilsk Nickel and entities
comprising the same group of companies
(collectively, the “Group”, “Nornickel”,
or the “Company”) for 2023. Nornickel
is a Russian vertically integrated metals and
mining company producing non-ferrous and
precious metals.
The Report discloses all aspects of Nornickel’s
operations both from strategic standpoint and
in the context of sustainability. Nornickel has
a unique resource base underpinning its strategy
of production growth and operational excellence
as well as its unprecedented environmental
programme. This clean growth strategy not
only lays out long-term production targets but
also sets out concrete action plans to reduce
the Company’s environmental footprint
in its regions of operation.
Standards
This Annual Report was prepared by the Investor Relations Department,
taking into account the requirements and recommendations of:
• the Bank of Russia’s Regulations No. 714-p On Information Disclosure
by Issuers of Issue-Grade Securities, dated 27 March 2021
• the Bank of Russia’s Letter No. IN-06-28/102 On Disclosure
of Compliance with the Principles and Recommendations
of the Corporate Governance Code in the Annual Report of a Public Joint
Stock Company, dated 27 December 2021
• the Bank of Russia’s Letter No. 06-52/2463 On the Corporate
Governance Code, dated 10 April 2014
• the Bank of Russia’s Letter No. IN-06-28/49 On Recommendations
for Public Joint Stock Companies to Disclose Non-financial Information
Related to Their Activities, dated 12 July 2021
• the Bank of Russia’s Letter No. IN-06-28/96 On Recommendations
for the Board of Directors of a Public Joint Stock Company to Consider ESG
Factors and Sustainable Development Issues, dated 16 December 2021
• the Bank of Russia’s Letter No. IN-06-28/57 On Recommendations
for a Public Joint Stock Company to Disclose Information
on the Remuneration of Members of the Board of Directors (Supervisory
Board), Executive Bodies,
and Other Top Management
of the Public Joint Stock Company
in Its Annual Report, dated
11 December 2017
• the Listing Rules of PJSC Moscow
Exchange.
Scope
The scope of disclosure corresponds
to the scope covered by the Group’s
IFRS consolidated financial
statements.
The Report also discloses financial
metrics based on the Group’s
IFRS consolidated financial
statements for 2023 audited by Kept
in accordance with International
Standards on Auditing (ISAs).
Nornickel’s reports
for 2023
Interactive version
of the Annual Report
ADDITIONAL
INFORMATION
Financial statements
234
294 Glossary
296 Contacts
Sustainability
Report
Human Rights
Report
Responsible Supply
Chain Report
Climate Change
Report
THIS ANNUAL REPORT WAS APPROVED
by the Annual General Meeting
of Shareholders
(Minutes No. 1 dated 28 June 2024)
PRE-APPROVED by the Board of Directors
(Minutes No. GMK/11-pr-sd dated
22 May 2024)
ACCURACY OF INFORMATION IS CONFIRMED
by the Audit Commission
(Opinion dated 16 May 2024)
Vladimir Potanin
President, Chairman
of the Management Board
Sergey Malyshev
Senior Vice President –
Chief Financial Officer
1
Annual Report - 2023NornickelAbout the Report
ADAPTING
TO CHANGE
Metal product sales by region: successful shift to the Asia-Pacific
and domestic markets, % OF REVENUE
54% Asia
47%
Europe
31%
Asia
24%
Europe
7%
Russia
and the CIS
15%
Americas
2022
10%
Americas
12%
Russia
and the CIS
2023
About Nornickel
4
Company
profile
6
Footprint
8
Performance
highlights
10
Investment
highlights
12
Our history
14
Business model
Company profile
The Norilsk Nickel Group is the leader in Russia’s metals and mining industry and
the largest palladium and Class I nickel producer globally as well as a leading
producer of platinum and copper, which are essential for the development
of a low-carbon economy and green transport. The Company also
produces cobalt, rhodium, silver, gold, iridium, ruthenium, and selenium.
The Company also produces
Co
cobalt
Rh
rhodium
Ag
silver
Au
gold
Ir
iridium
Ru
ruthenium
Se
selenium
Mission
and values
Efficiently using natural resources
and equity, we supply mankind
with non-ferrous metals, which
make the world a more reliable
place to live in, and help people
to realise their aspirations for
development and technological
progress
1 2 3 4 5 6 7
KEY ASSET
The Company views its people as
the key asset and is willing to invest
in their professional and personal
development while enabling a
corporate culture that would help
it and its people to successfully
achieve their core mission
>80 THOUSAND
employees
184 THOUSAND
average pay
RUB 1.3 BN
invested in employee
development in 2023
Reliability
Efficiency
Professionalism
Responsibility
Growth
Collaboration
Addressing any challenges
to ensure success for the
business
Delivering against our
targets in due time and at
minimum cost
Effectively delivering a
strong performance
A desire to honour our
commitments and take
on responsibility for our
decisions
Effective production ramp-up
and upgrade, leverage of
groundbreaking technologies,
and development of our people
Ability and desire of our
employees to achieve goals
through teamwork
4
5
Annual Report - 2023NornickelAbout the Report Footprint
Nornickel enterprises are focused on the exploration, mining,
and processing of minerals, as well as the production
and sale of non-ferrous and precious metals.
The Group’s operations are managed and coordinated
by its parent company, PJSC MMC NORILSK NICKEL,
incorporated in Dudinka, Krasnoyarsk Territory.
The Company’s Head Office is based in Moscow.
Murmansk Transport
Division
Norilsk Division
(Polar Division and
Medvezhy Ruchey)
Energy Division
Polar Transport Division
Norilsk Avia
Norilsk Airport
Norilsk Nickel Harjavalta Оу
Finland
Kola Division
(Kola MMC)
Arkhangelsk Transport
Division
Gipronickel
Institute
NORMETIMPEX
1 2 3 4 5 6 7
Metal revenue
by sales market, %
10.3%
the Company’s share
of Russia’s metals production
28 COUNTRIES
consume the Company’s
products
54%
Asia
24%
Europe
10%
Americas
12%
Russia and
the CIS
Yenisei River Shipping
Company
Lesosibirsk Port
Krasnoyarsk Transport
Division
Krasnoyarsk River Port
Trans-Baikal
Division
Bystrinsky Transport
Division
Operations
Energy
Transport and logistics
Research
Sales
Metal Trade Overseas
SA (Switzerland)
Norilsk Nickel Asia
Ltd (Hong Kong)
Norilsk Nickel Metals
Trading (Shanghai)
Co., Ltd. (China)
The Group’s major production assets
are located in Russia: on the Taimyr
Peninsula (Norilsk Division),
on the Kola Peninsula (Kola Division),
and in the Zabaykalsky Territory
(Trans-Baikal Division).
The Group also has an R&D facility based
in Saint Petersburg, with branches in Norilsk
and Monchegorsk. Other Group entities include
geological and energy enterprises, transport
logistics entities with port terminals and a unique
Arctic sea fleet, as well as a number of other auxiliary
units. The Group operates a global captive sales
network to distribute its products across the world.
6
7
Annual Report - 2023NornickelAbout the Report 1 2 3 4 5 6 7
Performance highlights
Operational
Sustainability
Financial
Production of nickel
and copper, FROM OWN
FEED, KT
Average monthly
salary
Social expenses
for employees, USD MLN
Revenue and net income,
USD BN
EBITDA and EBITDA margin,
USD BN
407
190
433
219
425
208
2.0
145
2.7
183
2.2
184
Copper
↓2%
Nickel
↓5%
‘21
‘22
‘23
‘21
‘22
‘23
179 223 193
153
123
140
USD
thousand
RUB
thousand
17
36
16
14
28
14
14
29
10
‘21
‘22
‘23
Other social
expenses
Pension plans
Health resort
treatment
Housing
programmes
17.9
7.0
16.9
5.9
14.4
2.9
59%
52% 48%
10.5 8.7 6.9
Revenue
↓15%
Net
income
↓51%
EBITDA margin
↓4 p. p.
EBITDA
↓21%
‘21
‘22
‘23
‘21
‘22
‘23
Production of palladium
and platinum, FROM OWN
FEED, KOZ
2,616
641
2,790
651
2,692
664
GHG emissions from
production assets, MLN T
Injury rates, PER MILLION HOURS
WORKED
Debt, USD BN
CAPEX breakdown, USD BN
9.0 8.6 8.6
0.5
8.5
0.5
8.1
0.5
8.1
0.10
0.38
0.03
0.58
0.04
0.65
4.9
0.5x
9.8
1.1x
8.1
1.2x
Palladium
↓4%
Platinum
↑2%
Scope 2
↓10%
Scope 1
↑0.1%
FIFR
↑18%
LTIFR
↑12%
2.8 4.3 3.0
0.9
0.9
2.5
0.5
0.6
1.9
0.5
0.8
1.4
Sulphur Project
(phase 1)
Commercial
Stay-in-business
Net
debt
↓18%
Net
debt /
12M EBITDA
↑0.1x
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
8
9
Annual Report - 2023NornickelAbout the Report 1 2 3 4 5 6 7
• Higher number of vehicles
across the world
• Vehicle hybridisation
• Introduction of tests for
emissions during driving in
real time
• Deployment of H2 storage,
transportation, and
purification solutions
Pd
Investment highlights
Unique resources
The Company’s unique mineral resource base secures the most advantaged
position in the global mining industry.
Copper-nickel sulphide ore
(Norilsk and Kola
Divisions)
7 mines
Proven and probable
reserves
1,267 MLN T
Ni
9 mln t
Cu
16 mln t
6PGMs
175 Moz
Measured and indicated
resources
1,869 MLN T
Ni
Cu
6PGMs
14 mln t
23 mln t
256 Moz
Reserves life
(at the current production
rate) over 70 years
Gold-iron-copper ore
(Trans-Baikal Division)
2 open pits
Proven and probable
reserves
283 MLN T
Cu
1.5 mln t
6 Moz
Au
25 Moz
Ag
53 mln t
Fe
Measured and indicated
resources
303 MLN T
1.8 mln t
Cu
6 Moz
Au
30 Moz
Ag
65 mln t
Fe
Reserves life
(at the current production
rate) over 20 years
Leading position in global markets
Nornickel is the global leader in palladium and metal nickel production.
Ni
• Transport electrification
• Increasing demand for
stainless steel
Cu
• Global infrastructure
development programmes
• Transport electrification and
growth of charging infrastructure
Position in the metals and mining
industry1
High degree
of vertical integration
41% 19% 11%
8% 2%
No. 1
No. 1
No. 4
No. 5
No. 12
Palladium
Nickel Class 1
Platinum
Rhodium
Copper
No. 1 No. 1 No. 4
No. 5 No. 12
From ore to finished products (100% self-sufficiency).
The Company’s reliance on own logistics, energy, fuel,
and water supply translates to a significantly smaller
share of these expenditures in cash costs vs peers.
1 Data as of early March 2024. Based on refined metal (including tolling) output for palladium, nickel, platinum, and
rhodium; based on contained metal production for copper.
10
Low carbon footprints
of nickel production
The carbon footprint
of nickel metal production
according to international
standards totalled
8.5 KG
of СО2 equivalent per kg
of metal
Indispensable metals for green energy
Nornickel is the world’s largest producer of green metals which underpin
the global economy’s decarbonisation process and the transition to renewable
energy and electrified transport.
Pt
Hydrogen
energy and fuel
cell cars
Co, Rh
Cobalt in batteries and rhodium
in clean ICE-powered vehicles
Highly liquid shares
in the market
Nornickel shares have been traded
in the Russian stock market since 2001.
Since 2014, the shares are included
on the First Level quotation list
of the Moscow Exchange (ticker: GMKN).
Shareholding structure
as of 2023-end
36.6
37.0
Interros
EN+ GROUP IPJSC
Other shareholders
26.4
Analysts’ recommendations
on Company shares
11
33
56
Buy
Hold
Sell
Nornickel shares are included
in the Moscow Exchange’s indices1:
MOEX Metals and Mining Index — 14.32%
Blue Chip Index — 9.63%
MOEX 15 Index — 8.74%
MOEX Russia Index — 6.98%
Best-in-class
feedstock mix
Natural diversification and
solid long-term fundamentals.
1 As of 29 December 2023.
11
Annual Report - 2023NornickelAbout the Report Our history
Nornickel is the leader in Russia’s metals and mining
industry, a reliable social partner, and one of the world’s
largest producers of palladium and Class I nickel.
1935–1959
1960–1992
Construction of the Norilsk
Metallurgical Plant on the Taimyr
Peninsula and of the Severonikel
plant on the Kola Peninsula
were launched. The first batch
of converter matte and salable
nickelproduced in 1939.
By late 1953, Norilsk Plant
produced:
35% of nickel,
12% of copper,
30% of cobalt,
90% of PGMs of the Soviet Union’s
total output.
New deposits developed and new facilities put
online
• Major sulphide deposits of copper-nickel ores
of the Talnakhskoye deposit were discovered.
• The construction of mines and the town
of Talnakh started on the Taimyr Peninsula.
• The first batch of carbonyl nickel was produced
at Severonickel Plant.
• Komsomolsky, Oktyabrsky, and Taimyrsky
Mines were launched; Talnakh Concentrator
and Nadezhda Metallurgical Plant were
commissioned. Severonickel Plant celebrated
first production of electrolytic copper.
1993–2012
Company transformation
The Norilsk Nickel State Concern
for the Production of Precious and Non-
ferrous Metals was transformed into RJSC
Norilsk Nickel and privatised. In 2001,
the Company was restructured, with
shareholders owning a combined 96.9%
stake in RJSC Norilsk Nickel exchanging their
shareholdings for shares in OJSC MMC Norilsk
Nickel. Company shares started trading
on the RTS and MICEX stock exchanges, and
first American Depositary Receipts (ADRs)
were issued in June.
1 2 3 4 5 6 7
2021–2030
Environmentally friendly growth strategy
The Company announced a new
investment cycle aimed at the
comprehensive development of mining
assets and the expansion of processing
capacities as well as the implementation
of its environmentally friendly growth
strategy, which not only lays out long-term
performance targets for ore production
and capital investment but also sets
out concrete action plans to reduce the
Company’s environmental footprint in its
regions of operation.
2013–2020
Implementing a new strategy
Vladimir Potanin and his new management
team took the helm of the Company.
The Board of Directors adopted a new
long-term development strategy focused
on world-class assets of the Polar Division
and Kola MMC. Bystrinsky GOK, the largest
greenfield project in the Russian metals
industry, was constructed from scratch
in the Zabaykalsky Territory. At that time,
a programme was launched to improve
the environmental conditions across
the Company’s footprint, including
the shuttering of Nickel Plant in Norilsk,
the launch of the Sulphur Project
to drastically reduce sulphur dioxide
emissions, and the closure of obsolete
metallurgical facilities in the Murmansk
Region.
Nornickel
in 2023
Nornickel fully delivered
on its production programme in line
with management guidance.
A development licence was obtained
for the Kolmozerskoye deposit
located in the Murmansk Region,
which envisages annual production
of 45 ktpa of lithium carbonate and
hydroxide.
RUB 60 billion 5-year exchange-
traded bonds with a floating RUONIA
linked rate were issued.
The Digital Investor corporate
programme was launched
for employees to receive a digital
financial asset linked to the market
value of Nornickel shares.
The Sulphur Project was launched
at Nadezhda Metallurgical Plant
in Norilsk. This major environmental
project is aimed at drastically reducing
sulphur dioxide emissions in Norilsk
and improving the city’s air quality.
The Company started the development
of the deepest ore horizons in Eurasia
and put onstream the Glubokaya
shaft at Skalisty Mine reaching depths
of almost 2 km. This move will enable
Nornickel to substantially boost
extraction of the most valuable high-
grade ore.
In a first for the Company, Nornickel
published a standalone Climate
Change Report disclosing its initiatives
around climate action and climate
change adaptation from 2021 to date,
the development of its risk management
system, and the resilience of Nornickel’s
strategy in three climate scenarios.
12
13
Annual Report - 2023NornickelAbout the Report Business model
Contribution
to the UN SDGs
A 20–25% growth
in the output
of the Company’s
core metals by 2030
Reduced environmental
footprint across
regions of operation
Deeper integration into emerging value chains and
diversification of production capacities
1 2 3 4 5 6 7
Resources
Performance highlights
Mineral resource base
1,267 MT
Proven and probable
reserves copper-nickel
sulphide ores
283 MT
Proven and probable
(gold-iron-copper ores)
Workforce
>80 THOUSAND
employees
Mining and metallurgical
assets
9 mines
4 concentration facilities
4 metallurgical plants
Auxiliary assets
• Transport enterprises
• Energy enterprises
• Global sales network
• R&D: Gipronickel
Institute
Mining
Norilsk Division
19.2
MT
of ore
Kola Division
7.2
MT
of ore
Ni
Cu
PGMs
1.14%
1.98%
6.48 g/t
Ni
Cu
PGMs
0.52%
0.22%
0.08 g/t
Trans-Baikal Division
Cu
0.63%
15.0
MT
of ore
Energy Division
2,720
MCM
of natural gas
85
KT
of gas condensate
Environment and
climate
8.6 MT
GHG emissions from
operations (Scope 1 + 2)
6.4 MT
GHG emissions (Scope 3)
99%
of the Company’s industrial
waste is non-hazardous
55%
Share of renewables
83%
Share of reused
and recycled water
Financial highlights
USD 6.9 BN
EBITDA
USD 2.9 BN
Net income
48%
EBITDA margin
1.2X
Net debt/EBITDA
Revenue by sales
market, %
10
12
24
USD 14.4 BN
Revenue
54
Asia
Europe
Russia and the CIS
Americas
Group’s metals production
Ni
209
KT
Cu
425
KT
Pd
2,692
KOZ
Pt
664
KOZ
Value
for stakeholders
Shareholders
USD 1,475 MLN
Total dividends paid in 2023
Employees
USD 193 MLN
Spending on social
programmes for employees
>USD 2,000
Average monthly pay
USD 15 MLN
Spending on pension plans
Suppliers
95%
Share of Russian
companies in supplies
to Nornickel
Customers
The Company’s products
are supplied to
28 COUNTRIES WORLDWIDE
Government
RUB 281 BN /
USD 3.3 BN
Tax and other payments
to budgets
14
15
Annual Report - 2023NornickelAbout the Report STAYING
IN SHAPE
Nornickel – No. 1 in metal
nickel production in 2023
18
Jinchuan
15
Glencore
13
Vale
9
Other
MMCs
4
Sumitomo
Corp./
KORES
4
Huayou
6
BHP
7
Sumitomo
MM
2
Anglo
American
3
Sherritt
Strategic
report
18
Chairman’s letter
20
President’s letter
22
Commodity markets
38
Our strategy
Chairman’s
letter
The Company’s leadership
managed to fully deliver
on its production guidance
and – more importantly –
to sell all metals produced
in the reporting period by
redirecting sales to friendly
countries.
Dear shareholders,
The year 2023 was marked by a slump in prices for our core
metals and lingering external political pressure on Russian
business, which could not but impact our annual financial
results. Our revenue decreased 15% to USD 14.4 billion while
EBITDA was down 21% to USD 6.9 billion.
Nevertheless, the Company’s leadership managed to fully
deliver on its production guidance and – more importantly
– to sell all metals produced in the reporting period by
redirecting sales to friendly countries. At the same time,
effective cost control measures backed by forex tailwind
resulted in lower cash operating costs and a solid EBITDA
margin of 48%.
Despite challenging conditions in the global financial
and commodities markets and non-cooperation by
certain equipment suppliers, we continued to execute
1 2 3 4 5 6 7
48%
EBITDA margin
USD 3 BN
Total investments
48%
Targeted reduction in
pollutant emissions by 2026
our investment programme, which
amounted to USD 3 billion in 2023.
I would like to specifically highlight
the launch of the keenly anticipated
Sulphur Project at Nadezhda
Metallurgical Plant, which became
the largest environmental programme
in Russia in recent years. When the
project reaches its full capacity, it
will help meet legal requirements for
reducing pollutant emissions in Norilsk
by at least 20% in 2024, and by 45% in
2025, from a 2015 baseline.
Our environmental efforts were not
limited to the Sulphur Project. For
example, we made significant progress
in cleaning up legacy pollution in the
Norilsk Industrial District, reducing
wastewater discharge, and boosting
waste utilisation. The Company also
teamed up with several research
teams from the Siberian Branch of
the Russian Academy of Sciences to
conduct a biodiversity study across
the Company’s footprint that was
unique in scope and depth.
As far as occupational health and
safety is concerned, we continued
our mine safety programmes by
deploying new digital solutions and
improving equipment and personnel
tracking systems.
Tragically, five fatal accidents were
recorded at the Company in 2023,
compared to four such accidents
in the year prior. All accidents were
thoroughly investigated, with the
resulting reports submitted to the
Board of Directors and action plans
developed to eliminate their root
causes. The Company continues
improving the quality of its incident
investigations to prevent new
accidents, while also redesigning its
occupational safety communications
with employees. As Board Chairman,
I reiterate that achieving zero work-
related fatalities is a top strategic
priority for Nornickel.
Last year, the Company also focussed
on joint business diversification
projects to support technology
innovation. Polar Lithium, a joint
venture between Nornickel and
ROSATOM, has been awarded a
licence to develop Kolmozerskoye,
Russia’s largest lithium deposit. The
development of this deposit will
enable us to become Russia’s first-
ever producer of lithium-bearing raw
materials and eventually high-tech
products such as lithium-ion batteries.
Nornickel also acquired an interest in
Russian Stainless Company, which
is implementing a project for the
production of flat-rolled stainless steel
products in the Volgograd Region.
Through this project, Nornickel will
substantially boost its nickel sales in
the domestic market and integrate
into the manufacturing of high-tech
products from steels and alloys.
On top of this, Nornickel was lauded as
a top performer in sustainability and
responsible business practices and
recognised as a first-degree winner
of the Responsible Business Leaders
national award.
Finally, to accommodate our more
than 400,000 shareholders, we have
decided to do a share split to boost
our stock’s liquidity and make our
shares more accessible to a wider
range of retail investors, as well as to
pay a dividend for the first nine months
of 2023. We believe that this move
will contribute to further expansion of
Nornickel’s shareholder base and the
growth of the Russian stock market
more broadly.
Andrey Bougrov
Chairman of the Board
of Directors MMC Norilsk Nickel
18
19
Annual Report — 2023NornickelStrategic report President’s
letter
2023 results confirmed
Nornickel’s ability to
demonstrate operational
resilience even in a
challenging economic
and geopolitical
environment.
Dear shareholders,
Looking back on 2023, I would immediately highlight
the fact that the year confirmed Nornickel’s ability
to demonstrate operational resilience even in a
challenging economic and geopolitical environment.
As this Report shows, we have succeeded in
highlighting that the Company we all build together
is ready to face any critical challenge through strict
adherence to our production schedule, a responsible
approach to investment, and coordinated efforts of
the entire team.
1 2 3 4 5 6 7
as over 60 thousand employees have
already been granted digital financial
assets with a value equivalent to the
price of Nornickel shares and received
their first dividends.
In conclusion, I would like to express
confidence that together we will
achieve our goals and will unlock the
full potential of our business to the
benefit of our employees, investors,
and all stakeholders who care about
our success.
Vladimir Potanin
President
Chairman of the Management
Board MMC Norilsk Nickel
Last year, Nornickel and the broader
Russian economy grappled with
severe sanctions, which, coupled with
inflation and volatility across global
commodity and financial markets,
adversely affected the Company’s
key financials. Lower market prices for
almost all of our metals drove down
our revenue and EBITDA. However,
we were able to reverse the negative
trends of 2022, caused by the need to
rethink our logistics and distribution
chains. The Company sold all metal
volumes produced in 2023 as well as
some of its inventories that built up
over 2022.
We have maximised our focus on
metrics within our control and
achieved notable successes in these
areas, substantially cutting our
operating costs and working capital.
CAPEX totalled close to USD 3 billion in
2023, remaining at a record-high level
in rouble terms.
We are currently adjusting our
long-term investment plans due to
a changing geopolitical situation,
self-sanctioning by some of our
partners, and a more challenging
macroeconomic environment. We are
redesigning some projects, exploring
alternative solutions, and looking into
import substitution opportunities.
In October 2023, Nornickel launched
the Sulphur Project at Nadezhda
Metallurgical Plant in Norilsk. This
is a flagship project of national
importance, believed to be the largest
environmental programme in Russia.
Construction has taken more than
three years. Although certain
international vendors refused to
provide critical equipment to Russia,
we successfully sourced alternative
suppliers and completed the project
on schedule. As a result, Norilsk now
hosts in effect a brand new facility
with approximately 500 new jobs. The
key thing, however, is that air quality in
Norilsk has improved dramatically.
Last year, we approved our
Sustainable Development Strategy
until 2030, which encompasses
four pillars: occupational health
and safety, talent management,
technological development, and social
advancement and enhancements to
the quality of life. We fully recognise
that major businesses are responsible
for developing local communities
and for promoting the well-being of
wider society, and we reiterate our
commitments to stakeholders.
In 2023, Nornickel launched an
innovative corporate programme,
Digital Investor, under which as many
20
21
Annual Report — 2023NornickelStrategic report Commodity markets
Nornickel metals’ applications
Application area
Description
PGMS
Automotive industry
Hydrogen solutions
Palladium, platinum, and rhodium are used as the active material in automotive exhaust gas catalysts to
minimise the vehicles’ environmental impact
Platinum, palladium, iridium, and ruthenium are widely used in rapidly developing hydrogen technologies.
Platinum group metals find application as catalysts in low-carbon hydrogen production as well as for
hydrogen purification, transportation, and use as an energy source in fuel cells
Chemical and petrochemical
industries
Palladium, platinum, and rhodium are used as catalysts in chemical and petrochemical processes to boost
process performance
Jewellery
Electronics
Healthcare
Palladium and platinum are used in all kinds of jewellery, which is renowned for its beauty but also for
durability
Palladium is used as material for capacitors, motherboards, and other components, while platinum is
primarily used in hard drives, and rhodium in coatings for connectors and contacts
PGMs are extensively used as catalysts in drug synthesis. Palladium has also found wide application in
dentistry, while platinum is used in medical devices such as pacemakers and as an active ingredient in
anti-cancer medicines
Glass fibre and optical glass
Platinum and rhodium are used to manufacture bushings for making glass fibre and optical glass
NICKEL
Mechanical engineering, chemical
and petrochemical industries, and
construction
Nickel is used in stainless steel production. Adding nickel as an alloying element to stabilise the austenite
structure enhances steel’s corrosion resistance, high-temperature properties, weldability, formability,
and resistance to aggressive environments
EV batteries
Aerospace industry
Renewable energy
COPPER
Automotive industry
Nickel is a key element used in the production of precursor cathode active materials for EV batteries.
The dominating technologies include nickel-intensive NCM and NCA batteries, owing to their higher
volumetric and gravimetric energy density, which increases drive range. Nickel-based batteries are also
more recyclable and reusable than other types of batteries
Nickel alloys are highly resistant to heat and aggressive environments and are used in the manufacturing
of aircraft engines
Nickel alloys are used in wind, solar, and geothermal power generation
The automotive industry uses copper in batteries, electric motors, inverters, wiring, and charging
infrastructure. Transport electrification is expected to become a key driver behind copper demand in this
decade
Construction and air conditioning
and cooling systems
The construction sector uses copper in pipes and tubing, heating and cooling systems as well as in wall
cladding. Electrical and communication cables are also mostly made of copper
Renewable energy
Copper is intensively used in the construction of wind, solar, and other types of renewable power plants
Electronics and home appliances
Copper is used in electronics and home appliances due to its excellent electrical and thermal conductivity
Copper is used in power generation, transmission, and distribution as well as in all types of wiring.
Network infrastructure
A strong push for transport electrification and transition to renewable energy will require significant
expansion of distribution networks
1 2 3 4 5 6 7
Nickel market
Key
market trends
Nickel surplus persisted in 2023,
exceeding 200 kt (compared to 113 kt
of surplus in 2022), mostly in the low-
grade nickel market. However, the high-
grade exchange nickel market remained
balanced as the inflow of metal to
exchange warehouses was insignificant
while alloys and specialty steels
continued to generate steady demand.
In 2023, nickel was the worst performer
among base metals on the London
Metal Exchange (LME) due both to a
significant surplus in the Class 2 market
owing to oversupply of NPI in Indonesia
Nornickel
following the commissioning of new
Jinchuan
capacities to produce nickel cathodes
Glencore
in China and Indonesia and the price
Vale
correction following a massive short
Sumitomo MM
squeeze and growing speculative
BHP
Sumitomo Corp./KORES
trading in the past year.
Huayou
Sherritt
Early in the year, the price exceeded
Anglo American
USD 31,000/t but dropped to USD
Other MMCs
22,000/t in mid-March triggered
by news that some Chinese nickel
producers were considering launching
production of nickel cathodes in China
and Indonesia as early as in 2023.
Another headwind was weak domestic
demand in China amid prospects of
further monetary policy tightening in
the US and Europe.
In April, nickel prices rebounded to above
USD 25,000/t, spurred by the short
covering by speculative players, lower
exchange inventories, and a weaker
US dollar. The growth, however, was
curbed by weak market fundamentals,
and as a result the price slipped to USD
20,000–21,000/t in late May.
Nornickel – No. 1 in Class I nickel production, %1
19
18 15
13
7
6
4
4
3
2
9
1
2
3
4
5
6
7
8
9
10
11
Nornickel
Jinchuan
Glencore
Vale
Sumitomo MM
BHP
Sumitomo Corp./KORES
Huayou
Sherritt
Anglo American
Other MMCs
1
2
3
4
5
6
7
8
9
10
11
Nornickel – No. 4 in primary nickel production, %1
19
10 6
5
5
4
4
4
3
3
38
1
2
3
4
5
6
7
8
9
10
11
Tsingshan Group
Delong Group
Jinchuan
Nornickel
Glencore
Vale
Zoomwe
Shandong Xinhai
Huayou
Lygend
Other MMCs
1
2
3
4
5
6
7
8
9
10
11
Primary nickel consumption by region, %
5
22
3.1
MLN T
11
Source: Company data
China
Europe, Africa, and
the Middle East
Rest of Asia
Americas
62
1 Sources: producer reports, Company analysis as of early March 2024
22
23
Annual Report — 2023NornickelStrategic report In June–July, the LME nickel
fluctuated within the range of USD
20,000–23,000/t as the expected
recovery of the Chinese economy
slowed down. In August, the price
was supported by the news of
a clampdown on illegal mining in
Indonesia, followed by delays in the
distribution of Indonesia’s new quotas
for nickel ore mining.
In the fourth quarter, nickel price
fell below USD 20,000/t due to a
surge in supply, weak demand from
the European and US stainless steel
sectors, and a record-high number
of LME short positions of investment
funds amid inflationary pressure and
high interest rates around the world.
Despite news that Indonesia wouldn’t
approve any new nickel mining
quotas for 2023 and the country’s
high-grade nickel resources could
face depletion in six years, the LME
nickel plunged to USD 16,000/t late
in the year.
As a result, the average nickel price
in 2023 amounted to USD 21,474/t,
or 16% below the average 2022 price
(USD 25,605/t).
LME nickel price in 2023, USD/T
Average annual nickel prices, USD/T
1
2
3
4
5
7
8 9
11
12
13
14
15
6
10
18,488 25,605 21,474
30,000
26,000
22,000
18,000
14,000
10,000
JAN.
FEB.
MAR.
APR. MAY
JUN.
JUL.
AUG.
SEP.
OCT.
NOV.
DEC.
'21
'22
'23
Source: London Metal Exchange
(cash settlement)
1. EV producers start to cut prices due
to slowdown of demand growth
2. US banking crisis
3. LME announces action plan to
strengthen its markets
4. Indonesia puts nickel export levy
on hold
9. Tsingshan starts production of
nickel cathodes in Indonesia
10. Distribution of Indonesia’s mining
quotas is delayed
11. The announcement, that Indonesia
will not approve any new nickel ore
mining quotas for 2023
5. Huayou Cobalt launches Huafei
12. Glencore to stop funding its
HPAL project in Indonesia
6. China extends EV tax benefit
scheme to 2027
Koniambo FeNi project
13. LME approves listing of GEM’s nickel
cathodes
7. LME approves Huayou’s nickel
14. Talks about a new Indonesian nickel
cathodes as new brand
price index
8. Indonesia arrests former top official
15. Germany cancels tax benefits
accused of illegal mining
for EVs
1 2 3 4 5 6 7
Market balance
Consumption
In 2023, primary nickel use grew 4%
y-o-y to 3.1 mln t amid steady growth
in the stainless steel sector (up 4%
y-o-y). Demand in the battery sector
was down (–1% y-o-y) due to the
continued destocking cycle in the EV
supply chain, a greater share of non-
nickel LFP batteries, and a partial shift
from BEV to PHEV sales in China. In
2023, nickel use in other industries
(alloys, special steels, plating, etc.)
increased by 6% y-o-y amid a stable
environment in the aerospace, oil and
gas, and military industries.
On the other hand, global primary
nickel production grew 9% y-o-y
to 3.4 mln t in 2023, driven by the
continued growth in the Indonesian NPI
(up 16% y-o-y) and nickel compounds
output for the battery sector (up 31%
y-o-y). The increase was due to the
launch of new NPI-to-matte conversion
and high-pressure acid leaching (HPAL)
projects. Metal nickel production grew
7% y-o-y due to new nickel cathode
production capacities launched in
China and Indonesia.
As a result, in 2023, the nickel market
moved into a surplus of more than
200 kt, mostly in low-grade nickel as
last year, while the high-grade nickel
market remained relatively balanced.
However, given the substantial
increase in current working stocks
over the last years, which, according
to our calculations, rose by as much
as 100–200 kt Ni, the actual market
surplus, i.e. excessive material
available for immediate delivery, could
be much smaller.
Stainless steel remained the key
sector of primary nickel use in 2023
(about 65% of total demand).
Stainless steel production uses almost
all types of nickel feed (except for
some special products, such as nickel
powder and compounds). However,
since the quality of nickel used has
almost no effect on stainless steel
quality, steelmakers primarily use
cheaper low-grade nickel such as
NPI, ferronickel, and nickel oxide. As a
result, the share of high-grade nickel
used in stainless steel has decreased
in recent years.
In 2023, global output of stainless
steel grew 3% y-o-y to 58 mln t amid
the launch of new capacities in China,
where production rose 10% y-o-y. In
other Asian countries, stainless steel
output declined 5% y-o-y, primarily
due to lower production in Indonesia,
which faced operational issues at
a steelmaker caused by a conflict
between shareholders, as well as due
to weak operational performance
in Japan and Taiwan. Meanwhile,
stainless steel output dropped 7%
y-o-y in Europe and the US due to
destocking, higher imports from Asia,
and weak consumer demand. As a
result, primary nickel consumption in
the stainless steel sector increased by
4% in 2023 and exceeded 2Mt.
The battery industry uses nickel
as a key element in the production
of cathode precursors for batteries.
Despite record-high EV sales, nickel
demand in the battery sector slipped 1%
to 0.5 mln t in 2023 due to destocking
across the battery value chain in China,
higher non-nickel LFP share, and a
partial shift from BEV to PHEV sales
3.1 MLN T
Primary nickel consumption
in 2023
3.4 MLN T
Primary nickel production
in 2023
Nickel production and
consumption balance, KT
(excluding changes in current reserves)
-167
114
200+
150+
50+
145
-31
-167
'21
'22
'23
Low-grade nickel
High-grade nickel
Source: Company’s assessment
as of March 2024
Source: London Metal Exchange, Company analysis
24
25
Annual Report — 2023NornickelStrategic report in China, which have lower battery
capacity and, in turn, lesser nickel
content.
In 2023, global EV sales1 grew 29%
y-o-y. Following several years of
rapid growth, the EV market seems
to be entering a maturity phase
and grappling with the associated
challenges of further expansion.
Sales in China decelerated to 23%
y-o-y following the country’s partial
withdrawal of the EV subsidies at the
end of 2022. However, EV sales have
been consistently rising in absolute
terms. For instance, 5.7 million battery
electric vehicles (BEVs) were sold in
China in 2023, up 19% y-o-y from 4.8
million in 2022, while plug-in hybrid
electric vehicle (PHEV) sales surged
almost twofold to 2.7 million (up
88% y-o-y). Additionally, China has
surpassed Japan as the world’s largest
automotive exporter, a core part of
which has been EVs.
Furthermore, support for the
EV sector in China continues to
flow. Recently, a national pilot
involving eight separate ministries
was launched to replace internal
combustion engine (ICE) vehicles with
EVs in public domain vehicle fleets.
This incorporates not only public
buses but also taxis and government
vehicles. When coupled with ongoing
support for a rural EV buildout, this
should ensure that the domestic China
market continues to grow faster than
the rest of the world.
total European BEV sales, with SAIC-
owned MG being the fourth best-
selling brand after Tesla, Volkswagen,
and BMW. In September, the European
Commission launched an anti-subsidy
investigation to impose additional
tariffs on Chinese EVs to protect local
producers, potentially slowing down EV
penetration rates in Europe, especially in
the low-cost segment.
EV sales in the US increased by 50%
in 2023, which could be attributed
to the adoption of the US Inflation
Reduction Act (IRA).
The growing popularity of electric
and hybrid cars, along with the
evolution of cathode technology
towards nickel-intensive types, add
to the tailwinds for significant growth
in primary nickel demand in batteries
in the long run. Despite the mounting
competition across technologies,
high-nickel formulations will
remain the preferred option for
automakers owing to their higher
energy density, longer range, and
better recyclability. In its base case
scenario, the Company estimates
that the nickel use in batteries
will reach approximately 1.5 mln t
of nickel by 2030, or 30% of total
primary nickel demand (compared
to 15% in 2023). Meanwhile, this
figure may require further revisions
given the continuous introduction
of more ambitious carbon neutrality
goals, subsidies-driven transport
electrification, and cost optimisation
of battery cell production.
Sales in Europe rose by 28% y-o-y, while
constrained by the removal of subsidies
in several countries. Additionally, there
has been an influx of cheap Chinese
EVs into the European market. In 2023,
the share of Chinese BEV deliveries
increased twofold to about 10% of
In 2023, nickel use in other industries
(alloys, special steels, plating, etc.)
increased by 6%, or 0.6 mln t, amid
the gradual post-COVID recovery of
industrial demand and robust economic
performance in the aerospace, oil and
gas, and military industries.
Primary nickel consumption
by industry, %
5 1
6
8
3.1
MLN T
15
65
Stainless steel
Batteries
Alloys and superalloys
Electroplating
Special steels
Other industries
Source: Company data
Stainless steel production, MLN T
59
56
58
3
8
14
34
3
6
14
33
2
6
14
36
Americas
EMEA (Europe,
Middle East,
Africa)
Rest of Asia
China
‘21
‘22
‘23
Sources: Eurofer, ISSF, USGS, SMR, METI,
TSIIA, Company data
1 2 3 4 5 6 7
Supply
Global sales of electric vehicles, THOUSAND UNITS
Primary nickel production can be
divided into the high-grade and low-
grade nickel segments.
High-grade nickel is produced in the
form of nickel cathodes, briquettes,
pellets and powder, rounds, and
other small special forms as well
as chemical compounds, both from
sulphide and from more common
and available laterite raw materials.
2023’s leading producers of high-
grade nickel were Jinchuan,
Nornickel, Glencore, Vale, Zoomwe,
Huayou, and Sumitomo Metal
Mining (SMM).
Low-grade nickel includes nickel pig
iron, ferronickel, nickel oxide and
utility nickel, which are produced
from laterite raw materials only. In
2023, the key producers of low-
grade nickel were Indonesian and
Chinese NPI smelters, owned by
Tsingshan and Delong, as well as
the largest ferronickel producers:
Anglo American, Eramet, South32,
POSCO, etc.
The nickel market had been
fundamentally divided into the low-
grade and high-grade segments.
However, these markets became
interconnected once the practical
implementation of the NPI-to-matte
conversion started in early 2021
along with the massive launches
of HPAL capacities and the launch
of nickel cathode production from
low-grade Indonesian s of HPAL
capacities and the launch of nickel
cathode production from low-grade
Indonesian feedsources in 2023.
In 2023, nickel producers around the
world were affected both by high
interest rates, inflationary pressure,
1,500
1,200
900
600
300
0
↑29%
↑59%
JAN.
FEB.
MAR.
APR.
MAY
JUN.
JUL.
AUG.
SEP.
OCT.
NOV.
DEC.
2021
2022
2023
Source: Company analysis
Sales of electric vehicles by region in 2023, THOUSAND UNITS.
↑23%
↑28%
↑50%
1,000
800
600
400
200
0
JAN.
MAR.
MAY
JUL.
SEP.
NOV.
China 2023
China 2022
Europe 2023
Europe 2022
USA 2023
USA 2022
Sales of electric vehicles by
region in 2023, %
9
12
China
Europe
USA
Other
22
57
1 Under this methodology, HEV and PHEV are recalculated according to their relative battery capacity ratio: HEV
2 kWh vs PHEV 12 kWh vs BEV 55 kWh.
26
27
Annual Report — 2023NornickelStrategic report 1 2 3 4 5 6 7
Overall, we estimate the total 2023
NPI production in Indonesia at 1.3 mln t
(up 16% y-o-y).
In 2023, China’s NPI output
continued to decline, falling 5% y-o-y
to 0.4 mln t amid stronger imports
of Indonesian NPI. Nevertheless,
despite the growing competition
from Indonesian NPI, the Chinese
NPI output was supported by
robust stainless steel production
and showed a much more moderate
decrease than expected.
In 2023, ferronickel output
continued to decline, slipping to 0.3
mln t of nickel (down 13% y-o-y), a
record low for more than a decade.
The primary factors behind the
decrease are: the continuing negative
price dynamics (FeNi is traded at a
discount to the LME, at a level close
to the NPI prices); high production
costs; fuel and electricity issues;
some major producers’ capacity
utilisation rates being low. For
instance, there were production
shutdowns across several sites,
including facilities in Guatemala,
Serbia, North Macedonia, Greece,
and Ukraine. Technical, operational,
and financial disruptions were
also observed at projects in the
Dominican Republic, Myanmar, Japan,
and New Caledonia.
NPI production, KT1
1.3
1.6
1.7
1.3
2023
↑10%
1.1
0.9
0.4
0.4
0.4
1.7
KT
Indonesia
↑16%
China
↓5%
‘21
‘22
‘23
Source: Company data
logistical issues, and operational
disruptions, and by negative price
trends amid oversupply and continued
surplus on the market. Nonetheless,
primary nickel production grew by
0.3 mln t, or 9% y-o-y, to 3.4 mln t
in 2023, driven by the growth in the
Indonesian NPI production capacities
and the continued underlying growth
of nickel compounds for the EV battery
sector, mainly fuelled by the launches
of new HPAL capacities and NPI-
to-matte conversion lines. Another
contributor was the rise in metal nickel
(Class 1) supply from new refining
capacities in China and Indonesia.
Production of high-grade nickel grew
15% to 1.4 mln t in 2023.
Production of metal nickel rose 7%
y-o-y to 0.9 mln t. In 2023, metal nickel
production was steadily growing,
mainly due to the launch of new
nickel cathode capacities in China
and Indonesia.
On top of this, Class 1 nickel output
grew in Norway (due to the local
enterprise’s ramp-up to designed
capacity after last year’s strikes) and
Japan (as a result of an increase in
nickel converter matte exports from
Indonesia) but declined in Canada and
Australia on the back of operational
issues and maintenance shutdowns.
Nornickel decreased its nickel
output somewhat in 2023 owing
to the decrease in mined ore
volumes due to testing of the mining
machinery from new suppliers and
the gradual replacement of the
existing equipment fleet. Nornickel
mines recovered to the scheduled
mining volumes in the fourth quarter.
In 2023, the Company’s nickel
output came in line with the annual
production guidance.
During the year, production of nickel
compounds, including nickel sulphate
from primary sources (excluding
sulphate produced by high-grade
nickel dissolution), increased by 31%
y-o-y to 0.5 mln t.
Nickel sulphate can be produced from
a variety of raw materials by different
processes: directly from nickel
intermediates such as mixed hydroxide
precipitate (MHP), mixed sulphide
precipitate (MSP), nickel matte, and
crude nickel sulphate (product of
copper processing), by dissolving
Class 1 nickel (such as nickel briquettes
or powder), or from recycled materials.
Despite the fact that nickel sulphate
was traded at discounts to LME prices
almost throughout the year, its output
grew in 2023. The increase was fuelled
by scheduled launches of new and
ramp-ups of existing intermediates
production capacities in Indonesia
both at HPAL projects and at NPI-
to-matte conversion lines. Chinese
producers were the largest nickel
sulphate producers in 2023, including
Zoomwe, GEM, Huayou, and Jinchuan.
At the same time, nickel sulphate
production by high-grade nickel
dissolution, considered to be one
of the most expensive production
method, decreased several times over
y-o-y amid the abundance of cheaper
intermediates on the market.
3.4 MLN T
Primary nickel output in 2023
Primary nickel production
by product, %
9
1
3.4
MLN T
14
26
50
Nickel pig iron
Metal nickel
Nickel compounds
Ferronickel
Nickel oxide and utility nickel
Source: Company data
Primary nickel production, MLN T
Low-grade nickel output grew by 6%
y-o-y to 2.0 mln t.
2.7
3.1
3.4
Indonesia continued ramping up its
nickel pig iron capacities, which was
the main driver behind the growing
supply of low-grade nickel in 2023.
The growing stainless steel output in
China provided significant support
to NPI production in Indonesia,
but its growth rates slowed down
somewhat year-on-year due to some
furnaces switching to converter matte
production and temporary suspension
of new quotas issue for nickel ore
mining later in the year, resulting
in higher ore cost in the country.
2.0
2023
↑9%
1.9
1.7
1.4
1.2
1.0
3.4
MLN T
Low-grade
nickel
↑6%
High-grade
nickel
↑15%
‘21
‘22
‘23
Source: Company data
28
29
1 Note: Figures may not sum up due to rounding.
Annual Report — 2023NornickelStrategic report Copper market
Nornickel – No. 12 in copper mine production, %
Market balance
LME copper price in 2023, USD/T
1 2 3 4 5 6 7
Key market trends
6.9
6.2 5.9 4.3 3.9 3.6 2.9 2.8 2.6 2.3 2.0 1.9 54.7
1
2
3
4
5
6
7
8
9
10
11
12
13
BHP Group
Codelco
Freeport-McMoRan
Glencore
Group Mexico
Zijin Mining
First Quantum Minerals
Rio Tinto
Anglo American plc
KGHM Polska Miedz
Antofagasta plc
Nornickel
Other MMCs
1
2
3
4
5
6
7
8
9
10
11
12
13
Sources: producer reports, Company analysis as of late March 2024
Refined copper consumption
by region, %
Average annual copper prices,
USD/T
10
1
9,317
8,797 8,478
12
20
25.4
MLN T
57
China
Rest of Asia
Europe
Americas
Other
'21
'22
'23
Source: London Metal Exchange
(cash settlement)
In 2023, factors that affected the
copper market included: weaker-
than-expected consumption growth
in China amid the construction crisis;
weak macroeconomic performance
across global major economies;
tougher monetary policies; low
exchange and bonded stocks in China;
strikes and social unrest in Latin
America; new renewable installed
capacity additions; and a stronger
push for transport electrification.
During the year, copper prices showed
mixed dynamics, trading between
USD 7,900–9,400/t. Peak values were
recorded in January amid the lifting
of COVID-19 restrictions in China and
low exchange stocks. Then, driven by
higher interest rates in major global
economies, fears of investors related to
the US public debt ceiling, and weaker-
than-expected demand in China, the
price retraced down to USD 7,900/t
towards the end of the first half of
the year. Once the US public debt
had been handled, the copper price
rebounded to USD 8,700/t in early
August. However, macroeconomic
challenges, especially in China,
continued to have a negative impact
on the market, and the price dropped
below USD 8,000/t in early October.
Late in the year, protests in Panama
resulting in the shutdown of the Cobre
Panamá mine supported the copper
price, which rose to USD 8,600/t.
The total exchange stocks on the LME,
SHFE, and CME grew 13% to 215 kt but
remain at their historically-low level.
Bonded stocks in China plummeted
86% from the start of the year to 8 kt.
In 2023, the LME copper price
averaged at USD 8,478/t vs USD
8,797/t in 2022 (down 4%).
In 2023, copper mine output
increased by 2% to 22.3 Mt, and
refined copper production by 4%
to 25.6 Mt. Global refined copper
consumption totalled 25.4 Mt, up
2%. Overall, the copper market was
balanced in 2023, with a statistical
surplus of 130kt, or less than 1% of
global consumption.
Consumption
In 2023, global refined copper
consumption totalled 25.4 Mt, up
2% y-o-y.
Despite weaker-than-expected
demand recovery due to the
construction crisis, China ramped up
its domestic consumption to 14.5 Mt,
or up 6% y-o-y. Imports of refined
copper to China fell 4% y-o-y to
3.5 Mt, while imports of scrap and
concentrates grew 12% and 9% to 2
Mt and 27.6 Mt, respectively.
Demand in Europe and North America
dropped to 3.1 Mt (down 5% y-o-
y) and 2.1 Mt (down 4% y-o-y),
respectively, while Asia (excluding
China) showed a 1% growth to 5.2 Mt.
In Russia, apparent primary copper
consumption is estimated at 450kt.
Supply
Global copper production increased 2%
to 22.3 Mt driven by the launch of new
and expansion of existing projects.
Chile, the world’s leading copper
producer, slightly cut its copper output
in 2023, by 1% to 5.3 Mt, due to technical
and operational disruptions faced by
Codelco, the country’s top producer of
the metal. Meanwhile, Peru ramped up
its output by 9% y-o-y to 2.7 Mt.
10,000
1
2
3 4
5
7
8
6
10
9
11
9,500
9,000
8,500
8,000
7,500
JAN.
FEB.
MAR.
APR. MAY
JUN.
JUL.
AUG.
SEP.
OCT.
NOV.
DEC.
1. China lifts COVID-19 restrictions
2. The Las Bambas mine decides to
7. Chile’s senate approves
progressive mining royalty bill
suspend operations
3. US increases import tariffs for
Russian metals
8. US sanctions UMMC
9. Udokan Copper starts Cu
concentrate production
4. Start of the US banking crisis
5. Teck Resources rejects Glencore’s
22.5 billion asset acquisition offer
6. BHP buys out OZ Minerals for
USD 6.6 billion
10. LME stocks are at 2-year highs
11. Cobre Panamá halts operations
due to protests of local residents
Source: London Metal Exchange, Company analysis
Copper market balance, KT
Production of refined copper, MLN T
-11
-151
130
24.3
24.7
25.6
2023
↑4%
25.6
MLN T
'21
'22
'23
Source: Company’s data as of
March 2024
'21
'22
'23
Source: Company data
30
31
Annual Report — 2023NornickelStrategic report Africa managed to increase its output
by 9% to 3.6 Mt, with DRC being the
top producer through its Ivanhoe’s
Kamoa-Kakula project.
China ramped up its production by 2%
to 1.9 Mt, while copper mine production
in Indonesia declined 5% to 0.9 Mt.
Production in North America
decreased, except for Canada where
the output grew 4% to 0.4 Mt. In the
US, the decline was 8% to 1.2 Mt, and in
Mexico 2% to 0.7 Mt.
Refined copper production grew 4%
y-o-y to 25.6 Mt amid new capacity
launches in China. In South and Central
America, production dropped 4% to
2.5 Mt due to the macroeconomic
pressure throughout the year. Africa
saw a 16% increase in production to 2.2
Mt, while Asia (including China) ramped
up its output by 5% to 15.6 Mt. China’s
refined copper output increased by 9%
to 11.5 Mt, while in Japan it decreased
by 1% to 1.5 Mt. Copper output in
Europe fell 2% to 3.5 Mt, in North
America 4% to 1.5 Mt.
Refined copper consumption
by industry
First use, %
3
12
12
25.4
MLN T
73
Tubes
Flat rolled products
Wire rod
Other
Source: Company data
End use by industry, %
10
8
31.1
MLN T
12
11
27
17
15
Construction
Utility
Machinery
Transport
Consumer goods
Air conditioning and
refrigeration
Other
Source: Company data
1 2 3 4 5 6 7
PGM market
Nornickel – No. 1 in palladium production, %1
41
20
16
13
4
6
1
2
3
4
5
6
Nornickel
Anglo American Platinum
Impala Platinum
Sibanye-Stillwater
Northam Platinum
Other MMCs
1
2
3
4
5
6
Nornickel – No. 4 in platinum production, %1
30
24
20
11
9
6
1
2
3
4
5
6
Anglo American Platinum
Impala Platinum
Sibanye-Stillwater
Nornickel
Northam Platinum
Other MMCs
1
2
3
4
5
6
Nornickel – No. 5 in rhodium production, %1
35
24
21
11
8
1
1
2
3
4
5
6
Anglo American Platinum
Sibanye-Stillwater
Impala Platinum
Northam Platinum
Nornickel
Other MMCs
1
2
3
4
5
6
Sources: producer reports, Company analysis as of early March 2024
1 Refined metal output including production from third-party feedstock and production from own
feedstock by third parties under tolling agreements.
Key market trends
Palladium
Due to low ICE-powered vehicle sales
in the first two months of 2023, the
palladium price was declining, getting
closer to the important USD 1,300/
oz support level up until mid-March,
when it entered into a horizontal trend,
fluctuating between USD 1,300/oz and
USD 1,600/oz levels. The trend change
was triggered by the US banking
crisis, which has supported prices for
precious metals as the market lowered
its expectations regarding the terminal
rate level.
The price continued its downward
movement in May to find the next
support level at USD 1,225/oz by the
end of June. Later, it started trading
sideways, fluctuating between USD
1,225/oz and USD 1,300/oz as inflation
expectations eased. The sideways trend
continued until the beginning of October,
when it made a stepdown to a lower
price corridor, reaching its bottom at
USD 1,125/oz. This occurred amid the Fed
representatives’ statements regarding
the higher-for-longer interest rates
environment.
The price plateaued at USD 1,125/oz up
until 7 November, when it fell by 4% to
USD 1,080/oz. Fed’s hawkish statements
yet again pressured all the precious
metals. This led the palladium price to
fall below the psychological level of
USD 1,100/oz, which triggered a 3-year-
record daily open interest increase on
the NYMEX, dipping palladium down
to USD 965/oz. Nevertheless, right
after that, palladium bounced back and
stabilised above the USD 1,050/oz level.
Late in the year, the palladium price
showed increased volatility: the
excessive volume of short positions
resulted in a short squeeze in December,
with prices soaring to USD 1,225/oz and
then dropping again to USD 1,050/oz.
32
33
Annual Report — 2023NornickelStrategic report Platinum
Palladium and platinum prices in 2023, LPPM
Market balance
Consumption
1 2 3 4 5 6 7
In early January, the platinum price
rose slightly above USD 1,100/
oz but began to decline by mid-
January amid weak car sales. As the
automotive market started to recover,
the significance of macroeconomic
factors in platinum pricing started to
strengthen, which led to the platinum
price following the upward trend of
gold since the end of February.
The price rally continued as the next
noticeable resistance level of USD
1,050/oz was broken on 13 April, when
South African Eskom announced the
return of Stage 6 load-shedding, which
drove the price up above USD 1,100/
oz level. However, in mid-May, the
platinum price started to fall sharply,
reaching its bottom at USD 900/oz by
late June. This drop was caused, among
other factors, by resilience of South
African producers to electricity supply
disruptions, weak macroeconomic data
from China, and hawkish statements by
the ECB, which put noticeable pressure
on prices for precious metals.
Until the end of October, the price
fluctuated between USD 900/oz and
USD 1,000/oz, followed by an overall
adjustment of prices for precious
metals, which led the platinum price to
a support level of USD 875/oz.
In December, the platinum price
soared to above USD 1,000/oz amid
statements by South American
PGM producers about cutting their
output given the depressed PGM
basket prices.
2
1
3
4
6
5
7
2,000
1,600
1,200
800
JAN.
FEB. MAR. APR. MAY
JUN.
JUL. AUG. SEP. OCT. NOV. DEC.
Platinum
Palladium
1. The US and Europe’s banking
crisis reversed the pricing trend
in the PGM market
2. Worsening of the power crunch
in South Africa
5. Fed representatives’ statements
regarding the higher-for-longer
interest rates environment, and a
surge in short speculative positions
for palladium
3. Stabilisation of inflation
6. Top foreign PGM producers
expectations
4. Fed’s hawkish statements
announce production plan cuts amid
cost optimisation efforts
7. Short squeeze in the palladium
market
Average annual PGM prices, USD/OZ
21,000
20,046
14,000
7,000
2,398
1,090
'21
15,482
2,112
961
'22
Rhodium (LHS)
Palladium (RHS)
Platinum (RHS)
Source: Company analysis
5,000
4,000
3,000
6,621
2,000
1,337
1,000
965
'23
In 2023, the palladium market remained
in a significant deficit estimated at 30
tonnes, net of investment demand and
consumer stock movement. Sales of
stocks by automakers and autocatalyst
producers provided additional liquidity
to balance the market. Amid stable
demand, the deficit increase was mainly
driven by lower production. In 2023,
palladium supply declined due to lower
recycling and output in Russia amid the
transition to new mining equipment and
scheduled maintenance at Nadezhda
Metallurgical Plant and Talnakh
Concentrator of the Norilsk Division.
Automotive industry. Exhaust treatment
systems account for the bulk of total
PGM consumption. In this sector,
palladium, platinum, and rhodium are
used in catalytic converters, which are
mandatory for road transport and legally
regulated in most countries. These
solutions drastically reduce emissions of
hazardous substances.
Due to their unique catalytic properties
ensuring effective chemical reactions
throughout the entire vehicle life cycle,
there are almost no alternatives to PGMs
in this sector.
The platinum market moved into a
deficit of 12 tonnes in 2023. During the
year, global platinum consumption grew
amid residual palladium-with-platinum
substitution in autocatalytic converters
and the launch of new capacities in
China’s glass industry. Meanwhile,
global platinum production stagnated,
as lower recycling was offset by the
recovery of primary production in
South Africa after the lack of smelting
capacities and widespread power
outages in 2022.
Due to their catalytic properties,
palladium and rhodium are the key
choice for exhaust treatment systems
in petrol vehicles, while platinum is used
mostly in diesel vehicles. There has been
a partial substitution of platinum for
palladium in petrol vehicle catalysts in
recent years due to a significant price
spread between the metals. The peak
level of substitution was reached in 2023,
as the narrowed price spread between
palladium and platinum leaves no
incentives for a short-term substitution.
A moderate deficit of 3 tonnes
remained in the rhodium market in 2023,
which, as in the case of palladium, was
balanced by stocks sold by market
players. Rhodium production remained
at the 2022 level: the recycling fall
was offset by the recovery of primary
production in South Africa while
moderate consumption growth was
driven by stronger demand from the
chemical and automotive industries.
In 2023, Western regulators decided to
adopt new environmental standards in
the US and Europe, which will support
PGM consumption in the automotive
industry in the longer run. Moreover, in
late 2023, global demand for EVs began
to slow down to the benefit of HEVs
(with PGM content even higher than in
conventional ICE-powered vehicles),
which makes automakers revisit their
transport electrification strategies.
30 TONNES
Palladium market deficit
in 2023
12 TONNES
Platinum market deficit
in 2023
3 TONNES
Rhodium market deficit
in 2023
Source: PGM balance estimate as
of March 2024
PGM consumption by region, %
293
236
33
14
9
20
29
28
18
11
21
17
33
18
10
24
-31
19
29
Palladium
Platinum
Rhodium
Total, t
Other
Japan
Europe
North America
China
34
35
Annual Report — 2023NornickelStrategic report In 2023, palladium consumption in
the automotive industry decreased
by 1 tonne to 240 tonnes. The reason
for sluggish demand for the metal
in the automotive industry was that
the minor increase in ICE-powered
vehicle output was offset by residual
palladium-with-platinum substitution
in autocatalytic converters.
At the same time, palladium consumption
in the automotive industry is supported
by the declining share of diesel cars in
the fleet mix as they are replaced with
petrol cars and hybrids, which make
greater use of palladium-based catalytic
converters for exhaust fumes. The
market share of diesel vehicles in Europe
(27 EU countries + the UK + European
Free Trade Association countries)
dropped from 16% to 13% over the year.
Despite the declining share of diesel
vehicles, global demand for platinum
from the automotive industry grew by 12
tonnes in 2023, driven by the recovery
in production of trucks and residual
substitution of platinum for palladium
in petrol vehicles.
Rhodium consumption in this industry
grew by 1 tonne amid a slight increase in
vehicle production.
Electronics. Palladium has found
its way into the electronics industry
primarily as a material for capacitors
and motherboards, while platinum is
used in hard drives. In 2023, palladium
consumption in the electronics industry
decreased by 1 tonne to 16 tonnes on
the back of weaker sales of household
appliances. Platinum demand from the
industry stayed flat at 5 tonnes.
Chemical industry. In 2023, the use
of platinum in catalysts grew by 1
tonne to 21 tonnes amid the expansion
of production capacities in China.
Palladium demand in this industry
remained at 19 tonnes.
Palladium: consumption by industry, % and by application, T in 2023
295
293
2023
↓1% y-o-y
82%
-1 t
2%
0
5%
-1 t
6%
0
2%
0
2%
0
293
TONNES
1
2
3
4
5
6
Autocatalytic
converters
Jewellery
Electronics
Chemical industry
Healthcare
Other
'22
1
2
3
4
5
6
'23
Platinum: consumption by industry, % and by application, T in 2023
220
236
2023
↑7% y-o-y
44%
+12 t
23%
0
2%
0
5%
+3 t
9%
+1 t
18%
0
236
TONNES
1
2
3
4
5
6
Autocatalytic
converters
Jewellery
Electronics
Glass industry
Chemical industry
Other
'22
1
2
3
4
5
6
'23
Rhodium: consumption by industry, % and by application, T in 2023
32
33
2023
↑4% y-o-y
33
TONNES
1
2
3
4
5
Autocatalytic
converters
Chemical industry
Electronics
Glass industry
Other
87%
+1 t
8%
0
1%
0
1%
0
3%
0
'22
1
2
3
4
5
'23
In 2023, South Africa, a key platinum
and rhodium producer, saw its
palladium, platinum, and rhodium
output grow by 1 tonne, 5 tonnes, and
1 tonne to 75 tonnes, 133 tonnes, and
20 tonnes, respectively, – primarily
because the shortage of smelting
capacities was addressed.
Primary palladium and platinum
production in Zimbabwe rose by
1 tonne to 14 tonnes and 17 tonnes,
respectively, while rhodium output
remained flat at 1.5 tonnes. Palladium
production in the North America
decreased by 1 tonne to 25 tonnes,
while platinum production remained
at 9 tonnes.
The main sources of recycled PGM
supply are scrapped autocatalytic
converters. In 2023, recycled
palladium, platinum, and rhodium
production decreased by 11 tonnes,
7 tonnes, and 1 tonne to 65 tonnes,
40 tonnes, and 7 tonnes, respectively.
Such a noticeable decline in recycled
supply was due to lower prices for
PGMs, a tough monetary policy,
stricter KYC policies in the US, and
tightening of state regulation of the
industry in China.
Primary PGM production, T
26
201
23
178
24
184
216
201
198
Rhodium
↑4%
Platinum
↑3%
Palladium
↓1%
‘21
‘22
‘23
Source: Company data
2.1 TONNES
Increase in palladium
inventories held by ETFs over
2023
2.4 TONNES
Reduction in platinum
inventories held by ETFs over
2023
1 2 3 4 5 6 7
Healthcare. Palladium consumption in
this industry decreased slightly, by 0.2
tonnes to 6 tonnes, driven by the long-
term substitution trend, while demand
for platinum stagnated at 8 tonnes.
Jewellery. The use of palladium and
platinum in jewellery stayed flat at 5
tonnes and 54 tonnes, respectively.
Although the macroeconomic
uncertainty continues to put pressure
on the demand for luxury goods in
Europe and the US, jewellery sales
growth in India offset the demand fall in
developed economies.
Glass industry. Platinum containing
products are needed to produce glass
fibre and optical glass. Demand for
the metal in this industry grew by 3
tonnes in 2023 as China expanded its
production capacities.
Investments. Palladium and platinum
are widely used as an investment
instrument. Physical investments may
vary from coins and smaller bars to
investments in ETFs. Palladium stocks
in ETFs increased by 2.1 tonnes to 16.0
tonnes in 2023, while platinum stocks
decreased by 2.4 tonnes to 91.7 tonnes.
Supply
In 2023, primary refined palladium
production decreased 1% y-o-y to 198
tonnes, while platinum and rhodium
production grew 3% and 4% to 184
tonnes and 24 tonnes, respectively.
In Russia, the key palladium
producer, palladium supply
declined (by 3 tonnes) due to the
transition to new mining equipment
and scheduled maintenance at
Nadezhda Metallurgical Plant and
Talnakh Concentrator of the Norilsk
Division. Platinum production stayed
flat at 20.5 tonnes.
36
37
Annual Report — 2023NornickelStrategic report 1 2 3 4 5 6 7
The Company’s key production projects
Sulphur Project
at Copper Plant
Reduction in pollutant
emissions in line with
regulations
TOF-3
Boosting the capacity of Talnakh
Concentrator to 18 Mtpa, improving
nickel recovery rate
Strategic
investment projects
Structure of
the Company’s
investment
programme
for 2023–2024
2023
3.0
USD BN
2024 (plan)
3.0–3.2
USD BN
Sulphur
Project
Other
Energy and gas
infrastructure
upgrades
South
Cluster
Talnakh
Concentrator
Trans-Baikal Division
(Chita)
Nickel refining at Kola
MMC
Development of long-
term solutions to improve
performance and optimise the
product portfolio
In progress
Redesign
Pre-feasibility study
Sulphur Project
at Nadezhda Metallurgical
Plant
Construction of facilities to recover
sulphur dioxide from furnace gases
(sulphuric acid production and
neutralisation lines) and associated
infrastructure
38
39
Annual Report — 2023NornickelStrategic report
Sulphur Project 2.0: environmental
roadmap
Smelting shop
Nikel
(shut down in December 2020)
Copper refining line
Monchegorsk
(shut down in March 2021)
Kola
Division
Norilsk
Division
AT 71%1
AT 90%1
Reduction in SO2 emissions in the
border area in 2020
Reduction in SO2 emissions in the Kola Division in 2021, with
zero border emissions achieved
1 2 3 4 5 6 7
Norilsk
Nickel Plant
(shut down
in 2016)
Copper
Plant
Nadezhda
Metallurgical
Plant
2020
2021
2023–2024
In progress
Redesign, refinement of design
solutions
Optimisation of smelting
operations to reduce SO2
emissions in the Russia–Norway
border area
Complete shutdown of an
Launch of Sulphur Project 2.0 at
obsolete copper refining line on
Nadezhda Metallurgical Plant to
the Kola Peninsula
recover furnace gases
In December 2020, the obsolete
on 20 March 2021
Metallurgical shop shut down
smelting shop in Nikel was shut
down
2x
50%1
Reduction in SO2
emissions in Nikel
and Zapolyarny
7x
90%1
Reduction in total
SO2 emissions at
the Kola Division
facilities
45%1
Reduction in SO2
emissions in the
Norilsk Division
once the design
capacity is
reached
~2x
Launch of Sulphur Project 2.0 at
Copper Plant
up to
90%1
Reduction in SO2
emissions in the
Norilsk Division
10x
Sulphur Project 2.0: Norilsk
Division
Nadezhda Metallurgical Plant
Copper Plant
The Sulphur Project at Nadezhda
Metallurgical Plant includes
technological upgrades to recover SO2
from off-gases of the main smelting
units (flash smelting furnaces) by
converting them into sulphuric acid
and then neutralising it with limestone
to produce gypsum – practically non-
hazardous waste to be placed in a
gypsum storage facility.
2023 highlights:
• Construction of core and
infrastructure facilities under
the Sulphur Project at Nadezhda
Metallurgical Plant
• Installation and pre-commissioning
of process equipment
• Comprehensive testing of the first
process line started in October 2023,
first sulphur dioxide recovery
Sulphur Project 2.0
facilities at Nadezhda
Metallurgical Plant
are expected to ramp
up to design capacity
by the end of 2024
The Sulphur Project at Copper Plant
comprises the development and
deployment of technology solutions
to reduce SO2 emissions from Copper
Plant operations to the level specified
by applicable standards and includes
several interconnected initiatives. Amid
external restrictions, the Company is
taking comprehensive efforts to refine
the design solutions to incorporate
technology and equipment import
substitution options.
2023 highlights:
• Survey and engineering works,
refinement of design solutions
to meet the need for import
substitution of technology and
equipment for core facilities
• Positive opinions of the Main
Department of State Expertise
(Glavgosexpertiza) and State
Environmental Review Office
were secured for several facilities
following expert reviews of the
design documents
• Priority upgrades were made as part
of a retrofit project for the wet gas
cleaning facility
1 From a 2015 baseline.
40
41
Annual Report — 2023NornickelStrategic report South Cluster:
growing production volumes
Project summary
A large existing deposit with more than a
20-year reserve and resource life in the
bottom quartile of the PGM cost curve.
137 MLN T1
Ore reserves
Project status
• In 2023, positive opinion of Glavgosexpertiza was secured.
• Deployment of an automated control system (ACS) for
mine infrastructure facilities was completed.
• Energy infrastructure facilities are in the construction and
pre-commissioning phase.
• Construction and development of the underground mine
and related infrastructure are in progress.
Ramp-up to design capacity in 2023–2027, MLN T
4.2
~ 4.0
6.0-7.0
8.0-9.0
‘23
‘24–25
‘26
‘27
2027–2028 mining targets
Ore
Ni
Cu
9 mln t
13+ kt
20+ kt
PGMs
750–850 koz
1 Calculated to the JORC Code as at 1 January 2024.
42
Trans-Baikal Division
Upgrade of Talnakh Concentrator: Stage 3
1 2 3 4 5 6 7
8 MTPA
Capacity additions
4%–7%
Expected increase in metal
recovery
Project summary
Major capacity expansion
based on proven
technology to process
growing Talnakh ore
volumes and unlock
strategic optionality
of the South Cluster
development project.
Project status
• In 2023, the installation of metal
frames of ore dressing units and
ore feeders was 90% complete,
installation of supports for the
process equipment is in progress.
• Installation of reinforced concrete
and metal structures is in progress.
Foundations for process equipment
were built.
• Groundworks at power supply
and water recycling facilities were
completed.
• Plans for 2024 include completing
the installation of metal frames
and fences for ore dressing units
and ore feeders as well as the bulk
of process equipment installation
works.
Projected implementation
timeline1
Commissioning date is to be confirmed
as it depends on the projected ore
production schedule.
Project summary
One of the largest greenfield projects in
Russia’s mining industry. 50.01% owned
by Nornickel. Life of mine: 27 years.
Project status
• In 2023, a new major strategic project was launched
to upgrade the concentrator’s milling section; utilities
design documents for the mill construction project
were developed and approved.
• Plans for 2024 include commissioning the first growth
projects under the long-term strategy – magnetic
separation capacity additions and a gold concentrate
dehydration unit.
283 MLN T1
Ore reserves, grading:
Cu ~0.53% Fe ~18.67% Au ~0.66 g/t
USD 963 MLN
2023 EBITDA
15 MLN T
Production in 2023, with
0.63% Cu content
Production volumes
2023
2024E
Cu in
concentrate
kt
69
64-68
1 Subject to import substitution of flotation
equipment and the target delivery schedule being
met.
43
Annual Report — 2023NornickelStrategic report 1 2 3 4 5 6 7
Logistics Infrastructure Development
Programme
Programme rationale
Growing eastbound shipments of
construction equipment and raw
materials as the investment programme
is entering its active phase, and
growing westbound shipments of
intermediate products as projects
move to the post-investment phase
Accelerated pace
of production
equipment
upgrades
Expansion of Northern
Sea Route operations and
increased freight volumes for
major investment projects of
other players using the route
in the Russian Arctic
The Company owns Dudinka
Port, which is Taimyr’s main
cargo gateway with no
reasonable alternative
Energy infrastructure upgrade programme
Programme goal: renovate generation facilities and energy
grid infrastructure to ensure reliable supply of all types of
energy to consumers in the Norilsk Industrial District.
Gas and gas condensate
exploration, production, and
transportation
Energy infrastructure
Drilling of five new gas wells
at the Pelyatkinskoye gas
condensate field.
In 2023, the bulk of
construction and installation
works was completed as
part of retrofitting a gas
pipeline’s underwater
crossing of the Bolshaya
Kheta River.
In 2023, stage one
of retrofitting the
Tukhard–Messoyakha–
Yuzhno-Soleninskoye–
Severo-Soleninskoye
methanol pipeline was
completed.
In 2023, at the Severo-
Soleninskoye gas
condensate field,
construction and installation
of a booster compressor
station were completed,
with the station now at the
pre-commissioning stage.
Gas and gas
condensate fields
Pipeline
Dudinka
CHPP-2
Norilsk
CHPP-3
CHPP-1
Power network
Ust-Khantayskaya
HPP
Snezhnogorsk
CHPP – combined
heat and power plant
HPP – hydropower
plant
Igarka
Kureyskaya HPP
Svetlogorsk
Contribution to energy efficiency: reinforced emphasis on higher
output of the new generating units at СHPPs and HPPs and
comprehensive energy loss reduction throughout the electricity
value chain.
Combined heat and power plants
Revamps of Units Nos. 1
and 2 at NTEC’s CHPP-2.
The new Unit No. 1 was
commissioned.
The core equipment of
Unit No. 2 of CHPP-2 was
completely installed in
2023 and is scheduled for
commissioning in 2024.
Also in 2023, three tanks at
CHPP-1 and CHPP-2 were
installed, and the installation
of a tank at CHPP-3 is nearing
completion.
44
45
Annual Report — 2023NornickelStrategic report STAYING
STRONG
Group ore output, MLN T
24.6
7.2
25.4
7.0
26.4
7.2
17.5
16.6
18.4
19.2
15.0
15.0
‘21
‘22
‘23
Norilsk Division
(copper-nickel sulphide ores)
Kola Division
(copper-nickel sulphide ores)
Trans-Baikal Division
(gold-iron-copper ores)
BUSINESS
OVERVIEW
48
Mineral resource base
57
Operational
performance
64
Logistics and
distribution
74
Energy assets
76
Innovation and digital
technology
84
Financial
performance (MD&A)
Mineral resource base
The Group’s mineral resources and ore reserves
as at 1 January 2024
NORILSK AND KOLA DIVISIONS1
(copper-nickel sulphide ores)
TOTAL PROVEN AND PROBABLE RESERVES
TOTAL MEASURED AND INDICATED RESOURCES³
TOTAL INFERRED RESOURCES
NORILSK DIVISION
Proven and probable reserves
Proven reserves
Talnakh ore field, including:
•
rich
• cuprous
• disseminated
Norilsk-1 deposit (disseminated ore)
Probable reserves
Talnakh ore field, including:
•
rich
• cuprous
• disseminated
Norilsk-1 deposit (disseminated ore)
Measured and indicated resources
Talnakh ore field, including:
•
rich
• cuprous
• disseminated
Norilsk-1 deposit (disseminated ore)
Inferred resources
Talnakh ore field, including:
•
rich
• cuprous
• disseminated
Norilsk-1 deposit (disseminated ore)
KOLA DIVISION (DISSEMINATED ORE)
Proven and probable reserves
Proven ore reserves
Probable reserves
Measured and indicated resources
Inferred resources
Ore
mln t
1,267
1,869
888
1,203
709
676
71
76
529
32
494
389
75
63
252
105
1,569
1,429
124
136
1,169
140
750
741
43
55
644
9
64
33
32
300
138
Ni,
(%)
0.70
0.74
0.68
0.71
0.65
0.67
2.66
0.70
0.40
0.25
0.79
0.94
2.84
0.63
0.45
0.22
0.75
0.80
3.46
0.83
0.51
0.28
0.69
0.69
3.19
0.78
0.52
0.25
0.63
0.59
0.68
0.69
0.63
Cu,
(%)
1.26
1.22
1.14
1.31
1.28
1.33
3.26
2.36
0.92
0.33
1.35
1.64
3.80
2.18
0.86
0.26
1.39
1.50
4.46
2.74
1.04
0.34
1.30
1.31
5.31
2.37
0.95
0.34
0.32
0.25
0.39
0.34
0.31
Pd
(g/t)
3.26
3.22
2.87
3.43
3.25
3.25
6.19
5.96
2.47
3.11
3.69
3.98
7.37
5.18
2.67
2.64
3.82
3.87
8.79
7.03
2.97
3.39
3.40
3.39
10.32
6.08
2.71
3.62
0.03
0.03
0.03
0.05
0.04
Pt
(g/t)
0.88
0.89
0.76
0.93
0.87
0.85
1.27
1.53
0.70
1.20
1.01
1.01
1.49
1.34
0.78
1.04
1.05
1.02
1.81
1.85
0.84
1.33
0.90
0.89
2.15
1.55
0.75
1.50
0.02
0.02
0.02
0.03
0.02
1
In 2021, SRK Consulting (Russia) completed an estimate of mineral resources and ore reserves using its own methodology.
2 The six platinum group metals (PGMs) are platinum, palladium, rhodium, ruthenium, osmium, and iridium.
3 Proven and probable ore reserves are included in measured and indicated resources.
1 2 3 4 5 6 7
Metal grade
6PGM2
(g/t)
4.30
4.26
3.76
4.52
4.26
4.25
8.00
7.59
3.26
4.56
4.90
5.17
9.38
6.59
3.57
3.89
5.06
5.07
11.28
9.00
3.95
5.00
4.44
4.43
13.08
7.79
3.57
5.41
0.05
0.05
0.05
0.09
0.06
Au
(g/t)
0.18
0.18
0.17
0.19
0.19
0.19
0.19
0.37
0.16
0.13
0.19
0.21
0.28
0.32
0.16
0.11
0.21
0.22
0.32
0.43
0.19
0.14
0.20
0.20
0.56
0.37
0.16
0.50
0.01
0.01
0.01
0.02
0.01
5
Ni
(kt)
8,918
13,890
6,033
8,511
4,628
4,547
1,886
530
2,131
81
3,883
3,649
2,120
399
1,131
233
11,822
11,431
4,308
1,131
5,991
392
5,160
5,138
1,358
427
3,353
22
407
192
215
2,068
873
Cu
(kt)
15,946
22,875
10,157
15,740
9,081
8,975
2,313
1,786
4,876
106
6,658
6,386
2,836
1,382
2,168
272
Pd
(koz)
132,756
193,341
81,997
132,697
73,995
70,751
14,138
14,495
42,118
3,244
58,701
49,802
17,660
10,549
21,593
8,900
Pt
(koz)
35,955
53,345
21,796
35,917
19,828
18,571
2,888
3,727
11,955
1,257
16,089
12,594
3,576
2,720
6,298
3,495
Au
(koz)
7,236
11,001
4,814
7,217
4,217
4,083
439
902
2,741
134
3,000
2,617
681
652
1,284
383
21,866
192,869
53,044
10,829
21,391
5,541
3,725
12,126
474
9,727
9,697
2,265
1,292
6,139
30
206
82
124
1,010
430
177,601
35,124
30,757
111,720
15,268
81,839
80,826
14,137
10,652
56,036
1,013
59
30
29
472
158
47,077
7,254
8,087
31,736
5,967
21,692
21,272
2,953
2,713
15,606
420
39
22
17
302
104
10,179
1,272
1,870
7,036
650
4,762
4,720
766
653
3,301
41
18
9
9
172
52
Contained metal
6МПГ2
(koz)
175,044
256,067
107,284
174,945
97,050
92,291
18,273
18,457
55,561
4,759
77,895
64,775
22,489
13,433
28,853
13,121
255,236
232,754
45,111
39,389
148,253
22,482
107,007
105,491
17,931
13,658
73,902
1,516
99
53
46
831
277
48
49
Annual Report — 2023NornickelBusiness overview
ZABAYKALSKY DIVISION1
(gold-iron-copper ores)
Ore
mln t
Cu
(%)
Au
(g/t)
PROVEN AND PROBABLE RESERVES
283
0.53
0.66
MEASURED AND INDICATED
RESOURCES
INFERRED RESOURCES
303
44
0.59
0.6
0.65
0.4
Metal grade
Contained metal
Fe
(%)
Cu
(kt)
Au
(koz)
Ag
(koz)
Fe
(koz)
18.67
1,505
6,028
25,074
52,874
21.54
4.29
1,801
262
6,328
30,020
65,268
563
44,741
1,891
Ag
(g/t)
2.75
3.08
3.34
The Company conducts exploration in three regions of Russia – on the Taimyr and Kola
Peninsulas and in the Zabaykalsky Territory. Through exploration at new and existing mine
sites, Nornickel drives increases in its high-grade and cuprous ore reserves to support
future production from existing sites, viewing it as a key driver of its long-term growth.
>70 YEARS
>20 YEARS
of resources for sulfide
copper-nickel ores
of resources for gold-
iron-copper ores
at the current production rate.
Existing ore deposits
Deposits: Talnakhskoye and
Oktyabrskoye
Minerals: copper-nickel sulphide
ores.
Location: Krasnoyarsk Territory,
Norilsk. Geologically, the deposits
are part of the Talnakh Ore Cluster.
The Company has been developing the Talnakhskoye and Oktyabrskoye
deposits since the early 1960s, when multiple deposits of high-grade, cuprous,
and disseminated ores were discovered within the area. Nornickel is still well
supplied with non-ferrous and noble metals from the uniquely rich and vast
resource base of the Talnakh Ore Cluster deposits.
Reserves and resources of the Talnakhskoye and Oktyabrskoye
deposits
Mokulayevskoye
deposit
Western flank
of the Oktyabrskoye
deposit
Proven and
probable
reserves
Measured
and indicated
resources
Inferred resources
1,075 915 1,066
1,368 1,378 1,429
842
725
741
221.3
20.4
229.9
21.1
232.8
21.4
Oktyabrskoye
deposit
Talnakh
Talnakhskoye
deposit
155.7
15.0
145.9
14.2
157.1
15.4
8.0
7.6
8.2
10.9
11.3
11.4
Total mln t
of ore
6 PGM, Moz
Copper, mln t
Nickel, mln t
100.0
9.1
99.4
9.3
105.5
9.7
4.9
4.9
5.1
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
1 2 3 4 5 6 7
Deposit: Norilsk-1
Minerals: copper-nickel sulphide
ores.
Location: Krasnoyarsk Territory,
Norilsk. Geologically, the deposit
is part of the Norilsk Ore Cluster.
The Company has been developing Norilsk-1 since the 1930s, currently mining
disseminated ores from the deposit’s northern portion. In 2020, the resource
estimate for the deposit was updated against new permanent exploratory
standards for open-pit and underground mining.
Reserves and resources of the Norilsk-1 deposit
Norilsk
Proven and
probable
reserves
Measured
and indicated
resources
Inferred resources
Norilsk-1 deposit
143
144
137
147
143
140
12
12
9
Southern part
of the Norilsk-1 deposit
Chernogorskoye deposit
(copper-nickel ores)
Maslovskoye
deposit
23.5
0.5
23.4
0.5
22.5
0.5
18.9
0.4
18.8
0.4
17.9
0.4
0.3
0.3
0.3
0.4
0.4
0.4
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
2.0
0.04
0.03
2.2
0.05
0.04
1.5
0.03
0.02
Reserves and resources of the Kola Division
Total mln t
of ore
6 PGM, Moz
Copper, mln t
Nickel, mln t
Zapolyarny
Deposits: Kotselvaara,
Semiletka, Zhdanovskoye,
Zapolyarnoye, Bystrinskoye,
Tundrovoye, Sputnik, and
Verkhneye
Minerals: copper-nickel sulphide
ores.
Location: Murmansk Region,
Pechengsky District.
The deposits are located within a
25 km stretch between Nikel and
Zapolyarny and grouped into two
ore clusters: Western (Kotselvaara
and Semiletka deposits) and
Eastern (Zhdanovskoye,
Zapolyarnoye, Bystrinskoye,
Tundrovoye, Sputnik, and
Verkhneye deposits). The deposits
in the Western and Eastern
clusters have been developed since
the 1930s and 1960s, respectively.
Semiletka deposit
Sputnik
deposit
Kotselvaara deposit
Zhdanovskoye
deposit
Verkhneye
deposit
Tundrovoye
deposit
Zapolyarnoye
deposit
Proven and
probable
reserves
Measured
and indicated
resources
Bystrinskoye
deposit
Inferred resources
74
69
64
310 305 300
141
139
138
0.8
1.0
0.8
1.0
0.8
1.0
2.1
2.1
2.1
Total mln t
of ore
6 PGM, Moz
Copper, mln t
Nickel, mln t
0.3
0.4
0.9
0.3
0.4
0.9
0.3
0.4
0.9
0.1
0.2
0.5
0.1
0.2
0.4
0.1
0.2
0.4
50
51
1
In 2021, SRK Consulting (Russia) completed an estimate of mineral resources and ore reserves using its own
methodology.
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
Annual Report — 2023NornickelBusiness overview
Deposit: Bystrinskoye
Minerals: gold-iron-copper ores.
Location: Zabaykalsky Territory,
Gazimuro-Zavodsky Municipal
District.
Gazimursky Zavod
Bystrinskoye
deposit
Developed since 2017, the Bystrinskoye deposit currently comprises two
open-pit mines, Verkhne-Ildikansky and Bystrinsky-2, with two more – Medny
Chainik and Yuzhno-Rodstvenny – scheduled to come online in 2030.
Reserves and resources of the Bystrinskoye deposit1
Proven and
probable
reserves
Measured
and indicated
resources
Inferred resources
281
274 283
274
261
303
61
59
44
1.5
6.0
25.1
53
1.7
5.6
28.0
42
2.0
5.2
26.0
40
1.8
6.3
30.0
65
2.0
6.5
32.0
49
2.0
5.3
29.8
46
Total mln t
of ore
Copper, mln t
Gold, Moz
Silver, Moz
Iron, mln t
0.2
1.0
5.0
8.0
0.1
0.9
3.8
5.0
0.2
0.6
4.7
2.0
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
1 2 3 4 5 6 7
Existing non-metallic deposits
Deposit:
Mokulayevskoye
Deposit:
Ozero Lesnoye
Minerals: limestone.
Minerals: magmatic rock (basalts).
Location: Krasnoyarsk Territory,
Taimyrsky Dolgano-Nenetsky
Municipal District.
The deposit lies 10 km north-
west of the production sites of the
Oktyabrsky and Taimyrsky Mines.
The exploration and mining licence
for this limestone deposit was obtained
upon its discovery in 2017. In 2018,
the State Commission for Mineral
Reserves of the Russian Ministry
of Natural Resources reviewed
the feasibility study of permanent
exploratory standards and the reserve
statement for the deposit. It included
the deposit’s limestone reserves
into the State Register of Mineral
Reserves for potential use in cement
and lime production and in sulphuric
acid neutralisation. The deposit can
be developed through open-pit mining.
In 2022, an exploration campaign
was completed to look into dolomite
overburden within the Mokulayevskoye
limestone deposit. 1.2 Mcm of reserves
at the Verkhne-Mokulayevskoye
dolomite deposit were confirmed,
which will be used to construct
roads for a project to develop
the limestone deposit.
Its B + C1 + C2 balance reserves
of limestone are 135 Moz as
at 1 January 2024.
135 MLN T
Limestone balance reserves
of the Mokulayevskoye
deposit
Location: Krasnoyarsk Territory,
Norilsk.
Located 22 km to the north of Norilsk,
the deposit consists of two adjacent
licence areas (No. 1 and No. 2)
which share a common boundary.
The deposit is developed within
licence area No. 1. In 2017, Nornickel
obtained a survey, exploration,
and mining licence for the magmatic
basalt reserves at licence area No. 2.
In 2022, Nornickel updated its
reserve estimate for the deposit’s
two licence areas to 189.2 Mcm. In
2023 a technical project developed
to further develop the deposit,
enabling mining the two licence
areas as one open-pit mine to ensure
continuous production.
Deposit:
Gribanovskoye
Minerals: sand.
Location: Krasnoyarsk Territory,
Taimyrsky Dolgano-Nenetsky
Municipal District.
In 2020, Nornickel obtained
an exploration and mining licence upon
the discovery of the Gribanovskoye
deposit, located on the Yenisei River,
22.5 km south of Dudinka. Exploration
phase activities were completed,
and a pilot operation was started
at the deposit in 2020. A state
expert review of the feasibility
study of permanent conditions
and the reserve statement
was conducted in 2021.. Sand
production was launched in 2022.
Deposit:
Gorozubovskoye
Minerals: anhydrite.
Location: Krasnoyarsk Territory,
Norilsk.
In 2020, following further
examination of the deposit’s flanks
carried out as part of follow-up
exploration of the Gorozubovskoye
anhydrite deposit, the reserves
were reclassified from C2 to C1.
A certificate issued by the State
Commission for Mineral Reserves
confirmed the parameters of updated
standards. The deposit is currently
under development.
Deposit:
Kayerkanskoye
Minerals: quartzose sandstone, coal,
tuffaceous argillite.
Location: Krasnoyarsk Territory,
Norilsk.
Since 1967, the Kayerkanskoye
deposit has been supplying the needs
of the Company’s Polar Division plants
in materials used to produce fluxes
for concentration and metallurgical
processes at the metallurgical plants,
as well as to manufacture building
materials.
The deposit is currently under
development.
1
In 2021, CSA Global completed an estimate of the Trans-Baikal Division’s mineral resources in line
with the JORC Code based on an updated resource model, which reflects both the complexity and diversity
of the deposit’s ore types.
52
53
Annual Report — 2023NornickelBusiness overview
206.8 MLN T
B + C1 + C2 copper-nickel
ore reserves of the
Maslovskoye deposit
Balance reserves of the
Kolmozerskoye deposit
75 MLN T
of ore
844.2 KT
of lithium oxide
813 MLN T
B + C1 + C2 ore reserves of
the Bugdainskoye deposit,
including
600 KT
of molybdenum
Growth projects
Deposit:
Maslovskoye
Deposit:
Bugdainskoye
Minerals: copper-nickel sulphide ores.
Minerals: molybdenum and associated
elements.
Location: Krasnoyarsk Territory,
Norilsk. Geologically, the deposit is part
of the Norilsk Ore Cluster.
The Company obtained the licence
to explore and mine the Maslovskoye
deposit upon its discovery in 2015.
A feasibility study of permanent
exploratory standards and a reserve
statement for the Maslovskoye
deposit were approved by the State
Commission for Mineral Reserves,
and its copper-nickel ore reserves
were included into the State Register
of Mineral Reserves. B + C1 + C2 ore
reserves: 206.8 mln t.
Deposit:
Kolmozerskoye
Minerals: beryllium, niobium, lithium,
lithium ore, tantalum
Location: Murmansk Region, Lovozersky
District
In 2023, Polar Lithium, a joint venture
between Nornickel and ROSATOM,
obtained an exploration and mining
licence for the Kolmozerskoye deposit,
located within an area of federal
significance.
The balance (economic) reserves of
the deposit were confirmed through
exploration in 1960 at 75 mln t of ore
and 844.2 kt of lithium oxide. In 2023,
follow-up exploration was initiated at
the deposit to confirm the quality and
quantity of the minerals. The exploration
is expected to continue in 2024–2025.
Location: Zabaykalsky Territory,
Alexandrovo-Zavodsky Municipal
District.
The deposit’s mineral reserves,
comprising 813 mln t of В + С1 + С2
ore reserves, including 600 kt of
molybdenum, were included into the
State Register of Mineral Reserves
in 2007.
Deposit:
Bystrinsko-Shirinskoye
Minerals: gold ore. gold ore.
Location: Zabaykalsky Territory,
Gazimuro-Zavodsky Municipal District.
In 2023, based on an expert review,
further exploration was recommended
for the deposit’s flanks and deep levels
given the high complexity of the ore
body structures. The exploration will
be followed by a feasibility study and a
reserve statement.
Deposit:
western flank
of the Oktyabrskoye deposit
Minerals: copper-nickel sulphide ores.
Location: Krasnoyarsk Territory,
Norilsk. Geologically, the deposit
is part of the Talnakh Ore Cluster.
Licensed for prospecting in 2017,
the area shares a boundary
with the earlier licensed mining area
1 2 3 4 5 6 7
at the Oktyabrskoye deposit. In 2022
and 2023, exploration was carried
out on the Zapadny section, where
prospecting had earlier confirmed
the presence of copper-nickel ores,
suggesting potential for reserve
additions of 500 kt in high-grade
ores, 2,140 kt in cuprous ores,
and 546 kt in disseminated ores.
Plans for 2024 include conducting
laboratory tests and compiling a
final report to be followed by a
state expert review and a reserve
statement approval.
Deposit: flanks
of the Bystrinskoye deposit
Minerals: lode gold, iron ore, copper
ore.
Location: Zabaykalsky Territory,
Gazimuro-Zavodsky Municipal District.
Licensed for prospecting in 2021,
the area shares a boundary
with the earlier licensed exploration
and mining area at the Bystrinskoye
deposit. In 2022 and 2023, to assess
the potential for adding gold-iron-
copper ore and gold ore reserves
to its the mineral resource base,
the Company conducted prospecting
at the flanks of the Bystrinskoye
deposit but found no prospects.
Potential for reserve
additions at the Western
flank of the Oktyabrskoye
deposit:
500 KT
in high-grade ores
2,140 KT
in cuprous ores
546 KT
in disseminated ores
Promising areas and prospects
Area:
Yuzhno-Norilskaya
Area:
Mikchangdinskaya
Area:
Arylakhskaya
Minerals: copper-nickel sulphide ores.
Minerals: copper-nickel sulphide ores.
Minerals: copper-nickel sulphide ores.
Location: Krasnoyarsk Territory,
Taimyrsky Dolgano-Nenetsky Municipal
District.
Location: Krasnoyarsk Territory,
Taimyrsky Dolgano-Nenetsky
Municipal District.
Location: Krasnoyarsk Territory,
Taimyrsky Dolgano-Nenetsky Municipal
District.
In 2019, the Company
obtained exploration licences
for the Morongovsky and Yuzhno-
Yergalakhsky copper-nickel sulphide
ore prospects within the Yuzhno-
Norilskaya area. In 2021 and 2022,
prospecting of the areas was
completed, including prospecting
drilling. A preliminary estimate
of the resource potential is currently
being prepared. In 2023, an exploration
licence was obtained for the adjacent
Mezhdurechensky area, where further
prospecting is planned.
In 2019 and 2020, the Company
obtained exploration licences
for the Neralakhsky, Yuzhno-
Neralakhsky, Snezhny, Yuzhno-
lkensky, and Medvezhy prospects
within the Mikchangdinskaya area.
Prospecting drilling conducted
in 2021-2023 confirmed that the area
has a potential for containing copper-
nickel sulphide ores. In 2024, there
are plans to assess the effectiveness
of mining the identified disseminated
copper-nickel mineralisation before
continuing the development.
In 2020, the Company
obtained exploration licences
for the Yttakhsky, Samoyedsky,
and Mastakh-Salinsky prospects
within the Arylakhskaya area.
In 2021 and 2022, prospecting
drilling was completed at prospects
identified by geophysical
and geochemical prospecting
across areal zones. In 2024, after
the ongoing laboratory tests
are completed, a report on the area’s
potential and an opinion on further
prospecting will be prepared.
54
55
Annual Report — 2023NornickelBusiness overview
Area:
Alenuyskaya
Area:
Dogyinskaya
Area:
Shamyanskaya
Minerals: gold-copper porphyry ores.
Minerals: gold-copper and gold-silver
ores.
Minerals: gold ore, copper-
molybdenum ore.
Location: Zabaykalsky Territory,
Gazimuro-Zavodsky District.
Location: Zabaykalsky Territory,
Zabaykalsky District.
In 2021, the Company obtained
exploration licences for the Severo-
Dogyinsky and Yuzhno-Dogyinsky
prospects within the Dogyinskaya area.
In 2022 and 2023, prospecting drilling
was completed at prospects identified
by geophysical and geochemical
prospecting across areal zones.
In 2024, after the ongoing laboratory
tests are completed, a report
on the area’s potential and an opinion
on further prospecting will be prepared.
In 2021 and 2022, the Company obtained
exploration licences for the Zapadno-
Shamyansky, Tsentralno-Shamyansky,
and Vostochno-Shamyansky prospects
within the Shamyanskaya area. In 2023,
prospecting drilling was completed
at prospects identified by geophysical
and geochemical prospecting across
areal zones. In 2024, after the ongoing
laboratory tests are completed, a report
on the area’s potential and an opinion
on further prospecting will be prepared.
Location: Zabaykalsky Territory,
Alexandrovo-Zavodsky District.
In 2020, the Company obtained
exploration licences for the Severo-
Alenuysky and Yuzhno-Alenuysky
prospects within the Alenuyskaya
area. In 2023, prospecting drilling
was completed at the Tsentralno-
Alenuysky area. In 2024, after
the ongoing laboratory tests
are completed, a report on the area’s
potential and an opinion on further
prospecting will be prepared.
Area:
Mostovskaya
Minerals: gold-silver ores, copper ore,
molybdenum ore.
Location: Zabaykalsky Territory,
Mogochinsky District.
In 2020, the Company obtained
exploration licences for the Zapadno-
Mostovsky and Vostochno-Mostovsky
prospects within the Mostovskaya
area. In 2022, prospecting drilling
was completed at prospects identified
by geophysical and geochemical
prospecting across areal zones. In 2024,
after the ongoing laboratory tests
are completed, a report on the area’s
potential and an opinion on further
prospecting will be prepared.
1 2 3 4 5 6 7
Operational performance
The Company does not mine or manufacture its
products in areas of conflict and/or to finance
conflicts. Nornickel’s mining and production
comply with human rights policies.
The Group owns three production
assets: the Norilsk and Kola Divisions
mining copper-nickel sulphide
ores and the Trans-Baikal Division
producing gold-iron-copper ores.
The Norilsk Division is the Group’s
flagship asset, which includes its
two major production assets – the
Polar Division and Medvezhy Ruchey
(100% stake), as well as a number
of support enterprises. The Norilsk
Division’s assets are located on the
Russian Taimyr Peninsula – in the
Norilsk Industrial District (northern
part of the Krasnoyarsk Territory,
within the Arctic Circle) – and linked to
other regions by the Yenisei River, the
Northern Sea Route, and by air.
Located on the Kola Peninsula in the
Murmansk Region, the Kola Division
includes two Nornickel’s wholly owned
subsidiaries: Kola MMC, a production
company; and Norilsk Nickel Harjavalta.
Norilsk Nickel Harjavalta is located
in Harjavalta, Finland. Founded
in 1959, Harjavalta is now the only
nickel refinery in Finland and one
of the largest in Europe with a total
throughput capacity of up to 65 ktpa
of nickel products.
The Trans-Baikal Division is located
in the Zabaykalsky Territory
of Russia, 350 km away from Chita.
The Division includes Bystrinsky
GOK (via 50.01% held in GRK
Bystrinskoye), the construction
of which was started by Nornickel
in 2013 (put into commercial operation
in 2019). This asset includes open-pit
ore mining operations and a mining
and processing plant with full
infrastructure, including a power line,
a 227-km Borzya–Gazimursky Zavod
railway line (25% held by Nornickel
and 75% by the government),
as well as a rotation camp.
The Group also holds 50% in Polar
Lithium, which develops Kolmozerskoye
lithium deposit in the Murmansk Region.
The Kolmozerskoye deposit contains
about 24% of lithium balance (economic)
reserves in Russia. Polar Lithium will
produce lithium carbonate and/or
hydroxide used in the growing Li-ion
battery industry. Exploration is currently
underway at the site to prepare a
feasibility study of the deposit’s
permanent conditions, and the process
is being developed for the future
facilities – a mining and processing plant
and a chemical and metallurgical plant.
Norilsk
Division
• Polar Division
• Medvezhy Ruchey
Taimyr Peninsula
Kola
Division
• Kola MMC
Kola Peninsula,
Murmansk Region
• Norilsk Nickel Harjavalta
Finland,
Harjavalta
Trans-Baikal
Division
• Bystrinsky GOK
The Zabaykalsky Territory
of Russia, 350 km away
from Chita
Polar Lithium
• Kolmozerskoye lithium
deposit
Murmansk Region
56
57
Annual Report — 2023NornickelBusiness overview Production flow
1 2 3 4 5 6 7
Mining
Concentration
Smelting
Refining
PGM refining
Sales
Mines
(nickel sulphide
ore)
• Taimyrsky
• Oktyabrsky
• Komsomolsky
• Skalisty
• Zapolyarny
• Mayak
Severny Mine
(copper-nickel
sulphide ores)
Open pits
(copper-iron-gold
ore)
• Verkhne-
Ildikansky
• Bystrinsky-2
1
2
3
4
C
M
M
a
o
K
l
a
t
l
a
v
a
j
r
a
H
N
N
Norilsk
Concentrator
Talnakh
Concentrator
5
6
7
8
Zapolyarny
Concentrator
Sulphide
concentrate
Bystrinsky GOK
(gold) gravity
concentrates
Copper Plant
Copper Plant’s metallurgical
shop
Nadezhda
Metallurgical Plant
9
9
Chemical and metallurgical shop
12
12
Tolling by third-
party companies
t
c
u
d
o
r
p
g
n
i
r
a
e
b
-
a
t
e
M
l
,
e
t
t
a
m
r
e
p
p
o
C
Nickel tankhouse
Converter matte
Refining shop
10
11
Nickel refinery in Finland
Copper matte, nickel matte
Sulphide concentrate
Copper cake to
the Norilsk Division
Copper cake from
NN Harjavalta
Third-party
feedstock
1 — Cuprous and disseminated ores
7 — Metal-bearing product from Talnakh Concentrator
2 — Rich, cuprous and disseminated ores
8 — Nickel concentrate
3 — Disseminated ore
4 — Copper-iron-gold ore
5 — Copper concentrates
9 — Metal-bearing reverts from the metallurgical shop
10 — Chlorine leaching residuals, nickel sludge
11 — Crushed converter matte, nickel concentrate
6 — Nickel-pyrrhotite concentrate
12 — Precious metal concentrate
Sales Division
Products
• Nickel
• Palladium
• Copper
• Platinum
• Cobalt
• Rhodium
• Iridium
• Ruthenium
• Silver
• Gold
• Selenium
• Tellurium
• Sulphur
• Sodium sulphate
• Sodium chloride
• Saleable
concentrates
Products
Iron and copper
concentrates
i
n
o
s
v
D
i
i
k
s
l
i
r
o
N
i
i
i
n
o
s
v
D
a
o
K
l
l
i
a
k
a
B
-
s
n
a
r
T
i
n
o
s
v
D
i
i
58
59
Annual Report — 2023NornickelBusiness overview
Mining
Average metal content
in mined ore
For more details on ore
production, metal content, and
metal recovery percentage in our
concentration and metallurgical
operations, please see the Data
Book section on the Company
website.
The Norilsk and Kola Divisions mine
copper-nickel sulphide ores of three
grades: high-grade ores with a higher
content of non-ferrous and precious
metals; cuprous ores with a higher
copper content as compared to nickel;
and disseminated ores with a lower
content of all metals. The Trans-Baikal
Division mines gold-iron-copper ores
of the Bystrinskoye deposit.
The Norilsk Division develops the
Talnakhskoye and Oktyabrskoye
deposits through underground
mining at the Taimyrsky, Oktyabrsky,
Komsomolsky, Skalisty, and Mayak
Mines. The mines deploy slicing and
room-and-pillar methods with the
cut-and-fill system, with stopes
refilled with backfill mixtures.
The Norilsk-1 deposit is developed
by the Zapolyarny Mine of the Norilsk
Division through open-pit
and underground mining. Underground
mining is carried out through sublevel
caving using front ore passes and self-
propelled vehicles.
In 2023, total ore production
by the Norilsk Division was 19.2 mln
t, up 0.74 mln t y-o-y (up 4%). High-
grade ore output decreased by 9%
(–0.6 mln t), while production
of cuprous ores decreased by 11.0%
(–0.6 mln t). The decline in ore output
was caused by self-propelled diesel
machinery breakdowns, lack of spare
parts, and undersupply of new
mining equipment. Disseminated ore
production increased by 34% (+1.9 mln
t). The year-on-year increase in the
production of disseminated ores was
driven by higher ore production at the
Zapolyarny Mine, which only produces
disseminated ores, as was anticipated
in the mining option.
The Kola Division mines disseminated
ores at Kola MMC, which operates
four deposits: Zhdanovskoye,
Zapolyarnoye, Kotselvaara, and
Semiletka. Kola MMC uses various ore
mining methods. The Zhdanovskoye
and Zapolyarnoye deposits use
three mining methods: gravity caving
with front ore passes, sublevel
caving with room-and-pillar ore
removal, and room-and-pillar mining.
The Kotselvaara and Semiletka deposits
primarily use stoping from sublevel
drifts and sublevel caving. Room-and-
pillar short-hole and long-hole stoping
is also used on a limited scale.
In 2023, Kola MMC produced 7.2 mln t
of ore (up 3% y-o-y). The increase in
ore production (+0.2 mln t) was driven
by the concentrator tapping into off-
balance (sub-economic) ore reserves
with partial replacement of the output
from the Kaula-Kotselvaara mine due to
preparations for mothballing in 2024.
The Trans-Baikal Division mines gold-
iron-copper ores of the Bystrinskoye
deposit through open-pit mining
at the Verkhne-Ildikansky
and Bystrinsky-2 mines.
In 2023, total ore production by the
Trans-Baikal Division was 15.0 mln t,
virtually flat year-on-year.
Group ore output, MLN T
24.6
16.6
25.4
15.0
26.4
15.0
7.2
17.5
7.0
18.4
7.2
19.2
‘21
‘22
‘23
Kola Division
(copper-nickel sulphide ores)
Norilsk Division
(copper-nickel sulphide ores)
Trans-Baikal Division
(gold-iron-copper ores)
Norilsk Division
6.69
6.64
6.48
PGMs, g/t
Copper, %
Nickel, %
2.09
2.18
1.20
1.27
1.98
1.14
‘21
‘22
‘23
Kola Division
0.29
0.25
0.57
0.08
0.21
0.49
0.08
0.22
0.52
PGMs, g/t
Copper, %
Nickel, %
‘21
‘22
‘23
Trans-Baikal Division
0.63
0.57
0.50
Copper, %
‘21
‘22
‘23
1 2 3 4 5 6 7
Concentration
Concentrators
• Talnakh Concentrator, Norilsk
Division
• Norilsk Concentrator, Norilsk Division
• Zapolyarny Concentrator, Kola
Division
• Bystrinsky GOK, Trans-Baikal
Division
Talnakh Concentrator
processes high-grade, cuprous,
and disseminated ores from
the Oktyabrskoye and Talnakhskoye
deposits to produce nickel-
pyrrhotite and copper concentrates
as well as metal-bearing products.
Its key processing stages include
crushing, milling, flotation,
and thickening. In 2023, ore
processing volumes at Talnakh
Concentrator stayed flat at 10.7 mln t.
Norilsk Concentrator processes all
disseminated ores from the Norilsk-1
deposit, cuprous and disseminated
ores from the Oktyabrskoye
and Talnakhskoye deposits,
and some metal-bearing products
from Talnakh Concentrator to produce
nickel and copper concentrates.
Its key processing stages include
crushing, milling, flotation, gravity
concentration, and thickening.
In 2023, Norilsk Concentrator
increased its ore processing
to 8.4 mln t, up 0.7 mln t y-o-y.
The resulting thickened concentrates
from Talnakh and Norilsk
Concentrators are transported
via slurry pipelines to the metals
operations of the Norilsk Division
for further processing.
Zapolyarny Concentrator processes
disseminated ores from Kola MMC
deposits. The concentrator produces
nickel sulphide concentrate, which
is then sold via third parties or partially
shipped to the Norilsk Division
for further processing. In 2023,
the concentrator processed 7.3 mln t
of ore, up 0.3 mln t y-o-y due to an
increase in open-pit ore production.
Bystrinsky GOK processes ores from
the Bystrinskoye deposit into copper,
iron ore, and gold concentrates. Its key
processing stages include crushing,
milling, flotation, thickening, filtration,
and end product packaging. The
concentrator has two processing lines.
Copper and iron ore concentrates
are sold via third parties, while gold
concentrates are further processed
at the Norilsk Division. In 2023,
Bystrinsky GOK processed 11.0 mln t
of ore, up 0.4 mln t y-o-y.
Metals recovery in concentration, %
Division
NICKEL
Norilsk Division
Kola Division (Kola MMC)
COPPER
Norilsk Division
Kola Division (Kola MMC)
Trans-Baikal Division
PGMS
Norilsk Division
2021
2022
2023
84.3
67.7
95.5
76.8
86.9
85.3
67.4
96.3
73.7
88.1
84.7
66.5
96.2
73.1
88.8
85.6
85.8
85.3
Concentrators’ throughput,
MLN T
10.6
11.0
7.0
7.7
7.3
8.4
10.8
10.7
10.5
7.1
6.4
10.1
‘21
‘22
‘23
Bystrinsky GOK
Zapolyarny
Concentrator
Norilsk
Concentrator
Talnakh
Concentrator
10.7 MLN T
Ore processing at Talnakh
Concentrator in 2023
0.7 MLN T
Growth in ore processing
volumes at Norilsk
Concentrator in 2023
0.3 MLN T
Growth in ore processing
volumes at Zapolyarny
Concentrator in 2023
0.4 MLN T
Increase in ore processing
volumes at Bystrinsky GOK
from 2022
60
61
Annual Report — 2023NornickelBusiness overview Smelting and refining
Downstream
facilities
• Nadezhda Metallurgical Plant, Norilsk
Division
• Copper Plant, Norilsk Division
• Metallurgical shop of Copper Plant,
Norilsk Division
• Chemical and metallurgical shop, Kola
Division
• Refining shop, Kola Division
• Nickel tankhouse, Kola Division
• Refinery, Kola Division, Harjavalta
Production
chain
Norilsk Division
The produced nickel concentrates,
including pressure oxidised sulphide
concentrate1, secondary materials,
and metal-bearing feed from Kola
MMC, are fed into flash smelting
furnaces at Nadezhda Metallurgical
Plant. The matte produced in flash
smelting furnaces is then converted
into high-grade converter matte,
which is shipped to the Kola MMC.
Copper Plant processes all
of the copper concentrate from
the Norilsk Division’s concentrators,
metal-bearing feed from Kola MMC,
and copper cake from Norilsk Nickel
Harjavalta to obtain copper cathodes,
elemental sulphur, and sulphuric acid
for the operational needs of the Norilsk
Division. Copper Plant’s metallurgical
Metals recovery in smelting, %
Division
NICKEL
Norilsk Division3
Kola Division (Kola MMC)4
Kola Division (NN Harjavalta)4
shop recycles sludge from the copper
tankhouses of Copper Plant to produce
precious metal concentrates and
commercial selenium.
Kola Division (Kola MMC)
Kola MMC’s refining facilities in
Monchegorsk refine converter matte
from the Norilsk Division1. Supplied
to the converter matte separation
section, converter matte is crushed,
milled, and separated into copper
and nickel concentrates by flotation,
while part of the converter matte
after crushing is immediately sent
for processing to Norilsk Nickel
Harjavalta. The resulting copper
concentrate is sent to the Norilsk
Division’s Copper Plant. The nickel
concentrate flow is then separated,
with some of it after magnetic
separation and recovery of precious
metals sent to Norilsk Nickel
Harjavalta for further processing.
The remaining nickel concentrate
is processed at the roasting
and electric furnace sections
to produce tube furnace nickel
powder, anodes, and granulated
nickel alloy. Anodes are processed
using the conventional electrorefining
technology at Tankhouse 1 to produce
cathodes. Tube furnace nickel powder
is processed at Tankhouse 2 using
a new technology involving leaching
plus electrowinning to produce
cathodes. The granulated nickel alloy
is processed at the nickel carbonyl
section to produce pellets and powder.
The production of nickel cathodes
at Tankhouse 1 and Tankhouse 2
results in semi-finished products
with a high content of precious
metals. These semi-finished products
are processed at the chemical
and metallurgical shop to produce
precious metal concentrates.
The production of nickel cathodes
at Tankhouse 1 and Tankhouse
2 also generates primary cobalt
cake, which is used by the cobalt
section to produce saleable cobalt
concentrate and cobalt cathodes.
Kola Division (NN Harjavalta)
Norilsk Nickel Harjavalta uses sulphuric
acid leaching with high metal recovery
rates – above 98%. The refinery
processes nickel feedstock (matte
and crushed converter matte with
precious metals recovered from it)
supplied by Kola MMC and feedstocks
purchased from third parties (nickel
salts). Once leached, copper cake
is sent to the Norilsk Division or sold
to third parties, while purified nickel
solutions are sent for further processing
to produce nickel cathodes, nickel
briquettes, powder, salts, as well as salts
and solutions of cobalt.
Precious metals produced by Nornickel
are refined under tolling agreements by
third-party companies.
2021
2022
2023
94.4
98.3
98.1
95.1
98.4
97.8
94.9
98.5
98.3
1 2 3 4 5 6 7
Division
COPPER
Norilsk Division3
Kola Division (Kola MMC)4
Kola Division (NN Harjavalta)4
PGMS
Norilsk Division3
Kola Division (Kola MMC)4
Kola Division (NN Harjavalta)4
2021
2022
2023
95.1
99.5
99.8
96.5
92.9
99.9
95.4
99.6
99.8
96.6
97.8
99.9
95.6
99.2
99.8
96.7
98.1
99.9
Products
Production volumes by Bystrinsky GOK
Finished products by division
in 2023, %
Products
Ore processing (mln t)
2021
10.47
2022
10.60
2023
11.02
100
16
3
81
Copper (in copper concentrate, t)
67,798
67,240
68,958
65
35
Nickel Copper PGMS
Trans-Baikal Division
Kola Division
Norilsk Division
22.96
2,892
65.09
2023
208.6
208.2
425.4
2,692
664
Copper content in the concentrate (%)
Iron ore concentrate (kt)
Iron content in the concentrate (%)
22.87
2,582
63.72
22.97
2,545
64.68
Finished product output by the Group
Saleable metals
Nickel (kt)
including from own feed
Copper (kt)
Palladium (koz)
Platinum (koz)
The Group’s
saleable products
Norilsk Division:
• Copper cathodes
• Commercial sulphur
• Selenium
• Precious metals
Kola Division:
• Nickel cathodes and carbonyl
• Nickel sulphide concentrate
• Nickel matte
• Copper matte
2021
193.0
189.9
406.8
2,616
641
2022
219.0
218.7
433.0
2,790
651
• Cobalt cathodes, cobalt
concentrate
• Precious metals
• Sulphuric acid
Norilsk Nickel Harjavalta:
• Nickel salts, briquettes, cathodes,
powders, and solutions
• Copper cake
• Cobalt sulphate, cobalt solutions
Trans-Baikal Division:
• Iron ore concentrate
• Copper concentrate
1 Hydrometallurgical product.
2 The production and processing of own converter matte have been discontinued following the shutdown of the smelting shop in December 2020.
3 Feedstock to finished products.
4
In refining, converter matte to finished products.
1
62
63
Annual Report — 2023NornickelBusiness overview Logistics and distribution
Asset summary:
Sea fleet
• six heavy ice-class vessels
• a sea-class diesel port icebreaker
River fleet
• 622 vessels (188 self-propelled and 434 towed
vessels), including the active core fleet of 406
vessels
• a river-class diesel port icebreaker
Rail car and locomotive fleet
• 142 container flatcars
• two shunting vehicles
• one shunting tractor
Aircraft fleet
• 17 helicopters
• one plane
• Norilsk Airport
HARJAVALTA
(NN Harjavalta)
Murmansk Transport
Division
1 2 3 4 5 6 7
Polar Transport
Division
Norilsk Airport
Norilsk Avia
MURMANSK
Arkhangelsk Transport
Division
ARKHANGELSK
production flows (internal)
finished products for export and domestic market
flows from suppliers
Krasnoyarsk
Transportation Hub
NORILSK
DUDINKA
Yenisei River Shipping
Company
Lesosibirsk Port
LESOSIBIRSK
Krasnoyarsk River Port
KRASNOYARSK
Bystrinsky Transport
Division
64
65
Annual Report — 2023NornickelBusiness overview water on the Yenisei and the use of
fully loaded ships. The port’s unique
benefits:
• The only dedicated port on the
Yenisei River capable of handling
explosives with a storage option
• Offers year-round service (rail-
to-road and road-to-rail cargo
transshipment services in between
navigation periods)
• Has access to the federal Baikal
Highway (M53) via the Krasnoyarsk–
Yeniseisk Highway
• A railway to Achinsk links Lesosibirsk
to the Trans-Siberian Railway
Nornickel has a unique Arctic fleet capable of
breaking through Arctic ice up to 1.5 m thick
without icebreaker support, which enables
the Company to provide year-round dry and liquid
cargo shipping services between sea ports.
1 2 3 4 5 6 7
In 2023, Nornickel also shipped liquid
cargoes, including by the Company-
owned tanker, Yenisei. The transport
services involved export of gas
condensate from the Pelyatkinskoye
field, delivery of petroleum products
to the Norilsk Industrial District, and
commercial trips to other destinations.
In addition to sea transportation with its
own fleet of Arc7 heavy ice-class
vessels, the Company engages a fleet
of lower ice-class Arc4/Arc5 vessels
to transport additional cargoes for major
investment projects in Taimyr. These
sea vessels require icebreaker escort
in the Yenisei River, the Yenisei Bay,
The Arkhangelsk Transport Division
is responsible for smooth year-round
transshipment services for Nornickel’s
cargoes via the Arkhangelsk sea port,
which is conveniently linked to other
Russian and foreign regions by road,
air, and rail.
The Krasnoyarsk Transport Division
is responsible for the transportation
and forwarding of Nornickel’s
cargoes and for the carriage of
precious metal concentrates.
Nornickel-YRSС was established in
2019 to coordinate the operations
of the Krasnoyarsk and Lesosibirsk
ports and Yenisei River Shipping
Company, which operate a strictly
seasonal service due to the Yenisei
River freezing over in winter. When
ice flows pass, the ports are used
to transship Nornickel’s cargoes to
Dudinka, including crushed stone,
clinker, materials, equipment, and
socially significant cargoes (as part of
the Northern Deliveries programme).
Yenisei River Shipping Company
carries the bulk of Nornickel’s and
third-party cargoes shipped on the
Yenisei River. The company owns
over 600 river vessels, including
self-propelled and towed ones.
The fleet operates in the Yenisei,
Angara, Nizhnyaya Tunguska, and
Podkamennaya Tunguska Rivers, and
their largest tributaries.
Krasnoyarsk River Port is one of the
largest ports in the Yenisei basin. The
port transships cargoes delivered
by road, rail, and water. The port
has three operating areas – Yenisei,
Zlobino, and Peschanka.
Lesosibirsk Port is located 40 km
downstream of the point of confluence
of the Angara and Yenisei Rivers and
downstream of the hard-to-navigate
rapids. This secures the delivery of
Nornickel’s cargoes at times of low
and the Kara Sea between November
and May, with three icebreakers
providing this support.
Nornickel signed a long-term contract
with ROSATOM (valid until 2041
and renewable until 2051) to engage
a nuclear-powered Project 22220
icebreaker with a shaft power of about
60 MW to make sure the Company’s
strategic needs for icebreaker support
are fully covered.
The Company operates Dudinka
Port on the Taimyr Peninsula as well
as a fleet of port service vessels,
which includes towboats, motorboats,
a bunker barge, and a floating
crane. Dudinka Port is Taimyr’s main
cargo gateway with no reasonable
alternative. In addition, Dudinka
is the world’s only port that gets
flooded every year during the spring
thaw. From November to May, its water
area and the Yenisei River freeze over.
At this period, Dudinka Port handles
only sea vessels using icebreakers to
de-ice the berths and provide support
during manoeuvring and mooring
operations. In May and June, during
the flooding, the service is suspended
to be resumed for sea and river vessels
when ice flows pass and the water
level goes down.
The port transships cargoes
for the Norilsk Division and residents
of the Taimyr Peninsula. In summer,
river vessels deliver equipment
and materials (sand, round timber,
clinker, process materials, etc.)
for production needs from Krasnoyarsk
and Lesosibirsk. Converter matte
and metal products are shipped by sea
from Dudinka throughout the year.
To reduce its environmental footprint,
the Company implements programmes
aimed at reducing fuel consumption
and preventing contamination of
the Dudinka and Yenisei Rivers and
finances the release of fry.
Dry cargo transportation by
fleet, MLN T1
1.6
1.9
1.6
‘21
‘22
‘23
Liquid cargo shipments, KT1
266
186
251
213
129
165
101
57
38
‘21
‘22
‘23
Other liquid
cargoes
Gas
condensate
Cargo traffic at Dudinka
Port, MLN T
3.2
4.5
3.8
2.5
2.0
2.1
1.7
1.6
1.6
‘21
‘22
‘23
Via
the Yenisei
River
Via
the Northern
Sea Route
66
1
Includes a third-party fleet
67
Annual Report — 2023NornickelBusiness overview Nornickel’s own terminal
in Murmansk ensures year-round
transshipment of the Company’s
finished metal products for export,
acceptance of converter matte from
Dudinka and its shipment by rail to
the Kola Division, and shipment of semi-
finished products to Dudinka for further
processing at the Norilsk Division
facilities as well as of cargoes to meet
the needs of the Norilsk region. Along
with sea transportation, the Company’s
Murmansk-based operations include
transport and freight forwarding
services, cargo transshipment and
storage, as well as railway services
between Murmansk and Monchegorsk.
The Company also owns the airline
Norilsk Avia and Norilsk Airport,
offering air transportation services
to local communities across the Taimyr
Peninsula. The air carrier has its own
fleet of 17 helicopters and one aircraft
and provides air services related
to the operations of the Norilsk Nickel
Group, emergency medical flights,
search and rescue operations, and
local passenger services.
Norilsk Airport is the only transport
infrastructure facility that provides
year-round connections between the
Norilsk Industrial District and other
Russian regions.
Distribution
Cargo traffic at the Murmansk
terminal, MLN T
1.3
1.7
1.6
‘21
‘22
‘23
Nornickel’s products are listed
on the London Metal Exchange
and the Shanghai Futures Exchange.
In 2023, the Company supplied its
products to 28 countries around the
world, with Asia becoming the leading
consumer on total portfolio, although
Europe retained the considerable
share on some of the products. The
share of supplies to the Russian market
also increased.
Sales and distribution
strategy
As the world’s largest producer
of several metals, Nornickel sees
distribution as one of its core activities
alongside production. The key
objective of sales and distribution is
to ensure current and future liquidity
across the entire product range.
Nornickel places an emphasis on strong
positioning within the end markets for
its core products. The Group operates
its own global network of sales offices
in Russia, China, and Switzerland1.
The Company’s market reach enables
it to respond promptly to the needs of
these offices in terms of product quality
and services as well as to changes
in the market environment and other
external conditions affecting sales and
distribution. Nornickel favours direct
sales to industrial customers while also
engaging other professional market
participants willing to partner with the
Company to promote its products.
Nornickel has traditionally positioned
itself as a responsible supplier
promoting the sustainable development
of end markets for its core products.
Consumers can rely on Nornickel for
a stable supply of and unrestricted
access to consistent-quality products
in the volumes required by the market,
whatever the external challenges.
The Company’s nickel product
sales mix matches the global nickel
consumption mix, with the production
of stainless and specialty steels and
alloys as well as electroplating as its
main segments. At the same time,
the battery sector is increasingly
gaining importance.
28 COUNTRIES
getting supplies of
Company products in 2023
Revenue metal sales by
region, %
5
15
27
53
7
15
31
47
12
10
54
24
‘21
‘22
‘23
Russia and
the CIS
Americas
Asia
Europe
1 2 3 4 5 6 7
To capture the expected mid-
and long-term growth in nickel demand
from the battery sector, Nornickel
continues implementing a number
of initiatives to enhance and expand
its existing product range supporting
the battery supply chain. Growing
Indonesian nickel supply could limit
implementation of these initiatives.
Nevertheless, the competitive
advantages of Norilsk Nickel products,
such as their low carbon footprint
and full compliance with generally
accepted international environmental
standards, make it possible to reach
a certain presence in the market,
which traditionally pays attention to
the specified ESG metrics to ensure
sustainable EV production.
This is a major competitive advantage
of Nornickel’s products that have one
of the lowest carbon footprints and
fully meet all internationally recognized
environmental standards.
When it comes to nickel products,
the sales and distribution strategy
focuses on achieving a healthy
balance between supplies to stainless
steel producers and shipments to
other industries to secure a stable
position in the market.
Electric vehicles and batteries
are a priority segment in the nickel
consumption mix, as its growth
rates suggest that in the long term,
it can become the key source of
demand for high-grade nickel. Given
the Company’s wide range of low-
carbon nickel products, high reliability
of supply, own global sales platform,
and long-term experience of partnering
with automakers and chemical
companies, Nornickel sees itself as
a key element in the development
of the electric-vehicle market
and related value chains. The Company
is strongly focused on building long-
term relationships with key market
participants and considers various
forms of cooperation with the battery
sector players. Nornickel also conducts
research in battery recycling and works
on developing integrated solutions
for the future battery supply chain.
In the alloys, special steels and
electroplating sectors, the Company
seeks to maximise the use of its product
portfolio advantages and improve
product quality to boost its share in
high-quality, premium segments.
production sites to ensure that no sub-
par products are supplied to customers.
The handling of such products,
responses to customer complaints,
and corrective actions are governed
by documented procedures compliant
with ISO 9001:2015. With regard to the
procedure for acceptance of products
by consumers, the Company is guided
by the instruction on the procedure
for acceptance of products in terms of
quantity and quality, as well as by the
product supply contract.
The automotive industry
and the production of other process
catalysts, as well as the jewellery
and medical products industries
traditionally remain the key market
segments for platinum group metal
(PGM) products.
At the same time, Nornickel engages
in various initiatives to further promote
the use of palladium in various future
industrial applications.
As the world’s largest producer
of palladium, the Company keeps
favouring relations with big end
consumers and key participants
in PGM market to sustain strong
demand over the long term. Nornickel
is actively developing palladium
applications in potential new
technologies, including hydrogen
energy, new chemistry, solar energy,
and other areas to expand palladium
usage going forward.
Product sales
In 2023, Nornickel once again confirmed
its reputation as a reliable supplier of
high-quality products. The Company
prioritises the offering of high-
quality products and related services
to maximise customer satisfaction.
Procedures for managing substandard
products are in place at Nornickel
Every year, the Company conducts
customer satisfaction analysis in line
with ISO 9001 to get feedback from
its customers. Customer feedback
is reviewed and incorporated into
initiatives to improve product and
service quality. Nornickel is committed
to continuous improvement. The
integrated index of customer
satisfaction with the Company’s
products and services was fully in line
with our target for 2023.
Despite the geopolitical challenges and
related logistical issues, the Company
successfully met all its obligations to
customers in 2023, having never failed
to deliver on its commitments. This
solid performance was to a large extent
driven by Nornickel’s long-standing
policy of independent positioning
in the market and building direct
relationships with market players.
In 2023, we developed and set up
backup routes to ensure uninterrupted
product supplies to consumers. In
addition, during the year, Nornickel
retained considerable part of its
customers and established new
relationships in new markets, promptly
adding them to the Company’s
customer portfolio.
1 The US-based sales company was sold to an independent operator in 2023.
68
69
Annual Report — 2023NornickelBusiness overview Consumer personal
data protection
Protection of personal data at
Nornickel is governed by the
Regulations on Personal Data
Protection and the Personal Data
Processing Policy developed
in line with legal requirements.
Documents provided by consumers
and containing personal data,
among other information, are stored
in the information system in line
with applicable data protection
requirements.
In 2023, there were no data-related incidents
involving consumers personal data.
The following key documents
guide supply chain and
procurement management at
Nornickel:
Business Ethics Code
Human Rights Policy
Supplier Code of Conduct
Responsible Sourcing
Policy
Internal corporate
procurement standards
Procurement and responsible
supply chain
In the reporting year, the Company
also approved a programme to improve
procurement efficiency aimed at:
• optimising the costs of inventory,
works, and services (zero inflation)
• meeting working capital targets in
terms of inventory reduction
• increasing supplier competition
• increasing transparency and
strengthening control of
procurement procedures.
Procurement
Approach
to management
Nornickel takes a responsible approach
to attracting suppliers and consumers,
prioritising partners who comply with
applicable laws and regulations, ensure
safe working conditions, and care
for the environment. The Company
expects its suppliers to comply
with international best practices
and standards in sustainability and
environmental stewardship.
To mitigate operational and financial
risks and costs, reduce working
capital, and improve supply reliability
and cadence, the Company applies
procurement policies. As of the end
of 2023, there were 48 category
procurement policies in place, four of
which were updated during the year.
Nornickel engages with suppliers via open tender
procedures. Nornickel’s procurement system
focuses on timely and fully meeting the Company’s
needs for required materials and services of
specified quality and at an acceptable price.
1 2 3 4 5 6 7
Procurement process
Nornickel’s procurement process is
certified to international standards ISO
9001 and ISO 14001.
The Company procures over 40
aggregated purchasing categories,
from heavy industrial equipment to
food. In doing so, Nornickel provides
equal competitive opportunities for
large, medium, and small businesses
alike, guided by generally accepted
standards of fair business practices
and the principles of avoiding conflicts
of interest. To maximise procurement
effectiveness and transparency, the
Company’s procurement activities are
mostly centralised at its Head Office
through automated systems and
electronic trading platforms.
Depending on the budgeted cost,
procurement can follow a tendering,
simple, or simplified procedure. Based
on the materiality and parameters of
purchases, the qualification results and
the winning bidder in the procurement
process are approved by the collective
procurement body composed of
representatives from various functions
of Nornickel. The contract with the
winning bidder is signed in accordance
with the approved results of the
procurement procedure.
All details of the Group’s
centralised procurement
transactions are published on the
Company website.
In 2023, procurement by collective
bodies of the Head Office (tender
committee, tender commissions)
amounted to about RUB 99 billion.
As the Company aims to work with
reliable suppliers meeting their
obligations regarding delivery dates and
Nornickel has in place a hotline that can be used by
any stakeholder to report any violations.
the quantity and quality of products
supplied, during the procurement
procedure, all suppliers undergo
mandatory qualification screening
against formalised criteria and rules.
Nornickel gives preference to local
suppliers to provide social support
to its operating regions. Along with
To raise market awareness and
attract new suppliers, the automated
management system (SAP SRM)
was integrated with the TEK-Torg
electronic trading platform. Information
on procurement by the Company’s
Russian subsidiaries is also published
on the TEK-Torg platform.
Nornickel has in place a supplier relationship
management (SRM) system to drive seamless and
effective engagements with suppliers.
saving jobs, this policy supports
unique enterprises whose continuous
operation is essential to both the well-
being of their employees and the social
fabric of local communities.
Supplier engagement
Efficient and convenient
communications with suppliers at
Nornickel are enabled through its SRM
procurement management system
that gives suppliers anytime access
to information about the Company’s
procurement procedures. As at 2023-
end, over 11 thousand potential suppliers
were accredited in the system. The
Company also engages with original
equipment manufacturers (OEMs) to
accredit them on this e-platform.
Sign-up for the supplier relationship
management (SRM) system is free
of charge and does not impose any
obligations on users.
One of the channels used by the
Company to interact with suppliers
is the Suppliers section on its
website, containing key information
on the procurement principles and
procedures, planned needs, as well
as announcements and invitations to
participate in tenders.
Nornickel procurement specialists
are active members of the
professional community in their
respective purchasing categories,
attending industry exhibitions and
participating in conferences.
70
71
Annual Report — 2023NornickelBusiness overview The Company’s priority in driving
supplier engagement is to provide
robust feedback mechanisms, which
are also implemented, improved, and
enhanced in the supplier’s personal
account in SRM. Designed for
communicating with counterparties
during contract execution, the system
is continuously improved to optimise
and boost performance for all
users. Suppliers can get updates on
Nornickel’s procurement procedures
and opportunities by communicating
online with procurement teams in all
product categories in Nornickel’s SRM
procurement management system.
In their personal accounts,
counterparties can manage the
documents generated for contract
purposes, track work stages,
and exchange files and instant
messages with contract owners to
request clarifications and accelerate
communication. The service helps to
keep suppliers better informed about
contract execution progress while also
ensuring transparency of transactions
and significantly speeding up daily
communication between the parties.
All supply terms and conditions
are specified in the contracts or
agreements signed with suppliers.
The supplier’s personal account also
enables sign-up for other services, such
as electronic document management,
factoring, and dynamic discounting,
forging a stronger partnership.
Nornickel is also working on
expanding and supplementing the list
of services and consolidating them
in the personal account to develop
relationships with counterparties.
In addition, the Company has
implemented and is operating an
electronic document management
solution for suppliers to speed
up mutual settlements and add
transparency to the process.
If a counterparty faces
difficulties signing in or using
the system, they can seek
help and advice
via e-mail at
suppliers@nornik.ru
or by phone at
+7 (495) 783-00-45
ext. 6 (for calls within
Moscow)
8 (800) 700-59-11
ext. 6 (toll-free federal
number)
ESG factors
in the supply chain
Nornickel seeks to create a common
information space and set of values
with its suppliers. The Company
employs a proprietary multi-tier
system to evaluate its suppliers. The
criteria for review, evaluation, and
re-evaluation of external suppliers
have been determined in line with the
requirements of ISO 9001:2015 Quality
management systems. Nornickel
is particularly focused on building
relationships with suppliers whose
equipment is unique and critical for
the stable operation of the Company’s
production facilities.
In 2021, the Company approved its
Responsible Sourcing Policy covering
all of Nornickel’s activities related to
supplier selection in the supply chain
of raw materials, goods, and services.
The purpose of the Policy is to define
the approach to responsible sourcing
and declare standards and principles
to be followed by the Company and its
suppliers.
Together with the Policy, the
Company approved its Supplier Code
of Conduct, which encourages the
Company and its business partners to
introduce procedures for responsible
sourcing in accordance with ESG
requirements in all of Nornickel’s
supply chains.
Provisions of the Policy and the
Code are included in contracts with
suppliers: contract templates were
supplemented with a clause on ESG
compliance, which, in particular,
provides for access to Nornickel’s
Corporate Trust Line for feedback.
In 2021, the Company developed a due
diligence management system (DDMS)
for metallic mineral suppliers and
started rolling it out in stages. In the
reporting period, the system was rolled
out to all production assets. The DDMS
is focused on identifying potential
risks affecting the sustainability of
business processes in the mineral
supply chain while also minimising risks
of human rights violation, corruption,
and misinformation about minerals, as
well as risks relating to illegal control
of mines and support for non-state
armed groups.
1 2 3 4 5 6 7
The Due Diligence Guidance for
Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk
Areas and a five-step model for risk-
based due diligence on supply chains
by the Organisation for Economic
Co-operation and Development (OECD)
provided a methodological framework
for developing the DDMS.
The DDMS is driven by the following
requirements and recommendations:
• London Metal Exchange responsible
sourcing policy
• Standards and principles of leading
sustainable development initiatives
in the industry: ICMM, IRMA, RMI,
and JDDS, as well as the Chinese
Due Diligence Guidelines for
Responsible Mineral Supply Chains
of the China Chamber of Commerce
of Metals, Minerals & Chemicals
Importers & Exporters (CCCMC)
• Requirements of the Company’s
customers.
The Company’s plans and progress
towards building a responsible supply
chain are disclosed in the Responsible
Supply Chain Report, first published in
2023 to cover 2021 and 2022; in 2024,
the Responsible Supply Chain Report
will disclose 2023 data.
In 2023, Nornickel expanded the scope
of its ESG assessment of suppliers
to include all categories of suppliers,
including non-mineral suppliers. The
Company piloted an ESG assessment
survey of selected major suppliers
of goods, works, and services
using a Supplier Self-Assessment
Questionnaire (SSAQ) that included
sections on environmental, social, and
governance (ESG) issues. The purpose
was to measure their compliance with
the requirements of the Supplier Code
of Conduct.
According to the survey findings, the
average level of suppliers’ compliance
with the requirements is 68%. The
counterparties were sampled so that
90% were non-public companies,
which suggests that the 68%
compliance rate is a fairly strong ESG
performance. In 2024, the Company
plans to expand the counterparty
survey sample.
Given the risk of potential negative
environmental impact of cargoes
in transit, the Company’s master
agreement sets explicit requirements
for cargo packaging. Goods to
be shipped must meet the cargo
standards and requirements of
GOST 26653-2015 Preparation of
general cargoes for transportation
and GOST 15846-2002 Production
for transportation to the areas of
the Far North and similar regions.
Packaging, labelling, transportation,
and storage. Mandatory requirements
are established for the transport
containers and product packaging
that should ensure cargo integrity
during multiple transshipments and
transportation to the Far North.
Environmental impact is assessed
throughout the life cycle of procured
products: production, transportation,
storage, use, and disposal.
Nornickel requires its contractors
to have a functioning environmental
management system in place and to
ensure that all services and products
delivered by them comply with local
environmental laws.
72
73
Annual Report — 2023NornickelBusiness overview Energy assets
Nornickel operates its own energy
assets, which are managed
by the Energy Division and comprise
four natural gas fields, three combined
heat and power (CHP) plants, two
hydropower plants (Ust-Khantayskaya
HPP and Kureyskaya HPP),
as well as gas pipelines and power
lines. Electricity is generated from
renewable (hydropower) and non-
renewable (natural gas) sources.
Norilskgazprom, part of the Energy
Division, produces gas and gas
condensate from the Pelyatkinskoye,
Yuzhno-Soleninskoye, and Severo-
Soleninskoye gas condensate fields,
as well as the Messoyakhskoye gas field.
Norilsktransgaz transports natural
gas and gas condensate from fields
to consumers. The string length
of its gas and condensate pipelines
totals 1,653 km.
Taimyr Fuel Company is a strategic
supplier of light and heavy oil products
to the Far North, performing important
commercial and social functions,
as well as exporting gas condensate
to consumers. The company’s
operations span vast areas of Russia,
including the Norilsk Industrial District,
the cities of Krasnoyarsk and Dudinka,
the Murmansk Region, and
the Zabaykalsky Territory. Taimyr Fuel
Company supplies petroleum products
to mining, exploration, and transport
companies as well as municipal
enterprises. Its key consumers are the
Norilsk Nickel Group enterprises.
NTEC is an electricity and heat
generation, transmission
and distribution company. NTEC
supplies electricity, heat, and water
to Norilsk households, as well as to all
industrial and commercial
consumers in the Norilsk Industrial
District. The local electricity grid
is operationally and geographically
isolated from the national grid
(the Unified Energy System of Russia),
which means stricter reliability
requirements. NTEC operates five
generating facilities: three thermal
power plants with a total installed
capacity of 1,154 MW and two
hydropower plants with a total
installed capacity of 1,102 MW.
The total installed capacity of all
plants is 2,256 MW.
Natural gas production
2,720 MCM
Gas condensate production
85 KT
Share of renewables across
the Group
55%
Production volume1
Natural gas, MCM
2,927 2,816 2,720
‘21
‘22
‘23
Gas condensate, KT
102
91
85
1 2 3 4 5 6 7
Ust-Khantayskaya and Kureyskaya
HPPs are the Company’s two
renewable electricity generation
facilities. In 2023, the share of
renewables in total electricity
generation stood at 55% for the Group
and 58% for the Norilsk Industrial
District.
For the Kola and Trans-Baikal
Divisions, electricity is purchased in
the wholesale electricity and capacity
market (WECM). Harjavalta sources
electricity from the Finnish electricity
market.
The Company’s investment programme
includes a number of projects to boost
the share of hydropower, capture
fuel and energy savings, and improve
the reliability of energy and gas
supplies.
Start of production
1969
Gas reserves
245.4 BCM
Gas condensate reserves
4,527 KT
Power generation mix
in the Norilsk Industrial District
in 2023, %
52
56
58
48
44
42
Renewables
(hydropower)
Natural gas
‘21
‘22
‘23
The Company’s key projects to improve equipment reliability and energy
efficiency and to boost output include:
A contractor was selected through a tender
process to drill five wells at well pad No. 4 of the
Pelyatkinskoye gas condensate field.
The core generating equipment of Unit No. 2 at
NTEC’s CHPP-2 was installed. The new Unit No. 1 was
commissioned.
Construction and installation were completed
for a booster compressor station at the Severo-
Soleninskoye gas condensate field, with the station
now at the equipment setup and pre-commissioning
stage.
The bulk of construction and installation works was
completed as part of retrofitting a gas pipeline’s
underwater crossing of the Bolshaya Kheta River;
stage one of retrofitting the Tukhard–Messoyakha–
Yuzhno-Soleninskoye–Severo-Soleninskoye methanol
pipeline was completed.
As part of revamping NTEC’s emergency diesel
fuel tanks, three tanks at CHPP-1 and CHPP-2 were
installed, and the installation of a tank at CHPP-3 is
nearing completion.
As part of a project to upgrade the Norilsk, Kayerkan,
and Dudinka tank farms operated by Taimyr Fuel
Company, a construction and installation contractor
was selected through a tender process for the Norilsk
and Kayerkan tank farms.
Under the programme to build local treatment
facilities, LTF No. 94 was put into operation.
1 Gas condensate production figures include production losses (carryover with separation gas).
‘21
‘22
‘23
74
75
Annual Report — 2023NornickelBusiness overview Innovation and digital technology
1 2 3 4 5 6 7
Contribution to the UN
SDGs
Environmental protection technologies
Nornickel relies on innovative solutions such as
artificial intelligence (AI) and machine learning (ML) at
all stages of its production process, from exploration
to smelting, to streamline processes and make its
operations safer for people and the environment.
The Company’s goal is not only
about research, development,
and deployment of promising
technologies but also about building
the Company’s own R&D capabilities,
shaping internal policies, and fostering
a culture of high-tech developments.
Gipronickel Institute, which makes part
of the Group and is one of Russia’s
largest research and design centres for
mining, concentration, and metallurgy,
is Nornickel’s core R&D platform.
In 2023, its continuous converting
technology was patented in South
Africa, and Roast–Leach–Electrowin
technology in Kazakhstan and China.
In 2023,
RUB 7.6 BN
were spent on the
implementation of projects
in the field of IT, innovation
and digitalization.
Industrial safety technology
Video analytics
To maintain a safety culture at its
operations, Nornickel is actively
adopting solutions that use AI-enabled
video analytics. The Company
operates a proprietary solution to
monitor the use of personal protective
equipment (PPE) by operational staff.
The AI-enabled solution continuously
monitors workwear usage on the shop
floor, including safety helmets with
chin straps buckled up, safety goggles,
and other protective equipment.
Specialists are also training the
system to monitor and record the use
of a safety harness when working at
height. If an employee violates the
rules for using personal protective
equipment, the system will generate
a violation card and send it to the
line manager, who will review each
case and make a decision. The card is
then submitted to a coordinator from
the Occupational Health and Safety
Department for final review. Once the
decision is approved, the department
head conducts a behavioural safety
audit of the employee.
New safety incident detection
models were also added (detecting
unauthorised access to hazardous
areas, detecting open fire, etc.) in
2022, and the solution was integrated
with personnel tracking and face
recognition modules. During the same
year, the Norilsk Division launched pilot
tests of a video analytics system at its
industrial facilities. In 2023, Nornickel
launched a PPE enforcement system at
Bystrinsky GOK.
Emergency
monitoring
A prototype of a system to monitor
the areas under gantry cranes was
successfully launched in 2023. The
system projects a laser beam to
illuminate a hazard warning zone under
the crane so as to increase operational
safety and monitor the presence of
people around load handling areas.
The Company is planning to further roll
out the system to 15 cranes in Trans-
Baikal Division.
This video analytics system
detects
>89%
of PPE usage violations
while its employee
identification accuracy
exceeds
>70%
Reduction in emissions
In 2023, Nornickel and subsidiary IT
company Norsoft launched a joint
project to develop an automated
emissions accounting system enabled
by digital process twins. The project
has been included into the list of
approved projects for substituting
Russian alternatives for foreign
software and into the development
roadmap for the New Industrial
Software high-tech area. On top of
this, the project is on the priority list
and is expected to bring significant
environmental benefits.
In 2023, an initiative to improve the
environmental conditions and reduce
air pollutant emissions was launched
as part of the Sulphur Project at
Nadezhda Metallurgical Plant. The
project provides for sulphur dioxide
recovery into sulphuric acid to be then
neutralised with limestone into gypsum
cake, which will be stored in a gypsum
storage facility.
The Company continues its research
into producing artificial anhydrite
from gypsum to be used in solidifying
backfill mixtures in mines. The solution
will eliminate the continuous expansion
of the gypsum storage facility and
phase out the production of natural
anhydrite.
The Company is considering the
launch of a WGCP1 Retrofit project
to boost the performance of the wet
gas cleaning plant’s pulp filtration
section at Copper Plant. Currently,
Vanyukov furnace off-gases undergo
consecutive wet cleaning from dust
and then are cooled, while pulp is
filtered, with the cake returned to the
melting stage.
Tech-enabled construction
Construction
management platform
Laser
scanning-based analytics
Nornickel is testing a digital platform
that provides a common data
environment for specific construction
projects based on updatable digital
models of buildings and structures.
Norilsk renovation projects have been
selected for piloting the platform.
Although construction is not the
Company’s core business, its
investment programme includes the
construction of industrial facilities,
homes, and social infrastructure.
Digital technologies enable monitoring
of funds allocated for these initiatives,
accelerating data exchange between
contributors, and identify design errors
and deviations from design.
This is one of the most promising
technologies for digital control over
construction and installation. Ground-
based LiDAR scanning is used at each
construction stage to automatically
detect deviations between the
construction project and its initial 3D
model.
The solution is used in the Norilsk
renovation programme as well
as at mining facilities of the Polar
Division.
76
77
1 WGCP – wet gas cleaning plant.
Annual Report — 2023NornickelBusiness overview The Company’s technology
to recover precious metals
from converter matte has
reduced work-in-progress
PGM volumes
BY 1.8 TONNES
+40 TONNES
in incremental demand for
palladium projected by
2030 due to new Palladium
Centre products
3X
Increase in activity of
catalysts for electrolysers
with 30% of iridium
substituted by palladium
as compared to existing
commercial alternatives
Technology in operations
Geological data
analysis
Palladium
Centre
The Company is working on creating
a single digital platform that will
support end-to-end automation of
core business processes at mining
enterprises: exploration, drilling,
sampling, mining, rock bolting,
etc. Such a platform will ensure
that high-quality reliable process
data are accessible at all levels of
the Company’s management, and
accordingly, enable faster and better
management decision making.
The project’s IT product was presented
at the 19th Mining Forum and the 2023
MINEX Russia forum, winning a finalist
diploma in the MineDigital category.
PGM production
technologies
The Company has developed a
technology to recover precious metals
from converter matte sent to the
Harjavalta nickel refinery. The crushed
converter matte is replaced with a
non-magnetic fraction from the first
milling stage to reduce the amount of
WIP PGMs by 1.8 tonnes.
Nornickel has also designed solutions
to produce refined platinum, palladium,
gold, and silver. The Kola Division is
planning to pilot a precious metals
refining technology section, which
will enable the Company to build
in-house capabilities in this area and
update core process parameters
and parameters of product and
semi-product quality using actual
concentrates with a view to launch
in-house refining projects at later
stages. The technologies provide for
annual processing of 36 tonnes of
concentrate and production of at least
3 tonnes of platinum and at least 12
tonnes of palladium powder.
To date, the Centre’s portfolio
comprises more than 20 new palladium
products offered through projects at
various development stages:
Hydrogen power. A range of Nornickel
products under development is meant
to support hydrogen energy, where
palladium can be used at every step
of the production chain: hydrogen
extraction from water, production from
gas, transportation, and directly in
fuel cells. The Company has obtained
catalyst samples for electrolysers with
30% of iridium substituted by palladium,
which offer a threefold increase in
activity compared to existing commercial
alternatives. Another innovation was
synthesised catalyst samples for fuel
cells with 25% of platinum substituted
by palladium, which offer over double
the activity of existing commercial
alternatives (the plan is to substitute up
to 80%). Catalyst samples are currently
being tested by respected foreign
partners, after which they will be sent
to end consumers.
New chemistry. The Company is
working on a range of products for
new chemistry technologies, such as
catalysts for glycolic acid synthesis for
cosmetology, FDCA for biodegradable
packaging, and elements for water
disinfection. The samples are expected
to move to customer testing in 2024.
Solar power. Research in this area is
focused on developing a prototype
of a new thin-film solar cell using
palladium chalcogenide, which
will improve efficiency and reduce
cost compared to existing silicon-,
tellurium-, or copper-based cells.
The Company also joined efforts
with research institutes for
fundamental research to unlock the
1 2 3 4 5 6 7
potential of palladium in longer-term
applications, such as superconductors,
supercapacitors, microelectronics
and spintronics devices, battery
technology, and medical devices.
Nornickel is actively building a partner
network of experts and customers,
conducting R&D jointly with institutes
and laboratories in Russia and beyond,
and engaging closely with potential
customers in the Asian market to
accelerate the commercialisation of
new products.
More than 100 new palladium-
containing materials are planned to be
developed in the next 5 to 10 years.
The Company estimates that new
uses for palladium will add at least 40
tonnes of demand for the metal by
2030.
Production management
optimisation
As part of diagnosing the current
production flow and building a project
portfolio, the Company has decided to
stabilise the parameters of the initial
melting charge. To this end, Nornickel
has developed digital assistants
which make recommendations on the
process flow.
In 2023, the Company launched
a project for streamlining the
management of concentrate
charge blending at the concentrate
dewatering and storing shop (CDSS)
and the flash smelting furnace (FSF).
This will optimise the pyrometallurgical
process through stabilising the nickel
sulphide concentrate charge while
reducing the standard deviation of the
total amount of non-ferrous metals in
the FSF’s matte from target levels.
The effectiveness of this approach
has been confirmed by pilot tests
completed so far. The Company is
planning to include expectations
of improved process parameters
into the efficiency improvement
programme. The technical effect of
these transformations will be tracked
during the first half of 2024, and
then the solutions will be put into
commercial operation with support
from contractors.
Machinery video
monitoring
In 2023, the Company developed a
software suite to monitor the operation
of mining machinery, including
autonomous haul trucks, load-haul-
dumpers, mine cars, tipping devices,
and self-propelled drilling rigs. The
suite accurately tracks machinery
movements and load through video
images and offers video tagging
functionality to speed up the
acquisition of data sets and leverage
the expertise of mine experts to
improve accuracy. At the time of writing
this Report, the suite was in the testing
stage. Four prototypes have already
been developed, slated for testing in
the Norilsk Division’s mines in 2024.
Ore Flow project
The Ore Flow project enabled by
computer vision and launched
in the Kola Division unlocks new
opportunities for better management
of underground rail transport and
ore logistics. The system detects
underload or ore buildup, analyses
fractions and ore water content.
Ore quality can be assessed using
infrared light, enabling video analysis
even in dust conditions. The system
also locates individual pieces of
machinery in a mine by monitoring
loading and unloading locations and
transport routes.
at the time of writing this Report. The
system is planned to be further rolled
out to other mines of the Norilsk Division.
Improving
drilling quality
In 2023, the Company, continued the
automation of drilling preparations
through a solution based on visual
navigation and digital beacons. At the
first stage, the application displays
tips for the operator by projecting a
laser beam, ensuring better drilling
and reducing drilling problems. Going
forward, we are planning to develop
an in-house solution, which could be
automated and rolled out across our
entire fleet of self-propelled drilling
rigs regardless of their manufacturer.
The system’s tests confirmed that
machinery tracking is highly accurate.
Equipment scale models were later
built, a self-propelled drilling rig was
inspected to connect the equipment
for correct operation, and terms of
reference were prepared to develop a
software and hardware suite prototype.
The development of the prototype and
two equipment sets is expected to
be completed before April 2024, with
pilot tests slated for April–May. The
decision on commercial operation will
be taken based on the performance
during the test period.
Modelling underground
blasting
In 2023, the Company launched a
project to model underground drilling,
aimed at reducing the share of rock
dilution with waste rock and concrete
during drilling and cleaning as well as
cutting drilling and blasting costs.
All detection models built for the system
make part of an integrated solution and
were being piloted at the Severny Mine
Computer modelling, with rock
parameters factored in, enables
highly accurate predictions of
78
79
Annual Report — 2023NornickelBusiness overview blasting outcomes while optimising
target drilling and blasting patterns.
At the time of writing this Report,
the Company selected the optimal
software solution, assessed the
technical and economic benefits from
its adoption, and collected data for
modelling and conducting full-scale
pilot tests, slated for the first half
of 2024.
The Company plans to validate that
the model’s performance meets the
technical and economic targets and
roll it out across all mines of the Polar
Division before the end of the year.
Modelling
open-pit blasting
In 2022, the Company launched a
project that models rock displacement
during open-pit blasting. This
solution will enable more accurate
ore displacement predictions while
reducing metal losses when recovering
the rock.
Currently, the model enables ore
displacement predictions using
both actual data on drilled wells and
explosives used, as well as target values,
to select the optimal design of the block
to be blasted. Six blasts were carried out
based on model data in 2023, and the
technical impact was verified.
The Company has already launched
the process of procuring software for
a full-scale rollout of the solution at
Bystrinsky GOK. During 2024, Nornickel
is planning to train staff on the new
functionality.
Concentration
optimisation
Research was conducted and
preparations are underway for
deploying wet magnetic separation
for enhanced recovery of magnetic
pyrrhotite from tailings of the
Company’s concentrators. At the time
of writing this Report, the initiative’s
economic feasibility was confirmed,
with the expected impacts of an
increase in nickel output by 1.5 kt and
PGMs by 602 kg over three years.
Norilsk Concentrator piloted a
flotation plant to further deploy
ejector flotation machines and boost
throughput roughly by 100–150 ktpa
of ore.
Research was conducted on
ionometric mapping and optimisation
of pulp ionic content during
flotation of copper-nickel ores at
the Company’s concentrators.
It was established that reagent
consumption can be effectively
regulated by using ion-selective
electrodes. Tests will be continued
to validate the result on winter pulps;
in case of success, the Company
expects a 0.5% increase in the
recovery of nickel, copper, and PGMs
into bulk concentrate at Talnakh
Concentrator.
A smart assistant for flotation
machine operators went on
stream at Norilsk Concentrator’s
copper circuit. The system uses
modelling algorithms leveraging
intelligent analysis methods and
makes recommendations based
on statistics and the expertise of
flotation machine operators, leaving
specialists on the ground to make
the final decision. The system’s
deployment was launched in 2020.
Experts from Norilsk Concentrator
and developers of the system worked
through all possible scenarios to
rule out almost all errors in the
assistant’s operation. After pilot
tests, the system is expected to work
fully automatically. The Company is
considering adding a video analytics
module to the solution going forward.
In 2023, the Company launched a
charge blending optimisation project
to stabilise concentrator processes.
Tests have shown that predictions
based on actual feedstock data,
the current process status, and
the concentrator’s performance
with different types of ore reduce
productivity and recovery losses.
A preliminary predictive model
has been developed so far, with
a comprehensive diagnostic of
the concentration stage and
development of a full-scale predictive
model slated for the first half of
2024 to support pilot tests in a live
environment.
Additive manufacturing
The Company is making great strides in
developing 3D-based additive solutions.
In 2023, Nornickel used 3D printing to
create and install a large, wear-resistant
cast iron spiral chamber on a pump at
Nadezhda Metallurgical Plant. This part
is a critical device for lifting concentrate
It allows for the creation of items
with unique properties, significantly
increasing metal use efficiency and
enhancing the competitiveness of end
products.
Demand for powder materials is
growing on the back of rapid advances
in 3D printing, die casting, hot isostatic
pressing, and coating application.
Powders can also be used in other
innovative developments, from new
nickel- and cobalt-based heat-
resistant alloys to catalytic materials.
The first prototypes of powders from
nickel alloys for use in 3D printing
and hot pressing were obtained by
Nornickel back in 2022. In 2023, the
Company conducted benchmarking
studies and is currently piloting their
commercial operation using a 3D
printer.
Expected impact from
deploying wet magnetic
separation technology:
incremental production of
nickel
at 1.5 KT
and PGMs
at 602 KG
Additive manufacturing
reduces the lead times to
manufacture and deliver
equipment and components
by 50%
1 2 3 4 5 6 7
from the ore-settling tank. Typically,
replacing this chamber would take
around a year, including the time it takes
to create its detailed drawings. However,
additive technologies have eliminated
this first step through scanning the part
and creating its 3D model.
Additive manufacturing reduces the
lead times to manufacture and deliver
equipment and components by 50%.
Additionally, it enables quick changes
and the creation of objects of any
shape. Three-dimensional printing can
also prevent unscheduled downtime in
production and facilitate partial import
substitution.
Turbidity
monitoring system
Nornickel has introduced a new
proprietary technology at Copper Plant
– a video analytics system to monitor
turbidity of water after ore processing.
The ore mixed with water into slurry
is sent from the concentrator to the
smelter’s drying shop, where water is
separated from the copper concentrate
in thickeners. The water discharged
from the thickeners must be clear, with
no traces of concentrate. The turbidity
monitoring system helps to control this.
The process is monitored by video
cameras. The data from the cameras
are processed by AI-enabled video
analytics software. If the drains are too
turbid, the system notifies the operator
and records the violation. This reduces
the loss of copper concentrate.
Powder metallurgy
Powder metallurgy is an economically
beneficial alternative to mechanical
processing of various metal parts.
80
81
Annual Report — 2023NornickelBusiness overview 20%
Increase in the number of
monitored IT facilities over
the year
>3 MLN
behavioural metrics are
collected and analysed 24/7
Digital projects
Deployment of innovative tools is a critical lever
to improve Nornickel’s business processes and workplace
safety. Nornickel has been continuously working towards
securing technological sovereignty and developing
IT initiatives to support its key business segments.
In 2023, the Company updated its IT
strategy. Its key strategic ambitions
include reliability and availability, agility
and technological sovereignty, while
the strategic objectives encompass
driving faster decision making, building
the necessary capabilities, and
ensuring the smooth operation of the
Company’s IT landscape during the
transformation.
Spending on digital projects totalled
RUB 7.6 billion in 2023.
IT infrastructure
monitoring
By continuously monitoring key
performance metrics, help desks
can timely locate issues, prevent
information system downtime, and
identify opportunities to boost IT
landscape performance.
In 2023, the Company continued to
develop its corporate IT monitoring
function. Over the last year, the number
of monitored IT facilities increased by
20% to more than 20 thousand. Today,
over 3 million behavioural metrics are
collected and analysed on a 24/7 basis,
enabling the Company to be more
proactive and promptly make informed
decisions on IT service management.
Data Lake
ecosystem
One of the core elements in the
corporate digital landscape is the Data
Lake, a scalable platform to digitise
operating and business processes,
which, in the longer run, will enable
storing and analysing data for the
entire Group while driving synergies by
enriching data in external systems with
new data. Integration data flows from
Nornickel’s core production sites have
already been incorporated into the
ecosystem.
A proprietary framework has been
developed for the ecosystem for
smoother connection and processing
of data from equipment sensors based
on advanced open source solutions.
Existing solutions allow integrating
machine-learning models, generating
analytical reports, customising
calculations, and running basic quality
checks of metrics without developing
additional standalone components.
In 2023, Nornickel successfully rolled
out the Data Platform PROD landscape
based on Russian Arenadata software,
which supports a multi-landscape
ecosystem. A geo-distributed Data
Lake infrastructure is slated to be rolled
out across production sites in 2024.
1 2 3 4 5 6 7
Enhancing corporate
business processes
A total 38 Group enterprises have
adopted electronic document
management. Introduction of algorithms
and robotic process automation of
accounting function tasks have boosted
the effectiveness of certain processes
by as much as 13 times. As part of
implementing electronic document
management for the HR function, the
system was redesigned to be hosted on
the domestic Directum RX platform.
A pilot project to digitise contracts has
reduced document signing times, with
a record turnaround of just 30 minutes
achieved in one of the tests.
Further development of digital treasury
Dynamic discounting tools launched in
2023 were used to run 14 tenders for
a total of over RUB 300 million during
the year. Nornickel has been actively
developing its monitoring and analytics
landscape to increase process maturity.
The necessary enablers have been put
in place for the deployment and rollout
of a full-cycle management digital
platform, including monitoring and
forecasting tools.
Towards the end of 2023, as part of
expanding the functionality offered
by the supplier online account,
the Company introduced dynamic
discounting feature to support contract
negotiation and execution processes,
with the coverage of key suppliers
expanded by more than 1 thousand
companies operating across the
country, or over 30% of the total number
of Nornickel suppliers.
In 2023, the Company migrated to a
systematic tax monitoring platform to
facilitate dispute resolution between
the Company and tax authorities. At the
time of writing this Report, over 97% of
the Group’s sales were monitored by tax
authorities in real time. The Company
is further increasing the platform’s
coverage of Group enterprises,
improving its interface, enhancing data
quality, and accelerating data sharing
while driving integration with information
systems of various government
authorities.
Nornickel is a top innovation-driven
counterparty demonstrating the
maximum level of disclosure and
cooperation with the Federal Tax Service
of Russia, which already results in
preferences granted to it by regulatory
authorities.
38 GROUP
ENTERPRISES
have adopted electronic
document management
14 TENDERS
run using digital treasury
tools launched in 2023
>97%
of the Group’s sales
monitored by tax authorities
in real time using a
systematic tax monitoring
platform
82
83
Annual Report — 2023NornickelBusiness overview Financial performance (MD&A)
FY2023
HIGHLIGHTS
• Consolidated revenue decreased
15% y-o-y amounting to USD 14.4
billion following the decline of prices
for nickel, copper, palladium and
rhodium. The Company sold all metal
volumes produced in 2023 as well as
a part of stock accumulated in 2022;
• EBITDA decreased 21% y-o-y to USD
6.9 billion owing to lower revenue
while EBITDA margin remained at
healthy 48%;
• Cash operating costs decreased
19% y-o-y to USD 5.3 billion
mostly driven by the weakening
of Russian rouble, the termination
of metal purchases from third
parties as well as the execution on
operating efficiencies that allowed
to mitigate inflationary pressure on
expenditures in spite of introduction
of export duties in October 2023;
• CAPEX decreased 29% y-o-y to
USD 3 billion driven by softening of
rouble exchange rate, optimization of
payments to contractors as well as
rescheduling of investment projects
owing to voluntary self-sanctions
imposed by foreign suppliers of
equipment and technologies;
• Net working capital decreased
23% year-to-date to USD 3.1 billion
driven mostly by devaluation of
rouble, partial sale of metal stock
accumulated in 2022 and application
of different payment terms in certain
major procurement and construction
contracts;
• Net debt decreased 18% y-o-y to
USD 8.1 billion with net debt/EBITDA
ratio as of December 31, 2023
remained at 1.2x;
• The Company continued the
optimization of its debt portfolio
to adapt to changing debt market
reality while servicing all its
outstanding debt portfolio and
maintaining comfortable liquidity
level on its balance sheet and
reserve credit lines;
• On December 7, General
Shareholders Meeting approved
the split of ordinary shares with
a ratio of 100 to 1 to improve their
attractiveness to retail investors.
Key corporate highlights, USD MILLION, UNLESS STATED OTHERWISE
USD 14.4 BN
Consolidated revenue
for 2023
48%
EBITDA margin for 2023
19%
Reduction in cash operating
costs
18%
Indicators
Revenue
EBITDA1
EBITDA margin, %
Net profit
Capital expenditures
Net working capital2
Net debt2
Net debt/12M EBITDA
Dividends paid per share (USD)3
Free cash flow2
Проценты уплаченные4
Dividends paid to non-controlling interest4
2022
2023
Change
Decrease in net debt as at 31
December 2023
16,876
14,409
8,697
52%
5,854
4,298
4,003
9,835
1.1x
40.5
437
599
73
6,884
48%
2,870
3,038
3,092
8,093
1.2x
–
2,686
791
503
–15%
–21%
–4 p.p.
–51%
–29%
–23%
–18%
0.1x
–100%
6x
32%
7x
1 2 3 4 5 6 7
Recent
developments
• In January 2024, the Company paid
dividend for 9 months of 2023 in
the amount of RUR 915.33 per one
ordinary share.
Key segmental highlights1, USD MILLION
Indicators
Revenue
GMK Group
South cluster
Kola division
GRK Bystrinskoye
Other mining
Other non-metallurgical
Eliminations
EBITDA
GMK Group
South cluster
Kola division
GRK Bystrinskoye
Other mining
Other non-metallurgical
Eliminations
Unallocated
EBITDA margin
GMK Group
South cluster
Kola division
GRK Bystrinskoye
Other mining
Other non-metallurgical
2022
16,876
12,242
972
10,889
1,325
1
1,556
–10,109
8,697
4,316
450
4,071
934
–11
8
–7
–1,064
52%
35%
46%
37%
70%
n.a.
1%
2023
14,409
10,488
1,066
8,396
1,340
–
1,064
–7,945
6,884
3,641
484
2,254
963
–12
–13
343
–776
48%
35%
45%
27%
72%
n.a.
n.a.
Change
–15%
–14%
10%
–23%
1%
–100%
–32%
–21%
–21%
–16%
8%
–45%
3%
9%
n.a
n.a
–27%
–4 p.p.
0 p.p.
–1 p.p.
–10 p.p.
2 p.p.
n.a.
n.a.
RUB 915.33
per ordinary share –
dividend paid in January
2024
USD 1,066 MLN
Revenue from the South
Cluster segment
8%
EBITDA growth in the South
Cluster segment
USD 1,340 MLN
Revenue from the GRK
Bystrinskoye segment
3%
EBITDA growth in the GRK
Bystrinskoye segment
1 A non-IFRS measure, for the calculation see the notes below.
2 A non-IFRS measure, for the calculation see an analytical review document ("Data book") available in
conjunction with Consolidated IFRS Financial Results on the Company’s web site.
3 Paid during the perio.
4 Regular outflows, financed from free cash flow.
1 Segments are defined in the consolidated financial statements.
84
85
Annual Report — 2023NornickelBusiness overview EBITDA of Other mining segment
decreased by USD 1 million and
amounted to negative USD 12 million.
EBITDA of Other non-metallurgical
segment decreased by USD 21
million and amounted to negative
USD 13 million.
EBITDA unallocated to segments
increased by USD 288 million and
amounted to a negative USD 776
million mainly due to lower social
expenses and effect of the Russian
rouble depreciation against US Dollar.
In 2023, revenue of GMK Group segment
decreased 14% to USD 10,488 million
primarily due to lower metal prices and
decrease in matte sales delivered to Kola
Division partly offset by increase in sales
volume of refined metals.
Revenue of South cluster segment
increased 10% to USD 1,066 million
primarily driven by higher volume of
semi-products realized to GMK Group
partly offset by decrease in semi-
products realized prices.
Revenue of Kola division segment
decreased 23% to USD 8,396 million
primarily owing to lower metal prices
partly offset by increase in sales volume
of refined metals.
Revenue of GRK Bystrinskoye segment
increased 1% to USD 1,340 million.
Revenue of Other non-metallurgical
segment decreased 32% to USD
1,064 million primarily due to cease
of metals resale.
In 2023, EBITDA of GMK Group segment
decreased 16% to USD 3,641 million
owing to lower revenue, partly positively
offset by decrease in cash operating
costs, primarily due to lower mineral
extraction tax and other levies, lower
labour and repair and maintenance
costs, and comparative impact of
environmental provisions accrual.
EBITDA of South cluster segment
increased 8% to USD 484 million
primarily owing to higher revenue
that was partly negatively offset
by increase in cash operating costs
primarily due to higher mineral
extraction tax and ore mining services.
EBITDA of Kola division segment
decreased 45% to USD 2,254 million
primarily owing to lower revenue.
EBITDA of GRK Bystrinskoye segment
increased 3% to USD 963 million
primarily due to decrease in cash
operating costs driven by Russian
rouble depreciation against US Dollar.
Metal sales
In 2023, revenue from metal sales was
down 15% (or –USD 2,371 million) y-o-y
to USD 13,702 million primarily driven
by lower selling prices (-USD 3,378
million) mainly for palladium, nickel,
rhodium and copper, as well decrease
in the resale of metals purchased from
third parties (-USD 385 million). The
increase in the volume of metal sales
(+USD 1,392 million) primarily due to the
partial sale of metal stock accumulated
in 2022 was partly offset by decrease
in production volume in 2023.
Other sales
In 2023, other sales decreased 12%
(or -USD 96 million) to USD 707
million primarily due to Russian rouble
depreciation, which was partially
offset by the increase of revenue
from resale of icebreaking and sea
transportation services.
1 2 3 4 5 6 7
Cost of sales
Cost of
metal sales
In 2022, the cost of metal sales
increased 21% (or +USD 1,051 million) to
USD 6,108 million, In 2023, the cost of
metal sales increased 4% (or +USD 232
million) to USD 6,322 million, driven by
the following factors:
• decrease in cash operating costs by
19% (or -USD 1,234 million);
• decrease in depreciation
and amortization by 7%
(or -USD 76 million);
Cost of metal sales, USD MILLION
Indicators
Labour
Materials and supplies
Mineral extraction tax and other levies
Third party services
Transportation expenses
Fuel
Export customs duties
Electricity and heat energy
Purchases of raw materials and semi-products
Purchases of refined metals for resale
Other costs
Total cash operating costs
Depreciation and amortisation
Decrease/ increase (-) in metal inventories
TOTAL
Labour
In 2023, labour costs decreased 13% (or
-USD 266 million) to USD 1,857 million
amounting to 35% of the Group’s total
cash operating costs driven by the
following factors:
• -USD 409 million – Russian rouble
depreciation against US Dollar;
• comparative effect of change in
metal inventories y-o-y leading to
the cost of metal sales increase by
USD 1,542 million.
Cash
operating costs
In 2023, total cash operating costs
decreased 19% (or -USD 1,234 million)
to USD 5,289 million mainly due to
decrease in purchases of refined
metals for resale (-USD 432 million),
decrease in mineral extraction tax and
other levies (-USD 319 million), decrease
in materials and supplies (-USD 98
million), decrease in labour costs (-USD
266 million) partly offset by introduction
of export customs duties from October
1, 2023 (+USD 121 million).
Inflationary growth of cash operating
costs amounted to +USD 428 million while
Russian rouble depreciation against US
Dollar amounted to cash operating costs
decrease of -USD 889 million.
2022
2,123
1,069
1,192
784
257
166
–
136
33
437
326
6,523
1,015
–1,448
6,090
2023
1,857
971
873
659
216
157
121
115
33
5
282
5,289
939
94
6,322
Change
–13%
–9%
–27%
–16%
–16%
–5%
100%
–15%
0%
–99%
–13%
–19%
–7%
n.a.
4%
• +USD 86 million – increase in
headcount in Norilsk industrial region;
• -USD 77 million – one-off incentive
payment to personnel in 1H2022:
• +USD 45 million – payments to
personnel within the programme
"Digital investor";
• +USD 89 million – other increase in
labour costs mainly due to indexation
of salaries and wages.
86
87
Annual Report — 2023NornickelBusiness overview Materials and supplies
Transportation expenses
Purchases of refined metals for resale
In 2023, transportation expenses
decreased 16% (or -USD 41 million) to
USD 216 million driven by the following
factors:
• -USD 23 million – primarily decrease
in transportation volume of metal
products;
• +USD 20 million – inflationary growth
of expenses;
• -USD 38 million – effect of the
Russian rouble depreciation
against US Dollar.
In 2023, purchases of refined metals
for resale decreased 99% (or -USD 432
million) to USD 5 million, primarily due
to cease of refined metals purchases.
Other costs
In 2023, other costs decreased 13%
(or -USD 44 million) to USD 282
million primarily due to Russian rouble
depreciation against US Dollar partly
offset by price inflation.
Fuel
Depreciation and amortisation
In 2023, fuel expenses decreased
5% (or -USD 9 million) to USD 157
million mainly due to Russian rouble
depreciation against US Dollar partly
offset by inflationary growth of fuel
expenses in Norilsk industrial region.
In 2023, depreciation and amortisation
expenses decreased 7% (or -USD 76
million) to USD 939 million mainly due
to Russian rouble depreciation against
US Dollar partly offset by increase in
property, plant and equipment.
Electricity and heat energy
In 2023, electricity and heat energy
expenses decreased 15% (or –USD
21 million) to USD 115 million primarily
due to Russian rouble depreciation
against US Dollar.
Purchases of raw materials and
semi-products
In 2023, purchases of raw materials
and semi-products remained
unchanged y-o-y and amounted
to USD 33 million.
Decrease / Increase (with minus) in
metal inventories
Сomparative effect of change in
metal inventory amounted to +USD
1,542 million resulting in a respective
increase in cost of metal sales mainly
due to increase in metal inventories
in 2022 driven by the extension of
logistics and refocusing sales to new
markets.
In 2023, expenses for materials and
supplies decreased 9% (or -USD 98
million) to USD 971 million driven by
the following factors:
• +USD 219 million – inflationary
growth of materials and supplies;
• -USD 133 million – lower material
and supplies expenses primarily
due to decreased repairs as part of
production efficiency measures;
• -USD 184 million – effect of the
Russian rouble depreciation
against US Dollar.
Mineral extraction tax and other
levies
In 2023, mineral extraction tax and
other levies decreased 27% (or
-USD 319 million) to USD 873 million
primarily due to lower metal prices
and lower ore mined.
Third-party services
In 2023, cost of third-party services
decreased 16% (or -USD 125 million) to
USD 659 million mainly driven by:
• -USD 61 million – primarily due
to decrease in repairs as part of
production efficiency measures;
• +USD 79 million – inflationary
growth of third-party services;
• -USD 143 million – effect of the
Russian rouble depreciation
against US Dollar.
Cost of other sales
In 2023, cost of other sales decreased
by USD 108 million to USD 721 million
due to Russian rouble depreciation
against US Dollar, which was partially
compensated by increase in the
cost of resale of icebreaking and sea
transportation services.
1 2 3 4 5 6 7
Selling and distribution expenses
Selling and distribution expenses, USD MILLION
Indicators
Transportation expenses
Export customs duties
Marketing expenses
Staff costs
Other
TOTAL
2022
118
–
52
29
56
255
In 2023, selling and distribution
expenses increased 12% (or USD 30
million) to USD 285 million driven by:
• +USD 43 million – export
customs duties introduced from
October 1, 2023;
• +USD 14 million – increase in
transportation expenses primarily
due to extension of logistics chains;
• -USD 23 million – decrease in
marketing expenses.
General and administrative expenses
General and administrative expenses, USD MILLION
Indicators
Staff costs
Third party services
Depreciation and amortisation
Property tax and other miscellaneous taxes
Transportation expenses
Other
TOTAL
2022
833
230
107
94
9
80
1,353
2023
132
43
29
27
54
285
2023
684
147
110
75
6
71
1,093
Change
12%
100%
–44%
–7%
–4%
12%
Change
–18%
–36%
3%
–20%
–33%
–11%
–19%
In 2023, general and administrative
expenses decreased 19% (or -USD 260
million) to USD
1,093 million. Positive effect of the
Russian rouble depreciation against
US Dollar amounted to USD 242
million. Changes of the general and
administrative expenses in real terms
were primarily driven by the following
factors:
• -USD 42 million – decrease in third-
party services primarily driven by
consulting services expenses;
• +USD 22 million – increase in
depreciation due to growth of fixed
assets.
88
89
Annual Report — 2023NornickelBusiness overview Other operating expenses
Other operating expenses, NET, USD MILLION
Indicators
Social expenses
Change in decommissioning obligations
Change in other allowances
Loss on disposal of property, plant and equipment
Expenses on industrial incidents response
Change in provision on production and mining facilities shut down
Change in environmental provisions
Other, net
TOTAL
2022
407
12
43
70
35
14
93
4
678
2023
205
53
40
36
10
–1
–32
–42
269
Change
–50%
4x
–7%
–49%
–71%
n.a.
n.a.
n.a.
–60%
In 2023, other operating expenses,
net decreased by USD 409 million to
USD 269 million driven by the following
factors:
• -USD 202 million – decrease in social
expenses;
• -USD 125 million – lower environmental
provisions related to compensation for
environmental damages;
• -USD 34 million – decrease in loss
on disposal of property, plant and
equipment;
• +USD 26 million – comparative effect
of changes in provision on production
and mining facilities shut down and in
decommissioning obligations;
• -USD 25 million – decrease in industrial
incidents response expenses.
Finance costs
Finance costs, NET, USD MILLION
Indicators
Interest expense, net of amounts capitalised
Unwinding of discount on provisions
Fair value loss / gain (-) on the cross-currency interest rate swap
contracts
Interest expense on lease liabilities
Income received as a result of early debt repayment
Gain (-) / loss from currency conversion operations
Other, net
TOTAL
2022
330
185
18
16
–172
111
5
493
2023
337
147
60
35
–
–5
–7
567
Change
2%
–21%
3x
2x
100%
n.a.
n.a.
15%
1 2 3 4 5 6 7
In 2023, finance costs, net increased
15% to USD 567 million. Finance costs,
net decreased by USD 98 million in 2023
without taking into consideration profit
from the early repayment of debt with a
discount in 2022. The primary drivers of
the change were:
• -USD 116 million – decrease in foreign
currency conversion costs due to
lower intraday volatility in the foreign
exchange market;
• -USD 38 million – decrease in
expenses related to unwinding of
discount on provisions and due to
significant volatility of discount rates
during 2023, as well as changes in
provisions;
• +USD 42 million – increase in expenses
driven by fair value revaluation of
cross-currency interest rate swaps
primarily related to Russian rouble
depreciation against US Dollar in 2023.
In 2022, negative result of revaluation
of financial instruments during a
period of high exchange rate volatility
was partially compensated by the
appreciation of Russian rouble against
US Dollar.
Income tax expense
The breakdown of the income tax expense, USD MILLION
Indicators
Current income tax expense
Deferred tax /benefit (-) /expense
TOTAL INCOME TAX EXPENSE
In 2023, income tax expense
decreased by USD 861 million driven
mostly by lower profit before tax.
EBITDA
EBITDA, USD MILLION
Indicators
Operating profit
Depreciation and amortisation
Impairment of non-financial assets, net
EBITDA
EBITDA margin
2022
1,306
219
1,525
2022
7,581
1,026
90
8,697
52%
2023
966
–302
664
Change
–26%
n.a.
–56%
2023
5,540
1,165
179
6,884
48%
Изменение
–27%
14%
99%
–21%
–4 p.p.
In 2023, EBITDА decreased 21% (or
-USD 1,813 million) to USD 6,884 million
primarily driven by lower revenue,
which was partially offset by Russian
rouble depreciation against US Dollar
in 2023.
90
91
Annual Report — 2023NornickelBusiness overview Statement of cash flows
Statement of cash flows, USD MILLION
Indicators
Cash generated from operations before changes in working
capital and income tax
Movements in working capital
Income tax paid
Net cash generated from operating activities
Capital expenditure
Other investing activities
Net cash used in investing activities
Free cash flow
Interest paid
Payments of lease liabilities
Dividends paid to non-controlling interest
Other financing activities
Net cash used in financing activities
Effects of foreign exchange differences on balances of cash
and cash equivalents
Net change in cash and cash equivalents
2022
8,897
–3,184
–1,127
4,586
–4,298
149
–4,149
437
–599
–50
–73
–4,342
–5,064
962
–3,665
2023
7,121
–229
–1,164
5,728
–3,038
–4
–3,042
2,686
–791
–45
–503
–1,065
–2,404
–25
257
Change
–20%
–93%
3%
25%
–29%
n.a.
–27%
6x
32%
–10%
7x
–75%
–53%
n.a.
n.a.
In 2023, net cash used in investing
activities decreased 27% to USD
3,042 million primarily driven by
decrease in capital expenditures.
In 2023, free cash flow increased
6 times to USD 2,686 million
following the increase in net
cash generated from operating
activities and the decrease in cash
used in investing activities.
In 2023, free cash flow less regular
financing outflows (interest paid,
payments of lease liabilities, dividends
paid to non-controlling interest
of GRK Bystrinsky) increased by
USD 1,632 million and amounted
to USD 1,347 million following the
increase in free cash flow.
Net working capital changes between the balance sheet and cash flow statement , USD MILLION
Indicators
Change of the net working capital in the balance sheet
Foreign exchange differences
Change in income tax balance
Change of provisions, reserves and long term components of working capital
included in cash flow
Other changes
CHANGE OF WORKING CAPITAL PER CASH FLOW
2022
–2,734
–218
–165
–225
158
–3,184
2023
911
–780
208
–412
–156
-229
1 2 3 4 5 6 7
Capital investments breakdown by project, USD MILLION
Indicators
Polar Division, including:
• Skalisty mine
• Taymirsky mine
• Komsomolsky mine
• Oktyabrsky mine
• Talnakh Enrichment Plant (TOF-3)
• Capitalised repairs
• Purchase of equipment
• Other Polar Division projects
Kola MMC
Environmental program (Sulfur Program
at the Nadezhda Smelter)
South cluster
Energy and gas infrastructure modernization
Bystrinsky project (Chita)
Other production projects
Other non-production assets
TOTAL
2022
1,543
90
83
40
14
194
222
322
578
350
893
298
465
72
607
70
2023
1,223
90
73
41
5
123
93
219
579
233
454
248
408
65
355
52
4,298
3,038
Change
–21%
0%
–12%
3%
–64%
–37%
–58%
–32%
0%
–33%
–49%
–17%
–12%
–10%
–42%
–6%
–29%
In 2023, CAPEX decreased 29% (or
-USD 1,260 million) to USD 3,038
million driven by the effect of the
Russian rouble depreciation against
US Dollar, optimization of settlements
with contractors as well as the
rescheduling of investment projects
as voluntary self-sanctions imposed
by foreign suppliers of equipment and
technologies resulted in redesign of
investment projects.
Debt and liquidity management
Debt and liquidity, USD MILLION
Indicators
Non-current loans and
borrowings
Current loans and borrowings
Lease liabilities
Total debt
Cash and cash equivalents
Net debt
Net debt /12M EBITDA
As of 31
December
2022
As of 31
December
2023
Change
USD
million
%
7,189
4,295
233
11,717
1,882
9,835
1.1x
5,377
4,335
520
–1,812
–25%
40
287
1%
2x
10,232
–1,485
–13%
2,139
257
14%
8,093
–1,742
–18%
1.2x
0,1x
n.a
As of December 31, 2023, the Company's
total debt decreased by 13% to USD
10,232 million compared to December 31,
2022 partly following the depreciation of
Russian rouble against US Dollar in 2023.
As of December 31, 2023, the Company's
net debt decreased by USD 1,742 million
due to decrease in total debt.
The Company fully honors its financial
obligations in line with transactional
documentation and fully complies with
existing regulations.
In November 2023, Russian rating agency "Expert
RA" confirmed the Company's credit rating at the
highest investment level "ruААА".
92
93
Annual Report — 2023NornickelBusiness overview FOCUSSED
ON RESULT
The Company consistently reduces direct
and indirect GHG emissions (Scope 1 + 2)
GHG emissions, Scope 1 + 2,
MLN T OF CO2 EQUIVALENT
10.3
0.5
8.5
9.9
0.5
8.1
9.7
0.5
8.1
Scope 2 emissions from
production assets
Scope 1 emissions from
production assets
Scope 1 emissions from
households and infrastructure
facilities
1.3
‘21
1.3
‘22
1.1
‘23
SUSTAINABLE
DEVELOPMENT
96
Strategic approach
102
Employees
119
Health and safety
127
Environment
and climate
139
Social policy
Strategic approach
Since 2022, the Company has been publishing reports on
its progress towards 10 United Nations Global Compact
(UNGC) Sustainable Development Goals (SDGs).
Contribution to
the UN SDGs
Sustainability governance
The Company’s sustainability
management is based on a matrix
structure, with responsibility
for specific ESG aspects split
among all Nornickel functions. At
the same time, most matters are
overseen by the Management
Board, Board of Directors, and
respective committees.
Sustainability-related processes
are coordinated by the Sustainable
Development Department, headed
by the Vice President for Investor
Relations and Sustainable Development.
At the Board level, the Sustainable
Development and Climate Change
Committee is responsible for overseeing
the evolution of ESG practices.
For more details on the
projects, see Nornickel’s
2023 Sustainability Report.
ESG projects that received the most funding in 2023:
Sulphur Project;
Clean Norilsk programme;
Norilsk renovation plan;
Investments in tourism projects;
Range of health and safety
initiatives;
Corporate Healthcare
programme;
Digital Investor programme;
Range of measures around
water management, wastewater
collection, treatment, and
discharge, and waste
management.
Faced with challenges such as
managing a workforce of over 70
thousand in the Arctic, a variety
of environmental impacts, and
commitments to the state and
society to build large-scale
infrastructure projects, Nornickel
consistently pursues sustainability-
related initiatives. The Company
provides safe living conditions
in the Arctic zone, invests in the
socio-economic development of its
operating regions and community
well-being, takes steps to prevent
environmental and climate risks
as well as climate-related losses
while building open and trust-based
relationships with stakeholders and
transparent corporate governance.
Sustainability principles underpin the
Company’s operations and strategic
business development and are outlined
in Nornickel’s internal documents.
In 2023, the Board of Directors
adopted the Socially Sustainable
Development Strategy to drive
technological and social progress
through technology and product
innovation. These innovations, in
particular, will ensure safe, just, and
supportive work environment and
preserve and restore the environment.
The Company is committed to
providing decent pay, comfortable
living conditions, and self-fulfilment
opportunities, seeing these factors
among the most important drivers
of its sustainable development.
Nornickel maintains partner relations
with the indigenous peoples of the
Taimyr and Kola Peninsulas and takes
its responsibility for preserving the
culture and traditions of the Russian
North communities very seriously.
In early 2024, the Board of Directors
approved the updated Environmental
and Climate Change Strategy.
1 2 3 4 5 6 7
Sustainability management flowchart
Sustainable Development and
Climate Change Committee
chaired by an independent
director
Monitors the strategy’s
progress and
effectiveness;
Oversees progress on
sustainability goals and
programmes;
Provides the Board of
Directors with an opinion
on the effectiveness
and quality of designing
and implementing key
sustainability projects
Board of Directors
Approves the Company’s
internal documents and
strategic goals
Management Board
Senior Vice President
Operational Director
Vice President
Energy Division
Vice President for
Production and Technical
Development
Vice President for
Ecology and Industrial
Safety
Energy Department
Renewable Energy
Development Centre
Audit Committee
chaired by an independent
director
Risk Management Committee
of the Management Board
chaired by the Company
President
Vice President
Internal Control and Risk
Management
Centre for Monitoring
Technical, Production, and
Environmental Risks
Vice President
for Investor Relations and
Sustainable Development
Participates in
developing sustainability
strategies
Monitors and coordinates
the implementation of the
Company’s sustainability
policies and internal
procedures
H&S
Department
Ecology Department
Environmental
risk management
and independent
internal control over
environmental protection
matters
Sustainable Development Department
Ensures a systematic approach to building an
effective model of sustainability management
and its enforcement by the Company
Develops and implements systems for evaluating
the Company’s performance for compliance with
the requirements of international standards,
leading associations, and best practices
96
97
Annual Report — 2023NornickelSustainable Development Achievements and priorities
s
t
n
e
m
e
v
e
h
c
a
y
e
K
i
s
e
i
t
i
r
o
i
r
p
c
g
e
t
a
r
t
S
i
E
environmental protection
and climate change
S
social responsibility
G
governance
• Reduction of SO2 emissions on
the Kola Peninsula following the
shutdown of the Company’s
smelting operations (down 90%
from 2015)
• The lowest CO2 emission level
(Scopes 1, 2, and 3) among global
metals and mining peers
• Conducting a pilot climate-related
risk assessment and publishing
first Climate Change Report
• Reputation of a socially responsible
• Sustainable corporate governance
business
and risk management
• Comprehensive support for local
communities and national projects
• Integrating ESG targets into short-
term and long-term KPIs
• Long track record of supporting
• Balanced and effective Board of
indigenous peoples; pioneering the
process to obtain their free, prior,
and informed consent to projects
• Publishing first Human Rights
Report
Directors
• Publishing first Responsible Supply
Chain Report
• Further integrating sustainability
principles into the Company’s
corporate culture
• Compliance with key international
sustainability initiatives
• Developing a framework for
managing climate-related risks and
opportunities
• Achieving the key SO2 reduction
milestones for the Norilsk
Industrial District
• Zero work-related fatalities
• Employee health and safety
• Clean-up of legacy waste
and remediation following
environmental incidents in
Norilsk
• Assessing biodiversity impact
and preparing a scientific
rationale for a biodiversity
conservation programme
• Further developing the physical
risk management system across
the Company’s footprint
• Supporting environmental
initiatives across the Company’s
footprint
• Preventing social risks for the
Company’s operations
• Attracting young talent and
experienced professionals and
reducing the turnover rate to 8% by
2026
• Matching living and working
conditions to employees’ demands
• Building supply chain transparency
on social metrics
• Reducing the impact of operations on
indigenous peoples in the regions of
operation
• Refurbishment of housing and social
infrastructure in Norilsk
1 2 3 4 5 6 7
The Company maintains its status as
an active participant in Russian and
international events on the sustainable
development agenda. In 2023,
Nornickel speakers took part in the
28th UN Climate Change Conference
(COP28), the forum of the UN Economic
Commission for Europe in Geneva on
sustainable development, human rights,
and climate change; the Company also
participated in the International Forum
on Sustainable Mineral Supply Chains
(Chengdu, China).
In the reporting year, Krasnoyarsk
hosted the third Siberian Perspective
summit organised by Nornickel and
supported by the National Council
on Corporate Volunteering, the
Russian Managers Association, and
the Protected Areas Embassy charity
foundation. The summit was centred
around responsible consumption and
supply chains and gathered together
more than 200 representatives of
businesses and government, experts,
Sustainability KPIs for management
and volunteers, including the Company’s
suppliers, to discuss the challenges in
these areas, as well as the relevant roles
and relationships between businesses
and consumers.
In 2023, the Company published its 2022
Sustainability Report and specialised
reports on human rights, responsible
supply chain, and climate change.
2022 Sustainability Report
Human Rights Report
Responsible Supply Chain Report
Climate Change Report
In 2024, Nornickel will continue
measures to harmonize activities based
on leading international standards and
guidelines, including:
• further integrating ESG principles into
strategic planning, risk management,
and reporting procedures
• working towards closer alignment with
the IRMA Standard for Responsible
Mining
• completing the self-evaluation
process in line with the Global Industry
Standard on Tailings Management
(GISTM)
• cascading adopted policies to
subsidiaries for implementation
• setting additional ESG-related KPIs
and evaluating performance
• establishing a human rights due
diligence system
• expanding the scope of ESG supplier
assessment.
Sustainability KPIs
20%
weighting in team KPIs
Long-term KPIs
The Company
actively integrates
sustainability
principles into its
corporate culture.
For example, in 2023, Nornickel:
delineated the areas exposed to the environmental impact of its operations
and studied the plant and animal species inhabiting the Taimyr and Kola
Peninsulas and Zabaykalsky Territory, the regions where it operates
held trainings on responsible supply chains at its divisions, including on
enhancing internal audits in line with ISO 19011:2018 and on conducting supplier
audits in line with international standards and ESG principles.
10%
Meeting the H&S targets
(20% reduction in
FIFR from 2022)
10%
Annual reduction of
greenhouse gas
emissions and zero
environmental incidents
30%
weighting in KPIs
Meeting the environmental
strategy goals, including SO2
emission reduction
98
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Annual Report — 2023NornickelSustainable Development
International sustainability standards
Standard
Certified assets
Status
ISO 14001-2015
ISO 9001:2015
ISO 45001:2018
Meets the
requirements
ISO 45001:2018
ISO 14001:2015
ISO 9001:2015
ISO 14001:2015
ISO 45001:2018
ISO/IEC 27001:2013
• MMC Norilsk Nickel
• Kola MMC
• Norilsk Nickel Harjavalta
• Pechengastroy
• GRK Bystrinskoye
• Kola MMC
• Murmansk Transport Division
• Nadezhda Metallurgical Plant
• Copper Plant
• Talnakh Concentrator
Bureau Veritas Certification
Surveillance audits – annually
Recertification audits – every
three years
Bureau Veritas Certification
Norilsk Nickel Harjavalta maintains
certifications
LLC Quality Management in
Accordance with International
Standards
A сertification audit was conducted
in 2023
IRCLASS IRQS (India).
The EMS was certified in 2023
A pre-certification audit was
completed in 2023.
A certification process is planned
for 2024
TŰV Austria
Surveillance audits – annually
Recertification audits – every
three years
Global ESG initiatives
Together for Sustainability (TfS)
initiative
Nickel Institute
The Company’s compliance with the requirements
of the initiative was confirmed by the 2022
follow-up audit
Member since 2005
International Platinum Group Metals
Association (IPA)
UN Global Compact
Member since 1999
Member since 2016
1 2 3 4 5 6 7
Initiative for Responsible Mining
Assurance (IRMA)
Responsible Minerals Initiative (RMI)
In 2022, IRMA suspended cooperation with
Russian companies. In the same year, Nornickel
independently assessed its mining assets for
compliance and readiness for the certification and
prepared a roadmap
In 2022, RMI suspended cooperation with the
Company’s Russian assets
Global Battery Alliance (GBA)
ICMM’s Mining Principles
Member since 2021
In 2022, ICMM suspended cooperation with
Russian companies. The Company is pursuing a
compliance roadmap (60% of measures implemented
as of 2023-end)
London Metal Exchange (LME)
In 2023, the London Metal Exchange accepted the Company’s
2022 RFAs. The Company decided to continue confirming
its compliance with LME requirements by submitting annual
Track C RFAs
ESG ratings
EcoVadis
MSCI1
ESG score — 58
ESG-rating — «В», score — 3.1 (out of 10)
Corporate Human Rights Benchmark
Score – 21.0 (out of 100.0)
ACRA
ESG-rating — «В», ESG-2, a very high ESG score
ESG Index by RBC and NCR
ESG level I (high)
RAEX
ESG-rating — «А», high level
Da-Strategy Group
ESG-rating — «А», Russia’s Best Corporate ESG Practice
Sustainalytics
ESG risk score — 44.0 (out of 100), on a scale from 1 (low risk) to 100 (high risk)
Expert RA
ESG-rating — III (а), a high level of compliance with sustainability goals when
making key decisions.
Outlook – stable
100
101
1
In August 2023, MSCI suspended ratings on Russian companies.
Annual Report — 2023NornickelSustainable Development
Employees
HR policy
People are Nornickel’s main value. The Company views
its employees as its core asset and invests in their
professional and personal development, provides them
with safe and comfortable working conditions as well as
decent pay and benefits package, and seeks to boost
their performance and ownership of work-related tasks.
Contribution to
the UN SDGs
HR policy: investing
in human capital
Nornickel retains leadership in key Russian and
international rankings of the best employers
Increase in headcount
as capacity expands and
environmental and production
projects are implemented,
THOUSAND PEOPLE
74
78
81
2023
↑5.4%
81
THOUSAND
PEOPLE
USD thousand
RUB thousand
‘21
‘22
‘23
RUB
184.1 THOUSAND
Average monthly salary of
Nornickel employees in 2023
6%
Proportion of the
benefits package in the
compensation package
1 2 3 4 5 6 7
Business Ethics Code
The Company has in place the
Business Ethics Code, a fundamental
document that plays a major role in
ensuring compliance with professional
standards and commitment to
Nornickel’s core values.
Every employee is fully aware of
the content and significance of the
Business Ethics Code. To encourage
commitment to the principles set out
in the Code, the Company operates a
system of rewards and incentives.
To address potential breaches of the
Code, procedures are in place for
employees to safely and confidentially
report relevant situations. All
reports are subject to subsequent
investigation. The Company guarantees
that no disciplinary action or sanctions,
including dismissal, demotion, or bonus
forfeiture, will be applied to employees
who report breaches of the Code.
Human rights
and working conditions
The Company respects the rights
and freedoms of its employees as
well as those of its stakeholders –
partners, investors, contractors,
local communities, customers, and
consumers.
Nornickel upholds the principles of
international standards such as the
UN Global Compact, the Universal
Declaration of Human Rights, and the
International Labour Organization’s
Declaration on Fundamental Principles
and Rights at Work. Nornickel
complies with the laws of the
countries in which it operates.
The Company implements
programmes for the development
and social support of its employees,
upholding their rights in respect of
social security, education, family
welfare, housing, freedom of artistic
expression, and participation in
cultural life.
The Company is committed
to fostering an inclusive work
environment free from any form of
discrimination. We work towards
ensuring equal opportunities in hiring,
promotion, training, and remuneration
for all employees, regardless of
ethnicity, nationality, religion, gender,
age, sexual orientation, marital status,
special needs, or any other protected
characteristic under applicable law.
The Company hires employees,
including those with disabilities.
According to the employment quotas,
the share of such employees is 2%
of the average headcount, excluding
employees involved in hazardous or
dangerous work. We provide necessary
working conditions for this category of
people with regard to the work and rest
schedule, duration of the annual paid
leave, extra days off, additional financial
assistance, and other parameters.
The Company strictly adheres to the
following principles with respect to its
employees:
• Zero tolerance for the use of child
labour, forced or slave labour
• Zero tolerance for the employment of
persons aged under 18 for hazardous
and/or dangerous work
• Zero tolerance for violence or
discrimination
• The Company does not engage
female employees in extreme or
dangerous working conditions
• The Company ensures its employees’
right to safe working conditions
• The Company makes sure all
employees enjoy equal rights and
opportunities regardless of gender,
age, race, nationality, and origin
• The Company provides all employees
with equal opportunities for
unlocking their potential. Employee
performance is evaluated on a fair
and impartial basis, and recruitment
and promotion decisions are tied
exclusively to professional abilities,
knowledge, and skills
• The Company respects the right
to form trade unions and does not
prevent employees from joining them
The Company has adopted internal
labour regulations, which are approved
in consultation with the trade union
organisation and establish employees’
working hours. The Company has a
standard working week of 40 hours as
determined by applicable Russian laws
and regulations. Employees involved
in hazardous or dangerous work enjoy
a reduced working week of not more
than 36 hours. Women employed in the
Far North and equivalent areas work
36 hours per week unless a shorter
working week is stipulated by Russian
laws and regulations. The Company
arranges for accurate work time control
for each employee.
Work on weekends and overtime is paid
as per the Labour Code of the Russian
Federation.
102
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Annual Report — 2023NornickelSustainable Development Awards and industry recognition
In 2023, Nornickel entered a number of best
employer lists:
Top 30 best employers in HeadHunter’s ranking
Gold in the Forbes Employer Rating with the highest
scores in the Employees and Society and Corporate
Governance categories
No. 1 among metals companies in Changellenge’s
Best Company Award ranking of the best employers
according to young respondents
No. 8 in Future Today’s ranking of top employers
selected by students
Grand Prix of HeadHunter’s HR Brand of the Year award
in the Grand Federation category for the Present for the
Future: Developing Engineering Potential project
Project of the Year Grand Prix of AKMR’s People Are Key
award for the Present for the Future: Developing the
Engineering Potential of the Industry and the Company
project
Three EMBRAS international awards in the Employer
Image, Good Deeds, and Business Results categories
Crystal Pyramid award for the best employer brand in
metallurgy
Two top awards of the WOW!HR International Business
Awards in the HR Hero and Workplace categories
Staff
composition
In 2023, the Group’s average
headcount was 80.6 thousand
employees, of which 99.5%
were employed by its Russian
companies. In 2023, the Company’s
turnover rate stood at 11.4%.
Nornickel is among the largest
employers in the Norilsk Industrial
District and Kola Peninsula,
employing 67% and 15% of the
regional workforce, respectively.
Local population accounts for
99.7% of the headcount. The
average headcount increase in
2023 was driven by the Company’s
investment strategy as well as
organisational and technical
changes.
Employees under permanent
employment contracts account for
94% of the workforce.
Since Nornickel is a production
company, the proportion of men in
its workforce is significantly higher
than that of women.
80.6 THOUSAND
EMPLOYEES
The average headcount of
Nornickel employees in 2023
99.7%
The share of new hires from
among local population
30
Male
Female
15
18
70
67
Other regions
Murmansk Region
Norilsk Industrial District
Average headcount
Location
Russia
Africa
Europe
Asia
USA
Australia
TOTAL
2021
73,061
151
317
15
10
3
2022
77,980
38
331
15
10
0
2023
80,166
47
322
22
5
0
73,557
78,374
80,562
1 2 3 4 5 6 7
Headcount by category and
gender1, %
Headcount by age and gender1,%
Employee turnover, PEOPLE2
16
23
61
15
66
19
13
48
Female
Male
1
2
3
Managers
White-collar
employees
Blue-collar
employees
4
12
12
11
13
53
Female
Male
6
13
1
2
3
<30 years
30–50 years
>50 years
4
11
12.2
10.5
11.4
14,281
14,803
20,726
17,642
13,484
13,344
Employee
turnover, %
Dismissed
Employed
1
2
3
1
2
3
‘21
‘22
‘23
Recruitment
The Company’s headcount grows
every year. Nornickel aims to provide
equal hiring opportunities for
employees while attracting talent
from across Russia and training them
to match its production needs. The
Norilsk Nickel Corporate University
offers numerous upskilling and
retraining programmes. Internal
candidates have a priority when
filling vacant positions. In 2023 alone,
more than 4 thousand employees
were promoted within the Group.
All vacancies in the Company are
posted on public resources and
on the intranet portal. Candidates
can send their CVs by e-mail,
telephone a 24/7 call centre, or visit
HR support centres. In addition,
recruitment centres were opened
in shopping malls in Norilsk, Ufa,
Orsk, and Irkutsk. Feedback is given
to each candidate.
The call centre received 3,155 phone
calls from job applicants in 2023.
In addition, a branded HR Support
Centre featuring a comfortable
waiting area, queue management
system, and career advice service
was opened in Norilsk to welcome
candidates in person.
A programme was launched to hire
back employees who had previously
left the Company. In 2023, 3.5
thousand former employees were
contacted by phone as part of the
programme. Over 3.3 thousand of
them showed interest in vacancies,
and 880 were re-employed.
3,155
phone calls from
job applicants handled by
the call centre in 2023
Eight units of the Norilsk Division
operate on a shift basis. In 2023, 1,919
employees worked on rotational shifts,
primarily crane operators, electricians,
drivers, and technicians.
> 4 THOUSAND
employees promoted within
the Group
Career guidance
The Company pays special attention
to career guidance for school students
and young people both in the cities
where it operates and throughout
Russia.
A unique encyclopaedia platform,
Nornickel’s City of Occupations,
was created for school students:
an interactive map incorporating
game mechanics such as quizzes,
quests, and a conversational bot.
The map includes descriptions
of 147 occupations and offers a
career guidance test to identify
a “candidate’s” strengths and
880
people employed under
the programme to hire
back employees who had
previously left the Company
1,919
employees worked on
rotational shifts
1 Based on the average annual RUB/USD exchange rate given at the end of the Report.
2 The ratio of resignations, dismissals for breach of labour discipline, and negotiated terminations to the average
headcount as at the year-end.
104
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Annual Report — 2023NornickelSustainable Development weaknesses. The platform also
features guidelines for parents to help
their child choose a career.
Recruitment
for the Sulphur Project
The Conquerors of the North four-
week online educational programme
is available for students across
Russia majoring in professions that
are in-demand at the Company. In
2023, 2,090 students applied for
the programme, with 336 people
completing it and recommended for
further employment and internships at
Nornickel.
The third stream of the First Arctic
programme aimed at building the
leadership potential of university
graduates was launched, with 323
applicants evaluated and 20 winners
employed as a result.
The Company also runs the Career
Start-up programme to attract young
talent to internship programmes. In
2023, 516 students from 20 Russian
higher education institutions and 200
students from five vocational training
institutions completed their internships
under the Polar College programme.
626 students were accepted for
on-the-job and pre-graduation
internships, including 360 students
employed for temporary jobs as part
of student construction brigades.
Corporate scholarships were awarded
to 454 students.
In addition, Nornickel supports federal
programmes aimed at engaging
young people, such as the Your
Move championship and the I Am a
Professional Olympiad.
In October 2023, Nornickel
inaugurated the Sulphur Project
at Nadezhda Metallurgical Plant,
marking the launch of Russia’s most
ambitious environmental project to
date. The sulphuric acid production
and neutralisation shop will need to fill
over 500 jobs, including over 70 jobs
for specialists and managers and over
400 blue-collar jobs. As at end-2023,
418 people were already employed,
including 64 managers and specialists
and 354 blue-collar employees.
In addition to general jobs and
jobs that can be covered by
related enterprises, such as repair
technician, electrical equipment
repair and maintenance electrician,
electric and gas welder, bunkerman,
crusher operator, and many others,
the enterprise needs specialists in
new jobs, specifically neutralisation
and oxidation unit operators. Such
specialists were trained in Omsk under
training programmes developed by the
Omsk Polytechnic College; students
studied theory independently while
practical studies took place at Omsk
Rubber Plant.
Staff for the new shop at Nadezhda
Metallurgical Plant was trained by
seasoned mentors across three sites
of the Norilsk Division: Copper Plant,
Nadezhda Metallurgical Plant, and
Talnakh Concentrator.
Project staff was recruited both on the
local labour market and outside Norilsk
in a 50/50 split, with employees
from other Polar Division entities and
invited specialists from other Russian
regions across a wide geography,
including Vladikavkaz, Bashkortostan,
Chelyabinsk Region, Zabaykalsky
Territory, Krasnoyarsk Territory, etc.
2,090
students applied for
participation in the
Conquerors of the North
online programme
323
applicants evaluated as
part of the First Arctic
programme for university
graduates
516
university students
completed their internships
under the Career Start-up
programme»
200
students from vocational
training institutions
completed their internships
under the Polar College
programme
454
students awarded corporate
scholarships
1 2 3 4 5 6 7
Outplacement following an asset closure
At the end of 2023, the Company
began the conservation of the
Kaula-Kotselvaara mine on the Kola
Peninsula. The Company developed a
set of measures for redundant miners
– those who decided to terminate
their employment with the Company
as well as those who opted for moving
to other Company units. The former
received support payments, while the
latter benefited from a whole package
of measures, from finding vacancies
within the Company and training in
new jobs while retaining their salaries
to reimbursement of relocation
expenses and housing rent if their
new place of work was in another city.
The programme was agreed with the
social and labour council and primary
trade union organisations.
The Succession programme
implies that a redundant employee
is trained by another Company
employee of retirement age with a
severance pay paid to the mentor
upon completion of training.
Group entities on job opportunities
for redundant employees. All staff-
related decisions and actions
complied with the Russian labour and
employment laws and Nornickel’s
Social Support Programme.
190 employees of the Kaula-
Kotselvaara mine and 36 employees
of other Company units chose to
terminate their employment as part
of the Social Support Programme,
while 299 employees were employed
within the Group.
Nornickel has fully delivered on its
programme of social guarantees to
redundant employees: beneficial
terms for moving to other production
facilities within the Company,
a retraining programme, and a
pension plan. Nornickel launched
a dedicated Employment Centre
to provide all-round support to
employees affected by the mine
shutdown (including by providing
information, advice, and career
guidance) and to partner with other
When an employee is employed
by other Group companies,
Nornickel provides:
reimbursement of rental expenses when
relocating to another city
retention of the same salary during one calendar
year
reimbursement of relocation expenses for the
employee and their family members
reimbursement of baggage fees
priority right to participate in corporate
subsidised loan programmes to purchase housing
at the new place of employment
training/retraining/certification in a new job/
position at the Company’s expense.
In case of termination, an
employee is entitled to:
a severance pay of six or more average monthly
salaries (as well as additional payments to
pensioners, socially vulnerable employee groups,
and participants in the Succession programme)
early payment of corporate pensions to
participants in corporate pension plans who
receive old-age or disability pension or pension
for length of service
reimbursement of relocation expenses for the
employee and their family members
reimbursement of baggage fees
the right to early termination of participation in
housing programs in favor of an employee
retention of the VHI policy for one calendar year
from the date of employment termination.
106
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Annual Report — 2023NornickelSustainable Development Training and career
Nornickel offers ample opportunities for
employee development, guided by the principles
of accessibility, innovation, and relevance.
In 2023, the Company continued to
foster a culture of continuous learning
and expand an accelerated training
ecosystem to boost professional
excellence and enhance and build
managerial, corporate, and critical
competencies.
2023 saw a continued trend towards
higher share of employees completing
training – now at 6% of the workforce,
or a 94% increase, while the share
of in-person training decreased.
42% of Nornickel’s total training was
focussed on building critical skills
and 50% – on building professional
competencies.
In addition, a career marathon was
held for the first time, involving over
1.8 thousand employees, with over
30% of them already promoted in
2023.
Professional competency
development
In 2023, the Company changed the
format of developing professional
competencies by introducing
distance learning and a module-based
approach which accelerated timelines
and improved the quality of training.
A successful pilot project triggered
a change to the entire approach to
organising professional training.
In 2023, ten group training
programmes covering the Company’s
core jobs were developed and
approved by the customer. Along with
distance-learning modules, these
programmes comprised modules
devoted to operating various types
of equipment. In particular, the most
complicated programmes involving
simulator training and sessions at
the underground training base (to
train LHD operators, operators of
self-propelled underground vehicles,
and hole drillers) were redesigned
accordingly.
360-Degree management
programme
Along with level-specific manager
development programmes,
the Company offers extensive
opportunities to develop
management and corporate skills
to employees who have passed a
360-degree assessment. In 2023,
the 360-Degree Management
programme offered in-person
training that included training
sessions, business games, and real-
world management case studies.
Participants independently chose
their training topics based on the
assessment results, a dialogue with
their manager, and their individual
development plan.
In-person trainings within the
programme are grouped into
three themed development areas:
operational discipline, systems
thinking, and people skills.
In 2023, the programme comprised
59 in-person training sessions
involving over 1 thousand employees,
and nine online workshops that had
3.5 thousand views.
School of leadership
In 2023, the School of Leadership
training programme was launched
for middle managers to build team
management skills. This crash course
Training in figures:
Reduced duration of one
training activity
Unchanged split between
in-person (30%) and online
(70%) learning
Increased coverage of
in-house training (86% of
the average headcount) at
Nornickel Academy
Increased training volumes
UP BY 45% Y-O-Y
Number of person-events
per person:
4.1 EVENTS
> 1.8 THOUSAND
Company employees
participated in a career
marathon
> 1 THOUSAND
employees participated
in face-to-face trainings
within the 360-Degree
Management programme
1 2 3 4 5 6 7
comprises four online modules and
one three-day in-person module,
Leadership Workshop, where
participants practice their newly
acquired knowledge. The programme
focuses on transforming routine
approaches to thinking, acting, and
interacting with colleagues.
In 2023, 356 managers were trained
under the programme.
One of the pressing tasks in the
reporting year was designing a
development programme for line
managers aimed primarily at improving
understanding of their management
role and developing their management
skills. The need for extensive coverage
(Nornickel employs over 6 thousand
line managers and supervisors)
prompted an innovative solution:
an AI-powered chatbot integrated
into the Supernika corporate app,
which enables training anytime and
anywhere. Besides, interaction with
artificial intelligence helps employees
get a grasp of modern digital
technologies.
Training young
managers
As part of the In a Good Company
project, young managers aged under
35 were invited to compete for the
opportunity to study at one of the
most prominent business schools
in Russia, the Graduate School of
Management at Saint Petersburg
University. More than 65 young
managers completed the studies in
2023. The top graduates mastered
best practices in people management,
becoming role models to Company
employees.
Building practical
skills
Employee training infrastructure is
becoming increasingly focussed on
learning practical skills with every year.
In 2023, Nornickel set up two lean
production laboratories, in Norilsk and
Monchegorsk, and launched the most
advanced work-at-height simulator at
Talnakh. The simulator was custom-
designed for Nornickel to match the
Company’s production profile and
requirements. It allows practicing more
than 25 basic skills for working at height,
with over 2 thousand employees trained
on the simulator over four months.
In 2023, the Norilsk Nickel Corporate
University’s underground training
base at the Anhydrite shaft of the
Kayerkansky mine was ranked among
the top 15 industrial tourism facilities. The
base is used for training professionals in
complex mining operations.
The Company is also strongly focussed
on creating a comfortable learning
environment. Specifically, the renovated
building of the corporate university
in Monchegorsk has become a key
venue for training and professional skills
competitions as well as for corporate
events. The next step is a large-scale
renovation project for the corporate
university building in Norilsk.
Digital training tools, such as the
Nornickel Academy platform, have
become commonplace for 80% of
Nornickel employees. The platform offers
training courses to develop professional
and management skills and provides
insights into modern trends and tools
as well as expert advice. We collaborate
with the Alpina Publisher publishing
house to develop an electronic reading
room currently offering over 10 thousand
books free of charge. In 2023, Company
employees completed more than 221
thousand courses.
Assistance programme
Since the Company’s production sites
are located in remote areas, Nornickel
actively sources staff from other regions
of Russia. To help them better adapt to
new environment, Nornickel launched
the Assistance programme targeting
not only skilled talent and managers but
also young employees and talent with
hard-to-find skills. All employees coming
to Taimyr are provided with comfortable
living conditions and reimbursed for
relocation and resettlement costs.
356
managers trained under
the School of Leadership
programme in 2023
> 65
young managers (under 35)
trained at the Graduate
School of Management at
Saint Petersburg University
> 2 THOUSAND
employees trained on a
work-at-height simulator
> 221 THOUSAND
courses completed by
Company employees on the
Nornickel Academy platform
in 2023
> 10 THOUSAND
books are available in the
electronic reading room of
Nornickel Academy
108
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Annual Report — 2023NornickelSustainable Development Today, the programme covers more
than 4.5 thousand Nornickel employees,
including 1.6 thousand who joined the
Company in 2023.
Relocation programme
The employee relocation programme
has been in place since early
2022. The programme supports all
employees relocating to another
region, whether they remain with
their current employer or are
transferred to other units within
the Group. Along with the standard
reimbursement of travel, baggage,
accommodation, and subsistence
cost and an additional leave for
settling in, relocated employees
receive a supplementary relocation
allowance amounting to up to
40% of the salary, depending
on the destination.
Relocation to a new place of work
unlocks opportunities for employees’
personal and professional growth,
while the Company is able to fill
vacancies even if there are no
sufficiently qualified candidates in the
talent pool and on the labour market of
the relevant operating regions.
Currently, 61 Nornickel employees are
covered by the programme, including
27 who joined in 2023.
Corporate culture
Nornickel nurtures its corporate culture to bring
together activist employees, enhance their engagement
in achieving the Company’s strategic objectives and
involvement in the corporate and social activities
of its facilities and regions of operation.
In the second half of 2023, the
Company ran a large-scale corporate
culture diagnostic covering the Head
Office and 16 production facilities.
Analysis of the current state and
changes in corporate culture since
2016 yields the following key findings:
• Nornickel’s corporate culture
is becoming stronger and more
homogeneous. 64% of respondents
believe that employees live
corporate values
• The Company has become more
united and has successfully
adapted to the current environment.
Employee communication channels
were enhanced, and understanding
and acceptance of corporate
values deepened. Today, Nornickel
is focussed on workplace safety,
environmental awareness, social
development, cooperation,
and innovation
• Corporate culture development
drove a significant improvement
in employee engagement while
enhancing mutual understanding
and vertical communication within
the team. The significance of
these achievements is confirmed
by a clear correlation between
corporate culture assessment
and employees’ confidence in the
Company’s management
• An important element of corporate
culture development is systematic
communication of the Company’s
values and their integration into
the hiring, assessment, and career
planning processes
• The objectives of corporate culture
development may need to be
revised in view of generational
change as well as changes in the
external environment and business
priorities. Going forward, this
may drive the need to update the
value model. Currently, increasing
priority is given to people,
cooperation, effectiveness, safety,
progress, and initiative
Mentoring
certificates acted as mentors to
high-potential employees. 40
mentoring meetings were held in the
reporting year.
In a Good Company
programme
Nornickel’s youth programme, In
a Good Company, was created to
unite employees aged under 35 and
encourage their professional and
creative growth in various areas and
spheres. Programme participants
are invited to implement projects
within four tracks: professional
practice, growth, social practice, and
creativity.
The programme’s additional objective
is to identify talented students and
young talents outside the Company,
attract them to work at Nornickel, and
make their onboarding as fast and
successful as possible.
In 2023, the Company introduced a
mentoring system. Top 100 managers
holding CCE ICF international
Programme participants can
communicate via an internal online
app that had 6,725 registered
1 2 3 4 5 6 7
users (Company employees) as at
end-2023, which accounted for
20.3% of the target audience.
Corporate volunteering
Corporate volunteering is an important
tool for human capital development.
Volunteering has become an integral
part of Nornickel’s corporate culture
and social mission, as evidenced by
almost 4 thousand employees in the
community of volunteers in the Plant
of Goodness program, who annually
attract about 40 partners and conduct
more than 410 volunteer events.
In 2023, Plant of Goodness was
named the winner of the Employer
Brand Award & Summit in the Good
Deeds category which featured social
projects.
The program carries out a wide range
of volunteer and charity projects in
which everyone can choose what
suits them: the Icebreaker educational
programme, the Poneslos (“Let’s Roll”)
environmental initiative, and the Your
Habitat regional ecological shifts. More
details are available on the Company
website and in the Sustainability
Report.
Dialogue with employees
Nornickel’s management is strongly
focussed on employee engagement
and continues to promote vertical
dialogue. In 2023, the following events
were organised:
• The main Nornickel Live Q&A session
involving the Company’s Vice
Presidents
• Divisional Nornickel Live Q&A
sessions involving division heads and
enterprise senior managers
• Corporate dialogues involving
enterprise heads and key managers
Employees actively engage in
dialogues with management and
submit a large number of questions,
more than 7 thousand per year.
In 2023, more than 25 thousand
employees participated in Q&A
sessions, and about 3 thousand
employees took part in corporate
dialogues.
The most significant topics of
discussion included the remuneration
and bonus system, social support, and
safety culture. In 2023, Nornickel ran
seven major information campaigns
covering changes in these areas:
salary increase from 1 July; bonuses
for the Company Day, annual
performance, and H&S achievements;
progress of the Support from Nornickel
programme, etc.
Efficient communication is enabled by
applying a multichannel approach and
training a large number of in-house
speakers. Specifically, in 2023, more
than 1 thousand in-house speakers
maintained live contact and engaged
with employees, and the total
audience of our information campaigns
exceeded 250 thousand people, i.e.
each employee was contacted on
average more than three times over
the year.
Open dialogue with management helps
build employees’ confidence, reduces
stress, and increases employee
engagement.
6,725
employees registered in the
online application of the In a
Good Company programme
In 2023, Plant of Goodness,
a corporate volunteering
programme, attracted
EMPLOYEES
~ 4 THOUSAND
40 PARTNERS
and enabled
> 410 ACTIVITIES
In 2023, more than
25 THOUSAND
employees participated in
Q&A sessions
70%
↑5%
employee satisfaction in
2023
> 250 THOUSAND
people reached by
information campaigns in
2023
110
111
Annual Report — 2023NornickelSustainable Development Engagement
Nornickel conducts regular targeted
polls and surveys to measure
employee engagement and assess
social programmes.
In 2023, the engagement survey
covered 57,145 Company employees,
6,563 more than in 2022. Employee
engagement increased by 5 p.p. y-o-y
and currently exceeds the industry
benchmark by 6 p.p.
In 2023, efforts to improve
engagement focussed primarily on
increasing the amount and quality of
internal communications, boosting
the bonus component and developing
remuneration programmes, targeting
the most sensitive audiences (young
talent and active employees), and
promoting social partnership. In
addition, the Company improved
working conditions and business
processes, ensured the supply of
necessary equipment and resources,
and improved the accessibility of
information about vacancies and
internal promotions.
The Company’s business objectives
were also integrated into the
engagement management cycle.
In 2023, more than 500 activities
were delivered to increase
engagement, of which 53% directly
supported enterprises’ current
goals: implementing the production
programme, ensuring uninterrupted
equipment operation, attracting talent
to remote areas, etc.
Remuneration
Key performance
indicators
The bonus system for Nornickel’s
managers and specialists is based on
the achievement of KPIs, including
financial performance, social
responsibility, occupational safety,
environmental safety, operational
efficiency, and capital management
metrics. In 2023, a total of
18,390 employees of the Group were
assessed against their KPIs.
The performance of Head Office
employees and Group managers is
evaluated separately. In 2020, a new
incentive system was introduced for
all employees of project management
offices (PMOs): project bonuses
and traditional annual bonus were
replaced with project completion
bonuses to motivate key project staff
and retain them until the project is
completed. In 2023, the performance
of the project bonus system was
evaluated by 1,328 Group employees.
KPI setting is driven by the principles
of balance, regularity, validation,
decomposition, and ambition as well
as the SMART criteria. Cascading is
used in KPI setting: a manager breaks
down their KPIs into components
which become their subordinates’
KPIs. Therefore, when employees
meet their KPI targets, their
superiors’ KPIs are also achieved.
In addition, an automated
360-degree assessment procedure
was run at 30 Group enterprises.
Following the assessment,
employees receive feedback from
their superiors, discuss areas
for improvement, and build their
individual development plans for
the year. In 2023, the assessment
covered more than 5 thousand
5 P. P.
Year-on-year increase in
employee engagement
> 500
activities delivered to
increase engagement in
2023
18,390
Group employees assessed
against their KPIs in 2023
> 5 THOUSAND
MANAGERS
7 THOUSAND
SPECIALISTS
covered by an automated
360-degree assessment
1 2 3 4 5 6 7
managers at all levels, including
top management, and 7 thousand
specialists, of whom 85% filled in their
individual development plans.
Salary and
benefits package
Nornickel has in place a
comprehensive employee incentive
system aimed at improving operational
efficiency and labour productivity,
delivering robust performance, and
retaining highly skilled employees.
Financial rewards are governed by the
Company’s remuneration policy and
include salary and a benefits package.
In its turn, salary includes fixed and
variable components.
The variable component is linked to
the Company’s performance and
KPI achievement as well as progress
on capital construction investment
projects. The variable component
of remuneration includes one-
off bonuses paid for the fulfilment
of one-off tasks that deliver an
economic benefit.
6.1 %
Increase in Company
employees’ salaries from 1
July 2023
Nornickel employees’ salaries do not depend on
their gender, age, race, nationality, origin, and
religion.
Average monthly salaries of
Nornickel employees1
2.0
145.0
2.7
183.0
2.2
184.0
USD thousand
RUB thousand
‘21
‘22
‘23
Employee compensation package breakdown
94%
Salary
6%
Benefits
72%
Fixed component
28%
Bonuses
10%
Regular
boneses
18%
One-off
bonuses
Nornickel has in place a grading
system, which is a key tool to develop
and implement various HR-related
programmes. Positions are graded
using the point rating method, which
takes into account the required
knowledge and skills, the complexity of
tasks involved, and the responsibility
level in each job.
A position’s grade determines the
amount of fixed salary and annual
bonus, the category of the VHI
programme, and other components of
the compensation package.
The Company has developed and
implemented policies to determine
salary levels and annual bonus rates.
A uniform approach to performance-
based bonuses is used along with
project-based bonuses and uniform
rules for paying one-off bonuses. In
2023, the automation of the year-
end performance bonus process was
completed for all employee categories.
The Company regularly reviews pay
levels and trends and makes sure
that salaries exceed the subsistence
minimum, while also considering the
cost of living – both the nation-wide
averages and the average figures for
each of its operating regions. Wage
indexation is done annually based
on the review results Specifically,
the Company increased employees’
salaries by 6.1% from 1 July 2023.
112
1 Based on the average annual RUB/USD
exchange rate given at the end of the Report.
113
Annual Report — 2023NornickelSustainable Development Minimum wage rate and employee remuneration by region
Region
Established minimum wage rate
Average monthly salaries
of Nornickel employees
Norilsk Industrial District
Murmansk Region
Krasnoyarsk Territory (excluding NID)
Zabaykalsky Territory
Moscow and other regions of Russia
RUB
42,230
37,357
25,987
24,363
17,054
USD
495
438
305
286
200
RUB
184,936
127,778
95,596
154,470
316,722
USD
2,169
1,499
1,121
1,812
3,715
Benefits package costs at Nornickel’s Russian entities
Total
Per employee
10.5
142.0
10.5
153.3
11.6
135.8
143.3
1.9
134.8
2.0
144.4
1.7
The benefits package
includes the following
benefits and
compensations:
VHI and major accident insurance
coverage
Discounted tours for health resort
treatment and recreation of
employees and their families
Reimbursements of holiday travel
expenses for a round trip and
baggage fees for employees and their
families living in the Far North and
territories equated thereto
Employee
turnover, %
Dismissed
One-off financial assistance in
difficult circumstances
Complementary corporate pension
plan
Other types of social benefits under
the existing collective bargaining
agreements and local regulations
‘21
‘22
‘23
‘21
‘22
‘23
RUB bn
USD mln
RUB thousand
USD thousand
VHI policy
Voluntary health insurance covers
100% of Group employees. In
addition, employees can take out a
policy at the corporate rate for one
close relative.
Employees residing in the Far North
are entitled to medical assistance
under a VHI policy in these
regions and beyond. All insurance
programmes offer the same range
of services with only the level of
clinics and covered regions differing
depending on employee category.
100%
of Group employees
covered by voluntary health
insurance
1 2 3 4 5 6 7
Additional employee
incentives
Digital Investor
In 2023, Nornickel launched the Digital
Investor programme, unique in the
Russian market. It aims to build a new
model of the employer-employee
relationship. The Company covers
100% of employees’ expenses on
purchasing digital financial assets
(DFAs), a new investment instrument
based on the blockchain technology.
DFAs entitle their holders to cash
payments and securities; they are
issued and circulated on dedicated
platforms under the supervision of the
Bank of Russia.
Nornickel’s DFAs are called
minetokens. The price of one
minetoken equals the value of one
Company share at issuance and at
redemption. The number of DFAs
granted to an employee is determined
by their length of service with the
Group as at 1 January 2023.
In 2023, the project was implemented
in the Norilsk Industrial District,
Moscow, Saint Petersburg, Sochi,
Saratov, Arkhangelsk, and the
Krasnoyarsk Territory, and in the first
quarter of 2024, it was rolled out to the
Murmansk Region and the Zabaykalsky
Territory. At the time of writing this
Report, more than 60 thousand
Company employees already became
DFA holders.
Under the programme, one year
after the receipt of minetokens,
holders are entitled to sell them to
investors registered on the special
platform. After five years, the DFAs
will be automatically redeemed
and their holders will receive an
amount equivalent to the value of the
respective number of Nornickel shares
at redemption.
Thus, the remuneration of Nornickel
DFA holders is linked directly to the
Company’s capitalisation, which
ensures additional motivation for
strong performance and success of
the team.
Number of DFAs granted to
an employee depending on
length of service
Length of service,
years
Number of DFAs
Up to 1
1–4
5–9
10–14
15–19
Over 20
0
2
4
6
8
10
> 60 THOUSAND
Company employees
already holding DFAs at the
time of writing this Report
Employee awards in 2023
41 291
2,358
4,831
AWARDS
1,809
332
Governmental and President
of Russia awards
Ministerial and agency awards
Awards from regional and municipal
authorities
Corporate awards
Internal awards
Simultaneously with the start of the
project, the Company launched an
information campaign to explain all
features of the new instrument to
employees. A dedicated training
programme and an online educational
module were developed, and a series of
webinars was held with leading experts
on financial literacy and investment. In
particular, over 200 HR specialists were
trained and became ambassadors for
the programme across all Company
enterprises. In addition, employees can
get an answer to any question about
digital assets by calling the hotline,
visiting the website, or examining other
informational materials.
Award policy
Nornickel’s Award Policy is closely
linked to its values and strategic
priorities. Employees are rewarded
for outstanding professional
achievements and contribution,
innovations that drive growth and add
value, efforts going beyond formal
agreements with employees, and
contribution to overall performance of
the business. Resolutions on corporate
incentives are passed by the President
of the Company.
Employees may also be rewarded at
the initiative of relevant enterprises.
Nornickel welcomes recognition of
its employees’ accomplishments by
the government and regional and
municipal authorities and nominates
those who achieved outstanding
results in operations and management
and made a significant contribution to
production development.
114
115
Annual Report — 2023NornickelSustainable Development Social partnership
The social partnership framework
regulates labour relations within
the Company and is a key tool to
engage with employees. Other
engagement mechanisms include
offices for social and labour
relations, a response centre,
and task forces at branches.
Trade union organisations
The Company has 58 trade union
organisations that are united into
territorial trade unions and are part
of the Trade Union of MMC Norilsk
Nickel Employees, an interregional
public organisation.
The trade unions of transport and
logistics divisions of the Krasnoyarsk
region are members of the Yenisey
Basin Trade Union of Russia’s Water
Transport Workers, headquartered in
Krasnoyarsk.
In 2023, trade unions participated
in negotiations to extend collective
bargaining agreements at eight
Group companies for three years, in
quality audits of catering facilities
and healthy meals suppliers, and in
special assessments of employees’
working conditions.
Social and labour councils
Social and labour councils have been
in place since 2006 to represent
the interests of all employees at the
local level. They can raise matters
relating to health resort treatment,
recreation, and leisure programmes
for employees, disease prevention,
provision of personal protective
equipment, workplace and catering
arrangements, etc.
Social partnership framework at Nornickel
Employee
representatives
Social
partnership
Employer
representatives
Social and labour
councils
77%
Collective bargaining agreements
94%
Trade union
organisations
7%
Interregional cross-industry
agreement
90%
Offices for operational, social, and
labour matters
In addition to the Corporate Trust Line
speak-up programme, the Group set
up offices for operational, social, and
labour matters back in 2003. Their key
functions are to respond to queries and
requests, oversee their review, regularly
monitor team climate, and promptly
resolve conflict situations.
Relevant specialists review incoming
queries and requests or redirect
them to functions or production
units and monitor response times
and quality. Complaints are never
forwarded to the managers whose
actions are challenged.
In 2023, Group enterprises in the
Norilsk Industrial District operated
26 offices, which received a total of over
49 thousand queries and requests from
employees (82.5%), former employees
(17%), and other individuals (0.5%).
> 49 THOUSAND
queries and requests
received by offices for
operational, social, and labour
matters operated by Group
enterprises in the Norilsk
Industrial District
Main topics of queries
and requests, %
0.1
10.3
89.6
Social welfare matters
Legal matters
Other
1 2 3 4 5 6 7
Collective
bargaining agreements
Collective bargaining agreements
at the Group’s Russian enterprises
comply with applicable laws and
adequately reflect employee
expectations.
agreements of the Group’s Russian
entities stipulate a uniform approach to
regulating social and labour relations.
No breaches of collective bargaining
agreements and no strikes or mass
layoffs took place across Group
enterprises in 2023.
In 2023, Group enterprises extended
for three years eight collective
bargaining agreements, which have
historically provided one of the
industry’s best benefits packages.
Today, all collective bargaining
Interregional
cross-industry agreement
The interregional cross-industry
agreement, along with collective
bargaining agreements, regulates
social and labour relations at Group
enterprises. Participants in the
agreement establish uniform corporate
approaches to compensation,
work and rest hours, provision of
guarantees, allowances, and benefits
to employees, occupational health,
and other matters. This allows Group
enterprises active in various industries
to pursue a uniform social policy.
In December 2021, the agreement
was amended and extended for
2022–2025. Currently, it covers
21 enterprises.
Social programmes for employees
Health
improvement programmes
Health resort treatment and health
improvement programmes for
employees and their families are
among the most popular programmes
offered by Nornickel as part of its
social policy in the Far North.
In 2023, 17.5 thousand employees
and their family members improved
their health at the corporate
Zapolyarye Health Resort in Sochi;
7.1 thousand employees spent their
holidays at other health resorts, with
1.6 thousand employees’ children
visiting children’s health resorts. The
Company compensates its employees
an average of about 86% of the trip
voucher cost.
Sports programmes
Another important social support
programme run by Nornickel promotes
corporate sports and supports healthy
lifestyle. It aims to improve the quality
of life, build a more attractive employer
brand, and make sports more accessible
to employees and local people in the
Company’s regions of operation.
The Company regularly holds
sporting events with a particular
focus on corporate competitions,
including annual Spartakiads.
Hockey, futsal, volleyball, basketball,
alpine skiing, snowboarding,
swimming, and family sports
contests are particularly popular
with employees. The Night
Hockey League was established
to encourage involvement
in amateur hockey.
In 2023, a large-scale project,
Nornickel: Hooked on Sport, was
launched to help each employee
stay physically active, eat healthy,
effectively cope with stress, and
feel satisfied with life and work.
A mobile app was developed for
project participants. The Company
collaborated with Hero Race to
organise the Nornickel Run Race
at the Norilsk and Kola Divisions,
which attracted a vast number
of participants.
Spending on social
programmes for employees,
USD MLN
Other social
expenses
Pension plans
Health resort
treatment
Housing
programmes
179 223 193
153
140
123
14
28
14
17
36
16
15
29
10
‘21
‘22
‘23
Sports expenses
4.0
297.0
5.0
337.0
5.0
423.0
During the year, sporting and
recreational events covered 27
Other social
thousand Company employees,
expenses
live broadcasts of corporate
competitions gathered
over 55 thousand views.
Pension plans
Health resort
treatment
USD mln
RUB mln
‘21
‘22
‘23
116
117
Annual Report — 2023NornickelSustainable Development Housing programmes
In 2023, Nornickel continued its
housing programmes, Our Home / My
Home and Your Home, which enabled
employees to purchase ready-to-
move-in apartments on preferential
terms across Russia.
Nornickel purchases housing at its
expense and transfers it to employees
under co-financing agreements:
the employer pays up to 50% of the
cost, but in any case no more than
RUB 3 million (USD 35 thousand),
with the rest paid by the employee
within a certain period of employment
with the Company (from 5 to 10
years). The cost of housing remains
unchanged throughout the employee’s
Other social
participation in the programmes.
expenses
Pension plans
The Our Home / My Home programme
Health resort
entitles an employee to use the
treatment
housing from the time they receive
it, but the property title is registered
in their name at the end of their
participation in the programme.
Under the Your Home programme, the
property title is registered in the name
of the employee immediately (with
the title encumbered by a mortgage
and encumbrance removed from the
property once the employee fully
repays the debt to the seller).
In 2014–2023, apartments for
employees were purchased in the
Moscow and Tver Regions, Krasnodar
Territory, and Yaroslavl. To develop
additional infrastructure, create a more
comfortable living environment for
employees, and optimise maintenance
for the property management company,
Nornickel purchased closely located
properties. A total of 6,118 apartments
have been provided to employees.
On top of this, Nornickel operates a
subsidised loan social programme
offering employees an interest-free
loan to pay the initial instalment and
reimbursing a certain percentage
of interest paid to the bank on the
mortgage loan. More than 1.6 thousand
employees have already benefited
from these preferential loans.
Corporate
pension plans
Nornickel offers its employees private
pension plans. Under the co-funded
pension plan, Nornickel and its
employees make equal contributions
to the plan. This provides incentives for
pre-retirement employees with a long
service record at Nornickel enterprises
and considerable job achievements.
Support to former
employees
As part of Nornickel’s corporate
social policy, the Company’s
Veterans programme aimed at
supporting former employees
targets unemployed pensioners
who permanently reside in Norilsk.
The main eligibility criterion is
the employee’s length of service
at the Company.
The Pensioner Financial Aid Fund
supports former employees who
retired prior to 10 July 2001 provided
they had been employed by the
Company for 25 years or more
and permanently reside outside of
the Norilsk Industrial District. The
Complementary
corporate
Fund relies on voluntary monthly
pension plan
contributions from employees
and charitable contributions from
the Company’s budget.
The Company also provides targeted
assistance to its former employees and
their families in difficult circumstances,
pays for health improvement,
medicines, or funeral services.
> 1.6 THOUSAND
employees benefitted from
preferential mortgage loans
Contributions to, and
participation in, corporate
pension plans
Contribution, USD mln
14
17
15
1
6
10
0.01
6
9
1
6
7
Other corporate
pension plans
Complementary
corporate
pension plan
Co-funded
pension plan
‘21
‘22
‘23
Number of participants,
people
12,192 11,775 10,825
961
455
10,776
948
421
10,406
1
445
10,379
Other corporate
pension plans
Complementary
corporate
pension plan
Co-funded
pension plan
‘21
‘22
‘23
1 2 3 4 5 6 7
Health and safety
Management system
Strategic goals
Zero work-related
fatalities
The Company has a zero
tolerance policy for work-
related fatalities
No major
accidents at
production sites
Measures to prevent accidents at the
Company’s facilities and the associated
negative impact on local communities in
rating regions or operational performance
Steady reduction
of health and
safety risks to
a tolerable level
Safe working conditions for
employees and mitigation of
ore mining and processing risks
Key performance indicators
10%-25% weighting in team KPIs
of all Group employees
10%-35% weighting in individual
KPIs of production site
managers
Goal:
Deliver on the action plan in
health and safety and reduce
FIFR by 20% or more
year-on-year
Goal:
Deliver on the injury prevention
plan and achieve zero work-
related fatalities
Contribution to
the UN SDGs
In 2022, the Company updated its
key strategic objectives in health
and safety for 2023–2025. Efforts
in this area are primarily focussed
on achieving an industry average
injury rate and zero-rate fatalities.
Heads of production sites are
personally responsible for the
life and health of each of their
subordinates. Injury and industrial
safety metrics weigh between 10%
and 35% in their individual KPIs.
Failure to prevent a fatality blocks
performance bonuses. In addition,
team KPIs for all employees
include injury rate and FIFR1
reduction by 20% or more, with
10%–25% weighting.
118
1 Fatal Injury Frequency Rate, the number of
fatalities per million hours worked.
119
Annual Report — 2023NornickelSustainable Development Control structure
Company’s management
(the Board of Directors Audit Committee, Management Board, President)
Senior Vice President – Operational Director
The Company’s management team member responsible for the
establishment, maintenance, operation, and improvement of the
Corporate Integrated Quality and Environmental Management
System covering quality as well as health, safety, and the
environment
Vice President for Ecology and Industrial Safety
Health, Safety, and Environment
Committee
Health and Safety
Department
Heads of the Company’s branches
Health and safety councils
(commissions)
Industrial safety functions
Industrial safety compliance
functions
The Audit Committee at the Board
of Directors deals with industrial
safety matters. The Committee
reviews management reports on
industrial safety performance every
quarter, hears reports on causes of
accidents, measures taken to prevent
similar accidents in the future, and
disciplinary actions taken against the
employees at fault.
The Company’s Health, Safety, and
Environment Committee, led by the
Senior Vice President – Operational
Director, is focussed on improving
performance and accountability in
health and safety. The Committee
meets quarterly at various production
sites of the Group.
1 2 3 4 5 6 7
Certifications and audits
In 2023, Nornickel’s health and safety
management system updated its
certificate of conformity through a
successful audit.
risk-based approach tools; contractor
management; and focus on
continuous improvement of the health
and safety management system.
Bureau Veritas Certification, the
certification body, described the
Company’s OHS management system
as mature and well-established and
found that the corporate systems
of Nornickel’s audited companies
met the relevant requirements of the
standard. The Company’s strengths
cited by the auditor include the
ongoing safety culture development
project; use of IT solutions and
As at the end of 2023, 49%1 of Group
companies maintained health and
safety certification ISO 45001
A total of 53 audits involving the
Group’s production site heads and
their deputies took place in 2023.
The audits included a comprehensive
inspection of safe practices as
well as equipment condition,
maintenance, and operation.
49%
of Group companies
maintained health and
safety certification ISO
45001
53 AUDITS
took place in 2023
Work-related injuries
In 2023, the Company continued
implementing its Building Risk-
Based Thinking Skills project aimed
at revising the health and safety
incident reporting process to
improve transparency and quality of
incident classification. These efforts
resulted in faster response times
and unlocked more opportunities
for further analysis of workplace
Complementary
incidents. Root cause investigation
corporate
and identification were also
pension plan
overhauled, which contributed to
more effective incident prevention
in the future.
In 2023, the Company’s lost time injury
frequency rate (LTIFR) slightly rose from
0.58 to 0.65 but remains below the
industry average. Nornickel continued
to improve mine safety by deploying its
Anti-collision proprietary solution and
Complementary
enhancing its machinery and personnel
corporate
tracking systems.
pension plan
Other corporate
pension plans
Work-related injuries across
the Group, PEOPLE
0.03 0.04
0.65
0.58
5
78
4
67
0.10
0.38
11
42
‘21
‘22
‘23
FIFR (per million
hours worked)
LTIFR (per million
hours worked)
Fatal injuries
Lost-time injuries
120
121
1 By average headcount.
Annual Report — 2023NornickelSustainable Development
Causes of fatalities
Item
Fall from height
Falling objects
Moving objects/parts
Rock fall
Underground transport
Electrocution
Collapse of structures
Explosion
Other
TOTAL
2021
2022
2023
1
0
3
2
0
1
0
0
4
11
1
0
0
2
0
0
0
0
1
4
0
0
0
0
3
0
2
0
0
5
Tragically, five fatal accidents were
recorded at the Company in 2023.
All accidents were thoroughly
investigated, with the resulting
reports submitted to the Board of
Directors and action plans developed
to eliminate their root causes. The
Company continues to improve the
quality of its incident investigations
while also reinventing its
occupational safety communications
with employees. The Group sees
fatality-free operations as its
strategic priority.
Following the investigations of
structure collapse incidents in the Kola
and Norilsk Divisions, the Company
has structured a procedure for
performing maintenance and repair of
ore conveyors subject to the results of
sensor-based non-destructive testing,
Contractor safety
Contractors’
work-related injuries
The Company’s procedural documents
on industrial safety – regulations,
policies, corporate standards, Golden
Rules of Safety – also apply to
our contractors.
Other corporate
In 2022, Nornickel reviewed the
pension plans
general terms and conditions related
to occupational health in its contracts
with contractors to emphasise the
achievement of zero fatalities and zero
breaches of industrial safety rules.
Complementary
corporate
pension plan
All tasks performed by contractors
in highly hazardous conditions are
carried out in line with corporate
standards. Work permits must contain
safety requirements to be met when
organising and performing work.
The Company checks compliance
with these requirements during each
shift. Prior to the commencement
of any work, contractor employees
are required to receive induction and
targeted briefings on occupational
health, including safety measures.
Fatal injuries
At its sites, Nornickel holds regular
LTIFR (per million
hours worked)
joint inspections for compliance
with safety requirements and H&S
committee meetings involving
contractor representatives. In the
event that contractors fail to comply
with safety requirements, they
are fined.
set up a technical council to assess
the quality of repair, and decided to
replace wooden roofing of vertical
mine workings with concrete roofing.
To prevent collision of employees with
self-propelled diesel equipment, the
Company fits its mining machinery
with the Anti-collision system that
stops the vehicle if a pedestrian
is detected in a hazardous area.
Nornickel also installs walkways, traffic
lights, and spherical mirrors. Common
requirements have been developed
for vehicle and pedestrian traffic plans
in underground workings, and safety
zones set up for remote control load-
haul dumper (LHD) operators.
Following the investigation into a self-
propelled drilling rig fall from height,
Nornickel has developed a standard
fence for vertical mine workings
with change in elevation; visualised
hazardous areas; provided operators
of underground machinery with
up-to-date traffic plans; and piloted
underground navigation solutions.
Contractors’ work-related
injuries
30 46 32
4
42
2
28
7
25
‘21
‘22
‘23
Fatal injuries
Lost-time injuries
1 2 3 4 5 6 7
Safety culture
The Company continuously improves
its H&S system elements. These
changes cover all production units
of the Company – from mining ore to
making metals.
To keep employees well-informed
about safety measures, the Company
regularly develops and updates its
guides, videos, presentations, and
other visuals highlighting the most
important guidance to protect life and
health in various situations or when
performing certain types of work.
A culture of safety begins with
mindful behaviour and leadership
demonstrated by each employee.
Nornickel continues to run the
Developing Risk-Based Thinking
project across all of its mines while
also growing its train-the-trainer
programme. Since 2023, 20 Group
enterprises run an initiative that
encourages employees to take
ownership of workplace safety. This
initiative has served as a basis for a
bonus programme that encourages
employees to adopt safer ways
of working and offers additional
rewards for showing initiative and
taking responsibility. Bonuses are
also awarded to employees who
complete training in safe working
practices offered by internal coaches
and later successfully identify
new risks and suggest mitigants.
The bonus size depends on the
extent of employee’s involvement
in risk mitigation and is between
RUB 5 thousand and RUB 10
thousand. Once these bonuses were
introduced, most identified risks were
eliminated as employees adopted
a more responsible and mindful
approach to health and safety
requirements, thereby improving
the overall manufacturing culture
and employee engagement. In 2023,
449 employees earned bonuses to a
total of RUB 3.5 million for identifying
workplace risks.
The Company has in place a formal
procedure for refusing a task if
exposed to a risk. Such refusal does
not entail any sanctions against the
employee. Complaints or suggestions
can be anonymously submitted by
each employee via the Corporate
Trust Line speak-up programme.
On top of this, employees can ask
questions and get feedback from
managers of different levels at
working meetings, huddles, etc.
Emergency preparedness
In line with Russian laws, Nornickel’s
facilities remain prepared at
all times for any emergencies,
including emergency containment
and response. This is vital, as the
Company operates more than 300
hazardous production facilities that
rely on hazardous substances for their
operational processes.
Emergency preparedness system
Every enterprise has in place
on-site emergency response
plans
Contracts with professional
emergency rescue services and
organisations are maintained
across the Company’s footprint
Auxiliary mine rescue teams are
set up and take regular training
in near-real-world settings
Our employees take
emergency response training,
with drills conducted on a
regular basis
Provisions are made for
emergency response at
hazardous production facilities
Emergency surveillance,
warning, communication, and
response support systems
operate across facilities
122
123
Annual Report — 2023NornickelSustainable Development
Monitoring of violations
Nornickel has developed and operates a multi-
tiered H&S monitoring system, with ad hoc,
targeted, and comprehensive H&S inspections.
Monitoring tiers
Tier I
Tier II and onwards
Monitoring by a line manager, involving H&S officers
Workplace inspection
Monitoring by H&S commissions aided by
management and employees
In 2022, the incident reporting procedure was changed to
accelerate responses, and the incident classification system
was improved to enhance further analysis. The investigation
and root cause identification process was significantly
transformed to prevent future incidents.
In addition, the Company conducts regular behavioural
safety audits. The prevention and control team has
identified and disciplined close to 8 thousand non-compliant
employees, including by partially or completely stripping
them of their bonuses.
Employee training
The Company is committed to ensuring its people have
all the necessary knowledge, skills, and competencies to
perform their duties in a safe and responsible manner.
Employees trained
38,253
51,520
57,114
Training starts right after a new
employee is hired, with a health and
safety induction and subsequent
on-the-job briefings. Briefings are then
repeated regularly in accordance with
the existing corporate programmes.
LTIFR (per million
All Group employees also regularly
hours worked)
take online industrial safety trainings
Fatal injuries
followed by tests. There are also
interactive training courses for
employees in main occupations.
In 2023, over 57 thousand Group
employees were covered by these
trainings and briefings.
A project to establish a train-the-
trainer programme for safety culture
moved into an active phase during the
year. In 2023, a total of 3,111 Dynamic
Risk Assessment trainings were
held involving about 45 thousand
employees as well as 1,151 Behavioural
Safety Audit trainings involving over 13
thousand employees.
‘21
‘22
‘23
>57 THOUSAND
Group employees took
online industrial safety
trainings followed by tests
1 2 3 4 5 6 7
Prevention of occupational diseases
To minimise the risk of occupational
diseases, Nornickel operates the
Sulphur Project aimed at reducing
sulphur dioxide emissions, takes
effective healthcare measures
considering both workplace and
personal risk factors, and encourages
healthy lifestyle.
Regular health monitoring of
employees is key to preventing
occupational diseases. Employees
undergo mandatory pre-employment,
regular, and ad-hoc medical
examinations at the Company’s
expense during their employment at
the Company. Production enterprises
have dedicated medical aid posts
to perform pre-shift health checks
and provide medical assistance
on request.
The Company protects employees
from negative workplace factors by
providing collective and personal
protective equipment while also
offering more effective work and
rest schedules and better workplace
amenities. All employees have a
mandatory meal break during their
shifts.
Special examinations at occupational
pathology centres are provided to
employees exposed to hazardous
substances. Employees working in
contaminated conditions are provided
with free-of-charge wash-off and
decontaminating agents. Employees
exposed to hazardous or highly
hazardous conditions are provided
with free preventive nutrition, milk, or
equivalent food products.
Corporate healthcare
The Company is focussed on the
availability of medical care for its
employees and their families. To
provide them with quality and
timely healthcare services both at
medical centres and enterprises, the
Company set up Nornickel Corporate
Health Centre.
Nornickel’s medical care framework
Nornickel
Nornickel Corporate Health Centre
single operator of healthcare services
Medical aid
post
Shop-level
healthcare
departments
Healthcare
centres
MRI
module
VHI coverage
CHI coverage
Newly identified occupational
diseases
213 174 145
‘21
‘22
‘23
30
medical facilities put into
operation since 2021
A total of
>2.2 MILLION
medical examinations
delivered
124
125
Annual Report — 2023NornickelSustainable Development
249
types of medical services
across 13 primary care
specialties are provided by
Nornickel’s healthcare centre
86
types of medical services
across five specialties
are provided by an MRI
department in Monchegorsk
174
types of medical services
across nine specialties are
provided by the Dudinka
Medical Centre
1 2 3 4 5 6 7
Environment and climate
Environmental strategy
Contribution to
the UN SDGs
In 2020, Nornickel developed its Holistic
Environmental Strategy which sets clear
goals across key focus areas: climate
change, air, water, soil, waste, and
biodiversity. The Strategy was further
detailed and approved by the Board of
Directors in 2021 and updated in the first
quarter of 2024.
For more details on the
Environmental Strategy, see
the Company website.
The updated Strategy is divided into
mandatory and voluntary sections.
The mandatory part focuses on legal
compliance and includes targets
across seven key pillars: number of
emergencies, air, water, tailings and
waste, soil, biodiversity, and stock
exchange requirements.
To meet the set targets, the Company
developed programmes containing more
than 150 specific initiatives.
Key measures include reduction of
sulphur dioxide emissions in Norilsk
and Monchegorsk; water recycling
and reuse; commissioning and
retrofit of wastewater treatment at
discharge sites; land remediation,
clean-up, and reforestation;
monitoring of environmental media
and the deployment of an automated
pollutant emission control system;
and biodiversity impact assessment
in all areas affected by the Company’s
operations.
The voluntary section of the Strategy
includes optional pillars, such as waste
(increasing recycling rates), soil, some
international initiatives and standards,
and climate change – a total of 187
initiatives.
To meet the set targets,
the Company developed
programmes containing
>150
ACTIVITIES
The voluntary section of the
Strategy includes
187
ACTIVITIES
Nornickel’s first corporate medical
centre opened in Norilsk in 2021 to
service patients under the voluntary
health insurance (VHI) programme.
Today, it provides 249 types of medical
services across 13 primary care
specialties. The average appointment
wait time ranges from seven days to
one month, which confirms the high
local demand for quality medical care.
In 2023, the Company continued to
roll out its healthcare network to the
production sites in the Norilsk Industrial
District and on the Kola Peninsula.
Shop-level healthcare departments
were set up to prevent diseases
and provide quality medical care to
employees directly on-site.
An MRI department was
commissioned at the Kolsky Health
and Spa Centre in Monchegorsk,
which provides 86 types of medical
services across five specialties. In
Dudinka, the Dudinka Medical Centre
was opened. It currently offers 174
types of medical services across
nine specialties, with a therapist,
physical therapist, massage nurse,
and nursing staff available on a
permanent basis. Specialist doctors
come to the centre weekly from
central outpatient facilities.
Since 2021, 30 medical facilities
have been put into operation, with a
total of more than 2.2 million medical
examinations and over 34 thousand
procedures delivered. At the moment,
medical centres in the Talnakhsky
and Kayerkansky Districts of Norilsk
and in Monchegorsk are being
prepared for launch.
The Company also rolled out its Digital
Healthcare programme to deploy
innovative IT solutions in medical
technology. The programme was
introduced at Zapolyarye Health Resort
in 2021 and in Norilsk in 2022. A mobile
app was developed and launched,
enabling employees to access their
medical records, make an appointment
with a doctor, and get all the
information they need about the clinics’
services. Nornickel continues to digitise
key medical documents and set up self-
diagnostic systems and a disease risk
assessment system.
126
127
Annual Report — 2023NornickelSustainable Development Environmental management
In place since 2005, Nornickel’s
Environmental Management System
(EMS) is part of the Corporate
Integrated Quality and Environmental
Management System. This ensures
coordination between all environmental
matters and other areas, enhancing
the Company’s overall performance on
environmental safety.
Bureau Veritas Certification Rus
operates in Russia under the
accreditation of the Egyptian
EGAC, which is a full signatory
and participant of the IAF MLA
(the Multilateral Recognition
Arrangement of the International
Accreditation Forum).
53%
of Group companies1
certified to the international
environmental standard at
the end of 2023
In 2023, the seventh recertification
audit of the system confirmed
the Company’s compliance with
the standard and extended the
certification until 12 January 2027.
At the end of 2023, 53% of Group
companies1 were certified to this
international environmental standard
ISO 14001:2015
System audit
The Company confirms the EMS
compliance with ISO 14001:2015 by
engaging Bureau Veritas Certification
Rus (BVC), a leading international
certification body, to conduct
surveillance audits once a year and
recertification audits every three years.
Сертификат ISO 14001:2015
Certificate
Certified assets
Audit
MMC Norilsk
Nickel
Certification body: Bureau Veritas Certification Rus
In 2023, a recertification audit was conducted for the
seventh certification period
Kola MMC
Certification body: Bureau Veritas Certification Rus
In 2023, a surveillance audit was conducted
ISO
14001:2015
Pechengastroy
Certification body: LLC Quality Management in Accordance
with International Standards
In 2023, a сertification audit was conducted
Norilsk Nickel
Harjavalta
Certification body: Bureau Veritas Certification Rus
Norilsk Nickel Harjavalta maintains certification to ISO
14001:2015
GRK
Bystrinskoye
Certification body: IRCLASS IRQS (India)
The EMS was certified in 2023
1 By average headcount.
128
1 2 3 4 5 6 7
Climate
Our approach
The Company continues
integrating its climate risk and
risk factor management system
into its business processes in
accordance with TCFD and COSO
recommendations.
To assess risks and opportunities
arising from the global energy
transition, Nornickel has developed
three own scenarios for global
economy and climate change until
2050.
The Company has chosen the
Sustainable Palladium as its baseline
scenario, according to which traditional
industries are expected to remain
centre stage along with the growing
green economy. In particular, internal
combustion engine vehicles are
expected to retain a large market share,
resulting in a steady long-term demand
for palladium. The other two scenarios
are used by the Company to stress-test
climate-related risks.
Rapid Transition
Probability: 25%
Low-carbon
development
scenario +1.7 °С1
For more details on climate-related
risks and opportunities, see the Risk
Management section of this Report.
Sustainable
Palladium
Probability: 70%
Continuation of current socio-
economic and technological trends
+2.0 °С1
Permafrost monitoring
Climate change in the Arctic drives
global-scale challenges and poses a
significant threat to the security of
polar infrastructure.
In 2022, Nornickel focused on
building a science-based, practical
framework for asset operation
management. Deep monitoring wells
were drilled in populated areas of the
Norilsk Industrial District to study
the permafrost soil temperature
range and assess the impact of
global climate change. A well in the
centre of Norilsk, where temperature
measurements have been taken since
as early as 1958, was restored and
fitted with a thermistor string. Data
from the well are sent twice a day to
the Company’s Facilities Monitoring
1 Temperature change by 2050.
Global Growth
Probability: 5%
Abandoning efforts to curb climate
change with further economic growth
fuelled by hydrocarbons
+2.5 °С1
The system developed by Nornickel to
monitor permafrost and the facilities built on it
enables assessments of the impact permafrost
degradation on the Taimyr Peninsula has on the
stability of engineering structures while managing
related risks.
Centre. Observations showed that in
1958 the base of permafrost was at a
150 m depth, while now it is at 147.7 m.
The pace of permafrost thawing at the
depth of 10 m was also established:
the temperature there has increased
by 4.2 °С since record keeping began,
which confirms the steady trend of
global warming.
Temperature changes in
the well
1958
2006
2023
10 metres
30 metres
-6.3°С
-4.4°C
-0.8°С
-3.0°C
-2.1°С
-3.2°C
129
Annual Report — 2023NornickelSustainable Development In 2023, the Company started to
develop a scientific approach to
monitoring permafrost and using these
data to build mathematical models
to assess the impact of natural and
anthropogenic factors on permafrost.
Cooperation was established with
the Research Centre for Construction
Technologies and Monitoring of
Buildings and Structures in the
Northern Arctic of the Fedorovsky
Polar State University.
The technical condition of facilities
built on permafrost in the Norilsk
Industrial District is monitored to
reduce the risk of emergencies.
To date, more than 1.8 thousand
automated sensors have been
installed across 218 facilities to gauge
soil temperature and displacement
of individual elements, carry out an
ongoing control of temperature and
humidity in crawl spaces, respond to
possible failures of heat and water
supply systems, monitor for relative
deformation of structures, etc.
Sensor readings are sent to the
control unit in real time. Along with
analysing automated monitoring data,
the Centre’s experts run a range of
geotechnical surveys, including visual
inspections, geodetic monitoring, and
measurement of groundwater level and
foundation soil temperature.
A new approach based on the
methods of mathematical modelling
of thermal and mechanical interaction
was developed to assess the impact
of climate change on the stability
of facilities in the Norilsk Industrial
District. It relies on the climate change
forecast across the Company’s
footprint, prepared by leading research
institutions. Buildings with foundation
on soils that remained frozen
throughout construction and operation
will be most affected by climate
change. That said, one of the key
challenges is the lack of information
about the properties of soils, which
have changed significantly during the
operation of structures. To address
this issue, geotechnical surveys and
laboratory studies of frozen soils
have been carried out to collect the
necessary data.
Background monitoring
Nornickel was the first Russian
organisation to set up its own regional
system of background permafrost
monitoring. The data obtained can be
used to supplement the database on the
condition and changes of permafrost in
the natural environment, quantitatively
predict changes in permafrost
conditions, and assess natural and
anthropogenic impacts on the soil
temperature.
To date, studies have covered an
area stretching about 147 km from the
Norilsk Industrial District to Dudinka and
measuring about 8 thousand sq km,
and identified 11 testing grounds that
best reflect the diversity of landscape
and geocryological conditions. In 2023,
the Company awarded contracts to
drill 24 wells with a depth of 10 to 20
m and two wells with a depth of 200
m on the allocated testing grounds to
assess permafrost characteristics and
determine the parameters of terrestrial
heat flow. The project was awarded the
National Environmental Prize named
after V.I. Vernadsky.
Thus, the Company now has
geotechnical and background
monitoring data that support informed
and economically sound decisions
regarding further operation of assets.
Greenhouse gases
In 2023, direct and energy indirect GHG
emissions from operations (Scope 1 + 2)
that could not be potentially removed
by the Company amounted to 8.6 mln t,
without the possibility of the process of
absorbing greenhouse gas emissions in
the Company.1
The year-on-year decrease in GHG
emissions (Scope 1 + 2) was due to:
• lower per unit fuel consumption for
electricity generation as a result
of optimising equipment operation
modes at combined heat and power
(CHP) plants
• higher share of HPPs in the power
generation mix due to the overall
optimisation of the energy system’s
operation
• less diesel fuel burnt at CHP plants in
2023 year-on-year.
Energy indirect GHG emissions
(Scope 2) were calculated using the
location-based method, including
regional emission factors. Notably, the
Trans-Baikal Division and RusHydro
signed a bilateral agreement to
purchase 212.1 mln kWh of electricity
generated by RusHydro hydropower
plants, up 20% y-o-y. This reduced
Scope 2 GHG emissions by more than
200 kt of CO2 equivalent in 2023.
Nornickel is exploring opportunities
for climate projects to reduce
the impact of its operations on
climate. To this end, the Company
signed an agreement with Siberian
Federal University to conceptualise
approaches to implementing a
comprehensive environmental and
climate project.
The Company has also developed
an innovative solution to utilise
waste from its core operations to
1 The emissions were calculated using the location-based method, including the emissions allowance for the Sulphur Project and excluding emissions from heat and
electricity supplies to household consumers.
1 2 3 4 5 6 7
GHG emissions, Scope 1 + 2, MLN T
OF CO2 EQUIVALENT1
10.3 9.9
9.7
0.5
8.5
0.5
8.1
0.5
8.1
1.3
1.3
1.1
‘21
‘22
‘23
Scope 2 emissions from
production assets
Scope 1 emissions from
production assets
Scope 1 emissions from households
and infrastructure facilities
GHG emissions from
operations by division, Scope
1 + 2, MLN T OF CO2 EQUIVALENT
9.0 8.6 8.6
0.6
3.6
0.6
0.5
3.7
0.3
3.4
0.3
3.4
0.5
0.5
3.9
0.5
0.5
3.9
‘21
‘22
‘23
Other
Energy Division
Trans-Baikal Division
Kola Division
Norilsk Division
remove GHG carbon dioxide (CO2).
By extracting materials from mines
and bringing them to the surface, the
Company already creates conditions
for mineralisation, which is a natural
carbon dioxide absorption process.
Concentrators fine grind ores and
separate useful elements from
gangue – tailings. The tailings then
undergo special treatment and
are transported to tailings storage
facilities to be distributed over the
entire surface, which enables their
reaction with atmospheric carbon
dioxide. During mineralisation, minerals
contained in Nornickel’s ores react
with carbon dioxide to form stable
secondary carbonates, which remain
in the tailings storage facility.
The tailings from ore concentration
can chemically capture from 4.5 to 17.9
kg of CO2 per tonne of tailings in the
natural environment, depending on the
mineral composition of gangue.
Calculations based on natural
mineralisation studies conducted in
2022 and 2023 showed that about
300 kt of CO2 per year has been
removed. The Company is currently
developing a methodology to estimate
and account for this absorption
capacity of tailings, which, once
audited and verified by an external
auditor, will be incorporated in the
Company’s statements on GHG
emissions and removals.
The Company’s further research is
focused on developing a technology
for accelerated and artificial
mineralisation. Such a technology will
significantly increase the absorption
capacity of tailings as compared
to natural mineralisation and, when
implemented at all Company sites,
reduce the carbon footprint of
products in the long term.
In 2023, Nornickel submitted a Report on
GHG Emissions to the Russian Ministry
of Economic Development to include
its data in the GHG emissions registry.2
The calculations only include direct GHG
emissions and are made as per Order
No. 371 On Approval of Methods for
Quantitative Determination of Greenhouse
Gas Emissions and Greenhouse Gas
Removals, dated 27 May 2022.
In addition, the Board of Directors
approved Nornickel’s Key Focus Areas
of Carbon Neutrality, outlining key steps
to reduce gross GHG emissions and
carbon footprint of products over short-,
medium-, and long-term horizons. The
document emphasises development of
low-carbon energy sources and climate
projects, the use of energy-efficient
technologies and equipment, artificial
intelligence, and conversion of vehicles
to alternative fuels. The Company also
continues looking into opportunities
for CO2 capture and utilisation projects
and unregulated bilateral power
purchase agreements.
Nornickel’s key production facilities are
located in the Norilsk Industrial District,
in the Arctic Circle, and operate in sub-
zero temperatures for about eight
months of the year. The district is isolated
from the federal energy infrastructure,
so Nornickel generates electricity
and heat locally at its own generating
facilities (100% owned by the Group).
As a result, the bulk of GHG emissions
comes from the Company’s energy
assets. As Nornickel is the only producer
of electricity and heat in the Norilsk
Industrial District, the Company also fully
meets the demand for energy and heat
from social infrastructure facilities and
the local population. The share of GHG
emissions generated by infrastructure
facilities and households in Nornickel’s
regions of operation is on average 12% of
total Scope 1 + 2 GHG emissions.
1 GHG emissions were calculated as per the GHG Protocol Guidelines. Estimates of greenhouse gas emissions
for the Group included the following greenhouse gases: direct emissions of carbon dioxide (CO2) – 9.5 mln
t, nitrogen oxide (N2O) – 0.051 kt, and methane (CH4) – 5.2 kt, mostly from gas transportation, including the
Sulphur Project, and heat and electricity supplies to household consumers.
2 According to Federal Law No. FZ-296 On Limiting Greenhouse Gas Emissions, dated 2 July 2021, starting from
2023, emitters generating 150 kt of carbon dioxide per year or more must submit annual reports on their GHG
emissions by 1 July of the year following the reporting year.
130
131
Annual Report — 2023NornickelSustainable Development Scope 3
The Company annually quantifies its
other indirect (Scope 3) GHG emissions,
which originate outside the Group
and are beyond the Group’s control or
influence. The Company distinguishes
between upstream and downstream
Scope 3 emissions.
The bulk of upstream Scope 3 emissions
is related to the purchase of raw
materials and equipment from suppliers
as well as energy and fuel consumption
(to the extent not included in Scope
1 + 2). Upstream Scope 3 emissions
have been primarily impacted by lower
diesel fuel consumption for power
generation in the Norilsk Industrial
District and by the sale of NordStar
Airlines in 2022.
Downstream Scope 3 emissions
come mostly from transportation
and processing of intermediates sold
outside the Group – iron ore and
copper concentrates produced by
the Trans-Baikal Division and nickel
intermediate products. Downstream
Scope 3 emissions are influenced by
changes in sales volumes, the Group’s
product and customer portfolio, and
the geographic mix of product sales.
In 2023, these emissions increased
year-on-year mostly due to higher
sales of intermediates.
Scope 3 emissions are quantified in
line with the GHG Protocol guidance
for all categories relevant to the Group
and the IPCC Guidelines for National
Greenhouse Gas Inventories.
GHG emissions, Scope 3, MLN T OF CO2 EQUIVALENT
Emissions by category
Scope 3 (other indirect GHG emissions)
UPSTREAM1, INCLUDING:
raw and other materials
equipment
energy and fuel
other
DOWNSTREAM, INCLUDING:
from processing of sold products
from transportation
2021
5.4
1.4
0.8
0.1
0.4
0.1
4.0
3.8
0.2
20221
5.3
1.4
0.9
0.1
0.3
0.1
3.9
3.7
0.2
2023
6.4
1.3
0.8
0.1
0.3
0.1
5.1
4.9
0.2
Energy sources
and energy efficiency
The Company’s key renewable energy
source is hydropower generated by
the Group’s Ust-Khantayskaya and
Kureyskaya HPPs. In 2023, the share of
renewables in total electricity generation
stood at 55% for the Group and 58%
for the Norilsk Industrial District. The
share of renewables in the Group’s total
electricity and fuel mix was 12%.
Nornickel has its own energy
assets located in the Norilsk
Industrial District. Natural gas
and renewables (hydropower) are
the core low-carbon sources for
energy generation. Diesel fuel, fuel
oil, petrol, and jet fuel are used by
Nornickel’s transport assets. Use of
coal by energy assets is minimised
to only small amounts in certain
production processes.
55%
Share of renewables in total
electricity generation for the
Group in 2023
58%
Share of renewables in total
electricity generation for
the Norilsk Industrial District
in 2023
1 2 3 4 5 6 7
The use of other renewables, such
as solar and geothermal energy, is
impracticable as Nornickel’s core
operating assets are located in a
region with harsh climatic conditions.
The Group’s own energy assets
produce about 54% of total energy
and 90% of electricity consumed by
the Group. The Company also supplies
electricity and heat to external
consumers, primarily local social
infrastructure and local communities
in the Norilsk Industrial District.
Due to harsh climates, not all renewables are
available in the Arctic Circle
Solar
Power
Geothermal
Energy
~8 months a year - air temperatures below
freezing point
~100 days - duration of polar nights and
twilights
~70 days per year - sunny days
Permafrost: 300 to 500 m deep
Energy generation and consumption by the Group1, TJ
Item
Fuel consumption by the Company2
• Natural gas
• Diesel fuel and fuel oil
• Petrol and jet fuel
• Coal3
Electricity and heat from own renewable sources (HPPs)
Electricity and heat purchased from third parties
Sales of electricity and heat to third parties
TOTAL CONSUMPTION OF ELECTRICITY AND FUEL4
Share of renewables in total electricity and fuel consumption
2021
151,235
130,867
15,097
3,715
1,557
14,586
10,891
19,974
156,383
9%
2022
141,380
125,933
13,581
311
1,555
16,152
11,005
18,968
149,274
11%
2023
137,211
121,643
13,080
308
2,180
16,800
8,700
19,216
143,146
12%
Fuel consumption by the Group, TJ
Electricity consumption by the Group, TJ
151,235
141,380
137,211
47%
2.5%
10%
1%
87%
0.2%
10%
1%
89%
0.2%
10%
2%
89%
51%
55%
14,351
15,946
16,574
Petrol and jet fuel
Diesel fuel and fuel oil
Coal
Natural gas
16,136
15,397
13,758
Share of renewables
Electricity from HPPs
Electricity from
non-renewables
‘21
‘22
‘23
‘21
‘22
‘23
1 As part of its effort to standardise the approach to identifying GHG emission sources, the Company reduced
the uncertainty of calculating upstream Scope 3 emissions by excluding insignificant sources in the Purchased
Goods and Services and Capital Investment categories from the calculation. The 2021 and 2022 data have been
recalculated using the new approach.
1 For a detailed breakdown of the Group’s energy consumption by enterprise, see Nornickel’s Sustainability Report 2023.
2
Including the fuel used to generate electricity for Norilsk.
3 Coal is only used in production processes, with the Kola Division accounting for 60% of total consumption, the Trans-Baikal Division 20%, and the Norilsk Division 20%.
4
Including losses.
132
133
Annual Report — 2023NornickelSustainable Development The Group attaches great importance
to improving the energy efficiency
of its existing and future production
sites, focusing on keeping GHG
emissions within the targets
announced in its comprehensive
environmental programme. In 2023,
the Company invested more than USD
400 million in upgrading its energy
infrastructure. The investments
cover multiple projects related to
equipment replacement at thermal and
hydropower plants and upgrades to
fuel tank storage facilities, power grids,
and gas pipelines. In 2023, 45 energy-
saving initiatives were implemented.
>USD 400 MLN
invested in upgrading energy
infrastructure in 2023
Air
High sulphur dioxide emissions from
the smelting of sulphide concentrates
with high sulphur content are a key
environmental issue for the Company.
business by implementing Sulphur
Project 2.0 across the Norilsk and Kola
Divisions and thus cutting its sulphur
dioxide emissions.
SO2 emissions from the Norilsk
Division, MLN T
1.6
1.8
1.7
Our targets
Nornickel’s strategic plan is to
transform the Company into an
environmentally clean and safe
In 2023, the Group’s pollutant
emissions totalled 1.7 mln t, down 6.1%
y-o-y. The decline was due to lower
sulphur content in metal-bearing feed.
Air pollutant emissions across the Group, KT
Item
Sulphur dioxide (SO2)
Nitrogen oxide (NОx)
Particulate matter
Other pollutants
TOTAL
2021
1,601
11
9
25
2022
1,778
10
11
21
2023
1,671
6
11
20
1,647
1,819
1,708
2023
↓6%
1.7
MLN T
‘21
‘22
‘23
SO2 emissions from the Kola
Division, MLN T
0.02 0.01 0.01
2023
↓2%
0.01
MLN T
‘21
‘22
‘23
1 2 3 4 5 6 7
Water
The Company’s assets are located
in regions with sufficient water
resources. In 2023, as in previous
years, no shortage of water was
reported as enterprises and
households were supplied with
sufficient amounts of water.
Nornickel is committed to responsible
and sustainable use of water resources
and prevention of water body
pollution. To this end, the Company
regularly monitors groundwater at
production facilities and designs water
collection and treatment systems.
The Company is extremely careful
about its use of fresh water and strictly
complies with restrictions applicable to
industrial water withdrawal.
relatively low level. Furthermore, the
Company never withdraws water
from protected natural areas. The
water we use is mostly withdrawn
from surface and underground water
bodies, in addition to third-party
wastewater and natural water inflow.
Water withdrawal in 2023 decreased
by 38 Mcm y-o-y, including a 17
Mcm decrease in fresh water. This
was due to the launch of automated
systems for energy metering, savings
in water consumption, and variable
water withdrawal for cooling CHPP
equipment. Natural water inflow
accounted for 16.3% of total water
withdrawal in 2023. All facilities using
water have programmes in place
to monitor water bodies and water
protection areas.
Nornickel’s key production facilities
use closed water circuits to keep
clean water withdrawal on a
In 2023, 83% of all water used was
recycled or reused, in line with the
Company’s strategic goals.
Total fresh water withdrawn
for production activities with
the exception of mine waters,
MCM3
235
236 219
2023
↓7%
219
MCM
‘21
‘22
‘23
In 2023, water withdrawal
decreased
BY 38 MCM
Water consumption and wastewater discharge in 2023
Water withdrawal
Consumption
Wastewater discharge
315 MCM:
Surface sources — 207 mcm
Underground
sources — 26 mcm
Wastewater — 20 mcm
Natural water
inflow — 52 mcm
Other — 10 mcm
1,292 MCM:
= 224 Mcm (fresh water)
+ 1,068 Mcm (reused and
recycled water)
52 mcm — water reused in
other production processes
(4%)
1,016 mcm — recycled
water (79%)
147 MCM:
Clean — 67 mcm
Treated — 7 mcm
Insufficiently
treated — 32 mcm
Contaminated — 41 mcm
134
135
Annual Report — 2023NornickelSustainable Development Wastewater discharge into water
bodies primarily stays within the
approved limits and has no material
impact on biodiversity of water
bodies and related habitats. In 2023,
the Company decreased its total
wastewater discharge by 12.5% y-o-y,
with untreated wastewater discharge
unchanged year-on-year. In 2023,
the mass of pollutant discharges
decreased by 25% y-o-y to 157 kt.
The Company routinely partially
reuses its produced and mine
waters in production, particularly at
concentrators, and in sulphuric acid
neutralisation under the Sulphur Project.
Nornickel strives to comply with
legal requirements for pollutant
concentrations in wastewater. All
domestic sewage discharges are
treated at biological or mechanical and
chemical treatment facilities to ensure
that water quality meets accepted
standards. All programmes at the
Company contain measures to this end.
The Company’s regular measures to
assess its impact on water resources
include:
• wastewater inventory
• assessment of wastewater quality at
accredited laboratories as often as
required by laws
• monitoring of wastewater discharge
volume and quality at discharge sites
• observation of surface water bodies
at control points upstream and
downstream of discharge sites
• investments in improving the
performance of water treatment
systems and building new systems
• monitoring of wastewater treatment
processes at treatment facilities and
implementation of organisational
and technical measures to improve
treatment effectiveness.
Waste
Over 99% of the Company’s generated
waste is mineral and non-hazardous.
Such waste includes rock and
overburden, tailings, metallurgical slags,
and ferrous cake.
open pits, road fill, or for tailings
dam reinforcement. In total waste
generated, gangue accounts for 80%,
tailings 17%, and recycled/reused waste
19%.
Ore extraction waste is placed
in tailings and used as backfill
for underground workings and
Total waste generation increased in
2023 due to the development of the
Mokulayevskoye limestone deposit.
Water consumption by the
Group , MCM
1,281 1,351 1,292
15
716
13
627
38
625
100
541
110
511
113
516
Other
NTEC (part of the
Energy Division)
Kola Division
Norilsk Division
‘21
‘22
‘23
Wastewater discharge, MCM
194 168 147
60
34
5
95
41
34
4
90
41
32
7
67
‘21
‘22
‘23
Contaminated
Insufficiently
treated
Treated
Clean
Waste generation by hazard
class, KT
156,416
166,283
176,894
6
156,410
6
166,278
8
176,886
‘21
‘22
‘23
Class I–III
Class IV–V (including overburden
and tailings)
1 2 3 4 5 6 7
Tailings
Today, Nornickel operates six tailings
storage facilities: four in the Norilsk
Division, one in the Kola Division, and
one in the Trans-Baikal Division.
While all tailings storage facilities
operated by the Company are
located at a significant distance
from production facilities and local
communities, Nornickel recognises
these facilities as higher-risk
Biodiversity
Although Nornickel has been focused
on supporting protected areas in
its regions of operation for years, it
was not until 2022 that the Company
decided to establish a dedicated
biodiversity impact management
system. This led to first baseline
surveys, which became another
milestone in Nornickel’s history of
partnering with research institutions
for biodiversity conservation.
The baseline survey project, known
as the Big Scientific Expedition,
is a comprehensive study of the
ecosystems near the Company’s
mining, production, and energy
facilities. Phase 2 of the Expedition
covered three regions: the
Zabaykalsky Territory, the Murmansk
Region, and the Taimyr Peninsula. This
biodiversity survey became the most
extensive ecosystem study since the
Soviet era.
For more details on the survey
findings and Nornickel’s
biodiversity conservation
measures, see life.nornickel.com,
the dedicated website with data
by division,
and the Biodiversity section on
the Company website.
assets with significant potential
environmental and social impacts. This
is why the Company has in place the
Tailings Management Policy, regularly
monitors the condition of hydraulic
structures, and inspects discharge
sites as well as adjacent areas.
Tailings Management Policy
Waste management, KT
128,080
133,443
146,025
0.1
29,460
3
33,076
5
33,896
‘21
‘22
‘23
Disposal
Treatment
Utilisation
Nornickel created the life.nornickel.
com website to tell about its
biodiversity conservation projects and
individual measures taken in clear and
simple language.
Phase 2 of the Big Scientific Expedition
brought more detailed delineation
of the areas where ecosystem
biodiversity is exposed to impact from
our operations. New data were also
used to update the methodology for
calculating the integrated ecosystem
health indicator (IEHI), which will be
used in assessing progress towards
the goal of net-zero biodiversity
loss. Changes in the IEHI can also
confirm biodiversity net gain where
it is achieved. In addition to refining
the boundaries and methodology for
calculating the IEHI, the 2023 surveys
established which negative impacts
from operations affect the surrounding
ecosystems.
The scientists used the latest
research methods, molecular genetic
and phytochemical, and seamlessly
integrated the results into the existing
methodology for calculating the IEHI.
The molecular genetic studies also
discovered a new weevil species near
Norilsk, which Norilsk residents called
“putoranchik” after the Putorana
Plateau, and a lot of new Myxogastria
species in the Zabaykalsky Territory.
The team also studied how heavy
metals migrate from rock dumps and
proved that such migration does not
affect plant diversity: the dumps were
initially set up in areas with increased
natural content of heavy metals in
soils, so their leaching does not have
a negative impact on plant and soil
ecosystems as they are adapted to
increased heavy metal concentrations
in soils. Such adaptability is
characteristic of places where ore
bodies lie very close to fertile soil
layers.
The next step in developing a
biodiversity impact management
system is to use the baseline study
results to finalise the draft corporate
Standard for Ecosystem Biodiversity
Conservation and Monitoring and
divisional biodiversity conservation
and monitoring programmes and
incorporate them into short-term
biodiversity conservation action
plans (measures). The draft standard
describes how impacts on biodiversity
are managed, while conservation
and monitoring programmes
136
137
Annual Report — 2023NornickelSustainable Development contain information on division-
specific biodiversity aspects. All
this information feeds into action
plans (measures) for biodiversity
conservation. The documents are
expected to be finalised and approved
within a year of the end of the last,
third, phase of the Big Scientific
Expedition.
Studies to improve the productivity of
Lake Pyasino through guanotrophication
were another separate project, now in
its second year.
Nornickel also signed an agreement
with the Russian Ministry of Natural
Resources and Environment to
preserve the gyrfalcon population in
Russia, starting this effort in 2023.
Cooperation with
nature reserves
There are no nature reserves in the
proximity of Nornickel’s operations. In
the Murmansk Region, the Pasvik and the
Lapland Nature Reserves are 10 to 15 km
away from the Kola Division production
facilities. In the Krasnoyarsk Territory,
the boundaries of the Putoransky Nature
Reserve buffer zone are at a distance of
80 to 100 km from the Norilsk Division
production sites.
In 2023, Nornickel environmentalists,
expedition participants from the Siberian
Branch of the Russian Academy of
Sciences, and representatives of the
nature reserves wrapped up the second
year of the Big Scientific Expedition. The
expedition covered the areas around
Nornickel’s mining and processing
operations. Its key feature was
collaboration between researchers and
scientists from the nature reserves who
have the most complete statistical data
on biodiversity within their respective
areas over the past decades.
In line with its long-term strategy to
maintain biodiversity in its regions of
operation and preserve the unique Arctic
nature, the Company also organises
regular volunteer campaigns, supports
nature reserves, and finances studies on
Red Data Book animals.
1 2 3 4 5 6 7
Social policy
Nornickel is playing an important
role in the Russian economy and
has a strong impact on the social
and economic life in its operating
regions. With its enterprises
located mostly in single-industry
towns, Nornickel seeks to foster a
favourable social climate and create
a comfortable urban environment,
providing its employees and
their family members with ample
opportunities for creative pursuits
and self-fulfilment.
Contribution to
the UN SDGs
To this end, Nornickel maintains
partnerships with its operating
regions, whereby all stakeholders
collaborate on the development and
implementation of social programmes.
The harsh climate faced by Nornickel
employees in life and at work, the
remoteness of the Company’s key
industrial facilities, and the increasing
competition for human capital across
the industry call for a highly effective,
human-centred social policy that
would promote Nornickel’s reputation
as an employer of choice.
Support for indigenous peoples
Nornickel uses a comprehensive
approach to engagements with
indigenous peoples, consistently
scaling related support programmes.
They cover Nenets, Dolgans,
Nganasans, Evenks, and Enets on the
Taimyr Peninsula, and Sámi, Nenets,
and Komi in the Murmansk Region.
The Company contributes to
preserving ethnic communities, their
traditional lifestyles, and indigenous
trades. Engagement with indigenous
peoples living within the Company’s
footprint is driven by respect for
their rights, indigenous culture, and
historical heritage. Nornickel maintains
a mutually beneficial dialogue with
indigenous peoples, recognises
its responsibility for ensuring their
well-being, and encourages careful
attitudes towards indigenous habitats.
The Company’s commitments and key
principles of engaging with indigenous
peoples are set out in its Indigenous
Rights Policy, which reiterates, inter
alia, its commitment to implement free,
prior and informed consent (FPIC) for
indigenous peoples where applicable,
according to the standards and
recommendations of the International
Council on Mining and Metals (ICMM).
RUB 1 BN
~
spent by the Company on
projects to support indigenous
peoples in 2023
Nornickel’s metals and mining assets are located
outside ancestral lands of indigenous peoples.
The Company’s voluntary commitments towards
the indigenous peoples of Taimyr are formalised
by agreements and minutes of meetings with
representatives of indigenous family communities.
138
139
Annual Report — 2023NornickelSustainable Development
In 2023, over 600 schoolchildren
aged between 8 and 14 participated
in webinars, creative workshops, and
online quizzes hosted by practicing
environmental engineers, geologists,
occupational safety specialists, and
education experts. Around 80 people
took part in webinars for teachers.
City of Endless
Inspiration art festival
The second City of Endless Inspiration
public art festival was held in Norilsk
in 2023 supported by Nornickel. The
festival’s key message is that we can
and should improve the environment
we live in, and public art, such as
street art, singing, playing music,
and dancing are excellent tools to
do just that. The festival helps rally
Norilsk residents around the idea of
improving the city and its environment
by creating art together.
Reflection was the keynote idea
behind the most recent festival.
People, urban space, and art are all
reflections of the city. Throughout the
event, local residents could take part
in interactive immersive activities that
put a spotlight on the beauty of the
city and its people. During the festival,
more than 3 thousand local residents
attended creative laboratories,
masterclasses and workshops,
with the most active participants
recognised with prizes. In the run-up
to the event, a campaign was held to
collect scrap metal and plastic bottle
caps, which the festival participants
turned into unique art projects during
the festival.
infrastructure, helping them prepare for
autumn and winter hunting and fishing
seasons, and fostering indigenous
culture and traditional economic
activities (RUB 100 million on an annual
basis).
To handle routine matters and
coordinate engagement with indigenous
peoples, a department was set up within
the Norilsk Division, responsible for
engagement with indigenous peoples of
Taymyr and staffed with the right level
of indigenous talent.
In 2021–2023, local educational
institutions organised community
service activities for high school
students across local communities;
the Five Hunters game was published;
and offline translators into indigenous
languages, unique in Russia, were
developed. Façades of 75 homes were
heat-insulated at the villages of Popigay
and Zhdanikha; 30 thousand refractory
bricks were delivered for the repair of
heating stoves at eight settlements
within the Khatanga rural municipality;
premises were repaired in the
Community Centre at the Khantayskoe
Ozero; and repair materials were
acquired for the Volochanka and Ust-
Avam settlements.
Nornickel supported the International
Decade of Indigenous Languages
started in 2022. Initiatives run by the
Company on the Taimyr Peninsula in
2023 aimed at preserving and promoting
indigenous culture. They included the
Nomad Camp festival, youth forums, a
folklore festival, and a project to create
language nests. The first ever literary
competition in indigenous languages
of Taimyr, Voice of the North, was held
during the year.
In 2023, the Company spent close to
RUB 1 billion on projects to support the
indigenous peoples of the North.
Nornickel’s strength in engaging with
indigenous peoples is driven by its
ongoing contacts with indigenous
communities and families and regular
discussion of issues as they arise,
contributing to better understanding
and inclusive engagement.
For instance, Nornickel, Wowhaus
architectural bureau, and the Norilsk
Development Agency have teamed up to
hold a public consultation with Tukhard
residents (Taimyr) focussed on the new
settlement’s master plan and house
plans. The consultation was part of a
process to obtain FPIC for any changes
from affected indigenous peoples, held
in line with the UN principles. During the
discussion, comments and suggestions
of Tukhard residents were taken into
account.
Nornickel operates a programme to
support and develop the indigenous
peoples of Taimyr. The programme’s
terms are detailed in the quadripartite
agreement on engagement and
cooperation for 2020–2024, with
allocated funds exceeding RUB 2 billion.
The Company supports the sustainable
development of indigenous peoples,
involving them in the efforts to enhance
their quality of life, preserve indigenous
habitats, improve infrastructure,
facilitate traditional economic activities,
and increase access to healthcare,
education, culture, sports, and tourism
services.
In 2023, a key programme highlight
was the World of Taimyr contest aimed
at addressing local challenges and
fostering the sustainable development
of indigenous territories. Only
indigenous participants and non-profit
organisations acting in the interests
of indigenous peoples were eligible
for participation in the contest. The
winners started implementing their
projects in June 2023 and are expected
to complete them in November 2024.
A total of 18 social-impact projects
received the grants totalling RUB 52.8
million.
The Indigenous Communities
Coordination Council, created at the
initiative of indigenous peoples, operates
in the Norilsk Division to monitor the
programme’s implementation. A total of
58 indigenous family communities are
represented in the Council to provide
public oversight for the programme
as well as to ensure, through voting,
fair allocation of extra funds for
strengthening the communities’
1 2 3 4 5 6 7
Youth programmes
Add Colours
to Your Town project
For ten years running, Nornickel has
been holding its annual Add Colours
to Your Town art contest for children
and young people living in Norilsk
and Monchegorsk. The main idea
behind the project is to engage the
younger generation in transforming
these places through art, foster
place attachment, and build a vision
of their future intertwined with
where they live. Apart from providing
a springboard for art projects, the
contest encourages responsible
attitudes towards the environment
and sustainable use of resources.
Career guidance for children
On 1 September each year, the
Company provides all first-graders
in its host cities with A Book on
How Metals Helped Build Cities,
showcasing metals and mining jobs.
Consistent career guidance efforts
foster a feeling of pride for Nornickel
among children and helps them
relate to what Nornickel does as well
as introduce them to local cultural
heritage while promoting scientific
knowledge and making science more
attractive through exposure to the
Company’s production processes.
Green Brush
online camp
Every year during vacations, Nornickel
supports the Green Brush online
children’s camp to offer career
guidance and foster green behaviours
and a safety culture. The project
lays a foundation for training future
environmental engineers and H&S
professionals by teaching school
students to be environmentally
responsible and considerate as well as
conscious of their own safety and the
safety of those around them.
140
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Annual Report — 2023NornickelSustainable Development In 2023,
>32 THOUSAND
PEOPLE
attended the World of New
Opportunities events
>80 PARTICIPANTS
trained under entrepreneur
support programmes
35 PROJECTS
selected for post-training
investment rounds
Charity programmes
World of New Opportunities
To foster sustainable development
across its operating regions,
Nornickel has launched the World
of New Opportunities charity
programme focussed on building
social skills among local communities,
demonstrating and incorporating new
social technology as well as supporting
and encouraging community initiatives
and intersectoral partnerships.
The programme’s key focus areas in 2023:
Focus area
Develop!
Invent!
Act!
Programmes and projects
We Are the City! social technologies forum
Socially Responsible Initiatives Competition
World of Taimyr project contest
Social Engineering Bureau
Peremena: Change Starts with You education project
SVET ON youth forum
IMAKE engineering marathon
An accelerator for regional entrepreneurs and an investment
round
Create!
Norilsk Development Agency
Second School centre for community initiatives in the
Pechengsky District
Monchegorsk Development Agency
The programme’s goals include
developing the service economy
across Russian regions, improving the
business climate, and facilitating the
development of small- and medium-
sized businesses, including social
entrepreneurship. Since 2014, training
programmes have been annually
delivered for business communities,
with support from trainers and mentors.
On top of this, in 2023, Nornickel
provided access to entrepreneurship
trainings and financial aid for launching
a business to high-school and
university students based in Norilsk.
During the year, over 80 participants
were trained under entrepreneur
support programmes, with 35 projects
selected for post-training investment
rounds. A total RUB 49 million in
interest-free loans (for nine projects)
was raised in Norilsk and RUB 20
million (for eight projects) in the
Murmansk Region.
For more details on the World of
New Opportunities programme, see
Nornickel’s 2023 Sustainability Report.
1 2 3 4 5 6 7
The Socially Responsible Initiatives Competition,
held by Nornickel since 2014 to support
community initiatives, is a crucial element of the
World of New Opportunities programme. Over
3.6 thousand applications have been submitted
to the competition over the past decade, with
support granted to more than 950 projects for a
total of RUB 1.1 billion.
Socially Responsible Initiatives
Competition
In 2023, 106 social-impact initiatives
were implemented in Nornickel’s
regions of operation. In 2022 and
2023, Nornickel primarily focussed
on intersectoral partnerships and
integration projects. In September
2023, the Company announced
the new phase of the Socially
Responsible Initiatives Competition.
The competition’s geography
was expanded, with a total of 371
applications received.
The competition’s sponsors observe
some positive trends: the quality
and definition of applications have
improved; the number of partnership
projects has increased; and the
range of social services provided by
participants is expanding. 2023 also
saw an increase in the number of
partnership projects and situations
where resources were pooled to
boost the social impact.
Systematic work with participants,
educational programmes, and travel
grants are starting to bear fruit.
Employee volunteers team up with
school students and teachers to
create projects; makers innovate for
non-profit organisations and children
with special needs; and entrepreneurs
offer their resources to monetise and
scale social-impact projects – such
partnerships generate synergies and
promote sustainability.
Peremena: Change Starts with You
education project
During the year, the Company
continued its Peremena: Change
Starts with You project, which
brings together all stakeholders of
the educational process: children,
parents, and teachers. Over 2
thousand people from six localities
took part in the project. In early 2023,
project experts delivered a series
of in-person trainings modules
such as Strong Skills of a Modern
Educator, Motivation and Methods for
Engaging School Students in Game
Activities, and others.
In June, the Peremena: Urban summer
academy was organised in Saint
Petersburg for 50 school students
from the Company’s operating regions.
During the ten busy days of the event,
the participants were immersed in
the world of urbanism and social
design. They also visited the site of
Gipronickel Institute and met with
employee volunteers.
In March 2023, over 700 teenagers
aged 14 to 18 from three of Nornickel’s
operating regions took part in the
SVET ON youth forum to try their hand
at entrepreneurship, engineering,
and technologies. Over 30 Nornickel
partners joined their efforts to support
the forum.
IMAKE League project
The project brings together aspiring
makers and future engineers and
scientists. The Company leverages
this venue to build a system of
educational activities that promote
science projects among children
and teenagers.
The project’s key activities in 2023
were IMAKE Science Camp in Skolkovo,
Skill Camp in Vladivostok, and IMAKE
engineering marathon, which included
crash courses and workshops across
a number of cities, consultations with
makers, and reviews of inventions
and prototypes. In 2023, more than
5 thousand school students from
the Company’s regions of operation
took part in the project. For the
first time, the project’s events – a
family invention festival, a maker
cleanup day, and a crash course for
children – were held in the settlement
of Snezhnogorsk.
142
143
Annual Report — 2023NornickelSustainable Development IMPROVING
GOVERNANCE
The proportion of independent directors on
the Board is in line with the Listing Rules
of PJSC Moscow Exchange and ensures
that the Board incorporates the views of all
stakeholders and its decisions are unbiased
46.2%
Proportion of independent directors
in 2023
CORPORATE
GOVERNANCE
146
Chairman’s letter
148
Corporate
governance
system
157
General Meeting
of Shareholders
160
Board of Directors
and Board
committees
178
Executive bodies
185
Control
system
199
Remuneration
report
202
Risk
management
Chairman’s letter
Strengthening corporate
governance has always been
top of mind for Nornickel.
Our Board of Directors believes
compliance with the key principles
and recommendations of the Bank of
Russia’s Corporate Governance Code to
be a prerequisite for better governance
at the Company, unlocking long-term
and sustainable growth.
1 2 3 4 5 6 7
>400
THOUSAND
individuals own Nornickel
shares
46.2%
Proportion of
independent directors
ААА+++
Nornickel’s score in the Anti-
corruption Ranking of Russian
Business
for the first time ever. In 2019, this
figure only sat around 62 thousand.
The Company runs road shows and
educational events for retail investors,
and organises on-site visits to its
production assets for investors and
analysts. Finally, to accommodate
our shareholders, we have decided to
do a share split to boost our stock’s
liquidity and make our shares more
accessible to a wider range of retail
investors. We believe that this move
will contribute to further expansion of
Nornickel’s shareholder base and the
growth of the Russian stock market
more broadly.
Nornickel has further strengthened its
long-standing partnerships with the
indigenous peoples of the North by
setting up a specialised department
within the Norilsk Division responsible
for liaising with them. We also continue
delivering on our RUB 2 billion, five-
year support programme for the
indigenous peoples of Taimyr.
management tools and AI solutions;
implement research projects, including
on nature and climate change in the
Arctic; deploy production innovations;
drive digitalisation; train qualified
talents for the Company; and so on.
In 2023, two General Meetings of
Shareholders were held via an easy-
to-use and reliable e-voting service.
This service enables shareholders to
vote regardless of their location, with
more and more shareholders taking
part in the meetings as a result.
The composition of Nornickel’s Board
of Directors meets Russian and global
best practices in corporate governance.
All 13 Board members enjoy an
impeccable business reputation and
recognition. In 2023, the Board was
46.2% independent, which is in line with
the Listing Rules of Moscow Exchange
and ensures that the Board factors in
the views of all stakeholders and its
decisions are unbiased.
Last year, Nornickel entered into a
number of partnership agreements
– including with the Federal
Environmental, Industrial, and Nuclear
Supervision Service of Russia
(Rostechnadzor); IT companies;
and leading research institutions
and universities – to reinforce its
competences in industrial safety and
information security; develop big data
A 2023 audit of Nornickel’s corporate
practices shows that the majority of
them are compliant with the principles
and recommendations of the Bank
of Russia’s Corporate Governance
Code. Last year, Nornickel focused on
improving the quality of counterparty
due diligence for corruption risks.
Along with training and educating
staff on our anti-corruption efforts,
we strive to get feedback from our
employees on whether these efforts
are effective. In 2023, Nornickel’s
leadership in corporate governance
was confirmed after it received an
AAA+++ in the anti-corruption rating of
Russian Business, which is assigned to
companies that have in place the most
stringent anti-corruption safeguards.
Nornickel successfully hit its goals
for 2023, while changes made and
measures taken during the year have
helped us maintain our leadership
in the Russian and global markets
and retain our appeal to investors.
Understanding the importance of the
work that stands before us, Nornickel
will continue making every effort to
deliver results while the experience
and expertise of Company employees,
management, and shareholders will
drive our strong performance, steadily
strengthen our corporate culture, and
boost our competitive growth.
Andrey Bougrov
Chairman
of the Board of Directors
MMC Norilsk Nickel
In 2023, Nornickel maintained its focus on maximum
transparency by disclosing financial and non-financial
information as a matter of course.
In particular, Nornickel released its public climate report in
the run-up to the UN Climate Change Conference. Although
this is our first specialised report, this type of work is
nothing new to us, having disclosed our climate efforts in
annual sustainability reports since 2016. In 2023, we also
published our first-ever standalone reports on human rights
and responsible mineral supply chain.
Nornickel further expanded its engagements with all
stakeholders. For instance, our already traditional open
online dialogues between Company employees and
management have once again proven themselves invaluable.
Employees received exhaustive replies to their questions
from Nornickel management, while the Company received
employee feedback via online surveys on a wide range of
pressing topics.
Nornickel has considerably stepped up its engagements
with Russian retail investors. In 2023, the number of
individual Nornickel shareholders topped 400 thousand
146
147
Annual Report — 2023NornickelCorporate governance Corporate governance system
Corporate governance structure
General Meeting
of Shareholders
37.0%
Interros
36.6%
Other shareholders
26.4%
EN+ GROUP IPJSC
1 2 3 4 5 6 7
Reporting
Election/appointment
President, Chairman of the
Management Board
Management Board
Budget Committee
Internal Control and Risk
Management
Internal Audit Department
Board of Directors
Corporate Governance,
Nominations and Remuneration
Committee
Audit Committee
Strategy Committee
Budget Committee
Sustainability and Climate
Change Committee
Audit Commission
Independent external auditor
Corporate Secretary
Transaction Committee
148
149
Annual Report — 2023NornickelCorporate governance Key principles
In its corporate governance practice, Nornickel is
governed by applicable Russian laws, the Listing Rules
of Moscow Exchange, and the Corporate Governance
Code recommended by the Bank of Russia.1
1 Nornickel’s corporate governance
system is designed to balance the
interests of its shareholders, the
Board of Directors, management,
and employees as well as other
stakeholders.
Key corporate governance principles
1.
2.
3.
Equitable and fair treatment of
every shareholder
Enabling shareholders to exercise
their rights and legitimate
interests in the most reasonable
and convenient manner
4.
5.
Professionalism and leadership
of the Board of Directors, and
involvement of independent
directors in govemance
Strategic management by the
Board of Oirectors, its efficient
control over oncutive bodies, and
oversight of the risk management
and internal control framework
Sound, diligent, and efficient
management of the Compary’s
day-to-day operatons by
excecutive bodies accountable
to the soard of Directors and the
General Meeting of Shareholders
7.
8.
9.
Zero tolerance for corrupt
behaviour
Full, transparent, reliable, and
timely disclosure of information
by the Company
Robust internal control and risk
management framework
10.
Adherence to sustainability
principles
6.
Strong business ethics
Corporate governance performance
During 2023, the Company approved
a number of internal documents in
corporate governance.
Following an amendment to the Bank
of Russia’s Regulations No. 714-P dated
27 March 2020,2 the Company updated
its internal document defining the
procedure for interaction between its
units when disclosing information.
In the reporting year, a number of
documents were developed and
approved to enhance the anti-
corruption compliance system
by setting out approaches to the
implementation of anti-corruption
measures at the Company. Specifically,
in March 2023, the Company approved
the procedure for activities aimed at
surveying employees on corruption
and the effectiveness of current anti-
corruption measures at the Company.
In October 2023, the Procedure for
Informing Employees about Anti-
corruption Measures in Place at the
Company was approved, setting out the
types, forms, and frequency of training
and awareness activities. To boost
the performance of counterparty due
diligence, the Procedure for Interaction
between the Company’s Relevant Units
Involved in Counterparty Due Diligence
and the Assessment of Corruption Risks
was approved in March 2023, setting out
the timelines, principles, and focus areas
for collaboration as well as mechanisms
for identifying corruption.
In addition, the Regulations on
Business Gifts at the Head Office
were updated, and a brief memo
for Company employees on the
requirements for giving and receiving
business gifts was developed.
Following an amendment to the Bank of
Russia’s Ordinance No. 5946-U3 dated
27 September 2021,2 a new list of the
Company’s insider information was
approved. The list was supplemented
with new types of insider information.
Besides, amendments were made to the
procedure for determining the size of a
transaction where information about the
consent to or subsequent approval of
such transaction by the issuer’s Board of
Directors is deemed insider information.
1
2
3
The Bank of Russia’s Letter No. 06-52/2463 On the Corporate Governance Code, dated 10 April 2014.
The Bank of Russia’s Regulations No. 714-P On Information Disclosure by Issuers of Issue-Grade Securities, dated 27 March 2020.
The Bank of Russia’s Ordinance No. 5946-U dated 27 September 2021 On the List of Insider Information of Legal Entities Specified in Clauses 1, 3, 4, 11, and 12, Article 4 of
Federal Law No. 224-FZ dated 27 July 2010 On Countering the Misuse of Insider Information and Market Manipulation and Amendments to Certain Legislative Acts of the
Russian Federation, as well as on the Procedure and Timelines for Its Disclosure.
1 2 3 4 5 6 7
In 2024, the Company intends to continue its efforts to improve the quality of its
corporate governance system and take further steps to implement and test the
approach to corruption risk management, in particular, to approve an internal document
on corruption risk assessment.
Compliance with the Corporate
Governance Code
Nornickel’s corporate governance standards embedded in its activities
are based on the principles and recommendations of the Bank of
Russia’s Corporate Governance Code (the “Code”), and the Company
continues to consistently incorporate and implement them.
The Company’s compliance with the
Code’s principles and recommendations
in 2023 was evaluated using a format
recommended by the Bank of Russia’s
Letter No. IN-06-28/102 dated
27 December 2021.
Nornickel’s corporate practices
cover most of the Code’s principles
and recommendations. In case
of partial non-compliance, the
Company provides an appropriate
explanation and description of the
corporate governance mechanisms
and tools used by it instead of those
recommended by the Code.
For the full 2023 Code Compliance Report, including comments, please see
an Appendix to this Annual Report .
Compliance with the Corporate Governance Code recommendations in 2023
Corporate governance principles
Full compliance
Partial compliance
Non-compliance
Rights and equal opportunities for shareholders in
exercising their rights
Board of Directors
Corporate Secretary
Remuneration system for members of the Board of
Directors and senior management
Risk management and internal control framework
Company disclosures
Material corporate actions
TOTAL
2021
2022
2023
2021
2022
2023
2021
2022
2023
9
28
2
6
5
4
3
10
25
2
7
5
4
3
10
27
2
7
5
4
3
4
8
—
4
1
3
2
3
11
—
3
1
3
2
3
9
—
3
1
3
2
57
56
58
22
23
21
—
—
—
—
—
—
—
0
—
—
—
—
—
—
—
0
—
—
—
—
—
—
—
0
150
151
Annual Report — 2023NornickelCorporate governance Stakeholder engagement
To achieve operational excellence and further improve
corporate governance, Nornickel is strongly focussed on
engaging its stakeholders in corporate governance, taking
their needs into account when making important decisions.
At the end of the reporting year,
Nornickel published its first climate
change report. The Company
disclosed its initiatives around climate
action and climate change adaptation
from 2021 to date, the development of
its risk management system, and the
resilience of the Company’s strategy
in three climate scenarios. The report
was prepared in line with the TCFD1
recommendations and was verified
by Kept, a professional audit firm. The
report allows the Company to be as
transparent as possible with all its
stakeholders about the way it adapts
to climate change and the measures
it takes to reduce its contribution
to climate change. In addition, the
report discloses the way changes in
the global economy in three climate
scenarios will affect demand for the
Company’s products and its financial
performance until 2050.
A well-built and clear corporate
governance framework which is
transparent for both Russian and
foreign shareholders and investors
as well as active stakeholder
engagement directly affect
investment decisions and the price of
the Company securities.
Dialogue with investors
Dialogue with employees
The Company is committed to making
mandatory disclosures in line with
global best practice. To make its
disclosures more meaningful and
comprehensive, Nornickel uses an
array of disclosure tools, including
press releases, presentations, annual
and sustainability reports, issuer
reports, corporate action notices, and
interactive tools. Nornickel ensures
parallel disclosure of all material
information both in Russian and
English.
Nornickel’s quarterly disclosures
made via its official website include
its operating results and RAS financial
statements. IFRS financial statements
are released on a semi-annual basis.
To maintain strong investor relations,
the Company makes extensive use of
various communication tools, including
conference presentations, road shows,
site visits for investors and analysts,
etc.2
For more details on investor relations,
please see the Shareholders relations
section of this Annual Report.
The Company regularly runs already
traditional open online conferences
between employees and senior
management to identify strengths and
weaknesses in communication and
improve corporate governance.
Production upgrades and ambitious
investment projects all transform
the approaches to work, routines,
sustainability, safety, and
environmental protection. To retain its
leadership in the market, the Company
needs to address newly emerging
challenges, which is impossible
without employee involvement.
During the Nornickel Live annual
broadcast, Nornickel’s vice presidents
answered employee questions and
discussed the Company’s news and
future plans. Specifically, 16 March
2023 saw another Direct Line live
broadcast, with top management
fielding questions from Nornickel
employees. The key topics discussed
were social support, safety culture,
and remuneration system.
Effective communication channels
between management and employees
and an open information environment
help build trust, reduce stress, and
increase employee engagement.
1 2 3 4 5 6 7
On 16 March 2023, another Direct Line live
broadcast took place, with top management
fielding questions from Nornickel employees. The
key topics discussed were social support, safety
culture, and remuneration system.
Partnerships
and cooperation
In February 2023, Polar Lithium, a
joint venture between Nornickel
and ROSATOM, obtained a subsoil
licence for the Kolmozerskoye lithium
deposit, the largest in Russia. The
Kolmozerskoye deposit development
project located in the Murmansk
Region.
Partners plan to set up a 45 ktpa
lithium carbonate and hydroxide
production facility which will create
new jobs and ensure the substitution
of imported lithium raw materials. The
facility’s products will be used, among
other things, in the production of
batteries, an industry now booming
both in Russia and globally.
In July 2023, the Company and VK
signed a cooperation agreement
to jointly develop IT solutions for
the metals industry, providing for
collaboration around cloud computing,
virtualisation of IT infrastructure, and
the development of multipurpose
platforms and portals, big data
management tools, and artificial
intelligence (AI) technologies. Services
around employee collaboration at a
metals company, secure corporate
communications, and career
development are a separate focus
45 KTPA
Output of lithium carbonate
and hydroxide targeted by
the Kolmozerskoye deposit
development project
1 Task Force on Climate-related Financial Disclosures.
2
1
Information on upcoming events is posted in the IR Calendar on the Company website.
1
Information on upcoming events is posted in the IR Calendar on the Company website.
152
153
Annual Report — 2023NornickelCorporate governance for the partnership. The two partners
look to develop Internet of Things
technologies and industry-specific
geographic information services.
In September 2023, Nornickel and
Kaspersky signed a cooperation
agreement, which will enable
Nornickel to improve its information
security and protect its corporate and
industrial infrastructure.
Besides, in November 2023, Nornickel
signed a cooperation agreement
with Security Vision, one of Russia’s
largest providers of information
security solutions. The partnership
aims to strengthen the protection
of industrial information systems
and data to ensure the integrity
and continuity of metal production
processes.
In November 2023, Nornickel,
Siberian Federal University, and
Fedorovsky Polar State University
signed a cooperation agreement
with a view to fostering innovation
and advancing the educational
landscape. The agreement aims to
combine scientific and educational
efforts for mutually beneficial results.
The main areas of cooperation include
the advancement of R&D projects,
especially on permafrost and climate
change in the Arctic, the introduction
of innovative production technologies,
as well as research in biotechnology
and artificial intelligence. An
important aspect of cooperation is
the development of Nornickel’s R&D1
centre which will focus on digitalising
and optimising processes in the mining
industry. The agreement also covers
educational support, encompassing
joint events, field schools, and
internships for undergraduate and
postgraduate students of Siberian
Federal University and Fedorovsky
Polar State University. A heightened
emphasis is laid on building a talent
pool for the Company, which involves
updating specialist’s, bachelor’s, and
master’s degree programmes while
implementing continuing professional
education programmes tailored to
Nornickel’s current talent needs.
At the end of the reporting year,
Nornickel and Astra, a leading
Russian IT developer, signed a
memorandum of cooperation to
develop software for Nornickel’s
needs, identify approaches to
integrating solutions and services, test
innovations, promote the transition
to Russian technologies, and hold
industry forums and conferences.
To reaffirm its commitment to the long-
term strategy of exiting international
assets, that do not met of first-class
criteria, as well as its stronger strategic
focus on developing and driving the
reliability of its unique mineral resource
base and processing capacities in
the Russian Federation, Nornickel
signed, through Norilsk Nickel
Africa Proprietary Limited (NNAf)
(a Nornickel Group company), an
agreement to transfer its 50%
interest in Nkomati Joint Venture
to its South African partner, African
Rainbow Minerals Limited (ARM).
In another strategic move, in 2023,
Nornickel signed a partnership with
R-Vision, a leader in the Russian
information security market,
focussed primarily on contributing to
the development of the information
security market for the industrial
sector. The two parties plan to
jointly develop proposals to improve,
test, and implement information
security solutions for industrial
systems, including those ensuring
an uninterrupted production cycle
and business process integrity at
Nornickel. Sharing experience and
expertise while contributing to the
promotion of solutions to build a
platform for interaction between the
public and business sectors are the
essential aspects of this partnership.
The Company’s dialogue with
indigenous peoples of the North
is based on the following key
principles:
“Nothing for us without us”
awareness and consistency
from patronising to
partnering
The Company’s regulatory
document setting out the
framework for dialogue with
indigenous peoples of the
North is the Indigenous Rights
Policy first adopted back
in 2018 and based on the
following approaches:
Application of the principle
of free, prior, and informed
consent (FRIC);
Support and development
of traditional trades;
Commitment to the
principle of consultations
in good faith
1 2 3 4 5 6 7
Dialogue with
indigenous minorities
Nornickel’s engagement with
indigenous peoples living in Taimyr
and in the Murmansk Region is based
on recognising the right of indigenous
peoples to independently determine
their development priorities and on
respecting the customs, traditions, and
culture of indigenous communities.
Regular dialogue covers all areas
of mutual interest and relies on a
holistic approach.
Although Nornickel is not a resident of
the Arctic zone, the Company adheres
to the provisions of the Standard of
Responsibility for the Residents of
Russia’s Arctic Zone.
Nornickel compiles with all applicable
international standards and regulations
regarding the support for indigenous
peoples of the North and recognises
the rights of local communities to
maintain their traditional lifestyle
and indigenous trades. To maintain a
consistent dialogue with indigenous
peoples of Taimyr:
• a department was set up within
the Norilsk Division, responsible for
engagement with indigenous peoples
of Taymyr and staffed with the right
level of indigenous talent
• on the initiative of the indigenous
peoples, the Indigenous
Communities Coordination Council
was established comprising
representatives from 57 indigenous
tribal communities.
Nornickel adopted the international
practices of free, prior, and informed
consent and due diligence (ethnicity
expert review) to identify indigenous
communities that will be affected
by the Company’s investment and
production activities along with the
extent of such impact.
In 2023, Nornickel continued
implementing the cooperation
agreement to support indigenous
peoples signed with the Federal
Agency for Ethnic Affairs (FAEA).
The media praised the Company’s
Indigenous Peoples of Russia –
Social Diplomacy programme aimed
at boosting civic consciousness and
capability building among indigenous
peoples as well as at supporting
potential opinion leaders from among
them. In 2023, 278 people (members
of more than 30 indigenous peoples of
Russia) registered for the programme.
Another outcome of the agreement
was the Public-Private Partnership
for the Sustainable Development of
Indigenous Peoples, an international
forum held in Moscow in November
2023 and sponsored by Nornickel,
which welcomed more than 200
delegates from Russia and other
countries in Moscow and sponsored
by Nornickel, which welcomed more
than 200 delegates from Russia and
other countries. Participants included
federal and regional authorities,
municipalities, and indigenous peoples’
associations from Russia, Africa, and
Asia, reindeer herders, leaders of tribal
communities from Taymyr, Yamal,
and Chukotka, UN expert bodies on
human rights and indigenous peoples,
and industrial companies. The event
was streamed live with simultaneous
translation into English and Spanish.
The participants discussed responsible
state and corporate governance around
respecting the rights of indigenous
peoples, strategies and forms of
business involvement in ensuring
indigenous peoples’ sustainability
through corporate programmes,
agreements with authorities and
associations of indigenous peoples,
infrastructure development,
environmental protection of indigenous
lands, and other matters.
1 Research and Development.
154
155
Annual Report — 2023NornickelCorporate governance Government
relations
The Company’s representatives also
take part in parliamentary hearings,
round table discussions, and working
groups organised by the Federation
Council, the State Duma of the
Federal Assembly of the Russian
Federation, the Government of the
Russian Federation, federal executive
authorities, the Civic Chamber of the
Russian Federation, the Chamber
of Commerce and Industry of the
Russian Federation, the Association
of Managers interregional non-
governmental organisation, etc.
Nornickel’s experts are involved in
discussing draft regulations through
anti-corruption expert reviews and
regulatory impact assessments. This
all helps to maintain a constructive
dialogue with the government, cut
red tape, and improve the country’s
business climate.
In 2023, Nornickel signed an
agreement with Rostechnadzor.
The agreement envisages the
promotion of information exchange,
joint organisation of scientific
and practical workshops and
conferences, development of
scientific and methodological
support, efforts to improve the
legal framework in Russia, and
identification of the best approaches
to managing hazardous facilities.
Managing conflicts of interest
Nornickel has developed measures to prevent potential conflicts of
interest involving shareholders, members of the Board of Directors and
the Management Board as well as the President of the Company.
The Company’s Articles of Association
set forth the specific procedure
for approving transactions by
shareholders who hold more than 5%
of voting shares and affiliated persons.
Such transactions are only made if
approved by a qualified majority of
Board members (at least 10 out of
13 votes).
ethical risks and conflict of interest
situations. The Code provides for
the obligation of members of the
Board of Directors to refrain from
actions that may result in a conflict of
interest, and if such a conflict arises,
they should promptly inform the
Corporate Secretary in writing about
such conflict.
If a Board member has a direct or
indirect personal interest in a matter
reviewed by the Board of Directors,
they should inform other members
of the Board of Directors before
the matter is reviewed or a relevant
resolution is passed, and refrain from
participating in the review and from
voting on the matter.
In 2023, no notifications of conflicts of interest
were received from members of the Board of
Directors.
Interested-party transactions involving
members of the Board of Directors
and the Management Board as well
as the President of the Company are
regulated by the law on joint stock
companies. The Company has in
place the procedure for obtaining the
Board of Directors’ prior consent to
interested-party transactions.
The Company also has in place the
Code of Conduct and Business
Ethics for Members of the Board of
Directors, which aims to reinforce
high standards of ethics and
business conduct among members
of the Board of Directors and
serves as guidance in the event of
1 2 3 4 5 6 7
General Meeting of Shareholders
The General Meeting of Shareholders is the
highest governance body of MMC Norilsk Nickel
responsible for making decisions on matters
most critical to the Company’s performance.
Matters within the remit of the General
Meeting of Shareholders are listed in the
Company’s Articles of Association, and
the procedures for convening, preparing,
and holding general meetings are detailed
in the Regulations on the General Meeting
of Shareholders.
Types of General
Meetings of
Shareholders
By attendance:
• In person
• In absentia
By frequency:
• Annual
• Extraordinary
Remit of the Company’s General Meeting
of Shareholders
1.
2.
3.
4.
Amendments to the Articles
of Association
Distribution of earnings,
including dividend payout
(declaration)
Approval of annual reports and
annual accounting (financial)
statements
Election of members of the
Board of Directors and early
termination of their appointment
5.
6.
7.
Election of members of
the Adit Commission and
early termination of their
appointment
Appointment of the auditor
Stock split and consolidation
Key shareholder dates
Events
Timeframe
Annual General Meeting of Shareholders
Extraordinary General Meeting of Shareholders
No sooner than three and no later than six months after the end of
the reporting year
At any time at the initiative of the Board of Directors or upon
request from the Audit Commission, the audit firm, or a shareholder
owning at least 10% of voting shares in the Company
Publication of the notice of the General Meeting of Shareholders
Not later than 30 calendar days prior to the meeting
Compilation of the list of shareholders entitled to participate in the
General Meeting of Shareholders
Not earlier than 10 days from the date of the Board of Directors’
decision to hold the meeting and not later than 25 days prior to the
date of the meeting1
Provision of materials for the General Meeting of Shareholders
20 calendar days prior to the meeting
156
157
1
In certain cases, the Federal Law On Joint Stock Companies establishes other timelines for publishing the notice of the General Meeting of Shareholders / compiling the
list of persons entitled to participate in the General Meeting of Shareholders.
Annual Report — 2023NornickelCorporate governance General Meetings of Shareholders held in 2023
Meeting date
Agenda
6 June 2023 — the Annual General Meeting
of Shareholders (held in absentia)
The Meeting approved the Annual Report, annual accounting statements, and
consolidated financial statements for 2022.
7 December 2023 –
the Extraordinary General Meeting of
Shareholders (held in absentia)
Except for the cumulative voting
to elect members of the Board
of Directors, each voting share
represents one vote at the General
Meeting of Shareholders.
Two General Meetings of Shareholders
were held in 2023. All meetings were
held by decision of the Board of
Directors in absentia via an easy-to-
use and reliable e-voting service. The
e-voting service for General Meetings
of Shareholders is provided by IRC –
R.O.S.T., the Company’s registrar
(official website: Shareholder’s Personal
Account, rrost.ru). Each time, more and
more shareholders take advantage
of this service enabling them to vote
regardless of their location.
The Meeting decided not to distribute earnings and not to pay dividends for 2022.
A new Board of Directors and Audit Commission were elected; resolutions on their
remuneration were passed.
The auditor was approved to audit Nornickel’s Russian accounting (financial) statements
for 2023, consolidated financial statements for 2023, and interim consolidated financial
statements for 1H 2023.
The Meeting approved transactions to provide liability insurance for members of the
Board of Directors and the Management Board, as well as transactions to reimburse
members of the Board of Directors and the Management Board for losses that these
persons may incur in connection with their appointment and discharge of their duties as
members of the Board of Directors and the Management Board
Resolutions were passed to pay 9M 2023 dividends, split stock, and approve the
Company’s membership in the Corporate Sports Development Association.
Attendance at General Meetings of Shareholders
72
72
78
70
61
66
61
50
3,840
3,782
2,978
2,626
3,255
3,358
3,363
4,402
Shareholders who used
e-voting services, %
Individuals that attended
the Meeting
Legal entities that attended
the Meeting
1
2
3
4
5
6
7
8
1
2
3
4
5
6
7
8
19.05.2021 (AGM)
19.08.2021
27.12.2021
03.06.2022 (AGM)
11.08.2022
24.11.2022
06.06.2023 (AGM)
07.12.2023
19.05.2021 (AGM)
19.08.2021
27.12.2021
03.06.2022 (AGM)
11.08.2022
24.11.2022
06.06.2023 (AGM)
07.12.2023
309
315
303
165
117
88
60
62
1
2
3
4
5
6
7
8
Meeting quorum, %
78
79
78
72
70
70
75
71
1
2
3
4
5
6
7
8
1 AGM – Annual General Meeting of Shareholders.
1 2 3 4 5 6 7
Dividends
Dividends
in 2023
On 7 December 2023, the
Extraordinary General Meeting of
Shareholders resolved to pay 9M 2023
dividends of RUB 915.33 per ordinary
share, with the amount of dividend
payout totalling close to RUB 130
billion (about USD 1.5 billion).
On 22 May 2024, the Company’s
Board of Directors recommended
that the Annual General Meeting of
Shareholders resolve not to pay a
final dividend for the financial year
2023. The resolution will be passed
at the Annual General Meeting of
Shareholders on 28 June 2024.
~130
RUB BN
Total dividend payout for
9M 2023
Dividend history1
3.5
259.9
6.2
410.9
1.5
130
‘20
‘21
9M ‘23
USD bn
RUB bn
1 Payments for 2021 included RUB 32.3 billion, or USD 0.5 billion, transferred by the Company to the Central
Depositary as dividends to ADR holders and shareholders who are customers of foreign nominee holders and
subsequently transferred back to the Company.
158
159
Annual Report — 2023NornickelCorporate governance Board of Directors and Board committees
Composition of the Board of Directors
The Board of Directors plays a crucial role in designing
and developing the corporate governance system,
ensures the protection and exercise of shareholder
rights, and supervises executive bodies.
The Board’s authority and formation
process as well as the procedure for
convening and holding Board meetings
are determined by the Company’s
Articles of Association and Regulations
on the Board of Directors.
Remit of the Board of Directors
1.
2.
Determination of business
priorities, development strategy,
and budgets
Convening and holding Annual
and Extraordinary Meetings
3.
Acquisition of shares, bonds, and
other securities placed by the
Company in line with applicable
laws
4.
5.
6.
7.
Recommendations on the
amount of dividend per share
Approval and amendment of the
dividend policy
Approval of a number of internal
documents
Preliminary approval of annual
reports and annual accounting
(financial) statements
8.
9.
10.
Establishment of the
Company’s branches and
representative offices and
approval of their regulations
Approval of material
transactions specified in the
Articles of Association
Determination of the principles
and approaches for setting
up the risk management and
internal control systems,
oversight of the said systems
According to Nornickel’s Articles of
Association, the Board of Directors
has 13 members. The current size
of the Board of Directors ensures
a balanced mix of professionalism,
expertise, and experience required
for the Board to properly perform its
functions and best align its activities
with the Company’s goals and
objectives. All Board members enjoy
an impeccable business reputation
and recognition (including among
investors) and have no conflicts of
interest with Nornickel. The current
Board of Directors comprises six
independent directors. An objective
judgement that independent directors
bring to the table, along with their
constructive feedback, is a valuable
contribution to the Board’s leadership
and the Company’s operations on the
whole. The independent directors’
contribution to decision making
helps align the interests of various
stakeholder groups while improving
the quality of management decisions.
As of 1 January 2023, the Board
of Directors consisted of Denis
Alexandrov, Sergey Batekhin, Alexey
Bashkirov, Elena Bezdenezhnykh,
Andrey Bougrov, Sergey Volk, Alexey
Germanovich, Alexandra Zakharova,
Marianna Zakharova, Alexey Ivanov,
Stanislav Luchitsky, Evgeny Shvarts,
and Egor Sheibak, who were elected
to the Board of Directors at the
Extraordinary General Meeting of
Shareholders in November 2022.
Following the Annual General Meeting
of Shareholders that took place on
6 June 2023, Alexey Bashkirov, Alexey
Germanovich, and Stanislav Luchitsky
stepped down from the Board of
Directors, and Irina Komarova, Sergey
Malyshev, and Anton Sychev were
elected as new Board members.
1 2 3 4 5 6 7
As of 31 December 2023, the Board of
Directors had 13 members, including:
• six independent directors: Denis
Alexandrov, Sergey Volk, Alexey
Ivanov, Irina Komarova, Anton
Sychev, and Evgeny Shvarts
• five non-executive directors: Sergey
Batekhin, Elena Bezdenezhnykh,
Andrey Bougrov, Alexandra
Zakharova, and Egor Sheibak
• two executive directors: Marianna
Zakharova and Sergey Malyshev.
Chairman
of the Board of Directors
The Chairman of Nornickel’s Board of
Directors leads the Board of Directors,
convenes and chairs its meetings, and
ensures constructive collaboration
between Board members and
corporate management.
Since 2022, the position of the
Chairman of the Board of Directors
is held by Andrey Bougrov, a non-
executive director with a long track
record at the Company: until 2022 in
his role as Senior Vice President for
Sustainable Development, Andrey
Bougrov focused on the sustainability
aspect of the Company’s development
strategy and on monitoring corporate
internal procedures, policies, and
organisational structure for compliance
with the requirements of international
sustainability associations and
certification procedures as well as on
preparing and further improving the
Company’s sustainability reporting to
bring it closer in line with international
non-financial reporting standards.
Andrey also oversaw the Company’s
investor relations.
Status of Board members, %
8
8
46
46
8
8
46
46
15
15
38
38
46
46
46
46
46
46
‘21
‘21
‘22
‘22
‘23
‘23
Executive directors
Executive directors
Non-executive directors
Non-executive directors
Independent directors
Independent directors
Board composition by
gender, %
Board composition by age
group, %
27
31
8
92
73
69
Female
Male
15
39
15
39
15
23
62
46
46
Over 61
years
51–61
years
35–50
years
‘21
‘22
‘23
‘21
‘22
‘23
Tenure on the Board
of Directors, %
46
23
23
39
54
15
23
62
15
‘21
‘22
‘23
8 years
or more
3–8 years
Under
3 years
160
161
Annual Report — 2023NornickelCorporate governance Andrey Bougrov knows the ins and
outs of the Company’s operations and
its internal business processes, which
helps better understand them and
facilitates fast but high-quality decision
making at the Board level. Andrey
Bougrov also boasts a vast track
record of serving on expert councils
on governance and sustainability, and
chairs the Share Issuers Committee of
Moscow Exchange.
In 2024, Andrey Bougrov won the
Director of the Year National Award in
the category Chairman of the Board
of Directors: Contribution to the
Development of Corporate Governance.
For more details on Andrey
Bougrov’s biography, please
see this Annual Report and
the Company website.
Independent
directors
Independent directors are sufficiently
professional, experienced, and self-
reliant to form their own opinion
and are capable of making unbiased
judgements in good faith, free
of influence by the Company’s
executive bodies, individual groups of
shareholders, or other stakeholders.
In 2023, in line with corporate
governance best practice, Nornickel’s
Board of Directors regularly evaluated
Board nominees and new members
against the independence criteria
set out in the Company’s Articles
of Association and the Listing Rules
of Moscow Exchange. If any signs
of relationship were identified, the
nature of such relationship was
comprehensively assessed. Where the
identified relationship was established
to be formal in nature, the Company’s
Board of Directors determined whether
the Board member in question met
the independence criteria based on
a recommendation by the Corporate
Governance, Nomination, and
Remuneration Committee. Thus, on
12 January 2023, Board member
Alexey Germanovich was determined
to be independent despite his formal
relationship with the Company’s
contractor since such relationship
did not affect his ability to exercise
independent, fair, and unbiased
judgement. Alexey Germanovich
has signed a relevant statement,
under which the Director committed
to represent the interests of all
shareholders and the Company,
despite the fact that he meets a formal
relationship criterion, and inform the
Board of Directors if he might start to
meet any other relationship criteria
or have a conflict of interest, or other
ethical issues.
Over the year, the Company was in
compliance with the requirements of
the Listing Rules of Moscow Exchange
as regards the number of independent
directors on the Board.
The Company’s Board of Directors
elected at the Annual General Meeting
of Shareholders on 6 June 2023
was 46.2% independent, comprising
six independent directors: Denis
Alexandrov, Sergey Volk, Alexey Ivanov,
Irina Komarova, Anton Sychev, and
Evgeny Shvarts.
The Board’s experience and skill mix
Name
Tenure on the Board
of Directors
Key skills
Strategy
Law and
corporate
governance
Finance
and audit
Metals and
mining /
engineering
International
economic
relations
ESG
COMPOSITION OF THE BOARD OF DIRECTORS AS AT 2023-END
Andrey Bougrov
Non-executive Director,
Chairman of the Board of
Directors
Denis Alexandrov
Independent Director
Sergey Batekhin
Non-executive Director
Elena Bezdenezhnykh
Non-executive Director
Sergey Volk
Independent Director
Marianna Zakharova
Executive Director
Alexandra Zakharova
Non-executive Director
2002–2020
2022 to date
2022 to date
2020 to date
2022 to date
2019 to date
2010 to date
2022 to date
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
1 2 3 4 5 6 7
Name
Tenure on the Board
of Directors
Key skills
Strategy
Law and
corporate
governance
Finance
and audit
Metals and
mining /
engineering
International
economic
relations
ESG
Alexey Ivanov
Independent Director
Irina Komarova
Independent Director
Sergey Malyshev
Executive Director
Anton Sychev
Independent Director
Evgeny Shvarts
Independent Director
Egor Sheibak
Non-executive Director
2022 to date
2023 to date
2023 to date
2023 to date
2019 to date
2022 to date
As at 31 December 2023, the average tenure on the
Board of Directors was 4.8 years
BOARD MEMBERS WHO STEPPED DOWN IN 2023
Alexey Bashkirov
Non-executive Director
Alexey Germanovich
Independent Director
Stanislav Luchitsky
Independent Director
2013–2023
2022–2023
2021–2023
•
•
5
•
•
•
•
•
•
•
9
•
•
•
•
•
7
•
•
•
•
8
•
•
•
•
3
•
•
4
•
•
Selection criteria and succession
The performance of the Company’s
Board of Directors is largely driven
by a mix of skills, qualifications,
experience, independent judgement,
and degree of independence on the
Board. The number of Board members
and the composition of the Company’s
Board of Directors enable fair and
comprehensive review of matters,
most informed decision making, timely
detection and prevention of conflicts
of interest, as well as effective
performance of the Board’s other
functions. When electing members to
the Board of Directors, the Company is
guided by the principles recommended
by the Bank of Russia:
• Having a mix of skills on the Board
of Directors that enables it to work
as a close-knit team of professionals
to drive informed and professional
collective decision making
by the Board;
• Balanced composition, whereby
the experience, expertise, and skills
of the Company’s Board members
complement each other and help the
Board of Directors exercise fair and
impartial judgement, timely identify
strategic risks, and assess their
potential impacts;
• Diversification, whereby the Board
of Directors is able to review matters
from different perspectives, bring up
new ideas for discussion, and make
more balanced decisions;
• Tailored approach, whereby the
Company itself decides on the optimal
composition of the Board of Directors
and its committees and maintains
succession plans for them considering
the Company’s objectives, business
profile, and other factors;
• Independence, whereby the Board
of Directors strives to make the
most fair and independent decisions.
Independent directors on the
Company’s Board of Directors play
an important role in maintaining a
balance of interests between various
shareholder groups and working out
the best possible solutions;
• Information transparency, whereby
shareholders are provided with
timely information about candidates,
their professional qualities,
experience, and skills.
162
163
Annual Report — 2023NornickelCorporate governance Training of Board members
The Company has Professional
development policy for members of the
Company’s Board of Directors.
In order to update the knowledge of
the Company’s Board members and
better involve them in the Company’s
processes, training courses on handling
insider information are delivered on a
regular basis for directors.
In addition, Nornickel Academy has
developed and posted Anti-corruption
for Managers, a remote learning
course for members of the Board of
Directors, the Management Board,
and senior management. Members of
the Company’s governance bodies
and top management are expected
to complete this course in the first
quarter of 2024.
In September 2023, to keep up to date
with local developments and progress
on sustainability activities, the
Company’s top managers and Board
members visited production sites
at Kola MMC. A number of informal
discussions and meetings took place
during the visit.
Board of Directors’ performance
In 2023, the Company’s Board of
Directors held 46 meetings, including
12 meetings in person, and reviewed 95
matters.
sustainable growth, investor
relations strategy, and operational and
financial performance.
During the year, the Board of
Directors continued to focus on
matters critical to the Company’s
In 2023, attendance at Board meetings was 100%.
Number of Board meetings
Matters reviewed in 2023
10
4
16
7
95
MATTERS
25
Corporate governance
Approval of transactions
33
Approval of internal
documents
Strategy, operations, and
finance
Sustainability
Other
102
105
33
29
95
34
10
9
12
‘21
‘22
‘23
Number
of matters
reviewed
In absentia
In person
1 2 3 4 5 6 7
Attendance of Board and committee meetings in 20231
Name
Status
Attendance at Board meetings
Attendance at committee meetings
l
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Executive Director
46/46
12/12
34/34
3/6
4/7
3/16
4/13
Andrey Bougrov
Denis Alexandrov
Non-executive Director /
Chairman of the Board of
Directors
Independent Director /
Chairman of the
Strategy Committee
Elena
Bezdenezhnykh
Non-executive Director
Sergey Batekhin
Non-executive Director
Sergey Volk
Independent Director
Marianna
Zakharova
Alexandra
Zakharova
Alexey Ivanov
Non-executive Director
/ Chairwoman of the
Transactions Committee
Independent Director /
Chairman of the Audit
Committee
Irina Komarova
Independent Director
Sergey Malyshev
Executive Director
Anton Sychev
Evgeny Shvarts
Independent Director /
Chairman of the
Corporate Governance,
Nomination, and
Remuneration
Committee
Independent
Director / Chairman
of the Sustainable
Development and
Climate Change
Committee
Egor Sheibak
Non-executive Director
46/46
12/12
34/34
5/6
5/7
8/16
4/13
5/8
46/46
12/12
34/34
6/6
2/7
16/16
3/13
45/46
46/46
46/46
11/12
12/12
12/12
34/34
34/34
34/34
6/6
6/6
4/6
3/7
7/7
4/7
1/16
1/16
8/16
4/13
13/13
13/13
-
-
-
-
-
7/7
8/8
5/8
2/8
5/8
3/8
46/46
12/12
34/34
6/6
7/7
16/16
5/13
8/8
7/7
46/46
20/46
20/46
12/12
34/34
5/12
5/12
15/34
15/34
5/6
4/6
6/6
1/7
5/7
5/7
16/16
8/16
7/16
4/13
8/13
3/13
7/8
3/8
4/8
-
-
1/7
20/46
5/12
15/34
4/6
5/7
8/16
8/13
3/8
-
46/46
46/46
12/12
12/12
34/34
34/34
5/6
6/6
-
7/7
3/16
9/16
3/13
13/13
8/8
6/8
-
7/7
Alexey Bashkirov
Non-executive Director
26/46
7/12
19/34
2/6
2/7
1/16
-
-
Alexey
Germanovich
Stanislav Luchitsky
Independent Director
26/46
7/12
19/34
2/6
3/7
8/16
6/13
4/8
Independent
Director / Chairman
of the Sustainable
Development and
Climate Change
Committee
26/46
7/12
19/34
2/6
-
3/16
5/13
3/8
-
-
-
164
165
1 The attendance by Board members is represented as X/Y, where X is the number of meetings attended by the director, and Y is the total number of meetings held.
Annual Report — 2023NornickelCorporate governance
1 2 3 4 5 6 7
Committee continued collaborating
with the Company’s management
during 2023 when resolving on matters
within its remit.
In 2023, the Strategy Committee
focussed on matters related
to the Company’s long-term growth
CAPEX programme, future production
programme, and the implementation
status of several projects (including
the Sulphur Project) and functional
strategies.
Biographical details of Board members1
For biographies of the Board
members who stepped down
after the Annual General Meeting
of Shareholders, please see
the 2022 Annual Report.
Andrey Bougrov
Non-executive Director, Chairman of
the Board of Directors since 2022
Education
Degree in International Economic Relations, Economist for Foreign Trade, Candidate of
Economic Sciences, Moscow State Institute of International Relations (MGIMO University)
Born in: 1952
Shares of the Company: 0%
Experience in the last five years
Since 2016: chairman of the Share Issuers Committee of Moscow Exchange
Since 2015: member of the National Council on Corporate Governance non-profit partnership
Positions at Nornickel: Senior Vice President (2016–2020), Senior Vice President for
Sustainable Development (2020–2022)
Performance evaluation of the Board of Directors
The procedure for evaluating
the performance of the Company’s
Board of Directors is regulated
by the relevant policy approved
by resolution of the Company’s Board
of Directors (Minutes No. GMK/1-
pr-sd dated 20 January 2015).
The policy provides for the evaluation
of the Board of Directors’
performance in the reporting financial
year in the form of an internal
evaluation conducted through
a questionnaire survey of Board
members within the Company,
or in the form of an external evaluation
as may be proposed by the Corporate
Governance, Nomination, and
Remuneration Committee
of the Board of Directors and
approved by resolution of the Board
of Directors, with such external
evaluations involving independent
professional advisors.
As per the Board of Directors’
resolution dated 7 February
2024, the evaluation of the Board
of Directors’ performance in 2023
was carried out in the form
of an internal evaluation
(self-evaluation).
The Corporate Governance,
Nomination, and Remuneration
Committee of the Board of Directors
conducted the evaluation focussing
on the performance of the Board
of Directors as the Company’s
governance body, the performance
of Board committees, and
the performance of the Chairman
of the Board of Directors while also
paying attention to the evaluation
of the Corporate Secretary’s
performance.
As part of the evaluation, detailed
questionnaires were sent
to the members of the Board
of Directors, asking them to evaluate
the performance of the Board
of Directors against the following
criteria: alignment of the Board’s
structure with its functions;
qualitative composition; internal
performance dynamics; activities
of the Corporate Secretary;
the Board’s involvement in creating
shareholder value; involvement
in the Company’s development
strategy; interaction within the risk
management, internal control, and
compliance system; corporate
governance system; supervisory
function; holding meetings; activities
of the Board’s Chairman; activities
of each individual Committee; and
overall evaluation.
All 13 Board members took part
in the survey.
The information obtained
from the survey was reviewed
by the Corporate Governance,
Nomination, and Remuneration
Committee and included in its report
on the internal performance evaluation
of the Board of Directors for 2023.
The Committee came to the following
conclusions:
• The current composition
of the Board of Directors is well-
balanced in terms of directors’
qualifications, experience, and
business skills. The qualitative
and quantitative composition
of the Board of Directors
matches the scale and profile
of the Company’s business,
its business objectives and risk
profile, and meets the Company’s
current and anticipated needs and
shareholder interests
• The composition of the Board
committees is aligned with
the Company’s goals and
objectives; there is no need to set
up additional Board committees
• The Chairman of the Board
of Directors organises the Board
of Directors’ activities in the most
efficient way, ensures
its communication with other
bodies of the Company, and
facilitates the best performance
of assigned duties
The Committee also identified
areas for development and made
recommendations on Board
functions requiring action to improve
performance in those areas.
The results of the internal
evaluation of the Board of Directors’
performance in 2023, including
the opinion and recommendations
of the Corporate Governance,
Nomination, and Remuneration
Committee, were reviewed at a Board
of Directors meeting. It was resolved
to acknowledge that in the reporting
year the Board of Directors, Board
Chairman, Board committees, and
Corporate Secretary discharged
their duties effectively and that
the recommendations of the Corporate
Governance, Nomination, and
Remuneration Committee should
be taken into account in the Board’s
future activities in 2024.
During the reporting year, the Board
of Directors’ efforts paid particular
attention to the areas for improvement
identified by the Board’s previous self-
evaluation as well as to consolidating
the progress made in priority areas.
For example, the Board of Directors
and top managers resumed
the practice of reviewing matters
related to the Company’s business
and strategic priorities at in-person
meetings, including informal ones.
In September 2023, to keep up
to date with local developments
and progress on ESG adoption,
the Company’s top managers and
Board members visited key production
sites at Kola MMC (Severny Mine, Kola
Superdeep Borehole) and discussed
matters of the Company’s strategic
importance.
In 2023, the Corporate Governance,
Nomination, and Remuneration
Committee continued reviewing
matters related to developing human
capital and motivating employees, such
as the Human Capital Development
Programme 2021–2023, 2022 and 2023
KPI scorecards for the Company’s
top 10’s and division directors, and
remuneration of members of the Board
of Directors and the Audit Commission.
To reflect stakeholders’ views and
interests in the decision-making
process, the Corporate Governance,
Nomination, and Remuneration
166
167
1 Positions are indicated as at 2023-end.
Annual Report — 2023NornickelCorporate governance Denis Alexandrov
Independent Director since 2022,
Chairman of the Strategy Committee,
member of the Audit Committee,
member of the Sustainable
Development and Climate Change
Committee
Education
Degree in International Economic Relations and Management, Far Eastern State University,
1996
Bachelor of Science in Business and Management, University of Maryland, 1995
Experience in the last five years
Born in: 1974
Shares of the Company: 0%
Since 2023: managing partner of Laurus Capital Management
2022–2023: member of the council of the Union of Gold Producers of Russia
2022–2023: member of the board of directors of Petropavlovsk-Avia, a Petropavlovsk Group
company
2021–2023: member of the board of directors of PHM Engineering, a Petropavlovsk Group
company
2021–2023: member of the board of directors of Pokrovskiy Mine, a Petropavlovsk Group company
2020–2023: CEO of Atlas Mining
2020–2023: CEO of the public gold mining company Petropavlovsk PLC (POG)
2016–2020: CEO of Russdragmet
Sergey Batekhin
Non-executive Director since 2020,
member of the Budget Committee,
member of the Corporate Governance,
Nomination, and Remuneration
Committee, member of the Strategy
Committee
Born in: 1965
Shares of the Company: 0%
Education
Degree in Finance and Credit, Economist, Plekhanov Russian Academy of Economics, 1998
Master of Business Administration, Moscow International Higher School of Business MIRBIS,
1998
Doctor of Philosophy, International Information Technology Academy, 2002
Speaks French, German, English, and Italian
Experience in the last five years
Since 2019: chairman of the presidium of the Night Hockey League non-profit amateur hockey
foundation
2019–2022: member of the board of directors of Jokerit Hockey Club Oy
Since 2018: member of the board of directors of Kontinental Hockey League
2018–2020: Senior Vice President – Head of Sales, Procurement, and Innovation at MMC
Norilsk Nickel
1 2 3 4 5 6 7
Elena Bezdenezhnykh
Non-executive Director since 2022,
member of the Strategy Committee,
member of the Sustainable
Development and Climate Change
Committee
Born in: 1973
Shares of the Company: 0.001146%
Education
Degree in Law, Lawyer, Krasnoyarsk State University, 1996
Experience in the last five years
Since 2023: vice president at RUSAL Management, Moscow
2020–2022: member of the board of directors of Yenisei Siberia Development Corporation
Since 2019: member of the presidium of the Association of Lawyers of the Russian Federation
2019-2023: vice president for regional policy and government relations at RUSAL
Management, Moscow
2018–2019: vice president for regional policy and government relations of the branch
at RUSAL Management, Moscow
Since 2018: member of the supervisory board of Siberian Federal University
Sergey Volk
Independent Director since 2019,
member of the Corporate Governance,
Nomination, and Remuneration
Committee, member of the Strategy
Committee
Born in: 1969
Shares of the Company: 0%
Education
Master of Business Administration (majoring in Finance), University of Texas at Austin (USA),
1998
Experience in the last five years
2019–2022: member of the board of directors of Fortenova grupa d.d. (Zagreb, Croatia)
2018–2022: member of the supervisory board of Mercator d.d. (Ljubljana, Slovenia)
168
169
Annual Report — 2023NornickelCorporate governance Marianna Zakharova
Executive Director since 2010, member
of the Management Board since
2016, member of the Transactions
Committee
Born in: 1976
Shares of the Company: 0%
Education
Bachelor in Law, 1998; Master in Law, 2000, Peoples’ Friendship University of Russia
Experience in the last five years
Since 2015: First Vice President – Head of Corporate Governance, Asset Management, and
Legal Affairs at MMC Norilsk Nickel
Alexandra Zakharova
Non-executive Director since 2022,
Chairwoman of the Transactions
Committee, member of the Audit
Committee, member of the Budget
Committee, member of the Sustainable
Development and Climate Change
Committee
Born in: 1973
Shares of the Company: 0%
Education
Bachelor in Law, 1998; Master in Law, 2000, Peoples’ Friendship University of Russia
Experience in the last five years
Since 2015: First Vice President – Head of Corporate Governance, Asset Management, and
Legal Affairs at MMC Norilsk Nickel
Alexey Ivanov
Independent Director since 2022,
Chairman of the Audit Committee,
member of the Sustainable
Development and Climate Change
Committee
Born in: 1969
Shares of the Company: 0%
Education
Department of Economic Cybernetics, Faculty of Economics, 1991; postgraduate degree,
Department of International Economic Relations, 1993, Leningrad State University
Institute of Chartered Accountants in England and Wales (АСА qualification), 1997
Experience in the last five years
Since 2023: member of the board of directors of Askona-Vek, Trading House Askona, and
Halecroft Limited
Since 2022: member of the board of directors of QIWI PLC
Since 2021: CEO of Green Energy
2020–2023: CEO of Axioma
2016–2020: key account management partner at PricewaterhouseCoopers (Moscow)
1 2 3 4 5 6 7
Irina Komarova
Independent Director since 2023,
member of the Audit Committee,
member of the Budget Committee,
member of the Corporate Governance,
Nomination, and Remuneration
Committee
Born in: 1970
Shares of the Company: 0%
Education
Mediator, Russian Academy of Advocacy and Notaries, 2020
EMBA – Legal Resource Management, HSE University (National Research University – Higher
School of Economics), 2012
Degree in Law, Lawyer, Kutafin Moscow State Law Academy, 2001
Degree in Foreign Economic Affairs, Economist, Moscow International Business Institute at
the Russian Foreign Trade Academy, 1995
Degree in Industrial and Civil Engineering, Construction Engineer, Kuibyshev Moscow Institute
of Civil Engineering (Moscow), 1992
Experience in the last five years
Since 2013: deputy CEO – head of the legal department at High-Speed Rail Lines
Since 2014: member of the management board of High-Speed Rail Lines
Sergey Malyshev
Executive Director since 2023,
member of the Management Board
since 2013
Born in: 1969
Shares of the Company: 0%
Education
Mechanical Engineer, specialty – textile and light industry machines and apparatuses,
Kosygin State University of Russia
Economist, specialty – finance and credit, Financial University under the Government of the
Russian Federation
Degree in Religious Education and Spiritual Development, higher theological courses, Moscow
Theological Academy of the Russian Orthodox Church
Public and Municipal Administration retraining programme, Institute of Advanced Training at
the Russian Presidential Academy of National Economy and Public Administration
Information Security retraining programme, Moscow State Institute of Electronic Technology
Experience in the last five years
Positions at Nornickel: Deputy CEO, Chief Financial Officer (2013-2015); Vice President and Chief
Financial Officer (2015- 2016); Senior Vice President – Chief Financial Officer (since 2016)
Anton Sychev
Independent Director since
2023, Chairman of the Corporate
Governance, Nomination, and
Remuneration Committee, member
of the Budget Committee, member of
the Audit Committee, member of the
Strategy Committee
Born in: 1978
Shares of the Company: 0%
Education
Degree in Finance and Credit, Economist (graduated with distinction), Financial University
under the Government of the Russian Federation, 2000
Postgraduate degree, Candidate of Economic Sciences, Financial University under the
Government of the Russian Federation, 2004
FCCA, Association of Chartered Certified Accountants, 2011
Experience in the last five years
Since 2023: chief financial officer of LITASCO Middle East
2021–2022: member of the board of directors of Goldman Sachs Bank, co-head of investment
banking, co-head of the Russian office of Goldman Sachs
2011–2021: managing director of investment banking, natural resources, Russia and the CIS,
Goldman Sachs
170
171
Annual Report — 2023NornickelCorporate governance Evgeny Shvarts
Independent Director since 2019,
Chairman of the Sustainable
Development and Climate Change
Committee
Born in: 1958
Shares of the Company: 0%
Education
Degree in Zoology and Botany, Biologist, Lomonosov Moscow State University, 1982
Candidate of Geographical Sciences (Biogeography and Soil Geography), Institute of
Geography, Academy of Sciences of the Soviet Union, 1987
Doctor of Geographical Sciences (Geoecology), Institute of Geography, Russian Academy of
Sciences, 2003
Experience in the last five years
Since 2023: leading researcher at the Department of Physical Geography and Environmental
Management Problems of the Institute of Geography, Russian Academy of Sciences
Since 2021: professor at the Faculty of Geography and Geoinformation Technology, HSE
University (National Research University – Higher School of Economics); head of the Centre
for Responsible Environmental Management at the Institute of Geography, Russian Academy
of Sciences
2020–2023: leading researcher at the Department of Physical Geography and Environmental
Management Problems of the Institute of Geography, Russian Academy of Sciences
Since 2020: member of the board of directors of UC RUSAL, IPJSC
2007–2019: director for conservation policy at WWF
Since 1992: member of the board of the Biodiversity Conservation Centre charitable
foundation
Egor Sheibak
Non-executive Director since 2022,
Chairman of the Budget Committee,
member of the Corporate Governance,
Nomination, and Remuneration
Committee, member of the
Transactions Committee
Born in: 1986
Shares of the Company: 0.00013%
Education
Degree in Public Administration, Manager, Lomonosov Moscow State University, 2008
Experience in the last five years
Since 2023: Advisor to Vice President for Internal Control and Risk Management at MMC
Norilsk Nickel
2013–2023: head of project of the Financial Control Service of MMC Norilsk Nickel
1 2 3 4 5 6 7
Board committees
Committees established by Nornickel’s
Board of Directors are responsible
for conducting a preliminary review
of critical matters related to the
Company’s activities and making
recommendations for decision making
on matters reserved for the Board. To
discharge their responsibilities in an
effective way, the committees may
consult Nornickel’s governance bodies
and seek opinions from independent
external advisors.
From the beginning of the reporting
year, the Board of Directors had five
committees, each consisting of five
members:
• Strategy Committee
• Budget Committee
• Corporate Governance, Nomination,
and Remuneration Committee
• Audit Committee
• Sustainable Development and Climate
Change Committee
In June 2023, the Board of Directors
decided to set up the Transactions
Committee to preview transactions
requiring approval by a qualified
majority of Board members and issue
recommendations regarding decisions
on the approval of such transactions
and other matters related to the
Company’s transactions.
Status of Board committee directors, %
40
60
40
20
40
33
80
60
60
60
67
40
Executive directors
Non-executive directors
Independent directors
1
2
3
4
5
Strategy Committee
Budget Committee
Corporate Governance,
Nomination, and Remuneration
Committee
Audit Committee
Sustainable Development and
Climate Change Committee
6
Transactions Committee
1
2
3
4
5
6
Number of Board committee meetings in 2023
6
7
13
16
8
7
8
8
8
5
6
2
5
3
5
6
1
1
2
3
4
5
6
In absentia
In person
1
2
3
4
5
Strategy Committee
Budget Committee
Corporate Governance,
Nomination, and Remuneration
Committee
Audit Committee
Sustainable Development and
Climate Change Committee
6
Transactions Committee
172
173
Annual Report — 2023NornickelCorporate governance Strategy Committee
The Strategy Committee is made up
of five directors, three of whom are
independent, including the Chairman.
In 2023, the Committee held six
meetings in person.
The Strategy Committee assists the
Board of Directors by previewing
matters related to:
• building a sustainability strategy
• investment planning and structural
changes
• engagement with capital markets.
During the reporting year, the Strategy
Committee made recommendations to
the Board of Directors and reviewed
progress and status updates on
Nornickel’s major investment projects,
including the Sulphur Project, the
Company’s sales and marketing
activities, assessment of the impact on
the production programme from the
current macroeconomic environment,
long-term investment plans, and the
Company’s financial model, as well as
downstream strategic initiatives and
partnerships. The Committee reported
on the Company’s operational
performance, comprehensive efforts
to promote employee engagement
and corporate values, as well as on
health and safety. In addition, the
Committee approved the innovation
and R&D strategy and reviewed the
Company’s strategy for financing,
developing the fuel and energy
complex and strategy of geologic
exploration activities.
In 2024, the Committee plans
to continue monitoring the
implementation of functional strategies
and progress on the Company’s key
promising projects and reviewing
management reports on other matters
within the Committee’s remit.
Committee members as at 2023-end
Denis Alexandrov (Chairman,
Independent Director)
Elena Bezdenezhnykh
Sergey Batekhin
Sergey Volk (Independent Director)
Anton Sychev (Independent Director)
Budget Committee
Nornickel’s current Budget Committee
is made up of five directors, two of
whom are independent.
In 2023, the Committee held seven
meetings, including two in absentia.
In 2023, the Budget Committee
focused on making recommendations
to the Board of Directors to inform
decision making on the amount of
the Company’s FY 2022 and 9M 2023
dividend and the dividend record date.
The Committee prepared an overview
of initiatives under the efficiency
improvement programme and reviewed
metal price and FX forecast updates
to support the Company’s 2024
budgeting. The Budget Committee also
approved and recommended that the
Board of Directors approve Nornickel’s
2024 budget.
Committee members as at 2023-end
Egor Sheibak (Chairman)
Sergey Batekhin
Alexandra Zakharova
Irina Komarova (Independent Director)
Anton Sychev (Independent Director)
The Strategy
Committee’s key
functions
Supporting Nornickel’s
Board of Directors in
developing, overseeing,
and adjusting the
corporate strategy;
Recommending uplates to
the strategy
Proportion of independent
directors:
60%
Proportion of independent
directors:
40%
The Budget Committee’s key functions
Organising and monitoring the Company’s budgeting and business
planning processes;
Monitoring the execution of budgets and business plans;
Reviewing and preparing proposals and recommendations to the Board
of Directors regarding dividends and dividend policy;
Preparing recommendations to the Board of Directors on establishing
and using the Company’s reserve and other funds
Proportion of independent
directors:
60%
and presented performance against
2022 team and individual KPIs for
the Company’s top 10’s and division
directors. The Committee also reviewed
the annual evaluation of the Board of
Directors’ performance in 2022, which
concluded that the Board of Directors
and the Corporate Secretary of
Nornickel were effective, and assessed
the independence of nominees to the
Company’s Board of Directors.
Committee members as at 2023-end
Anton Sychev (Chairman, Independent
Director)
Sergey Batekhin
Sergey Volk (Independent Director)
Irina Komarova (Independent Director)
Egor Sheibak
The Corporate Governance, Nomination, and
Remuneration Committee’s key
Evaluating, overseeing, and improving Nornickel’s corporate
governance framework;
Ensuring succession planning for Nornickel’s Board of Directors
and Management Board;
Providing incentives, evaluating the performance of Nornickel’s
Board of Directors, Management Board, President, and
Corporate Secretary, and setting relevant remuneration policies;
Supervising the development and implementation of Nomickel’s
inforation policy
1 2 3 4 5 6 7
Corporate Governance,
Nomination,
and Remuneration Committee
The Committee is made up of
five directors, three of whom are
independent, including the Committee
Chairman.
In the reporting year, the Committee
held 13 meetings, including seven
in absentia, four in person, and two
joint meetings with the Sustainable
Development and Climate Change
Committee of the Board of Directors
(one in person and one in absentia).
The Committee made
recommendations to the Board of
Directors to inform decision making
on convening, preparing, and holding
the Annual and Extraordinary
General Meetings of Shareholders
and on matters reserved to the
General Meeting of Shareholders
(remuneration and reimbursement of
expenses of members of the Board of
Directors and the Audit Commission,
and liability insurance and indemnity
for members of the Board of Directors
and the Management Board).
The Corporate Governance,
Nomination, and Remuneration
Committee advised the Board of
Directors on evaluation of the Board
of Directors’ performance in 2022,
on changes to the Company’s
Management Board, and on
the approval of a number of the
Company’s internal documents.
The Committee reviewed the
implementation of the Digital Investor
programme, the Company’s charitable
policy, sponsorship efforts, and
other social programmes, the Human
Capital Development Programme, and
the Youth Engagement Programme
174
175
Annual Report — 2023NornickelCorporate governance Audit Committee
The Audit Committee is made up
of five directors, four of whom are
independent, including the Committee
Chairman. On average, Committee
members have more than 10 years of
experience in finance.
In the reporting year, the Committee
held 16 meetings, including seven in
person, seven in absentia, and two
joint meetings with the Sustainable
Development and Climate Change
Committee of the Board of Directors
(one in person and one in absentia).
During 2023, the Audit Committee
prepared for the Board of Directors
a number of recommendations for
decision making on matters related
to the accuracy and reliability of
Nornickel’s financial statements,
health and safety, approval of new
versions of the Internal Control Policy
and the Risk Management Policy, as
well as approval of the Regulations
on the Corporate Risk Management
Framework. The Committee also
reviewed the results of audits by
the Internal Audit Department and
Internal Control Department; reports
by the Risk Management Service
on the Company’s key risks; reports
by the Inspection Department for
Monitoring Technical, Production, and
Environmental Risks; a report on the
Ecology Department’s performance;
as well as the Corporate Risk Appetite
Statement for 2023.
In 2023, in addition to the matters
mentioned above, the Audit
Committee:
• reviewed the annual audit plan and
internal audit development plans
• reviewed bonus-related
performance targets of the Internal
Audit Department Director
• discussed the results of completed
audits, including gaps identified
and remedial actions designed by
management to improve internal
controls and minimise risks.
The Audit Committee plays an important role in
enabling controls and accountability, and has
become an effective interface between the Board
of Directors, Audit Commission, independent
auditor, Internal Audit Department, and
management of Nornickel.
Committee members as at 2023-end
Alexey Ivanov (Chairman, Independent
Director)
Denis Alexandrov (Independent Director)
Alexandra Zakharova
Irina Komarova (Independent Director)
Anton Sychev (Independent Director)
Sustainable Development
and Climate Change
Committee
The Committee is made up of
five directors, three of whom
are independent, including the
Committee Chairman. In accordance
with its Regulations, the Committee
has five members, with an option to
increase its membership should the
Board of Directors decide to do so.
In the reporting year, the Committee
held eight meetings, including three
in person, one in absentia, two
joint meetings with the Corporate
Governance, Nomination, and
Remuneration Committee of the
Board of Directors (one in person
and one in absentia), and two joint
meetings with the Audit Committee of
the Board of Directors (one in person
and one in absentia).
In 2023, the Committee discussed
the presented options for developing
in-house power generation facilities
based on low-carbon technologies,
took note of the 2031 medium-
term emission reduction targets,
Proportion of independent
directors:
80%
The Audit
Committee’s key
functions
Reviewing financial
reporting matters;
Reviewing health and
safety matters
Managing risks and
internal controls;
Managing external and
internal audit;
Preventing wrongdoing
by Nornickel employees
and third parties
Proportion of independent
directors:
60%
1 2 3 4 5 6 7
and decided to continue technical
studies and further explore options
for developing in-house power
generation facilities based on low-
carbon technologies until 2050.
At a joint meeting, the Sustainable
Development and Climate Change
Committee and the Audit Committee
discussed the 2022 Sustainability
Report, the Group’s 2022 Human
Rights Report, and the Group’s
2021–2022 Responsible Supply Chain
Report.
In 2023, the Sustainable Development
and Climate Change Committee made
recommendations to the Board of
Directors to inform decision making
on the approval of the Socially
Sustainable Development Strategy.
The Committee reviewed the Climate
Change Report, noting the high
quality of the disclosure.
Committee members as at 2023-end
Evgeny Shvarts (Chairman,
Independent Director)
Denis Alexandrov (Independent Director)
Elena Bezdenezhnykh
Alexandra Zakharova
Alexey Ivanov (Independent Director)
The Sustainable Development and Climate
Change Committee’s key functions
Integrating sustainability principles, including dimate change, into
the Company’s activities;
Developing and implementing the Sustainable Development and
Climate Change Strategy;
Managing risks and internal controls related to sustainable
development and dimate change;
Preparing the Company’s internal reports and disclosures on
sustainable development and dimate change;
Overseeing the external audit of the Company’s reports and
activities related to sustainable development and dimate change
Transactions Committee
The Committee is made up of three
directors. In accordance with its
Regulations, the Committee has three
members, with an option to increase
its membership should the Board of
Directors decide to do so.
In 2023, the Committee held seven
meetings, including one in person and
six in absentia.
During the year, the Committee
reviewed matters relating to capital
raising, the Company’s bond
transactions.
Committee members as at 2023-end
Alexandra Zakharova (Chairwoman)
Marianna Zakharova
Egor Sheibak
The Transactions
Committee’s key
functions
Previewing transactions
requiring approval by
a qualified majority of
Board members, in line
with the Company’s
Artides of Association;
Reviewing other matters
related to the Company’s
transactions requiring
approval by the Board of
Directors and potential
major transactions
176
177
Annual Report — 2023NornickelCorporate governance 1 2 3 4 5 6 7
Attendance at meetings in 2023
Name
Vladimir Potanin
Anton Berlin
Sergey Dubovitsky
Marianna Zakharova
Larisa Zelkova
Dmitry Kushnarev1
Sergey Malyshev
Nina Plastinina
Elena Savitskaya
Sergey Stepanov
Evgeny Fyodorov
Tenure on the Management Board (years)
Meetings attended / total number of meetings
12
2
6
8
11
1
11
11
10
3
3
34/34
34/34
34/34
34/34
34/34
9/34
34/34
34/34
34/34
34/34
34/34
Tenure on the Management
Board, %
Management Board composition
by gender, %
50
50
55
40
40
36
30
20
30
20
27
18
8 years
or more
3–7 years
0–2 years
60
60
64
Female
Male
‘21
‘22
‘23
‘21
‘22
‘23
Executive bodies
The President and the Management
Board are Nornickel’s executive bodies
in charge of day-to-day operations.
President
The President is Nornickel’s sole
executive body in charge of day-to-day
operations. The President is elected by
the General Meeting of Shareholders for
an indefinite term and acts as Chairman
of the Management Board.
The President reports to the Board of
Directors and the General Meeting of
Shareholders. Since 2015, this position
has been held by Vladimir Potanin
(Nornickel’s CEO in 2012–2015).
Management Board
The Management Board is a collective
executive body in charge of Nornickel’s
day-to-day operations within its
scope of authority as set out in the
Articles of Association; it ensures the
implementation of resolutions passed
by the General Meeting of Shareholders
and the Board of Directors.
Members of the Management Board are
elected by the Board of Directors for an
indefinite term. The Board of Directors
may at any time terminate the office
and contract of any member of the
Management Board.
The Management Board had 10
members at the start of 2023, according
to the composition approved by the
Board of Directors on 1 June 2022. On
16 October 2023, the Board of Directors
resolved to elect Dmitry Kushnarev to
the Company’s Management Board and
to establish an 11-member Management
Board as from 16 October 2023.
In 2023, the Management Board held 34
meetings (all in absentia).
During 2023, the Management Board
made a number of important decisions,
including restructuring the Norilsk
Division and setting up the new Sales
Division; passed resolutions regarding
the Company’s branch directors and
amendments to their employment
contracts; reviewed the Company’s
capital-raising and bond transactions;
made recommendations to the Board
of Directors on approval of the Socially
Sustainable Development Strategy;
approved the launch of the Palladium
Development Programme; approved
the scope of internal control system
self-evaluation for 2023; and reviewed
matters related to the progress of the
Environmental and Climate Change
Strategy and key focus areas of the
Carbon Neutrality Strategy.
In addition to the decisions
made, in 2023, the Management
Board preliminarily reviewed and
recommended that the Board of
Directors approve the Sustainability
Report, the Climate Change Report, and
the Company’s Annual Report.
In 2023, in a first for the Company,
the Management Board reviewed
and recommended that the Board of
Directors approve the Human Rights
Report and the Responsible Supply
Chain Report.
The President and
the Management
Board ensure:
implementation of resolutions
passed by the Board of
Directors and the General
Meeting of Shareholders;
implementation of Nornickel’s
key plans and programmes;
continuous operation of an
effective risk management
and internal control system
(RMICS).
Number of Management
Board meetings
37
34
46
34
22
21
1
‘21
‘22
‘23
Number
of matters
reviewed
In absentia
In person
34 MEETINGS
OF THE COMPANY’S
MANAGEMENT BOARD
held in 2023
178
179
1 Joined the Management Board on 16 October 2023 as per the Board of Directors’ resolution.
Annual Report — 2023NornickelCorporate governance Biographical details of members of the Management Board1
Vladimir Potanin
Chairman of the Management Board
since 2012
President of the Company since 2015
(CEO in 2012–2015)
Education
Degree in International Economics, Moscow State Institute of International Relations
(MGIMO University)
Experience in the last five years
Since 2022: member of the management board of the Russian Ice Hockey Federation
Born in: 1961
Shares of the Company: 0%
Since 2021: member of the board of trustees of the Football Union of Russia non-governmental
organisation
Anton Berlin
Member of the Management Board
since 2022
Born in: 1973
Shares of the Company: 0.002%
Education
Faculty of Radio Electronic Equipment, Systems Engineer – Administrator of Production, MATI
– Russian State Technological University named after K. E. Tsiolkovsky, 1996
Postgraduate degree, MATI – Russian State Technological University named after K. E.
Tsiolkovsky, 1999
Experience in the last five years
Since 2023: member of the board of directors of Holding Company BYSTRA
Since 2019: Vice President – Head of Sales Divisions of MMC Norilsk Nickel
1 2 3 4 5 6 7
2020–2022: chairman of the board of trustees of the Vladimir Potanin Foundation
Since 2020: member of the board of trustees of the ROZA Club for Sport Development and Support
Since 2018: member of the board of trustees of the Russian–American Council for Business
Cooperation trade association; member of the board of trustees of the Fund for the Conservation
and Development of the Solovetsky Archipelago
Since 2017: chairman of the supervisory board of the Norilsk Development Agency autonomous
non-profit organisation
Since 2016: member of the board of the Endowment Fund for Education and Culture, chairman of
the board of trustees of the Night Hockey League non-profit amateur hockey foundation
Since 2011: member of the board of trustees of the State Hermitage Museum Endowment Fund
non-profit organisation; member of the board of trustees of the Moscow Church Construction
Foundation
Since 2010: member of the board of trustees of the Russian Geographical Society all-Russian non-
governmental organisation
Since 2009: deputy chairman of the board of trustees of the Russian International Olympic
University
Since 2007: member of the board of trustees of Saint Petersburg State University, deputy chairman
of the board of trustees of the MGIMO University Endowment Fund
Since 2006: deputy chairman of the board of trustees of the Moscow State Institute of International
Relations (MGIMO University), member of the board of trustees of the Graduate School of
Management at Saint Petersburg University
Since 2005: member of the board of trustees, member of the board of the Russian Olympians
Foundation non-profit charitable organisation
Since 2004: chairman, member of the presidium of the National Council on Corporate Governance
non-profit partnership
Since 2003: chairman of the board of trustees of the State Hermitage Museum
2001–2022: member of the board of trustees of the Solomon R. Guggenheim Foundation
(New York, NY)
Since 1995: member of the presidium of the International Foundation for the Unity of Orthodox
Christian Nations
Sergey Dubovitsky
Member of the Management Board
since 2018
Born in: 1978
Shares of the Company: 0%
Education
Public Relations Specialist with Foreign Language Skills, Moscow State Institute of
International Relations (MGIMO University)
Experience in the last five years
Since 2021: member of the boards of directors of MPI Nickel Pty Ltd, Norilsk Nickel Africa Pty
Ltd, and Norilsk Nickel Mauritius, member of the Executive Committee of Nkomati
Positions at Nornickel: Vice President for Strategic Planning (2016–2019) Vice President
– Head of Strategy and Strategic Projects (2019–2020), Senior Vice President – Head of
Strategy and Strategic Projects, Logistics, and Procurement (2020–2023), Senior Vice
President – Head of Strategy and Business Development (since 2023)
Marianna Zakharova
Member of the Management Board
since 2016, member of the Board of
Directors since 2010
Born in: 1976
Shares of the Company: 0%
Education
Bachelor in Law, 1998; Master in Law, 2000, Peoples’ Friendship University of Russia
Experience in the last five years
Since 2015: First Vice President – Head of Corporate Governance, Asset Management, and
Legal Affairs at MMC Norilsk Nickel
1 Positions are indicated as at 2023-end.
180
181
Annual Report — 2023NornickelCorporate governance Larisa Zelkova
Member of the Management Board
since 2013
Born in: 1969
Shares of the Company: 0%
Dmitry Kushnarev
Member of the Management Board
since 2023
Born in: 1979
Shares of the Company: 0.0000059%
Education
Journalist, Newspaper Literary Editor, Lomonosov Moscow State University, 1991
Experience in the last five years
Since 2023: member of the board of trustees of the Vladimir Potanin Foundation
Since 2020: chairwoman of the management boards of the Second School centre for community
initiatives in the Pechengsky District and the Monchegorsk Development Agency
Since 2019: member of the councils of the endowment funds for the replenishment of the
Tretyakov Gallery’s collection and development of its small museums at the State Tretyakov Gallery
Foundation non-profit organisation
Since 2018: chairwoman of the board of trustees of the Russian International Olympic University
(RIOU) Endowment Fund
Since 2017: chairwoman of the management board and member of the supervisory board of the
Norilsk Development Agency autonomous non-profit organisation
Since 2016: member of the board of trustees of the Endowment Fund for Education and Culture
(until 2021 – chairwoman)
2015–2020: member of the board of trustees of the Russian Academy of Education
2015–2022: member of the board of trustees of the Hermitage Foundation UK
2014–2023: chairwoman of the board of the Vladimir Potanin Foundation
2011–2020: member of the board of directors of Rosa Khutor Ski Resort Development Company
Since 2011: chairwoman of the management board of the State Hermitage Museum Endowment
Fund non-profit organisation
Since 2009: member of the board of trustees of the Pavlovsk Gymnasium private autonomous non-
profit organisation
Since 2007: member of the presidium of the MGIMO University Endowment Fund
Positions at Nornickel: d Deputy CEO for Social Policy and Public Relations (2013-2015); Vice
president - Head of HR, Social Policy, and Public Relations (2015 - 2016); Senior Vice President –
Head of HR, Social Policy and Public Relations (since 2016)
Education
Degree in Economics, Financial University under the Government of the Russian Federation,
2008
Degree in Mechanics, Applied Mathematics, Lomonosov Moscow State University, 2001
Experience in the last five years
Since 2023: member of the board of directors of Bystra Holding Company
Positions at Nornickel: Director of the Economic Department (2013–2020), Vice President for
Economics (2020–2023), Senior Vice President – Head of Sales, Commerce, and Logistics
(since 2023)
1 2 3 4 5 6 7
Sergey Malyshev
Executive Director since 2023,
member of the Management Board
since 2013
Born in: 1969
Shares of the Company: 0%
Education
Mechanical Engineer, specialty – textile and light industry machines and apparatuses, Kosygin
State University of Russia
Economist, specialty – finance and credit, Financial University under the Government of the
Russian Federation
Degree in Religious Education and Spiritual Development, higher theological courses, Moscow
Theological Academy of the Russian Orthodox Church
Public and Municipal Administration retraining programme, Institute of Advanced Training at the
Russian Presidential Academy of National Economy and Public Administration
Information Security retraining programme, Moscow State Institute of Electronic Technology
Experience in the last five years
Positions at Nornickel: Deputy CEO, Chief Financial Officer (2013-2015); Vice President and Chief
Financial Officer (2015- 2016); Senior Vice President – Chief Financial Officer (since 2016)
Nina Plastinina
Member of the Management Board
since 2013
Born in: 1961
Shares of the Company: 0%
Education
Degree in Chemical Machine and Fixture Building, Mechanical Engineer, Moscow Chemical
Machine Building Institute
Postgraduate degree in Economics and Production Management, Bauman Moscow State
Technical University
Experience in the last five years
Positions at Nornickel: Director of Internal Control Department (2013 – 2015); Vice President
– Head of Internal Audit (2015 -2016); Vice President – Head of Internal Control and Risk
Management (since 2016)
Elena Savitskaya
Member of the Management Board
since 2014
Born in: 1972
Shares of the Company: 0%
Education
Degree in Psychology, Psychologist, Psychology Teacher, Moscow Pedagogical State
University
Experience in the last five years
Positions at Nornickel: Chief of Staff (2013-2015), Vice President – Chief of Staff (since 20215)
182
183
Annual Report — 2023NornickelCorporate governance Sergey Stepanov
Member of the Management Board
since 2021
Born in: 1977
Shares of the Company: 0.001%
Education
Lomonosov Moscow State University, 1998: Bachelor in Economics (with distinction)
2000: Master in Economics (with distinction)
Experience in the last five years
Since 2021: Senior Vice President – Operational Director of MMC Norilsk Nickel
2020–2021: CEO of VSMPO-AVISMA Corporation
2014–2020: CEO of Raspadskaya
2012–2020: vice president, head of Evraz’s Coal Division
since 2022: chairman of the board of directors of Polarniy Litiy
Evgeny Fyodorov
Member of the Management Board
since 2021
Born in: 1978
Shares of the Company: 0%
Education
Degree in Economics and Enterprise Management, Economist/Manager, Bauman Moscow State
Technical University, 2001
Candidate of Economic Sciences, Moscow Power Engineering Institute (Technical University),
2003
Experience in the last five years
Since 2023: member of the board of directors of Vareineftegaz
Since 2021: Vice President – Head of Energy Division of MMC Norilsk Nickel
2018–2020: member of the board of directors, advisor to the CEO of TRUST SM
Since 2018: member of the board of directors of Unitile Holding
Corporate Secretary
Pavel Platov
Corporate Secretary since 2011
Born in: 1975
Shares of the Company: 0%
The role of the Corporate Secretary
is to ensure compliance with the
procedures for the protection of
shareholder rights and legitimate
interests, as prescribed by
applicable laws and Nornickel’s
internal documents, and to monitor
such compliance. According to the
Company’s Articles of Association,
the Corporate Secretary is appointed
by the Board of Directors for a three-
year term. The Board of Directors
may terminate the office of the
Corporate Secretary before the end
of the term.
Education
Linguistics University of Nizhny Novgorod
Academy of National Economy under the
Government of the Russian Federation
Experience in the last five years
Since 2011: Corporate Secretary of MMC
Norilsk Nickel
The Corporate Secretary reports
administratively to the President and is
accountable to the Board of Directors.
The Corporate Secretary’s key
functions:
• Involvement in preparing and holding
the General Meeting of Shareholders
• Preparing and holding meetings of the
Board of Directors and its committees
• Contributing to the improvement of
Nornickel’s corporate governance
framework and practice
• Managing the activities of the
Secretariat
• Other functions in accordance with
Nornickel’s internal documents
At present, Pavel Platov is Nornickel’s
Corporate Secretary. In December
2021, the Board of Directors extended
Pavel Platov’s term as Corporate
Secretary by another three years.
1 2 3 4 5 6 7
Control system
The Company has in place an internal control
system (ICS) covering key business processes
and all management levels across the Group.
The system comprises the following control
bodies:
Audit Commission;
1
Audit Committee of the
Board of Directors;
Internal Audit Department;
Internal Control and Risk
Management, comprising
the Internal Control Department,
Risk Management Service,
and the Centre for Monitoring
Technical, Production,
and Environmental Risks
The internal control system integrated
into the Company’s corporate
governance processes is geared
towards achieving the goals related
to accurate financial reporting and
operational efficiency as well as
compliance goals.
Control structure
Audit Commission
General
Meeting of
Shareholders
Independent
auditor
Audit Committee of the Board
of Directors
Board of
Directors
President, Chairman of the
Management Board
Internal Audit
Department Director
Vice President – Head
of Internal Control
and Risk Management
Election
Reporting
Administrative
reporting
Internal
Audit
Department
Internal Control and Risk
Management
184
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Annual Report — 2023NornickelCorporate governance
Audit Commission
The Audit Commission is Nornickel’s standing internal control
body that monitors its financial and business operations.
The five members of the Audit Commission are elected
annually at the Annual General Meeting of Shareholders.
Audit Commission’s
performance
In 2023, the Audit Commission
audited Nornickel’s business
operations for 2022, with the
auditors’ report presented to the
shareholders as part of materials
for the Annual General Meeting of
Shareholders. Results of the audit
of the Company’s business
operations for 2023 will be reported
to the Annual General Meeting
of Shareholders in 2024.
The Annual General Meeting of
Shareholders on 6 June 2023 elected
the Audit Commission as follows:
Alexey Dzybalov, Anna Masalova,
Georgy Svanidze, Eduard Gornin, and
Elena Yanevich.
President. The Company has in place
an Internal Audit Policy approved by
the Board of Directors.
• Progress on the Company’s strategic
investment projects
• Shipping the Company’s cargoes by
Internal audit
Internal audit at the Company is
performed by the Internal Audit
Department, which was set up
to assist the Board of Directors
and executive bodies in better
managing the Company and improving
its financial and business operations
through a systematic and consistent
approach to the analysis
and evaluation of risk management
and internal controls as tools providing
reasonable assurance that Nornickel
will achieve its goals.
The Internal Audit Department
conducts objective and independent
audits to assess the effectiveness
of the ICS and the corporate risk
management system (CRMS). Based
on the audits, the Department
prepares reports and proposals
for senior management on improving
internal controls and monitors
the development of remedial action
plans.
In 2023, the Audit Committee:
• updated the Guidelines for
Assessing the Corporate Risk
Management System
• discussed the Department’s
performance in 2022, 6M 2023, and
9M 2023, including the results of
completed audits, gaps identified,
and remedial actions designed by
management to improve internal
controls and minimise risks
• reviewed the results of internal audit
self-evaluation
• reviewed the annual audit plan of the
Internal Audit Department
• approved KPI scorecards of the
Internal Audit Department Director.
The Audit Committee commended
the work of the Internal Audit
Department in the reporting period.
In order to ensure independence
and objectivity, the Internal
Audit Department functionally
reports to the Board of Directors
through the Audit Committee
and administratively to Nornickel’s
In 2023, the Internal Audit
Department audited the following
areas:
• Operation of automated process
control systems (APCS) at the
Company’s production facilities
sea and river
• Corporate governance processes
• Controls over IT assets and IT
projects
The Internal Audit Department is
strongly focused on driving the
adoption of digital data processing
methods. For instance, in 2023, the
Department leveraged data analysis
tools to audit procurement processes,
processing significant data volumes
and presenting them graphically – the
capabilities unlocked by advanced-
analytics approaches.
In the reporting year, the Internal
Audit Department also performed
an annual performance evaluation of
the Company’s CRMS and ICS and
concluded that CRMS and ICS are
generally functioning effectively, there
are some comments. The evaluation
results were reviewed by an Audit
Committee meeting.
Based on the recommendations
issued during the audits,
management developed corrective
1 2 3 4 5 6 7
actions and implemented a total
of 214 such actions over 2023.
The actions included updating
regulatory documents, developing
new or amending existing control
procedures, communicating them
to employees, training employees,
and identifying and assessing risks.
The Internal Audit Department uses
the SAP AM solution to continuously
monitor the implementation of
initiatives developed by management,
with the resulting insights on types
and number of initiatives regularly
reviewed by the Audit Committee.
Internal control
The Internal Control Department
ensures uniform approaches to ICS
building, operation, and development
as well as to building a control
environment and a system for
assessing business process risks,
implementing control procedures, and
segregating duties and access rights
in information systems.
The Internal Control Department
regularly monitoring the Company’s
high-risk business processes:
• Procurement and investing activities;
• Capital construction and corporate
The Company maintains data on its ICS in
a SAP GRC PC information system, runs
procedures to assess its effectiveness,
and prepares relevant reports.
Corporate
Trust Line
Nornickel runs its Corporate Trust Line
(CTL) speak-up programme established
to respond promptly to:
• any irregularities
• embezzlement or misuse of
insurance transactions
Company property
• The existing systems of accounting
• any actions that may be viewed as
for metal-bearing products.
The Company also continuously
monitors compliance with regulatory
requirements to combat the unlawful
use of insider information and market
manipulation, as well as money
laundering, terrorist financing,
and proliferation financing.
The performance and maturity
of internal control system elements
are evaluated annually as part of an
external financial statement audit
and ICS self-evaluation. Reports
containing the ICS evaluation
results are reviewed by Nornickel’s
management and the Audit Committee
of the Board of Directors.
corruption, abuse of power, bribery,
or fraud
• violation of employees’ rights
• breach of ethical standards or rules
of conduct by employees.
Employees, shareholders, and other
stakeholders can report any actual or
potential actions that cause financial
or reputational damage to Nornickel.
All reports submitted via the line
are registered, assigned a unique
number, and thoroughly investigated.
Nornickel will in no circumstances
retaliate against a whistleblower who
raises a concern via the CTL, meaning
that no disciplinary action or sanction
Key CTL principles
1.
2.
3.
Keeping reports
confidential
Keeping whistleblowers
anonymous
Investigating all
submitted reports in
a timely and objective
manner
will be taken (including employees’
dismissal, demotion, forfeiture
of bonuses, etc.). If pressure on a
whistleblower is reported, the Company
conducts mandatory investigations of
such reports and thoroughly reviews
their findings. Whistleblower status
is regularly monitored at all levels to
identify cases of undue pressure.
In 2023, the Company introduced
mechanisms to provide feedback to
whistleblowers and collect satisfaction
data from them through a feedback
form for comments on complaint/report
investigation and handling.
186
187
Annual Report — 2023NornickelCorporate governance Complaints/reports about violations
of ethical standards or rules are
considered at meetings of commissions
established by the head of the
Company’s division or Group entity
requested to investigate the complaint/
report. If a report about employees
violating corporate ethical standards
or unresolved personal conflicts is
confirmed, management takes steps
to resolve conflict situations, once
again explains the need for employees
to comply with ethical business
standards, and holds town-hall
meetings. Employees can be disciplined
over violating ethical standards and
principles.
Anti-corruption
Nornickel believes that honest,
transparent, and ethical business
conduct, as well as a strong culture,
helps strengthen the Company’s
Reporting
channels (24/7):
8 (800) 700-19-41,
8 (800) 700-19-45
skd@nornik.ru
Reporting form
on Nornickel’s website:
Corporate Trust Line –
Nornickel (nornickel.ru)
Mailing address:
Corporate Trust Line of
MMC Norilsk Nickel, 15
1st Krasnogvardeysky
Drive, Moscow, 123112,
Russia
Сorporate application
NIKA (for employees)
business reputation and build trusting
relations with investors, partners,
employees, and other stakeholders.
In its day-to-day operations,
Nornickel has zero tolerance for any
corrupt practices, complying with
anti-corruption laws of Russia and
other countries in which it operates
and recognising the importance of
implementing and complying with
procedures to prevent corruption.
Members of Nornickel’s Board of
Directors and Management Board role
model a zero-tolerance approach to
corruption in any form or manifestation
at all levels across the organisation.
To ensure compliance with legal
requirements and rules of ethical
and transparent business conduct,
Nornickel has put in place and is
continuously improving an anti-
corruption compliance system
focussed primarily on preventing
and mitigating corruption risks and
strengthening the commitment of
Company employees to high ethical
standards. Anti-corruption standards
have been approved across the Group
The Company takes regular steps
to identify and analyse corruption
risks and manages them within its
CTL report statistics
89
859
46
589
2,079
391
422
1,243
1,463
‘21
‘22
‘23
Including reports about
violations of ethical standards
or principles
Total number of reports that
triggered investigation
Total number of reports
Detailed report statistics
are published annually in
the Sustainability Report.
The Company is annually included in the Anti-
corruption Ranking of Russian Business. Following
a comprehensive independent evaluation of the
Company’s anti-corruption management system
carried out in 2023, Nornickel received the top
rating, AAA+++, reflecting management’s particular
commitment to developing and improving the system
to prevent and combat corruption.
Facilitation payments and political contributions are
strictly prohibited by Nornickel’s policy.
1 2 3 4 5 6 7
overall risk management system,
including control and monitoring
of anti-corruption measures and
procedures, and uses a wide range of
tools to assess and eliminate potential
corruption risks when engaging
with counterparties.
Nornickel strives to maintain
respectful, strong business relations
with its partners and does not prohibit
giving and receiving business gifts,
which is common business practice.
The requirements and criteria
concerning business gifts are set out
in the Regulations on Business Gifts
applicable to all Company employees.
The Company is committed to
minimising corruption risks of the
current and new business processes,
so its internal documents are subject to
regular anti-corruption due diligence to
ensure that they present no potential
for corruption. If such potential is
identified, the document owner is
advised to amend the paragraph or
section in question as necessary.
Once every two years, we submit a
declaration to the Anti-corruption
Charter of the Russian Business
to prove our compliance with anti-
corruption requirements.
Nornickel annually publishes statistics
on recorded corruption incidents in its
Sustainability Report, demonstrating
its commitment to openness and
transparency to stakeholders.
Compliance with the Company’s anti-
corruption principles is achieved
when each employee feels a strong
sense of personal ownership. When
recruited, all Company employees take
an induction briefing in compliance
with anti-corruption laws, familiarise
themselves with anti-corruption
documents, and sign an agreement
setting out their anti-corruption
responsibilities, on a mandatory basis.
Nornickel also provides employees
with regular training in anti-corruption,
involving them in anti-corruption
programmes. The Company delivers
effective training culminating in
tests and tailored to different target
Nornickel will not tolerate any retaliation,
disciplinary or other action against an employee
who reports a concern about suspected bribery
or corruption, or refuses to offer a bribe, facilitate
bribery, including commercial bribery, or take part
in any other corrupt activities.
audiences: for example, all employees
take an annual anti-corruption training
course online, all HR employees – a
course on anti-corruption compliance
for HR services, and members of
the Board of Directors and of the
Management Board – an online course
on anti-corruption for managers. As of
the end of 2023, 100% of employees
were trained to be familiar with the
Group’s anti-corruption policies
and methods. Over the year, the
training on statutory requirements
and provisions of corporate anti-
corruption regulations covered about
26 thousand people.
One of the focus areas in anti-
corruption compliance is managing
conflicts of interest, which are the
most common cause of corruption.
The Regulations on the Prevention and
Management of Conflicts of Interest
in place require any pre-conflict
situations to be disclosed and timely
measures to be taken to prevent any
potential appearance of conflict of
interest. The Company set up standing
conflict of interest commissions across
the organisation to enhance the
effectiveness of preventing, identifying,
and resolving conflicts of interest, as
well as to ensure legal compliance and
improve corporate culture.
The Company strives to uphold and
promote a culture of zero tolerance for
corruption. To do this, the Company
maintains various channels to report
corruption. All employees of the
Group and its partners have free and
convenient access to information
1
In 2021, reports of violations of ethical standards and principles were classified as Production-Related Abuses.
188
189
Annual Report — 2023NornickelCorporate governance about the documents and current
measures to combat corruption,
available on the Company website in
the dedicated Anti-corruption section.
In order to mitigate potential
risks associated with contractor
engagement, Nornickel evaluates
business standing, integrity,
and solvency of its potential
counterparties. To prevent
procurement misconduct and
maximise value capture through
unbiased selection of best proposals,
Nornickel’s procurement owner,
customer, and secretary of a
collective procurement body adhere
to the following rules:
• Procurement relies on the principle
of division of roles
• Commercial proposals submitted
by suppliers are compared using
objective and measurable criteria
approved prior to sending a relevant
request for proposal
• The selection results and the
winning bidder in the material
procurement process are approved
by the collective procurement body
comprised of representatives from
various functions of Nornickel
• A Master Agreement containing
an anti-corruption clause is signed
with each supplier or updated on
an annual basis the anti-corruption
clause outlines the course of action
to be taken between the supplier
and Nornickel with respect to risks
of abuse. Moreover, by signing
the Master Agreement, suppliers
acknowledge that they have read
the Company’s Anti-corruption
Policy
In 2023, to develop and improve its
anti-corruption compliance system,
the Company:
• approved a uniform approach to
assessing corruption risks when
engaging with counterparties
• updated and launched Anti-
corruption and Anti-corruption for
Managers, remote learning courses
across the Group
• surveyed employees on
the effectiveness of its
anti-corruption measures
• delivered a training campaign on
managing conflicts of interest for
the Group employees responsible
for implementing anti-corruption
procedures
• revised and updated its anti-
corruption procedural documents.
The Anti-corruption section on the
Company website provides information
on its anti-corruption regulations and
measures taken to combat and prevent
corruption.
Over the past three years, the
Corporate Trust Line (CTL) has not
received any reports classified as
“corrupt practices”.
Statistics on CTL corruption reports
Item
Number of CTL corruption reports
2021
0
2022
0
2023
0
1 2 3 4 5 6 7
Antitrust
compliance
The antitrust compliance system in
place at the Company since 2017
establishes the processes for the
timely prevention, identification, and
elimination of causes and conditions
facilitating antitrust violations and
ensures compliance of the Company
and its corporate entities with
applicable laws.
Federal Law No. 135-FZ On
Protection of Competition, dated 26
July 2006, was amended in 2020
to set requirements for internal
antitrust compliance regulations
of organisations and establish the
right of organisations to submit
these regulations to the Federal
Antimonopoly Service and obtain
Corporate security
Nornickel’s corporate security system
management is based on a set of
programmes to ensure corporate and
economic security.
In furtherance of the Corporate Fraud
Policy approved by the Company’s
Board of Directors, the Company
is building consistent measures
to prevent, identify, and combat
abuses, corporate fraud, and corrupt
practices. The Company deploys
the following measures to shore up
economic security:
• Incorporating signs of price fixing,
conflict of interest, lobbying for
bidders, unreasonable restrictions,
etc. as red flags into the
procurement system
In 2023, as in previous years, no antitrust violations by
Nornickel were identified, and no administrative action
was taken for such violations.
its opinion upon confirmation of
compliance. The Company was
the first in Russia to use the new
statutory procedure to obtain
a confirmation of the Federal
Antimonopoly Service that its
antitrust compliance system
meets legal requirements, issued
on 25 March 2021.
Nornickel carried out an internal
assessment and identified business
units whose activities are exposed
• Optimising the counterparty due
diligence methodology
• Developing a corporate fraud
training course and incorporating
it into the framework of training
courses for Group employees
In 2023, we deployed a
comprehensive corporate security
solution for the Group’s strategic
investment projects, shoring
up economic protection for the
Company’s legitimate interests in its
engagements with contractors, staff
security, and site security.
to antitrust risks. At such units,
the Company designated antitrust
compliance owners and briefed them
on the applicable prohibitions and
restrictions stipulated by antitrust
laws. Management decisions in
the Company are made taking into
account the requirements of the
antitrust regulations.
In 2023,
> 520
TRAININGS
242
GENERAL DRILLS
22 TACTICAL AND
SPECIAL DRILLS
were conducted to maintain
a high level of emergency
preparedness across
facility security teams and
equipment.
190
191
Annual Report — 2023NornickelCorporate governance The operation of a dedicated unit,
the Centre for Forensic Chemistry
Research and Examinations
featuring a range of modern
analytical equipment, was taken
to a fundamentally new level to
address essential tasks of ensuring
the economic security of production
assets. This has significantly
expanded the Centre’s functions
and unlocked a wide range of
research aimed at providing technical
assistance to production units as
well as control and analytical teams
in quality assurance, investigation
of the root causes of shop-floor
emergencies, in-depth chemical,
mineralogical, and structural studies
of materials and substances when
developing new technologies for
concentration and metallurgical
facilities or when running special
external quality control processes
and verifying the reliability of non-
ferrous and precious metal analysis.
The Comprehensive Methodology for
Analysis and Identification of Metal-
Containing Materials developed by
the Centre was praised by members
of the International Platinum Group
Metals Association.
Measures to protect production,
transport, and energy sector
facilities against terrorism and to
prevent unlawful interference in their
operations are implemented on a
scheduled basis.
Information security
In 2023, the Company revised its approach to information security to reflect external
challenges and the Russian market’s specific profile. The information security function
was reorganised, and a strategy for its further development was designed and approved.
Among other things, it envisages continued efforts around import substitution of
information security solutions as well as the transition to a service-based model.
The Company took extra steps to
protect its enterprises’ technological
infrastructure and mitigate risks, as
the number and complexity of cyber
attacks continued to grow and some of
Company employees were still remote,
which called for measures to shore up
the information security of corporate
resources and infrastructure.
The Company is continuously
monitoring the security of its
systems to promptly identify and
address vulnerabilities as well
as prevent cyber intrusions.
Nornickel Sfera, a Company subsidiary, provides
all key information security and process protection
services to Group enterprises. Established in
2022 and leveraging a wide range of technical
competences, Nornickel Sfera was staffed up in
2023, with its range of services expanded to match
the needs and profiles of Nornickel’s businesses.
1 2 3 4 5 6 7
Programmes
The Company has in place relevant
information security processes,
including:
• identification and classification of
data assets
• managing access to data assets
• security analysis
• risk management
• information security incident
management
• information security architecture
management
• monitoring and using data protection
tools
• review of information technology
and automated process control
system (APCS) projects for
compliance with information security
requirements.
In 2023, as part of an ongoing process
of identifying and classifying data
assets, the Company continued to
actively implement plans to bring its
data assets in line with corporate
information security standards by
rolling out the necessary solutions and
information security tools.
APCS protection
In 2023, Nornickel revised its approach
to process protection relying on
domestic solutions. The Company’s
priority remains unchanged: to roll
out basic protection measures (tools
and systems) to the maximum number
of enterprises and production sites
using APCSs. Particular attention is
paid to compliance with regulatory
requirements for the protection of
industrial automation systems.
As previously planned, the Company
has completed the deployment of
basic process safeguards across
major production sites of the Norilsk
Division as well as at the gas industry
enterprise producing and transporting
energy to the Norilsk Industrial District.
In 2023, the Company ran an internal
audit to evaluate how process
safeguards are managed at Nornickel
as well as the overall approach to
protecting automated process control
systems, and the effectiveness of
technology infrastructure security
measures. The audit gave the
information security function good
marks:
• The Company runs projects to
create systems that protect
production/industrial processes; a
procedure has been established to
deploy APCS safeguards in line with
global best practice
• Procedural documents regulating
information security and technical
support for APCSs are in place at the
Company-wide level.
Audit recommendations will be
implemented in 2024 to boost the
overall security of our APCSs.
Import substitution
Since many foreign suppliers of
information security solutions have
left the Russian market, as well as to
comply with new legal requirements,
Nornickel continues to drive the import
substitution process, including for
industrial automation systems. The
Company has compared and selected
100% of information security solutions
for first-priority data protection tools
and 65% of solutions for second-
priority data protection tools. In
2023, Nornickel launched projects to
deploy the selected data protection
tools. The Company plans to replace
imported basic data protection tools
with domestic alternatives across the
Group’s most critical enterprises no
later than in 2026 while complying with
all legal and regulatory requirements.
This import substitution process
is expected to be completed no
later than in 2028 across all Group
enterprises.
Cyber incident
response system
The Company’s cyber incident
response unit operating as part of
the Company’s information security
function uses a range of advanced
technical solutions and leverages
best practices in managing cyber
defence. Nornickel continues to scale
its seamless information security
processes and procedures that
have been previously developed and
documented to boost the function’s
resilience in the event of incidents and
emergencies. These procedures are
tested for relevance at least once a
quarter.
Any Nornickel employee detecting
any suspicious content or activity
on company devices can send an
alert to the information security team
for investigation. Experts assess
the possible negative impact on the
Company’s information systems and
take measures to prevent and eliminate
the consequences of incidents. Over 6
thousand investigations into incidents
reported by Nornickel employees were
conducted over the year.
192
193
Annual Report — 2023NornickelCorporate governance > 1 THOUSAND
INCIDENTS
were processed by the
information security team
over the year
> 18 THOUSAND
information security events
handled
> 6 THOUSAND
INVESTIGATIONS
conducted over the year
into incidents reported by
Nornickel employees
During the year, the information
security team handled over 1 thousand
incidents and over 18 thousand
information security events in total.
development and operation, driving
more effective and transparent
security management throughout the
app life cycle.
The information security function
has traditionally worked closely with
industry partners and regulators.
The Company has maintained its
positive partnership with the National
Coordination Centre for Computer
Incidents, with a relevant cooperation
agreement already in its second year.
Vulnerability management
In 2023, the Company maintained
its focus on the practical aspects of
information security by managing
vulnerabilities and analysing the
security of corporate resources in
order to minimise risks and ensure their
resilience against existing cyber threats
in a fast-changing digital environment.
The use of advanced security
analysis methods helped identify
and promptly address weaknesses
in 57 existing systems. Regular
penetration testing helped the
Company assess its preparedness
for advanced cyberattacks. New
vulnerability management strategies
were developed and deployed over
the year to address new manipulation
techniques used by cyber attackers
and ensure the continuous security of
the Company’s systems.
In an effort to continuously improve
its information security, the Company
has been successfully delivering on its
DevSecOps strategy (Development,
Security, and Operations: a process
that ensures security throughout
the entire software development
life cycle), which integrates security
elements directly into software
The Company has committed to
driving the secure development of
three key mining projects as part of
the Metallurgy Industrial Competence
Centre (ICC) to actively engage in
cutting-edge technology and best
practice sharing while also delivering
unique industry-specific solutions.
The process being deployed has
shown that DevSecOps principles
and practices are effective in early
detection and rapid responses to
potential cyber threats.
Training and communication
The Company is strongly focused
on improving employee awareness
about information security principles
and digital hygiene. In 2023, the
Group set a global goal to enhance
information security culture among all
of its employees.
Employees are trained on an annual
basis, including on newly emerging
cyber threats and risks. A total of 95
scheduled and 19 unscheduled trainings
(including e-courses and face-to-face
lectures) were held in 2023, where
34,104 Group employees were trained.
Furthermore, the Company runs regular
drills including simulations of phishing
attacks and other unlawful practices
that affect users. Following the drills,
instructions for employees are updated.
In addition, the Company uses
regular dedicated newsletters to
improve employee awareness about
current information security threats
and digital hygiene.
Top management
engagement
Nornickel’s Information Security
Policy applies to all employees and
includes the engagement boundaries
and responsibilities of the Board of
Directors and the Management Board
in this regard. Their responsibilities
include, among other things, reviewing
information security risks and budgets
for relevant programmes and projects.
Risks are monitored on a regular basis
through dedicated committees and
corporate reporting.
1 2 3 4 5 6 7
Certification
In line with international best practices,
Nornickel enterprises have in place
information security management
systems (ISMSs) compliant with ISO/
IEC 27001:2013 requirements. An
ISMS compliant with international
standards helps systematise and
structure information security support
processes while building an effective
matrix of controls and ensuring timely
risk identification and mitigation.
Strong management engagement in
ISMS processes and preparedness
of the enterprises to respond to new
threats and challenges earned praise
from an external auditor following the
audits conducted at Nornickel’s sites
in 2023. Employees involved in the
operation of the ISMS showed excellent
knowledge of information security.
Thanks to the continuous
improvement effort around
information security management
processes, Nornickel’s projects to
develop and implement advanced
cyber security solutions for industrial
assets have been repeatedly
recognised by the professional
community and industry associations.
To further maintain information
security processes at a high maturity
level, Nornickel’s enterprises have
planned a series of audits for 2024 to
transition to ISO/IEC 27001:2022.
95 SCHEDULED
AND 19
UNSCHEDULED
CYBERSECURITY
TRAININGS
held in 2023
34,104
EMPLOYEES
trained in 2023
In 2023, five of Nornickel’s
enterprises had the high
effectiveness of their information
security management processes
confirmed:
1.
2.
3.
4.
5.
Murmansk Transport
Division
Kolskaya Mining and
Metallurgical Company
(Kola Division)
Nadezhda Metallurgical
Plant (Norilsk Division)
Copper Plant (Norilsk
Division)
Talnakh Concentrator
(Norilsk Division)
194
195
Annual Report — 2023NornickelCorporate governance Cross-functional
collaboration
In 2023, Nornickel put its Supernika
corporate application into commercial
operation. The app is a single
space for digital services and
communications within the Company.
Built on a commercial platform, the
application is available to any Nornickel
employee anytime from any company
or own device. As part of the project,
the Company placed a particular
emphasis on the app’s information
security aspects. Nornickel initiated
significant updates to the application
to bring it into compliance with
internal regulations. As a result, many
updates were migrated to the publicly
available version of the platform,
making a valuable contribution to
stronger information security of
corporate communications across the
country on the whole.
In 2023, Nornickel put its Supernika corporate
application into commercial operation. The app is a
single space for digital services and communications
within the Company.
1 2 3 4 5 6 7
Partnerships and
best practice sharing
For more than six years now, the
Information Security in Industry Club
initiated by Nornickel has been one of
the most respected associations for
information security and IT managers
of major Russian industrial holding
companies. The Club has become
a recognised platform for sharing
experience and best practices in
protecting information systems
as well as for maintaining public-
private dialogue, including on topical
matters such as industry-specific
legislation and import substitution in
information security.
Prompted by changes in the external
environment and emerging new digital
challenges and threats, the Club
updated its agenda in 2023, including
by moving into new corporate
security areas. The Club has doubled
its membership to over 70 Russian
businesses now, including flagship
companies from key industries.
In international information security,
Nornickel cooperates with the Security
Council and the Ministry of Foreign
Affairs of the Russian Federation,
contributing to the development and
discussion of position papers in this
area. The Company also participates
in the National Association for
International Information Security.
Nornickel is committed to contributing
to the development of the information
security market for the industrial
segment. The Company actively
engages with providers of information
security solutions in this area.
In 2023, the Company was the first
among other customers to run a
public meeting with developers and
vendors of information security
products and services. At the meeting,
Nornickel’s information security team
members shared information on
their approaches and requirements,
customer expectations, and outlooks
for productive collaboration under the
import substitution programme. Over
200 Russian companies (information
security market players and industry
partners) took part in the meeting.
The parties plan to jointly develop
proposals to improve, test, and
implement information security
solutions for industrial systems,
including those ensuring an
uninterrupted production cycle and
business process integrity at Nornickel.
> 70
RUSSIAN COMPANIES
are currently members of
the Information Security in
Industry Club
> 200
REPRESENTATIVES OF
RUSSIAN COMPANIES
took part in the Company’s
public meeting with
developers and vendors
of information security
products and services
In 2023, guided by the principles of open and
productive collaboration, the Company entered
into three strategic agreements with the
information security market leaders: Kaspersky,
Security Vision, and R-Vision.
196
197
Annual Report — 2023NornickelCorporate governance Personal
data protection
The Company has implemented and
put in practice a set of organisational
and technical measures to protect
the personal data (including third
parties’ personal data) of different
types of owners and ensure
compliance with Russian laws.
Technical protection involves anti-
virus protection, leak prevention,
monitoring of removable devices, and
analysis of security incidents.
Face-to-face trainings conducted for enterprise
staff have proven to be an effective tool to raise
awareness about personal data protection. In
2023, such trainings were delivered to more than
200 employees.
The Company places a heightened
emphasis on maintaining legal
compliance of its personal data
processing. The Company has
developed and continuously
updates its Personal Data
Compliance Guidelines. In 2023, in
line with these Guidelines, 13 Group
enterprises brought their personal
data processing procedures into
compliance with legal requirements
and the Company’s local regulations.
Independent audit
An independent auditor for Nornickel’s
financial statements is selected
through competitive bidding in
accordance with the Company’s
established procedure. The Audit
Committee of the Board of Directors
reviews the shortlist and makes a
recommendation to the Board of
Directors on the proposed auditor
to be approved by the Annual
General Meeting of Shareholders of
MMC Norilsk Nickel.
In 2023, on the recommendation of the
Board of Directors, the General Meeting
of Shareholders approved Kept as
the auditor for RAS and IFRS financial
statements for 2023.
The Audit Committee of the Board of
Directors recorded no comments to the
auditor’s reports, praised the quality of
materials supporting financial statement
reconciliation, and described Kept’s
performance as the Company’s auditor in
2023 as effective.
AT 13
GROUP ENTERPRISES
personal data processing
procedures were brought
into compliance with legal
requirements in 2023
1 2 3 4 5 6 7
Remuneration report
The Board of Directors directly
supervises the remuneration
framework at Nornickel. The Corporate
Governance, Nomination, and
Remuneration Committee of the Board
of Directors is responsible for:
• developing the Remuneration
Policy for Members of the Board
of Directors, Members of the
Management Board, and the
President of Nornickel
• overseeing the implementation and
execution of the Policy
• reviewing the Policy on a regular basis.
Remuneration paid to members of
the Board of Directors and of the
Management Board in 2023 totalled
RUB 6.6 billion (USD 77.9 million).1
Nornickel does not issue loans to
members of the Board of Directors
and of the Management Board
but encourages them to invest in
Nornickel shares.
Non-executive directors are not
eligible for any forms of short-term
or long-term cash incentives, or non-
cash remuneration, including shares (or
share-based payments), share options,
benefits package, or pension plans.
Remuneration
of executive
directors
In line with the approved Policy,
executive directors do not receive
any additional remuneration for their
service on the Board of Directors to
avoid any potential conflict of interest.
Directors’ remuneration
The Board of Directors’ annual
remuneration is set out in the
Remuneration Policy. By resolution of
the General Meeting of Shareholders,
members of the Board of Directors
are remunerated for their service on
the Board of Directors and reimbursed
for expenses incurred by them in
performing their duties as Board
members. Members of the Company’s
Board of Directors are covered by
liability insurance at the Company’s
expense under the directors’ liability
insurance programme. In addition,
indemnity agreements are signed with
members of the Board of Directors,
covering the losses that they may incur
in connection with their service on
the Board of Directors. The Corporate
Governance Code recommends that
companies pay for their directors’
liability insurance to be able to recover
potential losses through the insurer.
Remuneration
of the Chairman
of the Board of Directors
Remuneration of the Chairman of
the Board of Directors differs from
the remuneration payable to other
non-executive directors, due to the
Chairman’s enhanced scope of expertise
and responsibilities. Subject to a
resolution of the General Meeting of
Shareholders, the Chairman of the Board
of Directors may be entitled to additional
remuneration and benefits other than
those set out in the Policy. Under the
Policy, the annual base remuneration of
the Chairman of the Board of Directors
is USD 1 million. The Chairman of the
Board of Directors is not entitled to any
additional remuneration for serving on
Board committees.
Remuneration
of non-executive
directors
All non-executive directors receive
equal remuneration. The Policy sets
forth the following annual remuneration
for non-executive directors:
• Base remuneration of USD 120
thousand for Board membership
• Additional remuneration of USD 50
thousand for serving on a Board
committee
• Additional remuneration of USD
150 thousand for chairing a Board
committee
1 The amount of remuneration paid does not include the remuneration accrued but not yet paid as at 2023-end, as well as insurance premiums and voluntary health
insurance (VHI) contributions. Adding the amounts above, remuneration of members of Nornickel’s governance bodies for 2023 as per the IFRS statements totalled RUB 7.7
billion (USD 90 million).
198
199
Annual Report — 2023NornickelCorporate governance Directors’ remuneration
Type
For serving on the Board of Directors and Board committees
Salary
Bonuses
Reimbursement
Other
TOTAL
2023
RUB mln
USD mln
373.7
31.5
–
0.2
–
405.4
4.4
0.4
–
0.003
–
4.8
Remuneration of executive bodies
In line with Nornickel’s Articles of
Association, the remuneration and
reimbursement payable to members
of the Management Board are
determined by the Board of Directors.
Remuneration of members of
the Management Board is fixed.
Remuneration of the Company’s senior
management, including individuals
who are members of the Management
Board, is comprised of basic salary
and bonuses (variable part). Bonuses
comprising the variable part of senior
management’s remuneration are
based on the KPI system aligned with
Nornickel’s strategic goals, depend
on the Company’s performance, and
are linked to both financial (EBITDA)
and non-financial metrics (work-
related injury rate (weight: 10%),
GHG reduction (weight: 5%), zero
environmental incidents (weight: 5%),
and other individual KPIs). KPIs are
updated on an annual basis by the
Corporate Governance, Nomination,
and Remuneration Committee of the
Board of Directors. In 2023, KPIs for
industrial safety, occupational health,
and environment had a significant
weight (20%) in senior management’s
KPI scorecards, which confirms that
safety culture remains top of mind for
Nornickel.
Determining the remuneration and
reimbursement payable to the
Company’s President is within the
remit of the Board of Directors.
Remuneration payable to the President
is comprised of basic salary and
bonuses. The Board of Directors
decides whether to pay the President
of the Company a performance bonus
for the reporting year.
Remuneration of Board members and the President
Type
2023
For serving on the Management Board
Salary
Bonuses
Other
TOTAL
RUB mln
2.5
3,131.3
3,094.7
5.2
6,233.7
USD mln
0.03
36.7
36.3
0.1
73.1
1 2 3 4 5 6 7
Audit Commission’s remuneration
The Annual General Meeting of
Shareholders held on 6 June
2023 set total remuneration
at RUB 1.8 million per year (before
taxes) for each member of Nornickel’s
Audit Commission who is not an
employee of the Company. The
above remuneration level is similar
to the remuneration rate set for
members of the Audit Commission
in 2022. Members who are Nornickel
employees are not paid remuneration
for their work as part of the Audit
Commission. No bonuses or other
rewards were paid in 2023.
Audit Commission’s remuneration
Type
For serving on the Audit Commission
Auditor
Auditor’s fee
The fee paid to Kept for its audit and
auxiliary audit services as well as
other audit-related services in 2023
totalled around RUB 232 million (USD
2.7 million), net of VAT, with the share
of other audit-related services (non-
audit services) accounting for 30% of
the total.
Auditor’s fee
Service type
Audit
Auxiliary audit services
Other audit services
TOTAL
2021
RUB mln
7.2
2022
RUB mln
7.2
2023
RUB mln
7.2
USD mln
0.084
To prevent conflict of interest, Kept has in place a
specific policy covering different types of services
they provide to auditees, which complies with the
requirements of the International Ethics Standards
Board for Accountants (IESBA), the Russian
Independence Rules for Auditors and Audit Firms,
and other applicable standards.
2021
RUB mln
131.2
42.3
161.6
335.1
2022
RUB mln
116.9
57.3
165.6
339.8
2023
RUB mln
USD mln
125.8
36.7
69.7
232.2
1.5
0.4
0.8
2.7
200
201
Annual Report — 2023NornickelCorporate governance Risk management
Risk management system
The existing corporate risk
management system is integrated into
the Company’s business processes and
enables effective risk-based decisions
at various organisational levels to
achieve strategic and operational goals.
Nornickel has set the following key risk
management objectives:
• Increase the likelihood of achieving
the Company’s goals
• Improve resource allocation
• Boost Nornickel’s investment case
and shareholder value
The risk management system is based
on the principles and requirements
set forth in Russian laws, as well as
professional standards, including
the Corporate Governance Code
recommended by the Bank of
Russia, GOST R ISO 31000-2019 Risk
Management. Principles and Guidelines,
COSO Enterprise Risk Management –
Integrating with Strategy and
Performance, and Recommendations
for Public Joint Stock Companies to
Organise Risk Management, Internal
Controls, Internal Auditing, and the
Work of Auditing Committees under
Boards of Directors (Supervisory
Boards) (Appendix to the Bank of
Russia’s Letter No. IN-06-28/143 dated
1 October 2020).
To manage production and
infrastructure risks, Nornickel develops,
approves, updates, and tests business
continuity plans to maintain operations
and take recovery steps in case of
emergency.
Risk management framework
• • Approving the corporate Risk
Management Policy
• Supervising the development of the risk
management system
• Approving the Corporate Risk Appetite
Statement (annualy)
• Managing strategic risks on an ongoing
basis
• Reviewing and approving the risk
management development roadmap
and assessing its implementation status
(annualy)
• Reviewing reports on strategic and key
risks (annually/quarterly)
• Assessing risk management performance
at Nornickel (annualy)
Board of
Directors
Audit
Committee
of the
Board of
Directors
Internal audit
• Making independent
assessments of the
effectiveness of risk
management, internal
controls, and corporate
governance (annually)
•
Internal
control
• Methodological
support and
participation in
risk assessment of
business processes
1 2 3 4 5 6 7
Management
Board
Risk Management
Committee of
the Management
Board
• Reviewing strategic risks and reports on key risks
• Reviewing materialised risks and lessons learned
• Reviewing risk appetite metrics
• Making decisions related to key risk management
• Reviewing business continuity plans
• Reviewing the strategy and development plans for
the Corporate Risk Management System (CRMS)
and Internal Control System (ICS)
• Reviewing the performance of dedicated risk
management committees within business verticals
Risk Management Service
Risk owners
• Developing and updating the risk management
methodology
• Preparing reports on Nornickel’s top risks
(quarterly)
• Preparing reports on strategic risks (annualy)
• Enhancing quantitative risk assessment with
simulation modeling tools
• Improving the Company’s business continuity
management svstem
• Introducing the practice of using risk appetite
• Ensuring employee training in practical
approaches to risk management
• Day-to-day risk management within
the integrated risk management model,
including risk identification, analysis,
assessment, and/or prioritisation, as
well as development and execution of
response plans and mitigation measures
• Risk-based decision making
202
203
Annual Report — 2023NornickelCorporate governance In 2023, the Company completed the
following projects/initiatives to develop,
improve, and maintain the maturity of its
risk management system:
• Piloted a project to automate project
risk management via the existing GRC-
based system, and automated links
between risks and control procedures
for environmental risks
• Ran a quantitative assessment of
the cumulative impact of risks on
functional strategies
• Ran a quantitative assessment of the
cumulative impact of key risks on the
Company’s 2024 budget, as well as
an analysis of the budget sensitivity
to key risks, with follow-up risk
management measures included in
the budget
• Broke down the Company’s risk
appetite into lower organisational
levels, set up monitoring of relevant
metrics, and completed process
automation
• Prepared training materials on project
• Further improved quantitative
risk management
• Trained employees of the Kola and
Norilsk Divisions on environmental risk
management
• Maintained regular activities of
the Management Board’s Risk
Management Committee and
dedicated function-level risk
management committees
• Improved integration between risk
management and budget planning
processes through GRC-based
automation tools
assessment tools for operational
risks
• Ran regular quantitative
assessments of investment risks
• Had the risk management system’s
maturity independently assessed
by a third party, confirming its high
maturity level
• Developed the concept for
assessing long-term climate-
related risks as part of a project
to ensure compliance with TCFD
recommendations
Map of Nornickel’s material risks with year-on-year changes in 2023
Risk Map
Risk
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11
8
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12
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4
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8
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12
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Price risk
Market risk
Financial risks
Technical and
production risk
Investment risks
H&S risks
Permafrost degradation
Supply chain risks
Compliance risk
Information security
risks
Environmental risks
Low water levels in
rivers
Social risk
In line with risk management system
improvement plans for 2024, the
following areas have been prioritised:
• Further automating risk management
processes and system functionality
• Expanding the scope of quantitative
risk assessment in strategic and
operational planning
• Enhancing the methodology to
analyse, assess, and manage various
categories and types of risks
• Applying and enhancing the concept
for assessing long-term climate-
related risks in line with TCFD
requirements
A high-level map of Nornickel’s material
risks leverages global best practices in
risk management. The risk map ranks
material risks by effect on the Group’s
objectives and by source.
Risk: effect of uncertainty on
objectives (ISO/GOST R 31000).
Risk source: element which alone or
in combination has the potential to
give rise to risk (ISO/GOST R 31000).
The assessment takes into account
the predominance of external or
internal factors.
The Effect on Nornickel’s
Objectives scale shows the relative
impact of risks.
1 2 3 4 5 6 7
Changes in risk status in 2023 reflect the continued
or increased effect of multiple external factors on
the Company as it adapted to a new normal.
Key
strategic risks
Insurance
The Company’s strategic risks were
updated in 2023. Nornickel sees the
following groups of risks as its key risks:
• Lower demand for the Company’s
products
• Lower productivity and disruptions of
operations
• Mismatch between Nornickel’s
financial position and its growing
strategic development needs
• Failure to achieve targets to reduce
environmental footprint
Insurance is an essential tool used
to manage risks while protecting the
property interests of Nornickel and its
shareholders against any unforeseen
losses related to operations, including
due to external effects.
Nornickel has centralised its insurance
function to ensure the consistent
implementation of its uniform
insurance policy and standards.
The Company annually approves
a comprehensive programme that
defines key parameters by insurance
type, key business area, and project.
Nornickel has developed and
implemented a corporate insurance
programme that covers assets,
equipment failures, and business
interruptions across the Group
as well as enterprises in the core
production chain, all on the same
terms. The directors’ and officers’
liability, freight, construction and
installation, vehicle, and other types
of liability insurance programmes of
the Company are also centralised and
promote continuity.
Nornickel maintains insurance
contracts with major Russian
insurers.
The Company applies industry best
practice and leverages insurance
market trends to negotiate the
best insurance and insured risk
management terms.
Key risks
Nornickel’s risks are all inherent to its strategic and operational
development and business continuity goals. Key risks have a
varying degree of effect on Nornickel’s objectives.
Climate-related
risks
as well as TCFD recommendations,
which prioritise the following risks
categories:
and other climate risk factors which
may adversely affect the Group’s
operations.
For more details on Nornickel’s
climate-related risks and opportunities,
please see our Climate Change Report.
Nornickel assesses climate-related
risks and opportunities based on the
Bank of Russia’s recommendations
for public joint stock companies to
disclose non-financial information1
Physical risks can manifest themselves
as abnormal weather (acute) or lasting
changes in weather patterns (chronic).
Consequences of climate-related
physical risks for the Company can
include permafrost thawing, changes
in water levels in water bodies,
precipitation amounts and patterns,
Transition risks arise from the transition
to a low-carbon economy. Key risks
of this type include relevant political,
regulatory, technological, market, and
reputational risks that can substantially
affect demand for Nornickel products.
Source of risk
Internal
External
По сравнению с прошлым годом
Risk increased year-on-year
Risk decreased year-on-year
Risk has not changed year-on-year
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1 The Bank of Russia’s Information Letter No. IN-06-28/49 On Recommendations for Public Joint Stock Companies to Disclose Non-financial Information Related to Their
Activities, dated 12 July 2021.
Annual Report — 2023NornickelCorporate governance
1 2 3 4 5 6 7
The Company’s assets are located
in regions that have long been
affected by climate change, which
is reflected in our current technical,
production, and environmental
risks. The Company continues
integrating its climate risk and
risk factor management process
into its business processes in
accordance with TCFD and COSO
recommendations. The continued
integration of physer-term risks.
Transition risks can be classified in line
with TCFD recommendations both as a
standalone risk and as a risk factor for
other risks. The Company has compiled
a list of its transition risks and ran their
pilot assessment.
ical risks implies structuring the
procedure and rules around managing
both current and longAs part of
implementing the TCFD Compliance
Roadmap and meeting the objectives
set in the corporate Environmental
and Climate Change Strategy,
Nornickel has been improving its
climate risk management.
The analysis of physical risks
relies on public scenarios of the
Intergovernmental Panel on Climate
Change (SSP1-2.6, SSP2-4.5,
SSP5-8.5) localised for all regions
where the Company operates its
production facilities. To analyse
transition risks, we rely on our
own scenarios for global economy
and climate change until 2050. As
part of permafrost thawing risk
management, the Company further
develops its facility monitoring
system for continuous automated
monitoring of permafrost foundation
soil temperature and foundation
deformations. The monitoring system
is developed by the Buildings and
Structures Monitoring Centre of the
Norilsk Division, which is responsible for
technical supervision and permafrost
monitoring and serves as a centre of
excellence in engineering geology.
Developing climate risk management procedures
1
Forecast
2
Identification
3
4
Assessment
Mitigation and adaptation
Physical risks
Forecasting climate risk
factors for regions of
operation
Analysing the incorporation
of climate risk factors into risk
assessments, identifying new
risks
Transition risks and
opportunities
Developing our own scenarios
for global economy and climate
change
Identifying transition risks and
opportunities
Assessing the impact on
the Company’s financial
performance
Developing mitigation and
adaptation tools
Integrating risks into the
Company’s business processes
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Permafrost degradation (physical climate risk)
Low water levels in rivers (physical climate risk)
Loss of bearing capacity by pile foundation beds may lead to deformation and collapse of buildings and structures.
Water shortages in storage reservoirs of Nornickel’s hydropower facilities may result in failure to achieve required water
pressures at HPP turbines, leading to lower power output and to drinking water shortages in Norilsk.
Key risk factors
• Climate change, average annual temperature increases over the last 15 to 20 years
•
Increased depth of seasonal permafrost thawing
Effect on Nornickel’s development
goals and strategy
• Effective delivery of finished products (metals) in line with the production programme
• Social responsibility: comfort and safety of people living in Nornickel’s regions of
operation
• No emergency situations of interregional or nationwide scale, including environmental
Risk assessment
damage
Effect on objectives: medium.
Source of risk: external.
Year-on-year change in risk: stable.
Key mitigants
To manage this risk, Nornickel:
• carries out regular monitoring of soil condition under the foundations of buildings and
structures
• carries out geodetic monitoring of the movement of buildings
• uses satellite technology to monitor Nornickel’s assets and further analyse the data
regularly monitors the ongoing condition of Nornickel’s buildings and structures
•
and subsequently processes the results to check for potential risks of Earth surface
displacements
regularly monitors the ongoing condition of Nornickel’s buildings and structures by
scaling the information and diagnostic system (in particular, by deploying automated
observation points to monitor the key factors that affect the safe operation of buildings
and structures)
•
• monitors soil temperature in the foundations of buildings and structures
•
takes corrective and adaptive actions to ensure that buildings and structures are
technically operational.
Key risk factors
• Extreme weather events (droughts) caused by climate change
Effect on Nornickel’s development
goals and strategy
• Social responsibility: comfort and safety of people living in Nornickel’s regions of
operation
• Lower share of renewables in the Company’s energy mix
Risk assessment
Effect on objectives: medium.
Source of risk: external.
Year-on-year change in risk: stable.
Key mitigants
To manage this risk, Nornickel:
•
improves the performance of the closed water circuit to reduce water withdrawal from
surface sources (water bodies)
• carries out regular hydrological observations to forecast water levels in rivers and other
water bodies
• cooperates with the Federal Service for Hydrometeorology and Environmental
Monitoring (Rosgidromet) on setting up permanent hydrological and meteorological
monitoring stations in order to improve the accuracy of water level forecasts for major
rivers across Nornickel’s regions of operation
• dredges the Norilskaya River in the water withdrawal areas to increase water withdrawal
•
•
reliability during low water periods
implements a number of measures to reduce water consumption by boosting the
performance of equipment and production chains
replaced hydropower units at the Ust-Khantayskaya HPP to increase power output
through improving the hydropower units’ performance.
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Annual Report — 2023NornickelCorporate governance Transition risks and
opportunities
To assess risks and opportunities
arising from the global energy
transition, Nornickel has developed
three own scenarios for global economy
and climate change until 2050.
For this exercise, we engaged experts
from the Institute for Economic
Forecasting of the Russian Academy of
Sciences (IEF RAS) and conducted an
analysis of some 190 available public
scenarios from widely recognised
sources, such as the International
Energy Agency, the World Energy
Council, the International Renewable
Energy Agency, OPEC, Bloomberg,
NGFS, Shell, BP, DNV, and others.
The resulting three global economy
and climate change scenarios are
aligned with climate change pathways
described in public scenarios SSP1-2.6,
SSP2-4.5, and SSP5-8.5.
Key characteristics of the scenarios developed to assess transition risks and opportunities until 2050
Probability
Development focus
Inflation
Resource/Energy intensity
Climate regulation
CO2 prices
Temperature change by 20501
Alignment with the ParisAgreement goal +
Rapid Transition
SSP1-2.6
25%
Sustainable Palladium
SSP2-4.5
70%
Global Growth
SSP5-8.5
5%
Low-carbon development
paradigm with the
globalcommunity’s efforts
focused on the reduction of
GHG emissions
Maintaining current
socioeconomic trends.
Traditional industries remain
centre stagealong with the
green economy
Abandoning efforts to curb
climatechange with further
rapid economic growth
fuelled by hydrocarbons
High
Low
Strict
Moderate
Moderate reduction
Moderate
Major increase
Moderate increase
+1.7°С
+2.0°С
-
Low
High
Insignificant
At 2021 levels
+2.5°С
-
1 2 3 4 5 6 7
Price risk
Potential decrease in sales revenues due to lower prices for Nornickel metals is subject to actual or potential changes in
demand and supply in certain metals markets, global macroeconomic trends, and the financial community’s appetite for
speculative/investment transactions in the commodity markets.
Key risk factors
• Lower demand for metals produced by Nornickel
• A slowdown in the global economy in general and in the economies consuming Nornickel
metals in particular
• Supply and demand imbalance in metals markets
• Replacement of metals produced by the Company with alternative materials
Effect on Nornickel’s development
goals and strategy
Upgrade of the existing and construction of new facilities to ramp up our output of core
metals and maintain financial stability
Risk assessment
Effect on objectives: high.
Source of risk: external.
Year-on-year change in risk: stable.
Key mitigants
Nornickel is consciously accepting the existing price risk. To manage this risk, Nornickel:
• continuously monitors and forecasts supply and demand dynamics for key metals
• secures feedstock supplies for key consumers through long-term contracts to supply
metals in fixed volumes
• as a member of the Nickel Institute and the International Platinum Group Metals
Association, works with other nickel and PGM producers to maintain and expand the
demand for these metals
• searches for new applications and uses for palladium.
with the fleet of passenger EVs,
hydrogen cars, and plug-in hybrids,
in the Rapid Transition scenario will
be lower than that in the Sustainable
Palladium scenario as a result of the
general trend towards reduction in car
ownership and use and ride-sharing
development.
The Company has chosen the
Sustainable Palladium as its baseline
scenario, according to which
traditional industries are expected to
remain centre stage along with the
growing green economy. In particular,
internal combustion engine vehicles
are expected to retain a large market
share, resulting in a steady long-term
demand for palladium. The other two
scenarios will be used by the Company
to stress-test climate-related risks.
Scenario analysis2
Based on its global economy and
climate change scenarios, Nornickel
has conducted a scenario analysis
of the consolidated financial and
economic model until 2050. The
analysis has shown revenue growth
in all scenarios by 2050 against the
average value for 2017–2021. The key
revenue growth drivers in the Global
Growth scenario are the highest GDP
and population growth rate, which
will fuel the strongest demand for
palladium, nickel, and copper in 2050
vs the other two scenarios.
Although the Rapid Transition scenario
is based on the most aggressive
decarbonisation rates, which is
impossible without green metals –
nickel and copper, – the scenario
projects the global economy to
slow down, with the lowest GDP
and population growth rates. On
top of that, the total car fleet, along
1 Growth in temperature vs pre-industrial levels.
2 A scenario analysis of the consolidated financial and economic model until 2050 in line with three climate scenarios.
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Annual Report — 2023NornickelCorporate governance Market risk
Financial risks
Lower competitiveness of Nornickel products in the market may result in their lower liquidity, discounts to the market price,
and a decrease in Nornickel’s income.
This group includes FX, interest rate, and liquidity risks, as well as other risks related to the financial security of the
Company’s operations and investments.
1 2 3 4 5 6 7
Key risk factors
• Foreign regulators imposing new foreign trade restrictions that impact the Company’s
Key risk factors
activities
• Competition from producers of cheaper nickel
• More aggressive transport electrification programmes, requirements on metals and their
forms
• Stricter market requirements for product quality and ESG compliance
Effect on Nornickel’s development
goals and strategy
Upgrade of the existing and construction of new facilities to ramp up our output of core
metals and maintain financial stability
Risk assessment
Effect on objectives: high
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
Effect on Nornickel’s development
goals and strategy
Risk assessment
•
Increased debt financing costs
• Deteriorating market conditions
• Sharp rouble exchange rate fluctuations
• Limitation of the possibility to raise debt financing due to deterioration in financial
markets
• Lack of access to key segments of global financial markets (debt and derivatives), limited
access to the foreign currency debt market
• Unexpected major expenses
• Counterparty credit risk
• Foreign regulators imposing restrictions that affect Nornickel’s operations, its key
business partners, and infrastructure partners
• A debt portfolio with a well-balanced profile in terms of maturity, currency composition,
and sources of financing
• Maintaining a strong investment case
Effect on objectives: high
Source of risk: mixed
Year-on-year change in risk: decreased
• monitors and analyses changes in market demands for product quality and forms and
ESG compliance
• stimulates the demand for its key metals
• monitors changes in the vehicle fleet mix by engine type and requirements for metals
used
• diversifies its metal product sales across industries and geographies
•
• cooperates with industry institutions to maintain access to relevant sales markets for its
improves and diversifies its product range
metals
• cooperates with Russian ministries and agencies to prevent/mitigate negative impacts of
local or international regulation
implements an ESG roadmap
•
• seeks partnership opportunities with key producers of cathodes for lithium-ion batteries
• maintains strategic partnerships with automakers based on guarantees of long-term
palladium supplies
• explores partnership options to drive nickel demand in Russia
• works on building and enhancing alternative PGM supply/trading platforms.
Key mitigants
To manage this risk, Nornickel:
raises additional rouble-denominated debt to prevent a liquidity shortfall
• maintains a balanced debt portfolio
•
• holds liquidity reserves on the Group’s balance sheet to ensure timely payments
• monitors its account balances and existing cash gaps, as well as the availability of
•
liquidity reserves on its balance sheet
regularly evaluates key potential risk events through scenario modelling and develops
prevention and response plans
• constantly seeks new potential partners among borrowing and financial institutions,
expanding and diversifying its financial infrastructure
• uses different financial models for various purposes, expands the array of financial risk
assessment tools (stress testing and reverse stress testing of all financial risks and risk
factors considering their combinations, interrelations, and changes over time).
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Annual Report — 2023NornickelCorporate governance Technical and
production risks
1 2 3 4 5 6 7
Investment
risks
Technical, production, or natural phenomena which, once materialised, could have a negative impact on the implementation
of the production programme and cause equipment breakdown or result in the need to compensate damage to third parties.
Risk related to time and budget overruns, and performance targets of Nornickel’s major investment projects.
Key risk factors
• Harsh natural and climatic conditions, including low temperatures, storm winds, and
Effect on Nornickel’s development
goals and strategy
Risk assessment
snow load
• Unscheduled stoppages of core equipment caused by fixed assets’ wear and tear
• Release of explosive gases and flooding of mines
• Collapse of buildings or structures
•
Infrastructure breakdowns
Effective delivery of finished products (metals) in line with the production programme
Effect on objectives: high
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
• ensures proper and safe operation of its assets in line with the requirements of technical
documentation, as well as technical rules and regulations as prescribed by local laws
across Nornickel’s geographic footprint
• develops ranking criteria and criticality assessment for the Norilsk Nickel Group’s key
industrial assets
• ensures timely replacement of fixed assets to consistently achieve production safety
targets
• continuously monitors the ongoing condition of Nornickel’s buildings and structures via
an information system for conducting geotechnical surveys
• uses satellite technology to monitor Nornickel’s assets and further analyse the data
•
implements automated systems to control equipment process flows, uses state-of-the-
art engineering controls
improves its maintenance and repair system
trains and educates its employees both locally on site and centrally through its corporate
training centres
•
•
• systematically identifies, assesses, and monitors technical and production risks,
implements a programme of organisational and technical measures to mitigate relevant
risks
• continuously monitors the industrial asset management system
• ensures risk review by collective bodies at all management levels of the Company
• develops the technical and production risk management system, including by engaging
independent experts to assess the system’s performance and completeness of risk data
• develops and tests business continuity plans, which set out a sequence of actions to
be taken by Nornickel’s personnel and internal contractors in case of technical and
production risks causing maximum damage. These plans ensure that Nornickel resumes
its production operations as soon as possible after any disruption
• engages, on an annual basis, independent surveyors to analyse Nornickel’s exposure to
disruptions in the production chain and make assessments of related risks.
Key risk factors
• Changes in forecasts of ore volumes, grades, and properties resulting from follow-up
exploration
• Changes in investment project timelines
• Further changes to budgets of investment projects
• Amendments to project performance targets in the course of implementation
Effect on Nornickel’s development
goals and strategy
• Strategic goal: growth driven by Tier 1 assets
• Developing the mining, concentration, and metallurgical assets
• Developing the mineral resource base and upgrading core production processes at
Risk assessment
Nornickel’s Tier 1 assets
Effect on objectives: high
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
• carries out accelerated exploration and updates project performance targets and the
mining plan (a long-term production plan) based on the progress of its major investment
projects developing the mineral resource base
• conducts resource, geomechanical, and hydrogeological modelling
• holds external expert audits of geological data
• develops an in-house geological and mining information system
• models mining options in geological and mining information systems
• as part of the project assurance process, conducts internal (cross-functional) audits of
•
major investment projects at each stage in their life cycle
improves incentives to drive project delivery and build skills and capabilities (including
staff certification, identification of improvement areas, and provision of tailored training)
improves project delivery standards, develops project management tools
•
• promotes the use of pilot units across all technically challenging and unique processing
•
•
stages
redesigns projects and substitutes supply routes to source materials/services from
friendly countries, taking into account sanctions
implements a transformation programme for Gipronickel Institute to improve the quality
and reduce the timelines of R&D projects and survey and engineering activities
• enhances project management competences of project teams and ensures best practice
sharing through its Project Forum held on a regular basis.
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Annual Report — 2023NornickelCorporate governance Health
and safety risks
Failure to comply with Nornickel’s health and safety (H&S) rules may result in threats to health and life or temporary
suspension of operations, or cause property damage.
Key risk factors
Влияние на цель и стратегию
развития Компании
Risk assessment
Key mitigants
•
•
•
Suboptimal methods of work organisation
Disruptions in technological processes
Exposure to hazards
Health and safety
Effect on objectives: high
Source of risk: internal
Year-on-year change in risk: stable
Pursuant to the Occupational Health and Safety Policy approved by the Board of Directors,
Nornickel:
• continuously monitors compliance with H&S requirements
•
improves the working conditions for its employees and contractors deployed at
Nornickel’s production facilities, including by implementing new technologies and labour-
saving solutions as well as enhancing industrial safety at production facilities
• provides employees with certified state-of-the-art personal protective equipment
•
improves the system of stationary gas analysers, provides employees with portable gas
analysers
• carries out preventive and therapeutic interventions and enforces hygiene protocols to
reduce the potential impact of work-related hazards
• provides regular training and briefings to employees on health and safety, assesses
their health and safety performance, and conducts corporate workshops, including by
deploying special simulator units
• enhances methodological support for H&S functions, including through the development
•
•
and implementation of corporate standards
improves the risk assessment and management framework across Group enterprises as
part of the Risk Control project
reviews the competencies of line managers across Nornickel enterprises, develops H&S
training programmes, and arranges relevant trainings
• holds H&S competitions
• communicates the circumstances and causes of accidents to all Nornickel employees,
•
conducts ad hoc safety briefings
introduces frameworks to manage technical, technological, organisational, and HR
changes.
1 2 3 4 5 6 7
Compliance risks
The risk of legal liability, significant financial losses, suspension of production, revocation/suspension of a licence, loss of
reputation, or other adverse effects arising from Nornickel’s non-compliance with applicable laws, regulations, instructions,
rules, standards, codes of conduct, or from the imposition of sanctions and/or other corrective measures by external
supervisory bodies.
Key risk factors
• Discrepancies in rules and regulations
• Considerable powers and a high degree of discretion exercised by supervisory bodies
• Regulatory instability
• Market practices driven by business customs and specific to the country
Влияние на цель и стратегию
развития Компании
Compliance by Nornickel and Russian entities of the Norilsk Nickel Group with applicable
laws, regulatory requirements, corporate standards, and business codes
Risk assessment
Effect on objectives: medium
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
takes measures to ensure compliance with applicable laws
• ensures the development and update of key procedural documents on compliance
• applies best practices to further improve the compliance system
•
• protects its interests during regulatory inspections and administrative proceedings
• ensures that agreements signed by Nornickel contain clauses safeguarding its interests
• ensures pre-contractual due diligence of counterparties, partners, and suppliers
•
takes measures to prevent and mitigate compliance risks at the Norilsk Nickel Group
• consistently keeps employees up to date on the Company’s requirements and measures
to mitigate compliance risks
• ensures that the Corporate Trust Line receives and handles reports of corruption, fraud,
embezzlement, or other wrongdoing, either planned or committed
• maintains and enhances an antitrust compliance system
• ensures performance evaluation of compliance controls at the Norilsk Nickel Group.
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Annual Report — 2023NornickelCorporate governance Information security
risks
1 2 3 4 5 6 7
Environmental risks
This group includes risks such as potential cybercrimes, an unauthorised transfer, modification, or destruction of data assets,
disruption or reduced efficiency of Nornickel’s IT services as well as business, technological, or production processes.
This risk group includes events that result in environmental pollution, are not provided for in approved technological
processes and Russian laws, and affect the achievement of the Company’s environmental goals.
Key risk factors
• Growing external threats
• Unfair competition
• Rapid development of Nornickel’s IT infrastructure and automation of technological and
business processes
• Unlawful acts by employees and/or third parties
• Working from home / hybrid work schedule and hiring remote employees outside
Nornickel’s regions of operation
• Sanctions restricting the functionality of protection tools
Key risk factors
• Failure to comply with the requirements of environmental laws when operating the
Company’s facilities
• Poor internal management and control
• Delay in implementing environmental programmes and measures
• Natural and climate phenomena
Effect on Nornickel’s development
goals and strategy
Compliance of business with applicable environmental laws, regulations, corporate
standards, and business codes related to environmental protection
Effect on Nornickel’s development
goals and strategy
Mitigation of the information security risk and risk of cyberattacks on Nornickel’s information
systems and automated process control systems
Risk assessment
Effect on objectives: medium
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage these risks, Nornickel:
• develops, implements, and improves environmentally sustainable business processes
and introduces advanced practices and approaches
• has in place an incentive system and promotes environmental competencies of its
•
•
employees
implements its corporate Environmental and Climate Change Strategy
implements environmental initiatives at the Company and Russian entities of the Norilsk
Nickel Group
• oversees environmental compliance and the implementation of environmental
programmes and measures.
Risk assessment
Effect on objectives: medium
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
• ensures compliance with applicable Russian laws and regulations with respect to the
protection of personal data, insider information, trade secrets, and critical information
infrastructure
implements MMC Norilsk Nickel’s Information Security Policy
•
• categorises data assets and makes information security risk assessments
• embeds and monitors compliance with corporate information security standards within
information systems and automated process control systems
raises information security awareness among employees
•
• substitutes imported data protection tools whose functionality was restricted due to
sanctions
• uses technical means to ensure information security of assets and manage access to
data assets
• monitors threats to information security and the use of technical protection means,
including vulnerability analysis, penetration testing, cryptographic protection of
communication channels, controlled access to removable media, protection from
confidential data leaks, and mobile device management
• develops information security regulations
• sets up and certifies the Company’s information security management system
•
implements measures to ensure safe remote access.
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Social risk
Supply chain risks
Tensions may escalate among the workforce due to the deterioration of social and economic conditions in Nornickel’s
regions of operation.
Supply chain interruption/disruption within the existing transport and logistics system.
Key risk factors
• Headcount / staff composition optimisation projects
• Rejection of Nornickel’s values by individual employees and/or third parties
• Limited ability to perform annual wage indexation
• Dissemination of false and inaccurate information about Nornickel’s plans and operations
among Group employees
• Reallocation of funds originally intended for social programmes and charity
Key risk factors
• Challenging natural and climatic conditions in the regions of operation
• Limitations of the transport and logistics system
• Growing inflation, FX rates, pricing pressure from suppliers, poor planning, and other
factors
• Breach of contracts by contractors
Effect on Nornickel’s development
goals and strategy
• Effective delivery of finished products in line with the production programme
• Timely supply of products to consumers
Effect on Nornickel’s development
goals and strategy
Social responsibility:
Risk assessment
• Partnering with regional and local authorities to develop a social infrastructure that
supports a safe and comfortable living environment for local communities
• Facilitating the employees’ professional and cultural development and building up talent
pools across Nornickel’s regions of operation
• Running wide-ranging charity programmes and projects
Effect on objectives: medium
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
• actively engages Russian manufacturers to expand competition
• uses long-term agreements / contracts / price lists with fixed optimal prices for
materials, equipment, and spare parts on terms that are most beneficial for the Company
• drafts lists of critical manufacturers of equipment and materials, works to prevent supply
disruptions, and monitors suppliers’ performance
implements its Logistics Infrastructure Development Programme.
•
Risk assessment
Effect on objectives: medium
Source of risk: mixed
Year-on-year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
• strictly adheres to the terms and conditions of collective bargaining agreements
•
•
•
•
between Group companies and employees (the Group has signed a total of 22 collective
bargaining agreements)
interacts with regional authorities, municipalities, and civil society institutions
fulfils its social obligations under public-private partnership agreements
runs corporate social responsibility programmes and the World of New Opportunities
charity programme aimed at supporting and promoting regional civil initiatives, including
by indigenous peoples of Taimyr, and the Plant of Goodness employee volunteering
programme
implements infrastructure projects to support the accelerated development of the
service economy and improved living standards across Nornickel’s regions of operation
through the Norilsk Development Agency, the Second School centre for community
initiatives in the Pechengsky District, and the Monchegorsk Development Agency
• carries out regular sociological monitoring across its operations
• surveys Norilsk residents on living standards, employment, migration trends, and general
•
social sentiment to identify major issues
runs social projects and programmes aimed at supporting employees and their families,
as well as Nornickel’s former employees
• maintains dialogues with stakeholders and conducts stakeholder questionnaire surveys
when preparing the Group’s public sustainability reports
• provides a range of social support measures to redundant staff under Kola MMC’s
social programmes and develops the Social and Economic Development Strategy of the
Pechengsky District.
220
221
Annual Report — 2023NornickelCorporate governance STAYING
BALANCED
Leverage remains at a
conservative level
Expert RA affirmed
Nornickel’s highest
national credit rating
Debt profile
(USD MLN)
Long-term debt
Short-term debt
Lease liabilities
Net debt/EBITDA
0.5x
10,461
235
1,610
8,616
1.1x
1.2x
11,717
10,232
233
4,295
7,189
520
4,335
5,377
‘21
‘22
‘23
Shareholder
Information
224
Share capital
228
Dividend policy
231
Debt portfolio
management
233
Shareholder relations
Share capital
The Company has only issued
ordinary shares; the Company’s
Articles of Association do
not provide for the issuance
of preferred shares. Shares
in the Company are voting
shares, with each voting
share counted as one vote,
except for cumulative voting,
used when electing members
of the Board of Directors.
The current shareholding
structure is available
at the Company website
Shareholder rights
All shareholders are guaranteed
equal rights and treatment
in their relations with Nornickel.
Shareholders can exercise their
rights as prescribed by the federal
laws On Joint Stock Companies
and On the Securities Market,
as well as other regulations
of the Russian Federation that
do not limit their right to attend
General Meetings of Shareholders
depending on their location
or residence.
Authorised capital as at 31 December
2023
152,863,397
ordinary shares
RUB 1
par value
Shareholding structure as at calendar year-end (%)
Shareholder
Interros
EN+ GROUP IPJSC
Treasury shares
Other shareholders (including free
float)
2021
35.95
26.25
0.51
37.29
2022
37.0
26.4
–
36.6
2023
37.0
26.4
–
36.6
Total shares
153,654,624
152,863,397
152,863,397
Nornickel shareholders and their holdings1
93.7%
90.1%
89.2%
2,163
412,727
2,328
350,866
1,918
207,078
6.3%
9.9%
10.8%
Individual shareholders
Legal entities
Stake in the authorised capital owned by individuals
Stake in the authorised capital owned by legal
entities
‘21
‘22
‘23
1 2 3 4 5 6 7
Shares
Nornickel shares have been traded in the Russian stock market since
2001. Since 2014, the shares have been on the First Level quotation list
of the Moscow Exchange (ticker: GMKN).
Shares (ordinary)
Amount
Registered number
Issue date
Date of assignment of the state
registration number
ISIN
Ticker
Registrar
Registrar
152,863,397
1-01-40155-F
1997
2006
RU0007288411
GMKN
Registrar IRC – R.O.S.T.
IRC – R.O.S.T. is the Company’s
registrar. Shareholders, including
those owning shares via nominee
holders, can participate in General
Meetings of Shareholders via e-ballots
by using the Shareholder’s Personal
Account online service developed
by the registrar. The access procedure
for the Shareholder’s Personal
Account is detailed on the registrar’s
website. Shareholders can also use
the Shareholder.online mobile app.
Nornickel share price performance and trade volumes on the Moscow
Exchange in 2023
Thousand shares
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
RUB per share
18,000
12,000
6,000
Nornickel’s market
capitalisation at year-end
2023 was
RUB 2,472 billion
USD 27 billion
RUB 14,218
low
RUB 18,078
high
RUB 15,766
average traded price
RUB 16,172
year-end price
1 Data as at the dates of the Annual General Meetings of Shareholders. Stakes in the authorised capital.
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Trade volumes, thousand shares
Share price, RUB
Source: Company calculations based
on closing prices on the Moscow
Exchange
224
225
Annual Report - 2023NornickelShareholder Information OVER
60 THOUSAND
Company employees have
already become digital
investors and received their
tokens.
1 2 3 4 5 6 7
Digital Investor,
employee motivation
programme
In 2023, Nornickel launched Digital Investor, a motivation
programme for its employees. This innovative product
is unique in the Russian employment market, and
a new instrument in the investment market.
as at the reference date, 1 January
2023. Under the programme,
employees have the right to receive
dividends on Nornickel shares and sell
DFAs after holding them for a year,
or have them redeemed after holding
them for five years.
Although the programme’s first cycle
is still being rolled out, as many
as over 60 thousand Company
employees have already become
digital investors and received their
tokens.
Digital Investor represents a new
model of the employer-employee
relationship, which provides
for 100% financing of an investment
by the employee in a digital
financial asset (DFA) at a price equal
to the market value of Nornickel
shares at issuance and at redemption.
DFA is a financial instrument
recognised by Russian laws and
offering the advantages of blockchain.
DFAs may be linked to non-digital
assets such as metals, oil, or shares.
Under the Digital Investor programme,
DFAs are linked to the price
of Nornickel shares.
The number of DFAs that an employee
is eligible to receive depends on their
length of service at the Group
Share split
On 7 December 2023, Nornickel’s
Extraordinary General Meeting of
Shareholders resolved to split1 the
Company’s ordinary shares.
The split procedure involves
amendments to the Company’s
decision to issue ordinary shares
providing for a decrease in their par
value, as well as registration of such
amendments with the Bank of Russia.
Shares will be converted on the tenth
business day from the date of state
registration by the Bank of Russia
of amendments to the issuance
decision.
As a result of this procedure, every
ordinary share of the Company
will be converted into 100 shares.
After the split, Nornickel will have
15,286,339,700 shares with a par value
of RUB 0.01 each.
A share split makes Nornickel’s stock more
available to a wider range of retail investors,
thereby boosting the securities’ appeal.
American depositary
receipts
Share and ADR split
as at year-end 2023 (%)
6.7
152,863,397
SHARES
93.3
Shares
ADRs
On 28 April 2023, the permission
for the circulation of Company ADRs
outside Russia lapsed2. In accordance
with legislation, Company shares that
remain in nominee accounts under
depositary receipt programmes
are not vested with voting rights
for holders and no dividends are paid
on them.
Unpaid dividends may be claimed
by those who were ADR holders
as at 28 April 2023 and who received
Company shares upon repayment
of the ADRs belonging to them
as per the procedure established
for the unclaimed dividends
by the Federal Law On Joint Stock
Companies.
On 23 May 2023, Nornickel ADRs
were delisted from the London Stock
Exchange.
On 21 February 2023, The Bank
of New York Mellon, the Company’s
ADR programme depositary,
published a notice of the termination
of the deposit agreement with
Nornickel, effective 23 May 2023.
However, under the terms and
conditions of the deposit agreement,
ADR holders retain the right
to surrender their ADRs for delivery
of Nornickel shares. The ADRs
are cancelled by their issuer, The Bank
of New York Mellon.
Information and official notices
are available
at www.adrbnymellon.com.
1 A share split happens when the issuer increases the number of its securities while reducing their par
value without changing its capitalisation.
2 Permission from the Government Commission on Monitoring Foreign Investment in the Russian
Federation.
226
227
Annual Report - 2023NornickelShareholder Information Dividend policy
The Company’s Regulations
on the Dividend Policy approved
by the Board of Directors seek
to ensure the transparency
of the mechanism for determining
the amount of dividend and
the dividend payment procedure.
Upon the Board’s recommendations,
the General Meeting of Shareholders
determines the dividend amount
and record date, which, as per
Russian laws, is to be set within
10–20 days of the General Meeting
of Shareholders.
Dividend payment dates
Dividends to a nominee holder
are paid directly within 10 business
days, while dividends to persons
listed on the shareholder register
are paid through the registrar within
25 business days after the record
date.
Any person who has not received
the declared dividend because
their address or banking details
were not available to the Company
or the registrar as required,
or due to any other delays
on the part of the creditor, may
request payment of unpaid dividend
within three years from the date
of the resolution to pay the dividend.
Beyond this period, any declared but
unclaimed dividends are recovered
as part of the undistributed profit
of the Company, and there will be no
obligation to pay them.
Date of the Board
of Directors’
decision to hold
the General Meeting
of Shareholder
from 10 days
Record date
for a meeting
on dividend payment1
from 25 days
up to 10
business days
Payout by Nornickel
to nominee holders
on the shareholder register
1–7 business
days
Payout by nominee
holders
to respective
beneficial owners
General Meeting
of Shareholders
(dividend approval
date)
10–20 days
Dividend record
date2
(Т+1)3
up to 25
business days
Payout by Nornickel
to persons
on the shareholder register
Shareholders may request payment of unpaid dividend
from the registrar or nominee holders within three years
from the date of dividend approval at the General Meeting
of Shareholders.
1 2 3 4 5 6 7
In 2023, the Company paid dividends
subject to current regulatory
restrictions:
• Shareholders who are customers
of foreign nominee holders and
ADR holders: dividends were
paid directly to security holders;
the payment was made if information
to identify the security holder and
other information required to make
the payment was available
• Certain categories of foreign
shareholders: dividends were paid
to type “C” accounts opened with
Russian credit institutions
Report on dividend paid4
Reporting period for which
dividends were paid
9М 2023
2022
2021
2020
2019
Total dividend paid
Declared dividend per share
USD mln
1,475
0
6,196
3,532
5,011
RUB mln
129,982
0
410,917
259,893
323,482
RUB
915
0
2,689
1,645
2,045
Dividends in 2023
On 7 December 2023,
the Extraordinary General Meeting
of Shareholders resolved to pay 9M
2023 dividend of RUB 915.33 per
ordinary share, with the amount
of dividend payout totalling
close to RUB 130 billion (about
USD 1.5 billion).
RUB 915.33
Total dividend per ordinary
share in 2023
> RUB 130 BN
Total dividend paid in 2023
1 Meeting record date is the date on which shareholders need to hold shares in the Company to be entitled
to participate in the meeting.
2 Dividend record date is the date on which shareholders need to hold shares in the Company to be entitled
to receive dividend on such shares.
3 Ex-dividend date is the date on which shares are traded without granting the right to receive the next dividend.
Stocks are traded on the Moscow Exchange on a T+1 basis, that is, shares purchased by investors are not
delivered to them until one business day has elapsed after the purchase.
4 Earlier dividend history is available at the Company website.Dividends are paid out to shareholders within three
years from the respective dividend resolution date. Beyond this period, any unclaimed dividends are recovered
as part of the undistributed profit of the Company, and there will be no obligation to pay them.Including
RUB 32.3 billion, or USD 0.5 billion in dividend payments to ADR holders for 2021, transferred to the depository
(NSD) and returned to the Company due to the restrictions imposed by the President’s Executive Order No. 95
dated 5 March 2022 and the Resolution of the Bank of Russia’s Board of Directors dated 10 June 2022.
228
229
Annual Report - 2023NornickelShareholder Information Securities taxation
Income from securities is taxable
pursuant to the applicable laws
of the Russian Federation.
Under international double tax treaties,
non-Russian tax residents may claim
a reduced rate of withholding tax
or relief from tax in Russia1. To claim
these benefits, non-residents need
to submit the following confirmations
to their Russian tax agent paying
the income:
• A confirmation of permanent
residence in a state with which
the Russian Federation has a double
tax treaty (tax residency certificate)
• A confirmation of the actual right
to receive income
• A confirmation that they meet other
conditions set forth in the applicable
treaty
If such confirmations are not provided
by the date of income payment, the tax
shall be withheld at the standard rates.
Dividend tax formula
for Russian residents
AT = P × TR × (D1 – D2),
where
AT – amount of tax to be withheld
P – proportion of the dividend amount payable to one recipient to the total dividend
amount to be distributed
TR – tax rate stipulated by the Russian Tax Code
D1 – dividend amount to be distributed among all recipients
D2 – dividend amount2 received by the organization at the time of distribution of
dividends in favor of shareholders (participants), provided that previously this amount
was not included in the taxable income
Taxation of income from securities (%)
Shareholder
INDIVIDUALS
Residents
Non-residents
LEGAL ENTITIES
Residents
Non-residents
From transactions
Interest
Dividend
13/153,4
303
203
206
13/154
30
20
20
13/154
15
135
15
1 Executive Order of the Russian President No. 585 dated 8 August 2023 suspended the main provisions
of double tax treaties between Russia and “unfriendly” countries.
2 Excluding the dividend amount eligible for a zero tax rate pursuant to Subclauses 1–1.1, Clause 3, Article 284
of the Russian Tax Code.
3 Or 0%, if by the selling date the Company shares have been held for more than five years and the requirements
for the share of real estate in the Company’s assets as outlined in Clause 2, Article 284.2 of the Russian Tax
Code have been met. The terms and conditions of applying the 0% rate to international holding companies
are set forth in Article 284.7 of the Russian Tax Code. Pursuant to Subclause 1, Clause 1, Article 219.1
of the Russian Tax Code, individuals who are Russian tax residents are eligible for investment tax deductions
in the amount of the profits from sales of the Company shares owned by the taxpayer for over three years.
4 Pursuant to Clause 1, Article 224 of the Russian Tax Code, a tax rate of 15% applies to income over RUB 5 million
5
6
for the reporting period.
If the income is classified as income of a foreign entity from sources in Russia in accordance with Clause 1,
Article 309 of the Russian Tax Code.
If the income is classified as income of a foreign entity from sources in Russia in accordance with Clause 1,
Article 309 of the Russian Tax Code.
1 2 3 4 5 6 7
Debt portfolio management
Debt management
Nornickel maintains a conservative
approach to managing its debt.
As at 2023-end, its net debt/12M
EBITDA stood at 1.2x. To raise new
debt, the Company considers both
public instruments and bank loans,
striving to balance both in its debt
portfolio. When choosing debt
financing sources, the Company
pays particular attention to the debt
currency and loan parameters.
The Company strives to maintain
a comfortable level of liquidity and
standby credit facilities to cover
its refinancing needs.
Debt profile (USD MLN)
10,461
0.5х
235
1,610
8,616
11,717
1.1х
10,232
1.2х
233
4,295
7,189
520
4,335
5,377
2023
↓13%
10,232
USD MLN
Long-term debt
Short-term debt
Lease liabilities
Net debt/EBITDA
In November
2023, the Expert
RA national rating
agency affirmed
the Company’s
highest investment-
grade credit rating
“ruAAA”.
‘21
‘22
‘23
As at 2023-end, the Company’s debt
decreased by 13% from 31 December
2022 to USD 10,232 million, driven
among others by a weaker rouble
during 2023.
Bonds
In May, the Company placed a five-
year RUB 60 billion exchange-traded
bond with a coupon rate of RUONIA
+ 1.3%, named by Cbonds as the Best
Primary Offering of a Metals Company.
In April, the Company timely
fulfilled its obligation to redeem
its USD 1 billion eurobond.
The Company closely monitors
changes in the external regulatory
environment to enable timely
responses, while prioritising strict
compliance with the terms of debt
instruments and promptly aligning
loan documents with applicable laws.
The Company meets all payment
schedules on time, fully servicing
its debt as planned. In addition,
the Company timely renews permits
from the Russian Government
required to make payments
of principal and interest in foreign
currencies to foreign creditors.
The Company continues to make
split coupon payments on all
of its eurobonds in accordance
with the terms and conditions
of the offering documents and
the requirements of Russian laws:
payments to holders whose rights
are recorded by Russian depositories
and holders whose rights
are recorded by foreign institutions.
The scheduled redemption
of the eurobond in April also involved
split payments.
230
231
Annual Report - 2023NornickelShareholder Information In December 2023, as required
by Executive Order of the Russian
President No. 430 dated 5 July 2022,
the Company placed replacement bonds1
to substitute for the eurobonds maturing
in 2025 and 2026. The outstanding
issues were worth USD 315.6 million
and USD 333.5 million, respectively.
In October 2023, the Company
was permitted not to place replacement
bonds to substitute for the eurobonds
maturing in 2024.
Outstanding eurobonds
As at 2023-end, ten bond issues
•
were outstanding:
three eurobond issues worth
a total of USD 1.1 billion (nominal
value is net of the nominal value
of replacement bonds issued)
three bond issues worth a total
of RUB 110 billion
two replacement bond
issues worth a total
of USD 649 mln
two bond issues worth
a total of CNY 9 billion
Instrument
Offering date / maturity date
Issue size
Coupon rate (%)
Coupon frequency
ISSUER: MMC FINANCE D.A.C.
Eurobond 2024 (LPN)
28.10.2019/28.10.2024
USD 750 mln
Eurobond 2025 (LPN)
11.09.2020/11.09.2025
Eurobond 2026 (LPN)
27.10.2021/27.10.2026
USD 500 mln2
USD 500 mln3
3.375
2.55
2.80
Twice a year
Outstanding replacement bonds
Instrument
ISIN
Offering date / maturity date
Issue size
Coupon rate (%)
ISSUER: MMC NORILSK NICKEL
Exchange-traded
bond, BО-001P-01
Exchange-traded
bond, BО-001P-02
RU000A100VQ6
01.10.2019 /
24.09.2024
RU000A105A61
11.10.2022 /
05.10.2027
(put option expiring
14.10.2025)
RUB 25 bn
RUB 25 bn
7.20
9.75
Exchange-traded bond,
BО-001P-05-CNY
Exchange-traded bond,
BО-001P-06-CNY
RU000A105ML5
19.12.2022 /
15.12.2025
CNY 4 bn
3.95
RU000A105NL3
22.12.2022/18.06.2026 (put
option expiring 25.12.2025)
CNY 5 bn
LPR 1Y+ 0.1
Coupon
frequency
Every 182 days
starting from
the offering
date
Every 91 days
starting from
the offering
date
Exchange-traded
bond, BО-09
Exchange-traded
bond, ZO25-D
Exchange-traded
bond, ZO26-D
RU000A1069N8
24.05.2023/17.05.2028
RUB 60 bn
RUONIA + 1.3
RU000A107BL4
20.12.2023 /
11.09.2025
USD 315.559 mln
2.55
Twice a year
RU000A107C67
22.12.2023/27.10.2026
USD 333.485 mln
2.8
1 2 3 4 5 6 7
Shareholder relations
Nornickel maintains an active dialogue with a wide
universe of Russian and international investors
and security analysts. The Company holds regular
conference calls and meetings with investors,
participates in investment conferences, and organises
site visits to the Company’s production facilities.
In 2023, the Company remained
committed to global best practice
for disclosure, using an array
of disclosure tools, including press
releases, presentations, annual and
sustainability reports, corporate
action notices, as well as interactive
tools. Nornickel provides
disclosure both in Russian and
in English. Materials for investors
are available in the Investors section
of the Company website.
The number of retail investors
in the reporting period exceeded
400 thousand, accounting for about
11% in Nornickel’s shareholding
structure. Growing the number
of retail investors and their share
in the Company’s authorised capital
to 25% remains a strategic priority.
In 2023, Nornickel continued
to actively deliver on its retail investor
strategy:
• Nornickel’s presence on retail
investor social networks: promoting
accounts on professional platforms
Pulse, Profit and Smart-Lab
to engage with market participants.
Nornickel’s blog is among the top
10 most visited account profiles
across all platforms
• Leveraging information channels:
participating in webinars, podcasts,
video conferences with brokers,
live broadcasts with bloggers, and
conferences in Telegram channels
• Creating educational content:
publishing analytical reports
in Russian on the non-ferrous
metals market (metals market
review) and participating
in the Let’s Go Figure It Out
travel project to explain the inner
workings of major companies
• Participating in dedicated
conferences for retail investors:
Smart-Lab annual conference,
Tinkoff House within the St
Petersburg International
Economic Forum, Association
of Retail Investors, and ATON
industry conferences
• Engaging prime customers
in the private and premium banking
segments: holding meetings with
prime customers of major Russian
banks
In August 2023, Nornickel supported
the first youth forum on financial
literacy, Healthy Finance in Bobrovy
Log: Invest Smartly.
The forum’s objective is to give young
people essential knowledge about
the basics of investing in a fun way
and to demonstrate that a competent
and balanced approach can make
investments a reliable source of income.
Experts, analysts, and bloggers spoke
to school graduates and university
students about financial literacy and
shared useful tips on how to manage
personal funds and investments. More
than 300 people attended the event,
and about 6,000 people watched
the online broadcast of the forum.
In 2023, Nornickel participated in over 50
investor and shareholder events
Information on debt
instruments is posted
on the Company website.
1 Bonds which, when placed, are paid for in eurobonds or in cash with the proceeds
earmarked to purchase eurobonds.
Issue size net of replacement bonds is USD 184.4 million.
Issue size net of replacement bonds is USD 166.5 million
2
3
232
233
Annual Report - 2023NornickelShareholder Information Additional
Information
1 2 3 4 5 6 7
Consolidated financial statements
for the years ended 31 December 2023,
2022 and 2021
Index
235
and approval of the consolidated financial statements for the years ended 31 December 2023, 2022 and 2021
Statement of management’s responsibilities for the preparation
236
240
241
242
243
245
246
Independent auditors’ report
Consolidated income statement for the years ended 31 December 2023, 2022 and 2021
Consolidated statement of comprehensive income for the years ended 31 December 2023, 2022 and 2021
Consolidated statement of financial position at 31 December 2023, 2022 and 2021
Consolidated statement of cash flows for the years ended 31 December 2023, 2022 and 2021
Consolidated statement of changes in equity for the years ended 31 December 2023, 2022 and 2021
Notes to the consolidated financial statements for the years ended 31 December 2023, 2022 and 2021
Statement of management’s responsibilities
for the preparation and approval of the consolidated
financial statements for the years ended 31 December
2023, 2022 and 2021
The following statement, which
should be read in conjunction
with the auditors’ responsibility
stated in the independent auditors’
report, is made with a view
to distinguishing the respective
responsibilities of management
and those of the auditors in relation
to the consolidated financial
statements of public joint stock
company “mining and metallurgical
company “norilsk nickel”
and its subsidiaries (the “group”).
Management of the Group
is responsible for the preparation
of the consolidated financial
statements that present
fairly in all material respects
the consolidated financial position
of the Group at 31 December 2023,
2022 and 2021 and its consolidated
financial performance, comprehensive
income, consolidated cash flows
and changes in equity for the years
ended 31 December 2023,
2022 and 2021, in accordance
with International Financial Reporting
Standards (“IFRS”).
In preparing the consolidated
financial statements, management
is responsible for:
• selecting suitable accounting
principles and applying them
consistently;
• making judgements and estimates
that are reasonable and prudent;
• maintaining statutory accounting
records in compliance with local
legislation and accounting standards
in the respective jurisdictions
in which the Group operates;
• taking steps to safeguard the assets
of the Group; and
• detecting and preventing fraud
• stating whether International
and other irregularities.
Financial Reporting Standards
have been followed, subject
to any material departures disclosed
and explained in the Notes
to the consolidated financial
statements; and
• preparing the consolidated financial
statements on a going concern
basis, unless it is inappropriate
to presume that the Group
will continue in business
for the foreseeable future.
Management, within its competencies,
is also responsible for:
• designing, implementing
and maintaining an effective system
of internal controls throughout
the Group;
The consolidated financial statements
for the years ended 31 December
2023, 2022 and 2021 were approved
by:
President
V.O. Potanin
Senior Vice President –
Chief Financial Officer
S.G. Malyshev
Moscow, Russia
9 February 2024
234
235
Annual Report 2023NornickelAdditional Information JSC “Kept”
Naberezhnaya Tower Complex, Block C
10 Presnenskaya Naberezhnaya
Moscow, Russia 123112
Telephone +7 (495) 937 4477
Fax +7 (495) 937 4499
Independent Auditors’ Report
To the Shareholders and Board
of Directors of PJSC “Mining
and Metallurgical Company
“Norilsk Nickel”
for the years ended 31 December
2023, 2022 and 2021 in accordance
with International Financial Reporting
Standards (IFRS).
Opinion
We have audited the consolidated
financial statements of PJSC “Mining
and Metallurgical Company
“Norilsk Nickel” (the “Company”)
and its subsidiaries (the “Group”),
which comprise the consolidated
statements of financial position
as at 31 December 2023,
2022 and 2021, the consolidated
income statements, the consolidated
statements of comprehensive income,
changes in equity and cash flows
for the years ended 31 December
2023, 2022 and 2021, and notes,
including material accounting policy
information and other explanatory
information.
In our opinion, the accompanying
consolidated financial statements
present fairly, in all material respects,
the consolidated financial position
of the Group as at 31 December 2023,
2022 and 2021, and its consolidated
financial performance
and its consolidated cash flows
Basis for Opinion
We conducted our audit
in accordance with International
Standards on Auditing (ISAs). Our
responsibilities under those standards
are further described in the Auditors’
Responsibilities for the Audit
of the Сonsolidated Financial
Statements section of our report.
We are independent of the Group
in accordance with the independence
requirements that are relevant to our
audit of the consolidated financial
statements in the Russian Federation
and with the International Ethics
Standards Board for Accountants
International Code of Ethics
for Professional Accountants (including
International Independence Standards)
(IESBA Code), and we have fulfilled
our other ethical responsibilities
in accordance with the requirements
in the Russian Federation
and the IESBA Code. We believe
that the audit evidence we have
obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those
matters that, in our professional
judgment, were of most significance
in our audit of the consolidated
financial statements of the current
period. These matters were
addressed in the context of our
audit of the consolidated financial
statements as a whole, and in forming
our opinion thereon, and we do not
provide a separate opinion on these
matters.
1 2 3 4 5 6 7
JSC “Kept”
Naberezhnaya Tower Complex, Block C
10 Presnenskaya Naberezhnaya
Moscow, Russia 123112
Telephone +7 (495) 937 4477
Fax +7 (495) 937 4499
Disclosures on the impact of the economic situation on the Group’s operations
Please refer to the Notes 34, 35 in the consolidated financial statements.
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
During 2023 new restrictive measures
were introduced in addition to previously
introduced restrictive measures
by the United States of America,
the European Union and some
other countries against the Russian
government, major financial institutions,
certain other legal entities and individuals
in Russia, resulting in significant capital
markets volatility, supply and distribution
interruptions, and limited availability
of debt financing.
The Group made a comprehensive
disclosure on the impact of economic
and geopolitical environment
on the Group’s current and future
operations which we consider to be a key
audit matter.
Our audit procedures included the following:
• We obtained and critically reviewed the management’s assessment of the impact
of the economic and geopolitical situation on the Group’s operations; We reviewed
the assessment of revenue, production and capital expenditures amounts budgeted
for the next financial year;
• We assessed the Group’s analysis of sensitivity to the major market, financial
and regulatory risks, such as currency risks, interest rate risks and risks associated with
the availability of external financing;
• We analysed the disclosure of credit risk, including the Group’s assessment
of dependency from major customers and credit risk concentration. We compared
the information on credit ratings of the banks to external sources;
• We analysed the disclosure of liquidity risk including maturity profile and respective cash
flows and reconciled information on credit line commitments at the reporting date.
We considered the overall adequacy and appropriateness of the disclosures related
to the analysis of the impact of the economic situation on the Group’s current and future
operations in the consolidated financial statements.
Impairment of non-current assets
Please refer to the Note 14 in the consolidated financial statements.
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Due to the current economic
situation and changes in market
and macroeconomic conditions,
the Group performed the analysis
of impairment indicators for non-currents
assets as at 31 December 2023. Given
the materiality of the carrying amount
of non-current assets, complexity
of the impairment analysis in current
economic environment and high
degree of judgement in preparation
of a discounted cash flow model,
we consider impairment of non-current
assets to be a key audit matter.
Our audit procedures included the analysis of methodology used by the Group to identify
individual assets and determine cash-generating units (CGUs) for the purpose of assessing
indications of impairment. We also analysed the process and control procedures developed
by the Group to ensure the completeness of analysed external and internal indicators
of impairment and further estimation of the recoverable amount if impairment test
is to be performed.
We analysed the existence of internal and external indicators of impairment by separate CGU
and individual assets.
For CGUs with impairment indicators at the reporting date, we involved Kept valuation
specialists to assist us in evaluating the methodology used by the Group when preparing
discounted cash flow models and analysis of key assumptions in terms of their relevance
and reasonableness, taking into consideration current macroeconomic conditions, historic
performance results and future plans. We compared:
•
forecast metal prices, inflation and exchange rates with publicly available market
information;
• discount rates calculation to our own assessment of key components of discount rate
calculation
• production volumes with estimates of mineral reserves and historical operating
performance for certain CGUs.
We also assessed appropriateness and completeness of the disclosure in the consolidated
financial statements in relation to significant assumptions used in determination
of recoverable amount.
Audited entity: PJSC “Mining and Metallurgical Company “Norilsk Nickel”
Independent auditor: JSC “Kept”
Audited entity: PJSC “Mining and Metallurgical Company “Norilsk Nickel”
Independent auditor: JSC “Kept”
Registration number in the Unified State Register of Legal Entities:
No. 1028400000298
Registration number in the Unified State Register of Legal Entities:
No. 1028400000298
236
237
Annual Report 2023NornickelAdditional Information JSC “Kept”
Naberezhnaya Tower Complex, Block C
10 Presnenskaya Naberezhnaya
Moscow, Russia 123112
Telephone +7 (495) 937 4477
Fax +7 (495) 937 4499
Other Information
Management is responsible
for the other information. The other
information comprises the Financial
Overview (MD&A) but does not
include the consolidated financial
statements and our auditors’ report
thereon, which we obtained prior
to the date of this auditors’ report,
and the information included in other
sections of Annual Report for 2023,
which is expected to be made
available to us after that date.
Our opinion on the consolidated
financial statements does not cover
the other information and we do
not express any form of assurance
conclusion thereon.
In connection with our audit
of the consolidated financial
statements, our responsibility
is to read the other information
and, in doing so, consider whether
the other information is materially
inconsistent with the consolidated
financial statements or our knowledge
obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have
performed, we conclude that there
is a material misstatement of this
other information, we are required
to report that fact. We have nothing
to report in this regard.
Responsibilities of Management
and Audit Committee of Board
of Directors for the Consolidated
Financial Statements
Management is responsible
for the preparation and fair
presentation of the consolidated
financial statements in accordance
with IFRS, and for such internal
control as management determines
is necessary to enable the preparation
of consolidated financial statements
that are free from material
misstatement, whether due to fraud
or error.
In preparing the consolidated
financial statements, management
is responsible for assessing the Group’s
ability to continue as a going concern,
disclosing, as applicable, matters
related to going concern and using
the going concern basis of accounting
unless management either intends
to liquidate the Group or to cease
operations, or has no realistic
alternative but to do so.
Audit Committee of Board of Directors
is responsible for overseeing
the Group’s financial reporting
process.
Auditors’ Responsibilities for the Audit
of the Consolidated Financial
Statements
Our objectives are to obtain
reasonable assurance about whether
the consolidated financial statements
as a whole are free from material
misstatement, whether due to fraud
or error, and to issue an auditors’
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs will always detect a material
misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance
with ISAs, we exercise professional
judgment and maintain professional
scepticism throughout the audit.
We also:
• Identify and assess the risks
of material misstatement
of the consolidated financial
statements, whether due to fraud
or error, design and perform audit
procedures responsive to those
risks, and obtain audit evidence
that is sufficient and appropriate
to provide a basis for our opinion.
The risk of not detecting a material
misstatement resulting from fraud
is higher than for one resulting
from error, as fraud may involve
collusion, forgery, intentional
omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding
of internal control relevant
to the audit in order to design audit
procedures that are appropriate
in the circumstances, but not
1 2 3 4 5 6 7
JSC “Kept”
Naberezhnaya Tower Complex, Block C
10 Presnenskaya Naberezhnaya
Moscow, Russia 123112
Telephone +7 (495) 937 4477
Fax +7 (495) 937 4499
for the purpose of expressing
an opinion on the effectiveness
of the Group’s internal control.
• Evaluate the appropriateness
of accounting policies used
and the reasonableness
of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness
of management’s use of the going
concern basis of accounting and,
based on the audit evidence
obtained, whether a material
uncertainty exists related
to events or conditions that
may cast significant doubt
on the Group’s ability to continue
as a going concern. If we conclude
that a material uncertainty exists,
we are required to draw attention
in our auditors’ report to the related
disclosures in the consolidated
financial statements or, if such
disclosures are inadequate,
to modify our opinion. Our
conclusions are based on the audit
evidence obtained up to the date
of our auditors’ report. However,
future events or conditions
may cause the Group to cease
to continue as a going concern.
• Evaluate the overall presentation,
structure and content
of the consolidated financial
statements, including
the disclosures, and whether
the consolidated financial
statements represent the underlying
transactions and events in a manner
that achieves fair presentation.
• Obtain sufficient appropriate audit
evidence regarding the financial
information of the entities
or business activities within
the Group to express an opinion
on the consolidated financial
statements. We are responsible
for the direction, supervision
and performance of the group audit.
We remain solely responsible for our
audit opinion.
We communicate with Audit
Committee of Board of Directors
regarding, among other matters,
the planned scope and timing
of the audit and significant audit
findings, including any significant
deficiencies in internal control that
we identify during our audit.
We also provide Audit Committee
of Board of Directors with a statement
that we have complied with relevant
ethical requirements regarding
independence, and communicate
with them all relationships and other
matters that may reasonably
be thought to bear on our
independence, and where applicable,
actions taken to eliminate threats
or safeguards applied.
From the matters communicated
with Audit Committee of Board
of Directors, we determine those
matters that were of most significance
in the audit of the consolidated
financial statements of the current
period and are therefore the key
audit matters. We describe these
matters in our auditors’ report unless
law or regulation precludes public
disclosure about the matter or when,
in extremely rare circumstances,
we determine that a matter
should not be communicated
in our report because the adverse
consequences of doing so would
reasonably be expected to outweigh
the public interest benefits of such
communication.
The engagement partner
on the audit resulting in this
independent auditors’ report is:
Velichko Natalia
Nikolaevna
Principal registration number
of the entry in the Register
of Auditors and Audit organizations
No. 21906109427, acts on behalf
of the audit organization based
on the power of attorney
No. 375/22 as of 1 July 2022
JSC “Kept”
Principal registration number
of the entry in the Register
of Auditors and Audit Organizations
No. 12006020351
Moscow, Russia
9 February 2024
Audited entity: PJSC “Mining and Metallurgical Company “Norilsk Nickel”
Independent auditor: JSC “Kept
Audited entity: PJSC “Mining and Metallurgical Company “Norilsk Nickel”
Independent auditor: JSC “Kept
Registration number in the Unified State Register of Legal Entities:
No. 1028400000298
Registration number in the Unified State Register of Legal Entities:
No. 1028400000298
238
239
Annual Report 2023NornickelAdditional Information Consolidated income statement for the years ended
31 December 2023, 2022 and 2021
Consolidated statement of comprehensive income
for the years ended 31 December 2023, 2022 and 2021
1 2 3 4 5 6 7
US Dollars million
REVENUE
Metal sales
Other sales
Total revenue
Cost of metal sales
Cost of other sales
Gross profit
General and administrative expenses
Selling and distribution expenses
Impairment of non-financial assets, net
Other operating expenses, net
Operating profit
Foreign exchange (loss)/gain, net
Finance costs, net
Gain/(loss) from disposal of subsidiaries
and foreign joint operations
Income from investments
Profit before tax
Income tax expense
PROFIT FOR THE YEAR
Attributable to:
Shareholders of the parent company
Non-controlling interests
Notes
2021
2022
2023
For the year ended 31 December
7
8
9
10
14
11
12
21
13
17,103
749
17,852
(5,057)
(746)
12,049
(989)
(191)
(48)
(1,285)
9,536
(53)
(279)
29
52
9,285
(2,311)
6,974
6,512
462
6,974
16,073
803
16,876
(6,090)
(829)
9,957
(1,353)
(255)
(90)
(678)
7,581
251
(493)
(110)
150
7,379
(1,525)
5,854
5,458
396
5,854
13,702
707
14,409
(6,322)
(721)
7,366
(1,093)
(285)
(179)
(269)
5,540
(1,512)
(567)
32
41
3,534
(664)
2,870
2,384
486
2,870
EARNINGS PER SHARE
Basic and diluted earnings per share attributable
to shareholders of the parent company (US
Dollars per share)
22
41.9
35.7
15.6
The accompanying notes on pages 13-86 form an integral part of the consolidated financial statements
US Dollars million
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE (LOSS)/INCOME
Items that are or may be reclassified to profit or loss
in subsequent periods:
Reclassification of translation reserve for disposed foreign
operations to profit or loss (Note 21)
Effect of translation of foreign operations and other
reserves
Other comprehensive (loss)/income that are or may
be reclassified to profit or loss in subsequent periods, net
Items not to be reclassified to profit or loss in subsequent
periods:
Effect of translation to presentation currency
Other comprehensive (loss)/income not to be reclassified
to profit or loss in subsequent periods, net
Other comprehensive (loss)/income for the year, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET
OF TAX
Attributable to:
Shareholders of the parent company
Non-controlling interests
For the year ended 31 December
2021
6,974
2022
5,854
2023
2,870
20
(2)
18
80
80
98
7,072
6,618
454
7,072
–
29
29
891
891
920
6,774
6,332
442
6,774
–
(31)
(31)
(1,825)
(1,825)
(1,856)
1,014
779
235
1,014
The accompanying notes on pages 13-86 form an integral part of the consolidated financial statements
240
241
Annual Report 2023NornickelAdditional Information Consolidated statement of financial position
at 31 December 2023, 2022 and 2021
US Dollars million
Notes
2021
2022
2023
At 31 December
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Other financial assets
Deferred tax assets
Other non-current assets
CURRENT ASSETS
Inventories
Trade and other receivables
Advances paid and prepaid expenses
Other financial assets
Income tax receivable
Other taxes receivable
Cash and cash equivalents
Other current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Share premium
Treasury shares
Translation and other reserves
Retained earnings
Equity attributable to shareholders of the parent
company
Non-controlling interests
Non-current liabilities
Loans and borrowings
Lease liabilities
Provisions
Social liabilities
Trade and other long-term payables
Derivative financial instruments
Deferred tax liabilities
Other non-current liabilities
14
16
13
18
18
19
17
20
22
22
23
24
25
26
27
13
29
12,699
16,264
265
17
72
167
345
302
8
113
340
365
15,181
238
76
58
335
350
13,565
17,392
16,238
3,026
468
111
43
203
412
5,547
60
9,870
23,435
6
1,218
(305)
(5,415)
8,184
3,688
1,100
4,788
8,616
178
894
633
55
72
73
43
4,945
846
192
40
17
477
1,882
4
8,403
25,795
6
1,212
–
(4,541)
10,448
7,125
1,442
8,567
7,189
190
916
613
56
67
415
93
3,817
764
173
3
101
344
2,139
1
7,342
23,580
6
1,212
–
(6,146)
11,324
6,396
1,199
7,595
5,377
466
689
399
51
–
142
30
1 2 3 4 5 6 7
CURRENT LIABILITIES
Loans and borrowings
Lease liabilities
Trade and other payables
Dividends payable
Employee benefit obligations
Provisions
Social liabilities
Derivative financial instruments
Income tax payable
Other taxes payable
Total liabilities
TOTAL EQUITY AND LIABILITIES
24
25
28
30
29
26
27
17
10,564
9,539
7,154
At 31 December
1,610
57
2,224
3,146
417
146
158
15
41
269
8,083
18,647
23,435
4,295
43
1,381
496
585
180
201
–
169
339
7,689
17,228
25,795
4,335
54
1,273
1,924
555
90
207
114
7
272
8,831
15,985
23,580
The accompanying notes on pages 13-86 form an integral part of the consolidated financial statements
Consolidated statement of cash flows for the years ended
31 December 2023, 2022 and 2021
US Dollars million
For the year ended 31 December
2021
2022
2023
OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Depreciation and amortisation
Impairment of non-financial assets, net (Note 14)
Loss on disposal of property, plant and equipment (Note 14)
(Gain)/loss from disposal of subsidiaries
and foreign joint operations (Note 21)
Change in provisions and allowances (Notes 26, 27)
Finance costs, net (Note 12)
Income from investments
Foreign exchange loss/(gain), net
Other
MOVEMENTS IN WORKING CAPITAL:
Inventories
Trade and other receivables
Advances paid and prepaid expenses
Other taxes receivable
9,285
928
48
35
(29)
896
279
(52)
53
36
11,479
(796)
38
(30)
31
7,379
1,026
90
70
110
236
493
(150)
(251)
(106)
8,897
(1,693)
(347)
(60)
(121)
3,534
1,165
179
36
(32)
77
567
(41)
1,512
124
7,121
(185)
(4)
(62)
12
242
243
Annual Report 2023NornickelAdditional Information Employee benefit obligations
Trade and other payables
Provisions
Other taxes payable
Cash generated from operations
Income tax paid
Net cash generated from operating activities
INVESTING ACTIVITIES
Purchase of property, plant and equipment
Investments in associates and joint ventures
Purchase of intangible assets
Loans issued
Proceeds from repayment of loans issued
Net change in deposits placed
Proceeds from disposal of property, plant and equipment
Net cash inflow/(outflow) from disposal of subsidiaries and
foreign joint operations (Note 21)
Interest and other investment income received
34
669
(2,145)
(27)
9,253
(2,211)
7,042
For the year ended 31 December
129
(1,096)
(160)
164
5,713
(1,127)
4,586
39
51
(179)
99
6,892
(1,164)
5,728
(2,683)
(4,227)
(2,988)
(21)
(81)
(6)
43
(35)
12
49
84
(29)
(71)
–
22
34
11
(46)
157
(71)
(50)
(31)
38
–
1
11
48
Net cash used in investing activities
(2,638)
(4,149)
(3,042)
FINANCING ACTIVITIES
Proceeds from loans and borrowings (Note 34)
Repayments of loans and borrowings (Note 34)
Payments of lease liabilities (Note 34)
Dividends paid to shareholders of the parent company (Note
30)
Dividends paid to non-controlling interests
Receipt of dividends not remitted to shareholders and ADR
holders (Note 30)
Proceeds/(payments) on exchange of flows under cross-
currency interest rate swaps, net
Interest paid
Acquisition of own shares from shareholders (Note 22)
Net cash used in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(Note 20)
Effects of foreign exchange differences on balances of cash
and cash equivalents
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
(NOTE 20)
1,000
(415)
(55)
(2,198)
–
–
4
(315)
(2,068)
(4,047)
357
5,191
(1)
5,547
9,104
(7,775)
(50)
(6,196)
(73)
544
(19)
(599)
–
(5,064)
(4,627)
5,547
962
1,882
5,569
(6,642)
(45)
–
(503)
–
8
(791)
–
(2,404)
282
1,882
(25)
2,139
The accompanying notes on pages 13-86 form an integral part of the consolidated financial statements
1 2 3 4 5 6 7
Consolidated statement of changes in equity for the years
ended 31 December 2023, 2022 and 2021
Equity attributable to shareholders of the parent company
Notes
Share
capital
Share
premium
Treasury
shares
Translation
and other
reserves
Retained
earnings
Total
Non-
controlling
interests
Total
US Dollars million
Balance at 1 January
2021
Profit for the year
Other comprehensive
income/(loss)
TOTAL
COMPREHENSIVE
INCOME
FOR THE YEAR
Dividends
Other effects related
to transactions with
non-controlling interest
owners
Acquisition
of own shares
from shareholders
Cancellation of ordinary
shares from treasury
stock
BALANCE
AT 31 DECEMBER 2021
Profit for the year
Other comprehensive
income
TOTAL
COMPREHENSIVE
INCOME
FOR THE YEAR
Dividends
Cancellation of ordinary
shares from treasury
stock
BALANCE
AT 31 DECEMBER 2022
Profit for the year
Other comprehensive
loss
TOTAL
COMPREHENSIVE
INCOME
FOR THE YEAR
30
23
22
30
22
Dividends
30
BALANCE
AT 31 DECEMBER 2023
6
–
–
–
–
–
–
–
6
–
–
–
–
–
6
–
–
–
–
6
1,218
(305)
(5,415)
1,254
–
–
–
–
–
–
–
–
–
–
–
–
(2,075)
(36)
1,770
–
–
–
–
–
–
–
–
(6)
305
1,212
–
–
–
–
1,212
–
–
–
–
–
–
(5,521)
8,290
4,029
–
6,512
6,512
646
462
4,675
6,974
106
–
106
(8)
98
106
–
6,512
6,618
454
7,072
(5,374)
(5,374)
–
(5,374)
–
–
–
–
874
490
490
–
490
–
(2,075)
–
(2,075)
(1,734)
–
–
–
8,184
5,458
3,688
5,458
1,100
4,788
396
5,854
–
874
46
920
874
5,458
6,332
442
6,774
–
–
(2,895)
(2,895)
(100)
(2,995)
(299)
–
–
–
(4,541)
10,448
7,125
1,442
8,567
–
2,384
2,384
486
2,870
(1,605)
–
(1,605)
(251)
(1,856)
(1,605)
2,384
779
235
1,014
–
(1,508)
(1,508)
(478)
(1,986)
(6,146)
11,324
6,396
1,199
7,595
244
245
The accompanying notes on pages 13-86 form an integral part of the consolidated financial statements
Annual Report 2023NornickelAdditional Information Notes to the consolidated financial statements
for the years ended 31 December 2023, 2022 and 2021
1. General information
Basis of measurement
• IFRS 1 First-time Adoption
of International Financial Reporting
Standards (amended);
• IFRS 3 Business combinations
(amended);
• IFRS 16 Leases (amended);
• IAS 16 Property, plant and equipment
(amended);
• IAS 37 Provisions, contingent
liabilities and contingent assets
(amended).
Adoption of new and revised
standards and interpretations during
the year ended 31 December 2021
Adoption of amendments
to the following Standards did not
have material impact on the accounting
policies, financial position or financial
results of the Group:
Amendments related to interest rate
benchmark reform:
• IFRS 4 Insurance Contracts
(amended);
• IFRS 7 Financial Instruments:
Disclosures (amended);
• IFRS 9 Financial Instruments
(amended);
• IFRS 16 Leases (amended);
• IAS 39 Financial Instruments:
Recognition and Measurement
(amended).
Other amendments:
• IFRS 16 Leases (amended).
Standards and interpretations issued
but not yet effective
The Group did not early adopt
any standard, interpretation
or amendment that had been issued
but was not yet effective.
Organisation and principal business
activities
Public Joint Stock Company “Mining
and Metallurgical Company “Norilsk
Nickel” (the “Company” or PJSC “MMC
“Norilsk Nickel”) was incorporated
in the Russian Federation on 4
July 1997. The principal activities
of the Company and its subsidiaries
(the “Group”) are exploration,
extraction, refining of ore
and nonmetallic minerals and sale
of base and precious metals produced
from ore.
Major production facilities of the Group
are located on Russia’s Taimyr and Kola
Peninsulas and in the Zabaikalsky
Territory.
2. Basis of preparation
Statement of compliance
The consolidated financial statements
of the Group have been prepared
in accordance with International
Financial Reporting Standards (“IFRS”).
The entities of the Group maintain their
accounting records in accordance with
the laws, accounting and reporting
regulations of the jurisdictions in which
they are incorporated and registered.
Accounting principles in certain
jurisdictions may differ significantly
from those generally accepted
under IFRS. Financial statements
of such entities have been adjusted
to ensure that the consolidated
financial statements are presented
in accordance with IFRS.
The Group issues a separate set
of IFRS consolidated financial
statements to comply with
the requirements of the Russian
Federal Law No 208-FZ
On consolidated financial statements
(“208-FZ”) which was adopted on 27
July 2010.
The consolidated financial
statements of the Group are prepared
on the historical cost basis, except
for mark-to-market valuation of certain
classes of financial instruments,
in accordance with IFRS 9 Financial
Instruments.
3. Changes in accounting
policies
The accounting policies applied
in the preparation of the consolidated
financial statements for the year
ended 31 December 2023 are generally
consistent with those applied
in the preparation of the Group’s
consolidated financial statements
as at and for the years ended
31 December 2022 and 2021.
Adoption of new and revised
standards and interpretations during
for the year ended 31 December 2023
Adoption of the new Standard
and amendments to the following
Standards did not have material
impact on the accounting policies,
financial position or financial results
of the Group:
• IFRS 17 Insurance Contracts (new
Standard);
• IAS 1 Presentation of financial
statements (amended);
• IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors
(amended);
• IAS 12 Income Taxes (amended);
Adoption of new and revised
standards and interpretations during
the year ended 31 December 2022
Adoption of amendments
to the following Standards did not
have material impact on the accounting
policies, financial position or financial
results of the Group:
• IFRS 9 Financial Instruments
(amended);
1 2 3 4 5 6 7
Standards and Interpretations
Summary of amendments
Effective for annual periods beginning
on or after
IFRS 7 Financial Instruments: Disclosures
Additional disclosures of supplier
financing agreements
1 January 2024
IFRS 16 Leases
Lease obligations on sale and leaseback
1 January 2024
IAS 1 Presentation of financial statements
IAS 7 Statement of Cash Flows
IAS 21 The Effects of Changes in Foreign Exchange
Rates
Classification of liabilities as current
or non-current, non-current liabilities
with covenants
Additional disclosures of supplier
financing agreements
1 January 2024
1 January 2024
Lack of Exchangeability
1 January 2025
Management of the Group
plans to adopt all of the above
standards and interpretations
in the Group’s consolidated financial
statements for the respective
periods. These standards are not
expected to have a material impact
on the Group in the future reporting
periods and on foreseeable future
transactions, except for additional
disclosures of supplier financing
arrangements in the consolidated
financial statements.
Reclassification
Management reassessed classification
of certain items of cost of metal sales
and selling and distribution expenses
for the year ended 31 December
2023. Information for the years
ended 31 December 2022 and 2021
was reclassified to conform with
the current period presentation
and the effect of the reclassification
was immaterial.
4.Material accounting policies
Investments in associates and joint
ventures
An associate is an entity over which
the Group exercises significant
influence, but not control or joint
control, through participation
in financing and operating policy
Component of consolidated statements
Assets and liabilities
Income, expenses, and cash flows
Equity
decisions, in which it normally owns
between 20% and 50% of the voting
equity. A joint venture is an entity
in which the Group and other
investors have joint control, i.e.
decisions about the relevant activities
of the investee require unanimous
consent of the parties sharing control
and the Group has rights to its share
of the investee’s net assets.
The existence of significant influence
or joint control is determined based
on the respective rights of investors
established by investee’s charter,
corporate agreement, shareholders’
agreement or similar arrangements.
Investments in associates and joint
ventures are accounted for using
the equity method from the date
significant influence or joint control
commenced until the date that
significant influence or joint control
effectively ceased.
Under the equity method
of accounting, investments
in associates and joint ventures
are initially recognised at cost
and are adjusted thereafter
to recognise the Group’s share
of the post-acquisition profit or loss
and other movements in investee’s
equity and reserves.
Unrealised gains on transactions
between the Group and its associates
and joint ventures are eliminated
to the extent of the Group’s interest
in the investees. Unrealised losses
are eliminated unless the transaction
provides evidence of an impairment
of the asset transferred.
Functional and presentation currency
Russian rouble (“RUB”) is the functional
currency of the Company
and all of its subsidiaries except
for the Group’s foreign subsidiary
operating in metal processing whose
functional currency is US Dollar
(“USD”).
The presentation currency
of the Group’s consolidated financial
statements is US Dollar (“USD”).
Using USD as a presentation
currency is a common practice
among global mining companies.
The Group also issues consolidated
financial statements which use
RUB as the presentation currency
to comply with Federal Law 208-FZ.
Components of the consolidated
statement of financial position,
consolidated income statement,
consolidated statement
of comprehensive income,
consolidated statement of cash
flows and consolidated statement
of changes in equity are translated
into presentation currency using
the following applicable exchange
rates:
Applicable exchange rates
Period-end rate
Date of underlying transaction or average approximating
exchange rates prevailing at the dates of the transactions
Historical rates
246
247
Annual Report 2023NornickelAdditional Information All exchange differences resulting
from translation of the consolidated
income statement and consolidated
statement of financial position
components are recognised
as a separate component in other
comprehensive income/loss.
The exchange rates of certain
currencies to the Russian Rouble used
in the preparation of the consolidated
financial statements are as follows:
US Dollar/RUB
Euro/RUB
Chinese Yuan/RUB
At 31 December
2021
At 31 December
2022
At 31 December
2023
74.29
84.07
11.65
70.34
75.65
9.89
89.69
99.19
12.58
Revenue recognition
Leases
Metal sales revenue
Revenue from metal sales
is recognised at a point of time when
control over the asset is transferred
to the customer and represents
the invoiced value, net of value added
tax (if any).
Revenue from contracts that
are entered into and continue
to meet the Group’s expected
sale requirements designated
for that purpose at their inception
and are expected to be settled
by physical delivery of the goods,
is recognised in the consolidated
financial statements as and when
the goods are delivered. A gain or loss
on forward contracts expected
to be settled by physical delivery
or on a net basis is recognised
in revenue and disclosed separately
from revenue from contracts
with customers.
As a practical expedient, the Group
does not adjust the promised amount
of consideration for the effects
of a significant financing component,
if the expected period between
when the Group transfers promised
goods or a service to a customer
and the customer pays for those
goods or services is one year or less.
Certain contracts are provisionally
priced so that price is not settled
until a predetermined future date,
as of which the delivery price is settled
based on the market price (contracts
with quotation period). Revenue
from such transactions is initially
recognised at the market price
at the date of sale. Price adjustments
under provisionally priced contracts
are recognised in revenue.
At the inception of a contract,
the Group assesses whether
such contract or its components
constitute a lease. The Group
recognises a right-of-use asset
and a corresponding lease liability,
if a lease contract transfers
to the lessee the right to control
the use of the identified asset
for a period of time in exchange
for a consideration, except for current
leases with the term of 12 months
or less. The Group recognises lease
payments associated with current
leases as an expense on a straight-line
basis over the lease term. Land plot
lease payments are treated as variable
lease payments, if they are linked
to the cadastral value and changes
in the latter do not depend on market
rental rates. The Group recognises
such variable lease payments
as an expense in the period when
the event that triggers those payments
occurs.
Right-of-use assets are initially
recognised at cost that comprises
when applicable:
• the initial amount of the lease
liability;
• any lease payments made
at or before the lease
commencement date;
• any initial direct costs incurred
by the lessee;
• an estimate of costs to be incurred
by the lessee for retirement
of the underlying asset
and restoration of the site where
it is located.
Right-of-use assets are subsequently
measured at initial cost less
any accumulated depreciation
and any accumulated
impairment losses, adjusted
for any remeasurement of the lease
liability. Right-of-use assets
are depreciated on a straight-line
basis over their estimated economic
useful life or over the term of the lease,
whichever is shorter. Right-of-use
assets are presented in property, plant
and equipment in the consolidated
statement of financial position.
Lease liabilities (refer to Note 25)
are initially measured at the present
value of the lease payments that
are not paid at the commencement
date and subsequently remeasured
to reflect changes in lease
payments. The lease payments
are discounted using the interest
rate implicit in the lease (if that rate
can be readily determined) or using
Group incremental borrowing
rate at the commencement date
determined based on the lease term
and currency of the lease payments.
Employee benefits
Remuneration to employees in respect
of services rendered during a reporting
period is recognised as an expense
in that period. Deferred costs
under subsidised housing programs
for employees are presented in Other
non-current assets in the consolidated
statement of financial position
and amortised over a certain
period of employee participation
in the programme (two to ten
years). Long-term employee benefit
obligations are discounted to present
value.
Defined contribution plans
The Group contributes to the following
major defined contribution plans:
• Social Fund of the Russian
Federation;
1 2 3 4 5 6 7
• Mutual accumulated pension plan.
The only obligation of the Group
with respect to these and other
defined contribution plans is to make
specified contributions during
the period in which they arise.
Such contributions are recognised
in the consolidated income statement
when employees have rendered
respective services.
Income tax expense
Income tax expense represents
the sum of the current and deferred
tax.
Income tax is recognised
as an expense or income
in the consolidated income
statement unless it relates to other
items recognised directly in other
comprehensive income, in which
case the tax is also recognised
in the consolidated statement
of comprehensive income. Where
current or deferred tax arises from
the initial accounting for a business
combination, the tax effect is included
in the accounting for the business
combination.
Current tax
Current tax is based on taxable
profit for the year. Taxable profit
differs from profit before tax
as reported in the consolidated
income statement because it excludes
items of income or expense that
are taxable or deductible in other years
and excludes items that are not taxable
or deductible.
Deferred tax
Deferred tax is recognised in respect
of temporary differences between
the carrying amounts of assets
and liabilities for financial reporting
purposes and the amounts used
for taxation purposes. Deferred tax
assets and liabilities are not recognised
in the consolidated financial
statements, if temporary differences
arise from the initial recognition
of goodwill or from the initial
recognition of assets and liabilities
other than in a business combination,
which, at the time of the transaction,
affects neither taxable profit nor
accounting profit and do not give
rise to equal taxable and deductible
temporary differences.
The carrying amount of deferred tax
assets is reviewed at each reporting
date and adjusted to the extent that
it is probable that sufficient taxable
profits will be available to allow all
or part of the asset to be recovered.
The measurement of deferred tax
assets and liabilities reflects the tax
consequences of the manner in which
the Group expects at the reporting
date to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities
are offset when there is a legally
enforceable right to set off tax
assets against tax liabilities and when
they relate to income taxes levied
by the same tax authority.
Property, plant and equipment
Mining assets
Mine development costs
are capitalised and comprise
expenditures directly related to:
• acquiring mining and exploration
licences;
• developing new mines;
• estimating revised content
of minerals in the existing ore bodies
currently developed;
• expanding mine capacity.
Mine development costs include
directly attributable finance costs
capitalised during mine development.
Mine development costs
are recognised as mining assets
and start to be depreciated
when a mine reaches commercial
production quantities.
Mining assets are recognised at cost
less accumulated depreciation
and impairment losses. Mining
assets include cost of acquiring
and developing mining properties,
pre-production expenditure, mine
infrastructure, property, plant
and equipment that process extracted
ore, subsoil use rights, mining
and exploration licenses, finance
costs eligible for capitalisation
and discounted value of future
decommissioning costs.
Carrying value of mining assets
is depreciated over the lesser
of their individual economic
useful life on a straight-line
basis, or the remaining life
of mine. Life of mine is estimated
based on the Group production
plans. Average useful lives vary
from 2 to 47 years.
Exploration expenditure
Exploration expenditure, including
geophysical, topographical, geological
and similar types of expenditure
is capitalised and amortised over
the life of mine from the moment
the commercial viability of the project
is established. Otherwise,
it is expensed in the period in which
it is incurred.
Exploration expenditure written-off
before the start of mine development
is not subsequently capitalised, even if
commercial production subsequently
commences.
Non-mining assets
Non-mining assets include
metallurgical processing plants,
buildings, infrastructure, machinery
and equipment, and other non-mining
assets. Such assets are measured
at cost less accumulated depreciation
and impairment losses. Non-mining
assets include property, plant
and equipment used both in operations
directly and to provide social services
in the regions where the Group
operates.
Non-mining assets are depreciated
on a straight-line basis over their
economic useful life.
Depreciation charge is calculated over
the following economic useful life:
• buildings, facilities and infrastructure
5 to 50 years
• machinery, equipment and transport
2 to 33 years
• other non-mining assets
2 to 20 years
Capital construction-in-progress
Capital construction-in-progress
comprises costs directly related
to the construction of mining and non-
mining assets, including:
• prepayments for the purchase
of property, plant and equipment
and materials acquired
248
249
Annual Report 2023NornickelAdditional Information for the construction of buildings,
processing plants, infrastructure,
machinery and equipment;
• irrevocable letters of credit opened
for future fixed assets deliveries
and secured by deposits placed
with banks;
• directly attributable finance costs
capitalised during construction.
Depreciation of these assets begins
when they become available for use
and are in the location and condition
necessary for them to be capable
of operating in the manner intended
by management.
Capitalisation of finance cost
Finance costs directly attributable
to the acquisition, construction
or production of qualifying assets,
which are assets that necessarily
take a substantial period of time to get
ready for their intended use or sale,
are added to the cost of those assets,
until the assets are ready for their
intended use or sale.
Investment income earned
on the temporary investment
of specific borrowings pending their
expenditure on qualifying assets
is deducted from the borrowing costs
eligible for capitalisation.
Impairment of non-current assets,
excluding goodwill
At each reporting date, the Group
analyses the indicators of impairment
of its non-current assets to determine
whether there is any indication
that an impairment loss has been
incurred. If any such indicators exist,
the recoverable amount of the asset
is estimated in order to determine
the extent of the impairment loss (if
any).
Recoverable amount is the higher
of fair value less costs to sell or value
in use. In assessing value in use,
the estimated future cash flows
are discounted to their present
value using a pre-tax discount
rate that reflects current market
assessments of the time value
of money and the risks specific
to the asset or cash-generating
unit. Where the fair value less costs
of disposal of an individual asset
is higher than their carrying amount
the Group does not estimate its value
in use. If the recoverable amount
of an asset (or cash-generating unit)
is estimated to be less than its carrying
amount, the carrying amount
of the asset (or cash-generating unit)
is reduced to its recoverable amount.
An impairment loss is recognised
in the consolidated income statement
immediately.
Where an impairment loss
is subsequently reversed,
the carrying amount of the asset
(or cash-generating unit)
is increased to the revised estimate
of its recoverable amount but only
to the extent that the increased
carrying amount does not exceed
the original carrying amount that
would have been determined
had no impairment loss been
recognised in prior periods. A reversal
of an impairment loss is recognised
in the consolidated income statement
immediately.
Inventories
Refined metals
The Group’s main jointly produced
metals include nickel, copper,
palladium, platinum; by-products
include cobalt, gold, rhodium, silver,
and other metals. Main products
are measured at the lower of cost
of production or net realisable value.
The cost of production of main
products is determined as total
production cost allocated to each
joint product by reference to their
relative sales value. Export customs
duties (if applicable), transportation
costs and other costs incurred
by the Group before the produced
finished goods are designated
for sale under a particular contract
with a customer are included
in the cost of production, all costs
incurred after that point are included
in selling and distribution expenses.
By-products are initially measured
at net realisable value, based
on current market prices. Net realisable
value estimates take into consideration
fluctuations of price or cost directly
relating to events after the reporting
date, to the extent that such events
confirm conditions existing at the end
of the reporting period.
Work-in-process
Work-in-process includes all costs
incurred in the ordinary course
of business for producing each
product including direct material
and labour costs, allocation
of production overheads, depreciation,
amortisation and other costs, given
its stage of completion, less allowance
for adjustment to net realisable value.
Changes in the amount of allowance
are recognised in Cost of metal sales
in the consolidated income statement.
Materials and supplies
Materials and supplies are measured
at cost less allowance for obsolete
and slow-moving items.
Financial assets
Financial assets are recognised
when the Group becomes
party to contractual provisions
of the instrument and are initially
measured at fair value, plus directly
attributable transaction costs, except
for those financial assets measured
at fair value through profit or loss,
which are initially measured at fair
value.
Financial assets are classified into
the following categories:
• financial assets measured
at amortised cost;
• financial assets measured at fair
value through other comprehensive
income;
• financial assets measured at fair
value through profit or loss.
The classification of financial assets
depends on the Group’s business
model for managing the financial
assets and the contractual cash flow
characteristics of the financial asset
and is determined at the time of initial
recognition.
Effective interest method
The effective interest method is used
for calculating the amortised cost
of a financial asset and for allocating
interest income over the period.
The effective interest rate is the rate
that exactly discounts estimated
future cash receipts (including
directly attributable transaction
costs and other premiums
1 2 3 4 5 6 7
or discounts) through the expected
life of the financial asset, or, where
appropriate, a shorter period.
Income is recognised on an effective
interest rate basis for debt instruments
other than those financial assets
measured at fair value through profit
or loss or fair value through other
comprehensive income.
Financial assets measured at amortised
cost
The Group generally classifies
cash and cash equivalents, trade
and other receivables (excluding
trade receivables measured at fair
value through profit and loss under
provisionally priced contracts), loans
issued and bank deposits as financial
assets measured at amortised cost.
Financial assets measured at fair value
through profit or loss
All financial assets not classified
as measured at amortised cost
or at fair value through other
comprehensive income are classified
as financial assets measured at fair
value through profit or loss.
Trade receivables under provisionally
priced contracts and derivative
financial assets are measured at fair
Lifetime expected credit losses
Trade and other receivables
value through profit or loss. Trade
receivables under provisionally priced
contracts are remeasured at each
reporting date using the forward
market price for the period till
the price settlement date outlined
in the contract.
Impairment of financial assets
The Group recognises an allowance
for expected credit losses
on a financial asset measured
at amortised cost using either
of the following methods:
12-months expected credit losses since
the reporting date
Financial assets other than trade and other receivables for which credit risk has
not increased significantly since initial recognition
Financial assets other than trade and other receivables for which credit risk has
increased significantly since initial recognition
Financial assets other than trade and other receivables at initial recognition
When determining whether the credit
risk of the financial asset has increased
significantly since initial recognition
and when estimating expected credit
losses, the Group considers reliable
and supportable information, including
both quantitative and qualitative
information and analysis based
on the Group’s historical experience
and forward-looking information.
The Group applies the simplified
approach to measuring expected
credit losses under IFRS 9 Financial
Instruments, which uses a lifetime
expected loss allowance for trade
receivables. The Group assumes
that expected credit loss for all
trade and other receivables which
are overdue for more than 365 days
is equal to their carrying amount.
To measure the expected credit losses
trade and other receivables that
are overdue for less than 365 days
are grouped based on the length
of the overdue period to which
respective expected loss rates
are applied. The expected loss rates
are based on the historical credit loss
experience, adjusted to reflect current
and forward-looking information
on the ability of the customers
to settle the receivables.
When trade and other receivables
are considered uncollectable, they
are written off against the respective
loss allowance. Changes in the amount
of allowance are recognised
in the consolidated income statement.
Financial liabilities
The Group classifies financial liabilities
into loans and borrowings, trade
and other payables. Such financial
liabilities are recognised initially at fair
value less any directly attributable
transaction costs. Subsequent
to initial recognition, the financial
liabilities are measured at amortised
cost using the effective interest
method. Derivative financial liabilities
are measured at fair value through
profit or loss.
Effective interest method
The effective interest method is used
for calculating the amortised cost
of a financial liability and for allocating
interest expense over the period.
The effective interest rate is the rate
that exactly discounts estimated future
cash outflows through the expected
life of the financial liability, or where
appropriate, a shorter period.
Cash and cash equivalents
Cash and cash equivalents comprise
cash balances, cash deposits in banks,
brokers and other financial institutions
and highly liquid investments
with original maturities of three months
or less and on demand deposits,
which are readily convertible to known
amounts of cash and are subject
to an insignificant risk of changes
in value.
Provisions
Provisions are recognised when
the Group has a legal or constructive
obligation as a result of past
events for which it is probable
that an outflow of resources
embodying economic benefits will
be required to settle the obligation,
and the amount of the obligation can
be reliably estimated. If, in the course
of discharging an obligation,
the Group recognises property, plant
and equipment, then this settlement
does not result in an outflow
of the Group’s resources and,
therefore, no provision is recognised.
Provisions may be recognised
in respect of the Group social,
environmental, asset decommissioning
or other obligations, and are presented
250
251
Annual Report 2023NornickelAdditional Information in these consolidated financial
statements accordingly. In particular,
the Group’s social provisions
are presented together with other
liabilities related to its social
expenditure as a separate item
Social Liabilities in the consolidated
statement of financial position.
The amount recognised as a provision
is the best estimate of the expenditure
required to settle the present
obligation at the reporting date,
taking into account the risks
and uncertainties surrounding
the obligation. Where a provision
is measured using the future
cash flows, its carrying amount
is the present value of those cash
flows.
Decommissioning obligations
and environmental provisions
Decommissioning obligations include
direct asset decommissioning costs
as well as related land restoration
costs.
Future decommissioning costs
and related obligations, discounted
to present value, are recognised
when the legal or constructive
obligation in relation to such
costs arises and the future costs
can be reliably estimated. These
costs are capitalised as part
of the initial cost of the related asset
and are depreciated over the useful
life of the asset. The unwinding
of discount on decommissioning
obligations is recognised in Finance
cost, net in the consolidated income
statement. Decommissioning
obligations are periodically remeasured
for changes in applicable laws,
regulations, expected closure dates,
inflation and discount rates.
Environmental provisions may
include expenditure for remediation
of the damage to the environment,
including land and water bodies
clean-up and rehabilitation
costs, restoration of biological
resources, settlement of legal
claims and environmental damages,
fines and penalties imposed
by government authorities in respect
of the environmental incidents.
5. Сritical accounting
judgements and key sources
of estimation uncertainty
When preparing the consolidated
financial statements, the Group’s
management necessarily makes
estimates and assumptions that
affect the reported amounts of assets
and liabilities, disclosure of contingent
assets and liabilities at the reporting
date, and the amounts of income
and expenses for the reporting
period. Estimates and assumptions
require management judgement
based on historical experience,
current and expected economic
conditions, and any other available
information. Actual results may differ
from such estimates. Key estimates
and assumptions made by the Group’s
management are disclosed
below or elsewhere in the notes
to the consolidated financial
statements if applicable.
The most significant areas requiring
the use of management estimates
and assumptions are as follows:
• useful economic life of property,
plant and equipment;
• impairment of non-financial assets;
• decommissioning obligations
and environmental provisions;
• income taxes.
Useful economic life of property, plant
and equipment
The factors that may affect estimates
of the useful economic life of mining
assets include the following:
• changes in proved and probable ore
reserves;
• the grade of ore reserves changing
significantly over time;
• differences between actual
commodity prices and commodity
price assumptions used
in the estimation and classification
of ore reserves;
• unforeseen operational issues
at mine sites;
• changes in capital, operating, mining,
processing and decommissioning
costs, discount rates and foreign
exchange rates that could possibly
adversely affect the economic
viability of ore reserves.
The useful economic life of non-
mining property, plant and equipment
is reviewed by the management
periodically, based on the current
condition of the assets
and the estimated period during which
they will continue to bring economic
benefits to the Group.
Impairment of non-financial assets
At the end of each reporting period,
the Group reviews the carrying
amounts of its tangible and intangible
non-financial assets for an indication
that these assets may be impaired
or that a previously recognised
impairment loss may have decreased
in full or in part. For the purpose
of the impairment test, the assets that
do not generate independent cash
flows are allocated to an appropriate
cash-generating unit. Management
applies judgement in allocating assets
that do not generate independent
cash flows to appropriate cash-
generating units, and in estimating
the timing and amounts
of the underlying cash flows.
Subsequent changes to the assets
allocation to cash generating units
or the timing and amounts of cash
flows may affect the recoverable
amount of the respective assets.
Decommissioning obligations
and environmental provisions
The Group’s mining and exploration
activities are subject to various
environmental laws and regulations.
The Group estimates decommissioning
obligations and environmental
provisions based on the management’s
understanding of the current
legal requirements in the various
jurisdictions in which it operates, terms
of licenсe agreements and internally
generated engineering estimates.
Decommissioning obligations
and environmental provisions
are measured at present value using
inflation and discount rates at the date
of respective cash outflows.
Environmental provisions
are recognised based on the best
estimate of the consideration
required to settle the environmental
obligation at the reporting date, taking
into account risks and uncertainties
surrounding the present obligation,
1 2 3 4 5 6 7
including probable compensations
under civil lawsuits and costs
to be incurred under corresponding
environmental programmes. Where
it is possible to determine a reliable
timing of the environmental
obligations, estimates are based
on the discounted value of cash flows
required to settle those obligations,
otherwise the management uses
the best estimate of the future cash
outflows related to the environmental
obligations.
Actual costs incurred in future periods
may differ materially from the amounts
of the provisions. Additionally,
future changes to environmental
laws and regulations, life of mine
estimates, discount rates, court
decisions and government actions may
affect the carrying amount of these
provisions.
Income taxes
The Group is subject to income
taxes in numerous jurisdictions.
Significant judgement is required
in determining provisions for income
taxes paid in various jurisdictions
due to the complexity of legal
frameworks. There are many
transactions and calculations for which
the ultimate tax determination
is uncertain. The Group recognises
provisions for taxes arising from tax
audits based on estimates of whether
additional taxes will be due. Where,
following the tax disputes, the final
tax amount differs from the amounts
that were initially recognised,
such differences are recognised
in the consolidated financial
statements for the period when such
determination is made.
The carrying amount of deferred tax
assets is reviewed at each reporting
date and adjusted to the extent that
it is probable that sufficient taxable
income will be available to enable full
or partial utilisation of the deferred tax
asset.
Various factors are considered when
assessing the probability of the future
utilisation of deferred tax assets,
including past operating results,
the Group’s operational plan, expiration
of tax losses carried forward, and tax
planning strategies. If actual results
differ from these estimates or if
these estimates are to be adjusted
in future periods, the financial position
and financial results of the Group may
be affected.
6. Segments
Reportable segments are based
on internal reports on components
of the Group that are regularly
reviewed by the Management Board.
Management has determined
the following reportable segments:
• GMK Group segment includes main
mining, processing and metallurgy
operations as well as transport
services, energy, repair
and maintenance services located
on Taimyr Peninsula. GMK Group
metal sales to external customers
include metal volumes produced
from semi-products purchased
from South cluster, Kola Division
and GRK Bystrinskoye segments.
Intersegment revenue from metal
sales includes primarily sale of semi-
products to Kola division for further
processing. Metal sales to external
customers include an approximately
equal portion of base and precious
metals sales in 2023 and 2022,
while in 2021 the share of base
metals sales did not exceed 45%.
GMK Group’s intersegment other
sales include revenue from metal
processing services provided
to other segments. GMK Group’s
other sales to external customers
primarily include revenue
from energy and utilities services
provided on Taimyr Peninsula;
• South cluster segment includes
certain ore mining and processing
operations located on Taimyr
Peninsula. Intersegment revenue
from metal sales includes sale
of semi-products to the GMK Group
for further processing. The South
cluster segment revenue from other
sales includes intersegment ore
processing services under tolling
arrangements provided to the GMK
Group segment;
• During 2023 the Group
revised the composition
of the reporting segments
based on the management’s
approach to segments’
supervision; information
for 2022 and 2021 was recalculated
accordingly. The Group has
identified the following activities
as part of the new segment “Kola
Division”: mining and processing
operations, metallurgy
and subsequent processing of metal
semi-products, as well as energy
and utilities services and mineral
exploration activities on the territory
of Kola Peninsula. Kola Division
segment sells metals to external
customers, including metals
produced from semi-products
purchased from the GMK Group
segment. These metal sales include
in approximately equal portions
base and precious metals sales.
Metal sales to other segments
include sales of semi-products
to the GMK Group segment
for further processing. Other sales
of Kola Division segment include
metal processing services provided
to other segments of the Group,
as well as energy and utilities
services provided to external
customers on Kola Peninsula;
• GRK Bystrinskoye segment
includes ore mining and processing
operations located in the Zabaikalsky
Territory of the Russian Federation.
Approximately 50% of the metal
sales to external customers
in 2021-2023 were base metal sales,
the rest of the metal sales included
an approximately equal portion
of precious and other metals sales
in 2022-2023 and mainly precious
metal sales in 2021;
• Other mining segment includes
certain other mining and exploration
activities located in Russia
and abroad;
• Other non-metallurgical segment
includes other trading operations,
transport services, supply
chain management, energy
and utility, research and other
activities located in Russia
and abroad and resale of third-
party refined metal products.
Metal sales to external customers
include mainly base metals sales
in 2023 and 2022 and approximately
equal portion of base
and precious metals sales in 2021.
In 2021 the Other non-metallurgical
segment also included resale of 50%
of metal semi-products produced
by Nkomati. Other sales of the Other
non-metallurgical segment primarily
252
253
Annual Report 2023NornickelAdditional Information included revenue from fuel sales,
freight sea transportation services
and airport services for 2023
(revenue from passenger and freight
air transportation services and fuel
sales for 2022 and 2021).
Corporate activities of the Group do
not represent an operating segment,
include primarily the headquarters’
general and administrative expenses
and treasury operations of the Group
and are presented as Unallocated.
The amounts in respect of reportable
segments in the disclosure below
are stated before intersegment
eliminations, excluding:
• balances of intercompany loans
and borrowings and interest
accruals;
• balances of intercompany
investments;
• accrual of intercompany dividends.
Amounts are measured on the same
basis as those in the consolidated
financial statements.
The following tables present
revenue, measure of segment profit
or loss (EBITDA) and other segment
information from continuing operations
regarding the Group’s reportable
segments for the years ended
31 December 2023, 2022 and 2021,
respectively.
For the year ended
31 December 2023
GMK
Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
Elimi
nations
Total
Other
non-
metal-
lurgical
REVENUE FROM EXTERNAL
CUSTOMERS
Metal sales
Other sales
INTERSEGMENT REVENUE
Metal sales
Other sales
TOTAL REVENUE
Segment EBITDA
Unallocated
CONSOLIDATED EBITDA
Depreciation and amortisation
Impairment of non-financial assets, net
Finance costs, net
Foreign exchange loss, net
Income from investments and gain from
disposal of subsidiaries
PROFIT BEFORE TAX
OTHER MATERIAL CASH AND NON-
CASH ITEMS
Purchase of property, plant and
equipment and intangible assets
Depreciation and amortisation
Impairment of non-financial assets/
(reversal of impairment)
Change in provisions and allowances
5,171
250
–
4
7,354
31
4,742
325
10,488
3,641
916
146
1,066
484
1,009
2
8,396
2,254
1,160
2
128
50
1,340
963
–
–
–
–
–
17
420
–
–
13,702
707
47
(6,842)
580
(1,103)
–
–
1,064
(7,945)
14,409
(12)
(13)
343
7,660
(776)
6,884
(1,165)
(179)
(567)
(1,512)
73
3,534
2,303
739
67
11
248
56
9
(1)
248
162
28
10
65
118
1
–
9
–
(1)
5
165
90
75
1
–
–
–
51
3,038
1,165
179
77
REVENUE
FROM EXTERNAL
CUSTOMERS
Metal sales
Other sales
INTERSEGMENT REVENUE
Metal sales
Other sales
TOTAL REVENUE
Segment EBITDA
Unallocated
CONSOLIDATED EBITDA
Depreciation
and amortisation
Impairment of non-financial
assets, net
Finance costs, net
Foreign exchange gain, net
Income from investments
and loss from disposal
of subsidiaries
PROFIT BEFORE TAX
OTHER MATERIAL CASH
AND NON-CASH ITEMS
Purchase of property,
plant and equipment
and intangible assets
Depreciation
and amortisation
Impairment of non-
financial assets/(reversal
of impairment)
Change in provisions
and allowances
1 2 3 4 5 6 7
For the year ended
31 December 2022
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
Other non-
metal-
lurgical
Elimi
nations
Total
5,213
246
6,405
378
12,242
4,316
–
5
9,297
52
728
239
972
450
1,538
2
10,889
4,071
1,160
1
135
29
1,325
934
–
–
–
1
1
403
499
3
651
–
–
16,073
803
(8,809)
(1,300)
–
–
1,556
(10,109)
16,876
(11)
8
(7)
9,761
(1,064)
8,697
(1,026)
(90)
(493)
251
40
7,379
4,298
1,026
90
236
3,307
741
72
198
298
57
4
–
379
48
2
13
72
148
(1)
2
10
–
4
3
232
32
9
1
–
–
–
19
For the year ended
31 December 2021
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
Other non-
metal-
lurgical
Elimi
nations
Total
REVENUE TO EXTERNAL
CUSTOMERS
Metal sales
Other sales
INTERSEGMENT REVENUE
Metal sales
Other sales
TOTAL REVENUE
Segment EBITDA
Unallocated
6,480
188
4,852
316
11,836
5,456
–
1
618
148
767
397
8,793
34
1,188
1
10,016
3,761
1,200
3
109
34
1,346
1,076
28
–
–
–
28
(16)
602
523
–
407
1,532
11
–
–
17,103
749
(6,767)
(906)
(7,673)
772
–
–
17,852
11,457
(945)
254
255
Annual Report 2023NornickelAdditional Information For the year ended
31 December 2021
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
Other non-
metal-
lurgical
Elimi
nations
Consolidated EBITDA
Depreciation
and amortisation
Impairment of non-
financial assets, net
Finance costs, net
Foreign exchange loss, net
Income from investments
and gain from disposal
of subsidiaries
Profit before tax
OTHER MATERIAL CASH
AND NON-CASH ITEMS
Purchase of property,
plant and equipment
and intangible assets
Depreciation
and amortisation
(Reversal of impairment)/
impairment of non-
financial assets
Change in provisions
and allowances
2,002
622
(101)
760
304
30
–
6
232
97
137
19
62
122
2
1
12
1
–
–
152
56
10
–
–
–
–
110
Total
10,512
(928)
(48)
(279)
(53)
81
9,285
2,764
928
48
896
The following tables present assets and liabilities of the Group’s reportable segments at 31 December 2023, 2022 and 2021,
respectively.
For the year ended
31 December 2023
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
Intersegment assets
Segment assets
TOTAL SEGMENT ASSETS
1,618
14,326
15,944
Unallocated
TOTAL ASSETS
Intersegment liabilities
Segment liabilities
TOTAL SEGMENT
LIABILITIES
Unallocated
TOTAL LIABILITIES
552
2,909
3,461
196
965
1,161
30
243
273
1,308
3,728
5,036
851
415
1,266
173
1,252
1,425
32
125
157
–
51
51
1
64
65
Other non-
metal-
lurgical
171
1,610
1,781
Elimi
nations
(3,466)
(731)
(4,197)
2,000
(3,466)
364
–
2,364
(3,466)
For the year ended
31 December 2022
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
Intersegment assets
Segment assets
TOTAL SEGMENT ASSETS
Unallocated
1,345
15,446
16,791
143
1,117
1,260
2,085
4,869
6,954
133
1,546
1,679
–
55
55
Other non-
metal-
lurgical
103
1,786
1,889
Elimi
nations
(3,809)
(1,092)
(4,901)
Total
–
21,201
21,201
2,379
23,580
–
4,120
4,120
11,865
15,985
Total
–
23,727
23,727
2,068
1 2 3 4 5 6 7
For the year ended
31 December 2022
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
TOTAL ASSETS
Intersegment liabilities
Segment liabilities
TOTAL SEGMENT
LIABILITIES
Unallocated
TOTAL LIABILITIES
503
3,606
4,109
25
352
377
715
568
1,283
4
161
165
1
65
66
For the year ended
31 December 2021
GMK Group
South
cluster
Kola
division
GRK
Bystrinskoye
Other
mining
804
11,605
12,409
205
2,676
2,881
60
827
887
32
250
282
316
3,700
39
1,508
4,016
1,547
740
643
1,383
7
135
142
–
98
98
1
72
73
Intersegment assets
Segment assets
TOTAL SEGMENT
ASSETS
Unallocated
TOTAL ASSETS
Intersegment liabilities
Segment liabilities
TOTAL SEGMENT
LIABILITIES
Unallocated
TOTAL LIABILITIES
7. Metal sales
Other non-
metal-
lurgical
Elimi
nations
Total
2,561
320
(3,809)
25,795
–
–
5,072
2,881
(3,809)
Other non-
metal-
lurgical
60
1,262
Elimi
nations
(1,279)
(1,299)
1,322
(2,578)
5,072
12,156
17,228
Total
–
17,701
17,701
5,734
23,435
–
294
1,318
(1,279)
–
5,094
1,612
(1,279)
5,094
13,553
18,647
The Group’s metal sales to external customers are detailed below (based on external customers’ locations):
Asia
Europe
Russian Federation and CIS
North and South America
Revenue from metal sales for the year
ended 31 December 2023 included
net gain of USD0.2 million in respect
of forward contracts measured at fair
value that are expected to be settled
by physical delivery or on a net basis
(for the year ended 31 December
2022: net loss in the amount
of USD (64) million and for the year
ended 31 December 2021: net loss
in the amount of USD (41) million).
For the year ended 31 December
2021
4,688
9,036
732
2,647
17,103
2022
4,966
7,522
1,250
2,335
16,073
2023
7,318
3,312
1,680
1,392
13,702
For the year ended 31 December
2023 metal revenue included net
loss of USD (47) million from price
adjustments in respect of certain
provisionally priced contracts, primarily
for sale of nickel and palladium
(for the year ended 31 December
256
257
Annual Report 2023NornickelAdditional Information 1 2 3 4 5 6 7
11. Other operating expenses, net
For the year ended 31 December
Change in other allowances
Social expenses (Note 27)
Change in decommissioning obligations (Note 26)
2022 primarily for sale of nickel: net
gain in the amount of USD35 million
and for the year ended 31 December
2021 primarily for sale of rhodium
and other metals: net gain
in the amount of USD25 million).
8. Cost of metal sales
CASH OPERATING COSTS
Labour
Materials and supplies
Mineral extraction tax and other levies
Third party services
Transportation expenses
Fuel
Export customs duties
Electricity and heat energy
Purchases of raw materials and semi-products
Purchases of refined metals for resale
Other costs
Total cash operating costs
Depreciation and amortisation
Decrease/(increase) in metal inventories
TOTAL
9. General and administrative expenses
Staff costs
Third party services
Depreciation and amortisation
Property tax and other miscellaneous taxes
Transportation expenses
Other
TOTAL
10. Selling and distribution expenses
Transportation expenses
Export customs duties
Marketing expenses
Staff costs
Other
TOTAL
2021
2022
2023
1,406
715
627
410
130
122
442
118
95
581
228
4,874
843
(660)
5,057
2021
577
191
83
76
18
44
989
2021
81
–
48
23
39
191
2,123
1,069
1,192
784
257
166
–
136
33
437
326
6,523
1,015
(1,448)
6,090
1,857
971
873
659
216
157
121
115
33
5
282
5,289
939
94
6,322
For the year ended 31 December
2022
833
230
107
94
9
80
1,353
2023
684
147
110
75
6
71
1,093
For the year ended 31 December
2022
118
–
52
29
56
255
2023
132
43
29
27
54
285
Loss on disposal of property, plant and equipment
Expenses on industrial incidents response
Change in provision on production and mining facilities shut down (Note
26)
Change in environmental provisions (Note 26)
Other, net
TOTAL
12. Finance costs, net
Interest expense, net of amounts capitalised
Unwinding of discount on provisions
Fair value loss/ (gain) on the cross-currency interest rate swap contracts
Interest expense on lease liabilities
Changes in fair value of other current liabilities
Income received as a result of early debt repayment
(Gain)/loss from currency conversion operations
Other, net
TOTAL
13. Income tax expense
Current income tax expense
Deferred tax (benefit)/expense
TOTAL INCOME TAX EXPENSE
2021
1,048
(5)
(3)
35
69
(3)
176
(32)
1,285
2021
225
59
(68)
15
66
–
(24)
6
279
2021
1,695
616
2,311
For the year ended 31 December
2022
407
12
43
70
35
14
93
4
678
2023
205
53
40
36
10
(1)
(32)
(42)
269
For the year ended 31 December
2022
330
185
18
16
–
(172)
111
5
493
2023
337
147
60
35
–
–
(5)
(7)
567
For the year ended 31 December
2022
1,306
219
1,525
2023
966
(302)
664
Current income tax expense
for the year ended 31 December
2023 includes USD (8) million related
to previous tax periods (31 December
2022: USD (15) million and 31 December
2021: USD (2) million).
In August 2023 Federal Law
No. 414-FZ introduced a windfall tax
on excess profits. The base windfall
tax rate is 10% of the difference
between average taxable profits
for 2021-2022 and taxable profits
for 2018-2019. The amount
of tax expense can be reduced
to an effective rate of 5% subject
to the conditions provided
by the Federal Law No. 414-FZ (if
the payment is made during the period
from 1 October 2023 to 30 November
2023 and it is not subsequently
claimed back by a taxpayer).
In October 2023 the Group paid
using an early payment option
and recognised in Current
income tax expense a windfall tax
on excess profits in the amount
of RUB8 198 million (USD84 million
at the exchange rate on the date
of payment).
A reconciliation of theoretic income
tax, calculated at the statutory
rate in the Russian Federation,
the location of major production assets
of the Group, to the amount of actual
income tax expense recognised
in the consolidated income statement
is as follows:
258
259
Annual Report 2023NornickelAdditional Information For the year ended 31 December
2021
9,285
1,857
177
15
(45)
460
–
(153)
–
2,311
2022
7,379
1,476
67
36
(13)
–
40
(81)
–
1,525
2023
3,534
707
48
28
(1)
–
–
(202)
84
664
Profit before tax
Income tax at statutory rate of 20%
Non-deductible social expenses
Changes in unrecognised deferred tax assets
Effect of different tax rates of subsidiaries
Income tax provision related to the compensation of environmental
damages
Tax effect of other provisions and liabilities
Tax effect of other permanent differences
Windfall tax
TOTAL INCOME TAX EXPENSE
In 2023 tax effect of other permanent
differences was mailnly represented
by an income tax rate credit applicable
to Group’s subsidiaries (in 2022:
was mainly represented by an income
tax rate credit applicable to a Group’s
subsidiary and was partially offset,
Deferred tax balances
in approximately equal parts, by non-
deductible expenses of Group`s foreign
subsidiaries and non-deductible
loss on disposal of investments
in subsidiaries in the total amount
of USD100 million and in 2021:
was represented mainly by the income
tax rate credit applicable to a Group’s
subsidiary).
The corporate income tax rates in other
countries where the Group has a taxable
presence vary from 0% to 30%.
Property, plant
and equipment,right-of use
assets
Inventories
Trade and other receivables
Decommissioning obligations
Environmental provisions
Other provisions
Loans and borrowings, trade
and other payables,lease
liabilities
Other assets
Other liabilities
Tax loss carry-forwards
NET DEFERRED TAX
LIABILITIES/(ASSETS)
At 31 December
2022
Recognised
in income
statement
Recognised
in other
compre-hensive
income
Disposed
on disposal
of subsidiaries
Effect
of translation
to presentation
currency
At 31 December
2023
593
(203)
(4)
(101)
(3)
(58)
(117)
24
59
(115)
75
170
94
(91)
(5)
2
–
(491)
6
7
6
(302)
–
–
–
–
–
–
–
–
(8)
–
(8)
(3)
(147)
9
–
–
–
–
–
3
–
–
9
(9)
62
23
1
12
82
3
(10)
16
33
613
(109)
(33)
(83)
–
(46)
(526)
36
48
(93)
(193)
1 2 3 4 5 6 7
At 31 December
2021
Recognised
in income
statement
Recognised
in other
compre-hensive
income
Disposed
on disposal
of subsidiaries
Effect
of translation
to presentation
currency
At 31 December
2022
Property, plant and equipment,
right-of use assets
Inventories
Trade and other receivables
Decommissioning obligations
Environmental provisions
Other provisions
Loans and borrowings, trade
and other payables, lease
liabilities
Other assets
Other liabilities
Tax loss carry-forwards
NET DEFERRED TAX (ASSETS)/
LIABILITIES
490
(174)
3
(115)
(6)
(89)
(145)
15
33
(106)
(94)
110
15
(28)
16
5
30
58
8
24
(19)
219
–
–
–
–
–
–
–
–
7
–
7
(15)
–
–
–
–
–
21
–
(5)
(1)
–
8
(44)
21
(2)
(2)
1
(51)
1
–
11
(57)
593
(203)
(4)
(101)
(3)
(58)
(117)
24
59
(115)
75
At 1 January 2021
Recognised
in income
statement
Recognised in other
compre-hensive
income
Effect of translation
to presentation
currency
At 31 December
2021
389
(448)
6
(94)
(416)
(51)
(117)
21
21
(23)
(712)
104
285
(3)
(22)
407
(38)
(37)
6
11
(97)
616
–
–
–
–
–
–
–
–
2
–
2
(3)
(11)
–
1
3
–
9
(12)
(1)
14
–
490
(174)
3
(115)
(6)
(89)
(145)
15
33
(106)
(94)
to Group entities which were part
of the consolidated taxpayers
group in 2021. At 31 December
2022 and 2023 deferred tax assets
and liabilities are offset only
to the extent they relate to the same
legal entity within the Group
following the expiry of the agreement
on the consolidated taxpayers group
on 1 January 2023.
Deferred tax balances presented
in the consolidated statement
of financial position were as follows:
Property, plant and equipment,
right-of use assets
Inventories
Trade and other receivables
Decommissioning obligations
Environmental provisions
Other provisions
Loans and borrowings, trade
and other payables, lease
liabilities
Other assets
Other liabilities
Tax loss carry-forwards
NET DEFERRED TAX (ASSETS)/
LIABILITIES
Accounting for foreign exchange
differences for tax purposes
due to changes in legislation
is disclosed in Note 33.
Certain deferred tax
assets and liabilities were
offset as at 31 December
2021 to the extent they related
260
261
Annual Report 2023NornickelAdditional Information 1 2 3 4 5 6 7
At 31 December
14. Property, plant and equipment
Deferred tax liabilities
Deferred tax assets
NET DEFERRED TAX (ASSETS)/LIABILITIES
Unrecognised deferred tax assets
Deferred tax assets that have not been recognised were as follows:
2021
73
(167)
(94)
2021
194
201
395
2022
415
(340)
75
2022
150
124
274
2023
142
(335)
(193)
At 31 December
2023
144
93
237
Deductible temporary differences
Tax loss carry-forwards
TOTAL
Deferred tax assets have not been
recognised in respect of these
items because it is not probable that
future taxable profit will be available
against which the Group can utilise
the benefits therefrom.
At 31 December 2021 a deferred
tax asset of USD135 million related
to the previous years tax losses
on disposal of shares of OJSC “Third
Generation Company of the Wholesale
Electricity Market” was not
recognised as it had occurred before
the Company joined the consolidated
taxpayers group. As the agreement
that established the consolidated
taxpayers group expired on 1 January
2023 and taking into account
the amount of available tax losses
potentially recoverable by 1 January
2025, the Group estimated this
unrecognised deferred tax asset
in the amount of USD38 million
at 31 December 2022.
As of 31 December 2023, the Group
has reassessed the probability
for recovery of the above deferred
tax asset taking into account
the conditions stipulated by Federal
Law No. 420-FZ dated 28 December
2013 and recognised it in full.
At 31 December 2023 unrecognised
deferred tax assets in the amount
of USD93 million related to other tax
loss carry-forwards may be carried
forward indefintely without expiry
due to specific rules stated by art. 283
“Carry-Forward Of Losses” of the Tax
code of the Russian Federation
(31 December 2022: USD86 million
and31 December 2021: USD66 million).
At 31 December 2023, the Group did
not recognise a deferred tax liability
in respect of taxable temporary
differences of USD3,382 million
(31 December 2022: USD6,611 million
and 31 December 2021:
USD3,499 million) associated
with investments in subsidiaries,
because management believes
that it is able to control the timing
of reversal of such differences
and does not expect their reversal
in foreseeable future.
On 20 December 2021, OECD
has published Model rules
for implementation of global minimum
top-up tax for multinational enterprises
(GloBE\Pillar Two), aimed to resolve
challenges with global tax base
erosion, arising from digitalization
and globalization of the economy.
Under these rules, multinational
enterprises will have to pay additional
income tax arising in the jurisdictions
in which they operate, if income
in those jurisdictions is taxed
at an effective tax rate below 15%.
To this end, Pillar Two rules need
to be adopted at the level of national
tax legislation.
In 2023, the International Accounting
Standards Board (IASB) published
International Tax Reform – Pillar
Two Model Rules (Amendments
to IAS 12 Income Taxes). The Group
applies a temporary exeption
from recognising and disclosing
deferred tax relating to Pillar Two
under the Amendments to IAS 12
Income Taxes.
The Group operates in a number
of jurisdictions where the new tax
legislation pertaining to the global
minimum tax (Pillar Two) was enacted
in 2023 and applies for tax periods
beginning on 1 January 2024.
As the global minimum tax (Pillar
Two) rules are not applicable
to transactions in 2023, there is no
impact on the Group’s consolidated
financial statements for the year
ended 31 December 2023.
The Group is currently assessing
the potential impact of the new Pillar
Two tax legislation on its operations.
Non-mining assets and right-of-use assets
Mining assets
and mine
development
cost
Buildings,
facilities and
infrastructure
Machinery,
equipment
and transport
Capital
construction-
in-progress
Other
9,273
1,237
–
134
–
(68)
(3)
(82)
10,491
1,703
–
(34)
–
(87)
21
410
12,504
1,556
–
(140)
–
(99)
(1)
(2,796)
11,024
3,188
–
302
21
7
(55)
(6)
(21)
3,436
–
437
(27)
125
(79)
4
140
4,036
–
376
17
368
(22)
14
3,883
–
465
–
18
(107)
(2)
(22)
4,235
–
787
–
27
(179)
16
135
5,021
–
484
–
27
(142)
14
(894)
3,895
(1,025)
4,379
272
–
26
–
8
(51)
(1)
(2)
252
–
160
–
15
(11)
(28)
6
394
–
98
–
10
(8)
(42)
(91)
361
1,663
1,750
(793)
–
–
(17)
–
(21)
2,582
2,756
(1,384)
–
–
(22)
(13)
129
4,048
2,102
(958)
–
–
(23)
12
(913)
4,268
Total
18,279
2,987
–
155
33
(298)
(12)
(148)
20,996
4,459
–
(61)
167
(378)
–
820
26,003
3,658
–
(123)
405
(294)
(3)
(5,719)
23,927
COST
Balance at 1 January 2021
Additions
Transfers
Change in decommissioning
provision
Additions of right-of-use assets and
remeasurement of the lease liability
Disposals
Other
Effect of translation to presentation
currency
BALANCE AT 31 DECEMBER 2021
Additions
Transfers
Change in decommissioning provision
Additions of right-of-use assets and
remeasurement of the lease liability
Disposals
Other
Effect of translation to presentation
currency
BALANCE AT 31 DECEMBER 2022
Additions
Transfers
Change in decommissioning provision
Additions of right-of-use assets and
remeasurement of the lease liability
Disposals
Other
Effect of translation to presentation
currency
BALANCE AT 31 DECEMBER 2023
262
263
Annual Report 2023NornickelAdditional Information Non-mining assets and right-of-use assets
Mining assets
and mine
development
cost
Buildings,
facilities and
infrastructure
Machinery,
equipment
and transport
Capital
construction-
in-progress
Other
ACCUMULATED DEPRECIATION AND
IMPAIRMENT
BALANCE AT 1 JANUARY 2021
(3,304)
Charge for the year
Disposals
Impairment loss, net
Other
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2021
Charge for the year
Disposals
Impairment loss, net
Other
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2022
Charge for the year
Disposals
Impairment loss, net
Other
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2023
CARRYING VALUE
AT 31 DECEMBER 2021
AT 31 DECEMBER 2022
AT 31 DECEMBER 2023
(479)
57
(123)
3
40
(3,806)
(582)
77
(50)
(2)
(172)
(4,535)
(498)
90
(48)
1
1,002
(3,988)
6,685
7,969
7,036
(1,678)
(179)
(2,268)
(357)
51
75
4
8
(1,719)
(183)
65
(17)
(2)
(93)
(1,949)
(214)
19
(22)
–
418
89
13
1
12
(2,510)
(424)
91
(12)
(5)
(91)
(2,951)
(390)
107
(46)
(3)
604
(139)
(24)
32
(2)
2
1
(130)
(48)
7
2
7
(4)
(166)
(65)
8
(1)
3
38
(128)
–
5
(11)
–
2
(132)
–
9
(13)
–
(2)
(138)
–
19
(60)
–
31
(1,748)
(2,679)
(183)
(148)
1,717
2,087
2,147
1,725
2,070
1,700
122
228
178
2,450
3,910
4,120
Total
(7,517)
(1,039)
234
(48)
10
63
(8,297)
(1,237)
249
(90)
(2)
(362)
(9,739)
(1,167)
243
(177)
1
2,093
(8,746)
12,699
16,264
15,181
Capitalised borrowing costs
for the year ended 31 December
2023 amounted to USD 439 million
(for the year ended 31 December 2022:
USD277 million and for the year ended
31 December 2021: USD95 million).
The capitalisation rate used
to determine the amount of borrowing
costs was 7.26% per annum
for the year ended 31 December 2023
(for the year ended 31 December
2022: 5.05% and for the year ended
31 December 2021: 3.12%).
At 31 December 2023 mining
assets and mine development
cost included USD3,097 million
of mining assets under development
(31 December 2022: USD3,738 million
and 31 December 2021:
USD2,560 million).
At 31 December 2023 non-mining
assets included USD29 million
of investment property (31 December
2022: USD39 million and 31 December
2021: USD38 million).
Impairment
As at 31 December 2023, the Group
performed impairment analysis
of its assets and did not identify
any indicators of economic impairment
of assets, except for the assets
described below.
In 2020 a federal law set a 3.5 times
increase of mineral extraction
tax on the types of ores mined
by the Group. The Group assessed
this change in the tax legislation
as an indicator for impairment of KGMK
ore mining and processing operation.
The recoverable amount of this cash-
generating unit (CGU) was determined
based on the value-in-use calculations.
As a result, KGMK ore mining
and processing assets in the amount
of USD264 million were fully impaired
at 31 December 2020.
Since 2021 the Group developed
and continues to implement
optimization plans in order to increase
KGMK ore mining and processing
1 2 3 4 5 6 7
operations’ cash flows and mitigate
the negative impact of higher mineral
extraction tax.
In April 2023, the Group announced
reconfiguration of its mining
operations in Kola peninsula in order
to increase efficiency and accelerate
the development of mining capacities,
as well as termination of a certain
outdated mining facility till 2024.
As a result, the Group revised
the amount of the decommissioning
obligations and recognised
an increase in the provisions
for the reconfiguration of mining
facilities (included in Other provisions –
See Note 26).
At 31 December 2023, 2022 and 2021,
the Group did not identify indicators
of an increase of the recoverable
amount of this CGU. For the year
ended 31 December 2023 the Group
recognised further impairment
of additions to non-current assets
in the amount of USD28 million within
Impairment of non-financial assets
in the consolidated income statement
(for the year ended 31 December 2022:
USD2 million and for the year ended
31 December 2021: USD137 million).
The most significant estimates
and assumptions used in determination
of value in use at 31 December 2023,
2022 and 2021 were as follows:
• Future сash flows were projected
based on budgeted amounts,
taking into account actual results
for the previous years. Forecasts
were assessed up to 2048.
Measurements were performed
based on discounted cash
flows expected to be generated
by a separate cash-generating unit;
• Management used adjusted
commodities prices for copper-nickel
concentrate price forecast. Prices
adjustments were made based
on current contract terms;
• Production information was primarily
based on internal production reports
available at the date of impairment
test and management’s assumptions
regarding future production levels;
• Inflation indices and foreign
cash-generating unit and reversed
the previously recognised impairment
losses from the gas extraction assets,
net of respective accumulated
depreciation that would have been
accrued had no impairment been
recognised, included in reversal
of impairment of non-financial assets,
in the consolidated income statement
in the amount of USD115 million
for the year ended 31 December 2021.
During the year ended 31 December
2023, the Group identified indicators
of impairment and performed
the impairment analysis of assets
related to tourism and sports
development projects in the regions
where the Group operates. As a result,
the recoverable amount of these
assets was revised and the impairment
loss in the amount of USD53 million
was recognised in Impairment of non-
financial assets in the consolidated
income statement for the year ended
31 December 2023.
For the year ended 31 December 2023,
the Group recognised impairment
loss in respect of certain individual
assets in the amount of USD98 million
(for the year ended 31 December
2022: impairment loss USD88 million
and for the year ended 31 December
2021: impairment loss USD26 million).
currency trends are in general
consistent with external sources
of information. As of December
2023, forecast inflation rate
was within 2.1-5.1% (31 December
2022: 2.5-6.9% and 31 December
2021: 3.0-4.6%), USD/RUB exchange
rates were within the range
of 92.00-114.76 (31 December 2022:
76.68-89.79 and 31 December 2021:
72.23-84.76);
• A pre-tax nominal discount rate
of 22.3% (31 December 2022: 19.1%
and 31 December 2021: 12.2%)
was calculated based on weighted
average cost of capital and reflects
management’s estimates of the risks
specific to the cash-generating unit.
In 2015 the Group recognised
the gas extraction assets
as a separate cash-generating unit,
with its value in use determined
using a discounted cash flow model
at each subsequent reporting date.
During the year ended 31 December
2021 due to change in circumstances
and changes in the operating
environment the Group reviewed
the aggregation of gas extraction
assets into a separate cash-generating
unit. As a result, these assets were
included in a cash-generating unit,
which includes operations of the core
production assets in Norilsk.
The Group did not identify indicators
of impairment in respect of the above
264
265
Annual Report 2023NornickelAdditional Information Right-of-use assets
Balance at 1 January 2021
Additions of right-of-use assets and
remeasurement of the lease liability
Depreciation
BALANCE AT 31 DECEMBER 2021
Additions of right-of-use assets
and remeasurement of the lease liability
Disposals (Note 21)
Depreciation
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2022
Additions of right-of-use assets
and remeasurement of the lease liability
Disposals
Impairment loss, net
Depreciation
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2023
Buildings, facilities
and infrastructure
Machinery,
equipment
and transport
Other
Total
115
7
(30)
92
125
(4)
(34)
(9)
170
368
(1)
(2)
(36)
(74)
425
111
18
(21)
108
27
(69)
(8)
(22)
36
27
–
–
(6)
(8)
49
8
8
(2)
14
15
(3)
(4)
(2)
20
10
–
–
(6)
(5)
19
234
33
(53)
214
167
(76)
(46)
(33)
226
405
(1)
(2)
(48)
(87)
493
15. Investments in significant subsidiaries
Subsidiaries by operating
segments
GMK GROUP
Country
Nature of business
Effective % held
31 December
2021
31 December
2022
31 December
2023
JSC “Norilsky Kombinat”
Russian Federation
Rental of property
JSC “Norilskgazprom”
Russian Federation
Gas extraction
JSC “Norilsktransgaz”
Russian Federation
Gas transportation
JSC “NTEK”
LLC “ZSC”
Russian Federation
Russian Federation
LLC “Norilsknickelremont”
Russian Federation
Electricity production
and distribution
Construction
Repairs
LLC “Norilskyi
obespechivaushyi complex”
SOUTH CLUSTER
Russian Federation
Production of spare parts
LLC “Medvezhyi ruchey”
Russian Federation
Ore mining and processing
KOLA DIVISION
JSC “Kolskaya GMK”
Russian Federation
Mining and metallurgy
LLC “Pechengastroy”
Russian Federation
Norilsk Nickel Harjavalta OY
Finland
Repairs
Metallurgy
GRK BYSTRINSKOYE
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
LLC “GRK “Bystrinskoye”
Russian Federation
Ore mining and processing
50.01
50.01
50.01
1 2 3 4 5 6 7
Subsidiaries by operating
segments
Country
Nature of business
Effective % held
31 December
2021
31 December
2022
31 December
2023
LLC “Vostokgeologiya”
Russian Federation
Geological works
and construction
100
100
100
OTHER
NON-METALLURGICAL
Metal Trade Overseas A.G.
Norilsk Nickel (Asia) Limited
Norilsk Nickel Metal Trade
(Shanghai)
Norilsk Nickel USA, Inc.
Switzerland
Hong Kong
China
USA
LLC “Institut Gypronickel”
Russian Federation
Distribution
Distribution
Distribution
Distribution
Research
JSC “TTK”
JSC “ERP”
Russian Federation
Supplier of fuel
Russian Federation
River shipping operations
LLC “Aeroport Norilsk”
Russian Federation
JSC “AK “NordStar”
Russian Federation
Airport
Air company
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
-
100
100
100
100
-
OTHER MINING
Nkomati Nickel Mine
Republic of South
Africa
Ore mining and processing
50
50
50
16. Investments in associates and joint ventures
On 18 December 2023, the Group
acquired 50% in Russian
Stainless Company (“RSC”)
which is implementing a project
for the production of flat rolled
products from stainless steel
in the Russian Federation.
On 28 September 2023, the Group
cofounded joint venture
Vareyneftegaz LLC with a 50%
interest. The company engages
in geological survey, exploration
and production of hydrocarbons
in the Russian Federation.
On 11 July 2022, the Group
cofounded joint venture Polar Lithium
LLC with a 50% interest. The company
develops the Kolmozerskoye lithium
deposit in the Russian Federation.
The carrying amount of investments
in associates and joint ventures
is presented in the table below:
Investments in joint ventures
RSC (50%)
Polar Lithium
LLC (50%)
Vareynefte-
gaz LLC (50%)
Investments
in associates
Total
AT 1 JANUARY 2021
Investments in associates and joint ventures
Share of profits/(losses) of associates and joint ventures
AT 31 DECEMBER 2021
Investments in associates and joint ventures
Share of profits/(losses) of associates and joint ventures
Disposals
Effect of translation to presentation currency
AT 31 DECEMBER 2022
Investments in associates and joint ventures
Share of profits/(losses) of associates and joint ventures
Effect of translation to presentation currency
AT 31 DECEMBER 2023
–
–
–
–
–
–
–
–
–
55
–
–
55
–
–
–
–
–
–
–
–
–
15
–
–
15
–
–
–
–
–
–
–
–
–
1
–
–
1
14
21
(18)
17
12
(17)
(8)
4
8
–
(1)
(2)
5
14
21
(18)
17
12
(17)
(8)
4
8
71
(1)
(2)
76
266
267
Annual Report 2023NornickelAdditional Information 17. Other taxes
18. Inventories
1 2 3 4 5 6 7
TAXES RECEIVABLE
Value added tax recoverable
Advance payments of other taxes
Less: impairment of value added tax recoverable
Other taxes receivable and other taxes payable subject to offset
on a unified taxpayer account
OTHER TAXES RECEIVABLE
TAXES PAYABLE
Social security contributions
Value added tax
Mineral extraction tax
Property tax
Other
Other taxes receivable and other taxes payable subject to offset
on a unified taxpayer account
OTHER TAXES PAYABLE
2021
2022
2023
At 31 December
410
9
419
(7)
–
412
51
75
50
19
74
–
269
584
10
594
(8)
(109)
477
135
112
78
18
105
(109)
339
392
17
409
(5)
(60)
344
96
82
67
20
67
(60)
272
Each subsidiary of the Group
in the Russian Federation calculates
the amount of a single tax payment
payable to the budget taking
into account the offset of taxes
receivable and taxes payable. Other
taxes receivable and other taxes
payable are presented on a net
basis for each Russian subsidiary
of the Group in the consolidated
statement of financial position.
Income tax payable or income
tax receivable of each subsidiary
of the Group are presented separately
in the consolidated statement
of financial position in accordance
with IFRS.
Taxes receivable and taxes payable
including income tax after offset
on a unified taxpayer account
of each subsidiary of the Group
registered in the Russian Federation,
are presented below.
OTHER TAXES RECEIVABLE
INCOME TAX RECEIVABLE
Income tax and taxes other than income tax receivable/payable subject
to offset on a unified taxpayer account
TAXES RECEIVABLE (INCLUDING INCOME TAX) AFTER OFFSET
OF TAXES PAYABLE ON A UNIFIED TAXPAYER ACCOUNT
OTHER TAXES PAYABLE
INCOME TAX PAYABLE
Income tax and taxes other than income tax receivable/payable subject
to offset on a unified taxpayer account
TAXES PAYABLE (INCLUDING INCOME TAX) AFTER OFFSET OF TAXES
RECEIVABLE ON A UNIFIED TAXPAYER ACCOUNT
2021
412
203
–
615
269
41
–
310
At 31 December
2023
344
100
(42)
402
272
6
(42)
236
2022
477
17
(9)
485
339
169
(9)
499
268
Work-in-process and semi-products
Refined metals and other metal products
Less: allowance to net realisable value for finished goods
and work-in-process
Total metal inventories
Materials and supplies
Less: allowance for obsolete and slow-moving items
Materials and supplies, net
INVENTORIES
2021
1,572
767
(78)
2,261
823
(58)
765
3,026
2022
1,870
1,967
(81)
3,756
1,257
(68)
1,189
4,945
At 31 December
2023
1,640
1,194
(79)
2,755
1,123
(61)
1,062
3,817
At 31 December 2023 a part
of the metal semi-product stock
in the amount of USD183 million
net of impairment in the amount
of USD101 million was presented
in other non-current assets in line
with the Group’s production plans
(31 December 2022: USD163 million
net of impairment of USD92 million
and 31 December 2021: USD121 million
net of impairment of USD69 million).
At 31 December 2023 the Group
recognised an allowance to net
realisable value in respect of metal
by-products in stock in the amount
of USD17 million (31 December
2022 and 31 December 2021: none).
19. Trade and other receivables
Trade receivables
Other receivables
Less: allowance for expected credit losses
TRADE AND OTHER RECEIVABLES, NET
In 2023, 2022 and 2021, the average
credit period on metal sales varied
from 0 to 30 days. Trade receivables
are generally non-interest bearing.
At 31 December 2023 trade
and other receivables include
USD500 million of accounts
receivable measured at fair value
through profit or loss, Level 2 of fair
value hierarchy (31 December 2022:
USD563 million and 31 December
2021: USD248 million). The fair value
is measured using the forward
market price at the reporting date
corresponding to the quotation period
specified in the contract.
Less than 180 days
180-365 days
2021
345
171
516
(48)
468
At 31 December
2023
666
207
873
(109)
764
2022
675
250
925
(79)
846
At 31 December 2023,
2021 and 2021 there were no material
trade accounts receivable which were
overdue or individually determined
to be impaired.
The average credit period on sales
of other products and services
for the year ended 31 December
2023 was 37 days (for the year
ended 31 December 2022: 39 days
and for the year ended 31 December
2021: 42 days). No interest
was charged on these receivables.
At 31 December 2023 debtors
with a carrying value of USD31 million
(31 December 2022: USD65 million
and 31 December 2021: USD109 million),
were included in the Group’s other
receivables that were past due but not
impaired. Management of the Group
believes that these amounts
are recoverable in full.
The Group did not hold any collateral
for accounts receivable balances.
Ageing of other receivables past
due but not impaired was as follows:
2021
97
12
109
At 31 December
2023
26
5
31
2022
54
11
65
269
Annual Report 2023NornickelAdditional Information Movement in the allowance for expected credit losses was as follows:
Balance at the beginning of the year
Change in allowance
Accounts receivable written-off
Effect of translation to presentation currency
BALANCE AT THE END OF THE YEAR
2021
56
2
(10)
–
48
At 31 December
2023
79
54
(1)
(23)
109
2022
48
22
(2)
11
79
During the year ended 31 December
2023, the Group recognised allowance
for expected credit losses under
certain contracts with foreign
equipment suppliers for the total
amount of USD37 million due to low
probability of recovery caused
by the failure of both suppliers
and guarantor banks to meet their
obligations (during the year ended
31 December 2022: USD35 million).
20. Cash and cash equivalents
Current accounts
• RUB
• USD
• CNY
• other
Bank deposits
• RUB
• USD
• CNY
• other
Other cash and cash equivalents
• RUB
• USD
• CNY
TOTAL
2021
249
1,691
14
41
2,402
1,132
5
–
6
7
–
At 31 December
2022
2023
266
591
209
70
74
584
57
–
3
28
–
71
659
653
178
134
283
102
48
2
5
4
1 2 3 4 5 6 7
Discontinued suspended production
of the joint operations of Nkomati,
the Group reclassified the foreign
currency translation reserve of foreign
operations to the profit or loss
for the year ended 31 December
2021 in the amount of USD20 million.
In October 2021, the Group received
cash consideration in the amount
of USD51 million and incurred
associated costs in the amount
of USD2 million under the settlement
agreement in relation to the cancelled
sale of Nkomati. The amount
was presented in Disposal of foreign
joint operations in the consolidated
income statement and consolidated
statement of cash flows for the year
ended 31 December 2021
22. Share capital
Authorised and issued ordinary shares
At 31 December
2023 and 2022 the number
of the Group’s authorized and issued
shares taking into account
cancellation occurred in October
2022 amounts to 152,863,397.
At 31 December 2021 the number
of the Group’s authorised and issued
ordinary shares taking into account
cancellation occurred in October
2021 was 153,654,624.
Earnings per share
In December 2023, an extraordinary
General meeting of shareholders
of the Company decided
to implement a 100-for-1 split
of the Company’s ordinary
shares in order to increase their
attractiveness to investors and their
liquidity on the Moscow Stock
Exchange.
The stock split is expected
to be completed within 6 months
from the date of the decision
of the extraordinary General meeting
of shareholders. An application
for the state registration of changes
to the resolution on the issue
of the Company’s shares will be filed
with the Bank of Russia after these
consolidated financial statements
are issued.
On 11 August 2022, the extraordinary
General meeting of shareholders
of the Company decided to reduce
the Company’s share capital
by cancelling 791,227 ordinary
shares. The state registration
of the amendments to the Company’s
Charter related to the reduction
of the Company’s share capital
was carried out on 17 October 2022.
The cancellation of treasury shares
was recognised in the consolidated
statement of changes in equity
for the year ended 31 December 2022.
On 19 August 2021, the extraordinary
General meeting of shareholders
of the Company decided to reduce
the Company’s share capital
by cancelling 4,590,852 ordinary
shares. The state registration
of the amendments to the Company’s
Charter related to the reduction
of the Company’s share capital
was carried out on 14 October 2021.
The cancellation of treasury shares
was recognised in the consolidated
statement of changes in equity
for the year ended 31 December 2021.
On 27 April 2021, the Board of Directors
of the Company decided to acquire
the Company’s own outstanding
shares. The Company completed
acquisition of 5,382,079 ordinary
shares on 29 June 2021 and presented
the purchase of treasury
shares in the consolidated
statement of changes in equity
in the amount of USD2,075 million
(RUB149,630 million). Cash
consideration was fully paid
and recognised in the consolidated
statement of cash flows
in the amount of USD2,068 million
(RUB149,630 million) at the USD/
RUB exchange rates effective
on payment dates.
5,547
1,882
2,139
BASIC AND DILUTED EARNINGS PER SHARE (US DOLLARS PER
SHARE):
2021
41.9
For the year ended 31 December
2022
35.7
2023
15.6
21. Disposal of subsidiaries and
foreign joint operations
On 6 July 2023, the Group
sold its interest in the trading
subsidiary Norilsk Nickel USA, Inc.
for a consideration in the amount
of USD8 million. The net assets
of the disposed subsidiary
in the amount of USD44 million
at the date of disposal primarily
included refined metals stock
recognised at production cost
in the amount of USD29 million,
as well as other assets in the amount
of USD15 million. Income from disposal
in the amount of USD30 million
was recognised in Gain/(loss)
from disposal of subsidiaries
in the consolidated income
statement, including the recognition
of receivables for the supply of refined
metals from Norilsk Nickel USA, Inc.
in the amount of USD66 million.
Net cash inflow from disposal
of the subsidiary was recognised
in the consolidated statement of cash
flows.
On 25 March 2022, the Group sold
its interest in the subsidiary JSC “AK
“Nordstar” engaged in transportation
services for a consideration
of RUB1 million (USD0.02 million)
resulting in a net cash outflow
from disposal of the subsidiary
recognised in the consolidated
statement of cash flows in the line Net
cash (outflow)/inflow from disposal
of subsidiaries. Loss on disposal
in the amount of USD110 million
was recognised in the consolidated
income statement for the year ended
31 December 2022.
The earnings and weighted average number of outstanding shares used in the calculation of basic and diluted earnings per
share are as follows:
PROFIT FOR THE PERIOD ATTRIBUTABLE TO SHAREHOLDERS
OF THE PARENT COMPANY
For the year ended 31 December
2021
6,512
2022
5,458
2023
2,384
270
271
Annual Report 2023NornickelAdditional Information Weighted average number of shares outstanding
24. Loans and borrowings
1 2 3 4 5 6 7
Shares outstanding at 1 January
158,245,476
152,863,397
152,863,397
June 2021: acquisition of own shares from shareholders
(5,382,079)
–
–
Shares outstanding at 31 December
152,863,397
152,863,397
152,863,397
WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES USED
IN THE CALCULATION OF BASIC AND DILUTED EARNINGS PER SHARE
155,502,830
152,863,397
152,863,397
For the year ended 31 December
2021
2022
2023
23. Non-controlling interest
At 31 December 2023, 31 December 2022 and 2021 aggregated financial information relating to the subsidiary, LLC “GRK
“Bystrinskoye”, that has material non-controlling interest, before any intra-group eliminations, is presented below:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
NET ASSETS ATTRIBUTABLE TO NON-CONTROLLING INTEREST
Net profit for the year
Other comprehensive (loss)/income for the year
Total comprehensive income for the year
Profit attributable to non-controlling interest
OTHER COMPREHENSIVE (LOSS)/INCOME ATTRIBUTABLE TO NON-
CONTROLLING INTEREST
Cash flows from operating activities
Cash flows from/(used in) investing activities
Cash flows used in financing activities
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
2021
1,254
1,061
(66)
(65)
2,184
1,093
2021
924
(15)
909
462
(7)
2021
1,083
(407)
(675)
1
2022
1,268
1,774
(88)
(86)
2,868
1,434
At 31 December
2023
981
1,537
(72)
(68)
2,378
1,189
For the year ended 31 December
2022
793
90
883
396
45
2023
971
(494)
477
486
(247)
For the year ended 31 December
2022
783
(650)
(177)
(44)
2023
737
310
(977)
70
Currency
Fixed
or floating
interest rate
Average nominal % rate During
the year ended
31 December
Maturity
At 31 December
2021
2022
2023
2021
2022
2023
RUB
RUB
floating
fixed
–
–
12.67%
11.14%
–
12.00%
2024
2024
–
–
995
–
1,226
3
USD
RUB
EUR
RUB
USD
CNY
CNY
RUB
RUB
1.53%
3.17%
6.44% 2024-2028
5,624
5,055
floating
floating
floating
fixed
–
13.31%
11.92% 2026-2028
.85%
9.75%
.99%
4.14% 2024-2028
–
–
2022
fixed
4.20%
floating
fixed
fixed
floating
–
–
7.20%
–
3.38%
3.75%
3.95%
8.48%
2.98% 2024-2026
3.69%
3.95%
2025
2025
8.48% 2024-2025
–
12.41%
2028
–
24
4
5,652
4,238
–
–
336
–
697
19
–
6,766
2,743
703
562
710
–
2,679
1,558
17
–
5,483
1,746
700
560
556
667
4,574
4,718
4,229
10,226
11,484
9,712
(1,610)
(4,295)
(4,335)
8,616
7,189
5,377
UNSECURED LOANS
Loan agreements
with contractual
maturity of less than
12 months
Loan agreements
with contractual
maturity of more than
12 months
Secured loans
TOTAL LOANS
Bonds
Total bonds
TOTAL LOANS
AND BORROWINGS
Less: current portion
due within twelve
months
NON-CURRENT
LOANS
AND BORROWINGS
The Group is obliged to comply
with a number of restrictive
financial and other covenants,
including maintaining certain
financial ratios and restrictions
on pledging and disposal of certain
assets. At 31 December 2023,
2022 and 2021 the Group fulfills
its obligations on loans and borrowings
in accordance with loans and bonds
transactional documentation
and the requirements of current
legislation.
At 31 December 2023 and 31 December
2022 loans and borrowings were not
secured by any collateral (31 December
2021: USD8 million).
In 2021 – 2023 all loans were
raised on market terms existing
at the drawdown dates reflecting such
factors as the currency of the debt,
expected maturities, changes
in the key rate and credit risks inherent
to the Group. The Group did not
use collateral and did not assume
any financial obligations to lenders
other than servicing the debt.
In 2023 the Group received
floating rate rouble loans
from unrelated parties
in the amounts of USD1 699 million
and USD1 092 million (at the USD/
RUB exchange rates effective
as of drawdown dates) with maturity
in 2028 and 2024, respectively.
The lenders can use various
instruments to fund their own
activities, including issuing bonds
to an unlimited range of qualified
investors.
272
273
Annual Report 2023NornickelAdditional Information In May 2023 the Group issued rouble-
denominated exchange-traded bonds
on the Moscow Exchange (MOEX)
in the amount of USD748 million
at the USD/RUB exchange rates
effective as of the issuance date.
In accordance with the requirements
of Presidential Decree No. 430 dated
5 July 2022 (as amended on 22 May
2023) «On repatriation of foreign
and Russian currency by the residents
who participate in international
economic activity», on 20 and 22
December 2023 the Company
placed two issues of replacement
bonds, which were paid for on issue
by transfer of Eurobonds
or in cash with proceeds intended
for the purchase of Eurobonds.
Replacement bonds were placed
in the amount of USD316 million
and USD338 million in respect
of Eurobond issues maturing
in 2025 and 2026, respectively.
The coupon rate, payment
schedule, currency and maturity
of the replacement bonds
are identical to the Eurobond issues
in respect of which they were
placed. The amount of the Group’s
debt as a result of the placement
of replacement bonds has not
changed.
25. Lease liabilities
Currency
Average borrowing rate during the year ended
31 December, %
Maturity
At 31 December
2021
2022
2023
2021
2022
2023
LEASE
LIABILITIES
RUB
USD
EUR
7.23%
4.10%
6.31%
9.52%
2.81%
6.88%
10.07%
2024-2072
3.37%
2024-2033
6.80%
2024-2050
113
107
15
235
(57)
178
210
12
11
233
(43)
190
496
13
11
520
(54)
466
Total lease liabilities
Less: current portion of lease liabilities
NON-CURRENT LEASE LIABILITIES
At 31 December 2023 lease liabilities
with original term of lease payments
in excess of 15 years amounted
to USD85 million (31 December 2022:
USD67 million and 31 December 2021:
USD13 million).
26. Provisions
Balance at 1 January 2021
Accruals
Utilization
Change in estimates
Unwinding of discount
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2021
Accruals
Utilisation
Change in estimates
Unwinding of discount
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2022
In May 2023, the Group received
the railway infrastructure in Norilsk
region for free use for a period
of 49 years under the agreement with
the Federal Property Management
Agency with a corresponding
obligation to incur expenditure
in order to comply with the regulatory
requirements for non-public
railways in the Russian Federation.
The Group recognised this
agreement in accordance with IFRS
16 Leases, therefore, the Group
recognised a liability at the discounted
value of cash outflows in the amount
of USD322 million and a corresponding
right-of-use asset.
Decommissioning
Environmental
Tax
Other
615
146
(24)
1
39
(9)
768
–
(32)
(36)
73
(37)
736
2,081
–
(1,984)
176
–
(14)
259
–
(18)
93
29
(13)
350
5
2
(1)
(1)
–
(1)
4
7
(4)
(4)
–
1
4
21
11
(20)
(3)
–
–
9
8
(4)
(7)
–
–
6
Total
2,722
159
(2,029)
173
39
(24)
1,040
15
(58)
46
102
(49)
1,096
1 2 3 4 5 6 7
Accruals
Utilisation
Change in estimate
Unwinding of discount
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2023
including the current portion:
At 31 December 2021
At 31 December 2022
At 31 December 2023
Significant event – fuel spill in Norilsk
On 29 May 2020 an incident
occurred at the site of heat
and power plant No. 3 (HPP-3)
in the Kayerkan neighbourhood
of Norilsk: diesel fuel storage reservoir
was damaged through sudden failure
of support posts, which resulted
in approximately 21.2 kt of diesel fuel
leakage. According to the Group’s
assessment, the incident was caused
by defects in design and construction
as well as by unusually hot weather,
which led to thawing of permafrost
resulting in sinking of support posts.
The incident resulted in contamination
of nearby water bodies
and land in the area of leakage
as well as damage to biological
resources. The main stage of clean-up
works following the incident
was completed in 2020.
On 10 September 2020 Yenisei
interregional administration
of the Federal Environment
Supervision Agency (Rosprirodnadzor)
filed a lawsuit to the Arbitration
Court of the Krasnoyarsk Territory
against Joint Stock Company Norilsk-
Taimyr Energy Company (JSC
“NTEK”) claiming compensation
of damages to water bodies
and soil caused by diesel fuel spill
at HPP-3 in Norilsk in the amount
of RUB147.78 billion (USD1,943 million
at RUB/USD exchange rate at the date
of filing).
On 10 March 2021, in accordance with
the court decision on the lawsuit filed
by Rosprirodnadzor, the Group paid
RUB146.177 billion (USD1,968 million)
in compensation of damages to water
bodies and soil.
Decommissioning
Environmental
Tax
Other
Total
–
(50)
(75)
49
(154)
506
86
146
61
–
(8)
(32)
29
(79)
260
48
24
16
2
(1)
(1)
–
–
4
4
4
4
14
(6)
(3)
–
(2)
9
8
6
9
16
(65)
(111)
78
(235)
779
146
180
90
In 2021, expenditure
for the compensation of damages
due to fuel leakage was deducted
against taxable profits. On 3
December 2021, the Group
received a decision of the off-site tax
audit for the consolidated taxpayers
group for the first half of 2021 that
invalidated income tax deduction
of the damages compensation.
Taking into consideration all
the facts and circumstances
and based on an assessment
of the probability of economic
benefits outflows, the Group
recognised an income tax provision
in the amount of USD402 million
offset against income tax
prepayments at 31 December 2021.
The Group’s appeal filed in the first
quarter of 2022 was not satisfied.
The provision was utilised during
the first quarter of 2022.
In April 2021, the Company’s
subsidiary, JSC“NTEK”, signed a three-
party agreement with the Ministry
of Environment Protection and Natural
Resources of the Krasnoyarsk
Territory and the Siberian Federal
University in order to develop,
approve and implement a set
of measures to remediate the damage
caused by the oil spill to the wildlife
and broader environment
of the Krasnoyarsk Territory.
On 29 July 2021, Yenisei territorial
administration of the Federal
Agency for Fishery (Rosrybolovstvo)
filed a lawsuit for compensation
of damages to aquatic
bioresources for the total amount
of RUB58.65 billion (USD810 million).
On 3 September 2021 during
the court hearing, the parties
agreed to proceed with the dispute
settlement by negotiating an amicable
agreement, which would include
compensation in kind of the damage
caused to aquatic life by artificially
reproducing the affected fish species
and releasing the fry to the water
bodies.
Subsequently on 15 April
2022 the amount of claims
was increased by the Federal Agency
for Fishery to RUB58.96 billion
(USD725 million).
On 22 July 2022, the court confirmed
the amicable agreement between
the parties. In accordance with
the terms of the agreement JSC
“NTEK” will fully compensate damage
to aquatic bioresources in kind
by releasing the fry of different fish
species (sturgeon, muksun, broad
whitefish, vendace and nelma)
to the water bodies of the Norilo-
Pyasinskoe lake and river system
damaged by the incident in years
2033-2050. Before 2033, JSC “NTEK”
plans annual early release of the fry
of the Siberian sturgeon to the Yenisei
river starting 2023.
In addition, in order to ensure
scientific support of recovery
measures JSC “NTEK” will provide
financing of scientific research
from 2023 to 2051 by Russian
Federal Research Institute
of Fisheries and Oceanography
(VNIRO) with respect to assessment
of the water bioresources conditions
and their environment.
274
275
Annual Report 2023NornickelAdditional Information The key assumptions for determining
the estimation of liabilities under
the amicable agreement inherently
contain a high degree of uncertainty,
primarily due to the following:
fishery research results, the cost
of construction and operation of fish-
breeding infrastructure, the costs
of operation at the water bodies
of the Norilo-Pyasinskoe lake and river
system, the future fry purchase
prices for aquatic bioresources,
the possibility of achieving
stable recovery of the population
of the reproduced water bioresources,
macroeconomic assumptions
(including applicable inflation rates
and risk-free rates), and the material
effect of the discount factor for longer
terms.
On 2 December 2022, the Russian
Supreme Court received a cassation
appeal from the Prosecutor General’s
Office against judgements of lower
instance courts that upheld
and confirmed the legitimacy
of an amicable agreement
between the Federal Agency
for Fishery (Rosrybolovstvo),
JSC “NTEK” and Russian Federal
Research Institute of Fisheries
and Oceanography (VNIRO)
in a lawsuit initiated by Rosrybolovstvo
seeking to recover RUB58.96 billion
(USD838 million) in compensation
for the damage to aquatic
biological resources as a result
of the HPP-3 incident in Norilsk.
On 30 January 2023, a judge
of the Supreme Court ruled to reject
the submission of the cassation appeal
of the Prosecutor General’s Office
for a court hearing by the Judicial
Chamber for Economic Disputes
of the Supreme Court. On 13
March 2023, the Deputy Chairman
of the Supreme Court of the Russian
Federation considered a complaint
filed by the Prosecutor General’s
Office of the Russian Federation
on 6 February 2023 and upheld
the earlier ruling of the Supreme Court
of the Russian Federation.
For the year ended 31 December
2023, the Group incurred clean-up
and remediation expenditures
amounting to USD3 million
(for the year ended 31 December 2022:
USD16 million and for the year ended
31 December 2021: USD16 million).
The Group finished main rehabilitation
measures.
At 31 December 2023,
2022 and 2021 the total discounted
amount of the provision
in relation to the diesel fuel spill
at HPP-3 in Norilsk was recognised
in the environmental provision
in the consolidated statement
of financial position.
The amount of the provision is subject
to a high degree of uncertainty
and will be adjusted in the future
reporting periods as new facts
and circumstances arise, including
the reassessment of forecast
cost for environment remediation,
changes in macroeconomic and other
factors. However, to the best
of its knowledge and in accordance
with the requirements of law the Group
does not expect new significant
claims to be filed with respect
to the HPP-3 fuel spill in the future
periods.
Key assumptions used in estimation
of decommissioning obligations
and environmental provisions were
as follows:
Discount rates Russian entities
Expected closure date of mines
2021
2022
2023
8.2% – 8.7%
7.2% – 11.1%
12.0% – 12.7%
from 2023 to 2054
from 2023 to 2125
from 2024 to 2125
At 31 December
Expected inflation over the period from 2024 to 2043
2.8% – 4.9%
2.7% – 6.9%
Expected inflation over the period from 2044 onwards
2.5% – 2.8%
2.4% – 2.7%
2.3% – 6.1%
2.1% – 2.2%
Present value of expected cost to be incurred for settlement of long-term provisions was as follows:
1 2 3 4 5 6 7
27. Social liabilities and contingent social commitments
Social liabilities of the Group include
social provisions and payables relating
to social commitments of the Group.
The table below represents changes
in social liabilities of the Group
for the years ended 31 December
2023, 2022 and 2021, separately
detailing changes in the provision
in respect of the Comprehensive Social
and Economic Development Plan
for Norilsk (see the description below).
Social liabilities
Incl. Comprehensive plan
provision
Balance at 1 January 2021
Accruals of provision and payables
Utilisation and payment
Change in estimates
Unwinding of discount
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2021
Accruals of provision and payables
Utilisation and payment
Change in estimates
Unwinding of discount
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2022
Accruals of provision and payables
Utilisation and payment
Change in estimate
Unwinding of discount
Effect of translation to presentation currency
BALANCE AT 31 DECEMBER 2023
including the current portion:
At 31 December 2021
At 31 December 2022
At 31 December 2023
180
1,079
(448)
(31)
18
(7)
791
475
(454)
(68)
78
(8)
814
267
(304)
(62)
61
(170)
606
158
201
207
13
517
(12)
(3)
4
(1)
518
–
(23)
(14)
50
(2)
529
–
(34)
(41)
41
(114)
381
48
100
93
Present value of expected cost to be incurred for settlement of long-term social provisions was as follows:
2021
296
216
117
2
2
633
At 31 December
2023
188
119
90
1
1
399
2022
320
213
77
2
1
613
Due in years 2 – 5
Due in years 6 – 10
Due in years 11 – 15
Due in years 16 – 20
Due thereafter
TOTAL
2021
317
231
86
66
194
894
At 31 December
2023
332
169
84
36
68
689
2022
412
230
134
23
117
916
Due in years 2 – 5
Due in years 6 – 10
Due in years 11 – 15
Due in years 16 – 20
Due thereafter
TOTAL
276
277
Carrying value of social provisions
is determined based on the discounted
cash flows required to settle
the present obligation. The discount
rate was between 12.0% and 12.7%
at 31 December 2023 (31 December
2022: 7.2% and 10.5%; 31 December
2021: 8.2% and 8.7%).
In 2017–2023, the Group entered
into several agreements with
the governments of the regions where
it operates, namely the Zabaikalsky
Territory, the Krasnoyarsk Territory
and the Murmansk Region. These
agreements imply the Group’s
financial commitments in respect
of the social and economic
Annual Report 2023NornickelAdditional Information Apart from the financing committed
under the four-party partnership
agreement and the Comprehensive
Plan, in 2021 the Company
announced an additional financing
programme for the social
and economic development
of Norilsk for RUB150 billion
(USD2,019 million). As of the date
the consolidated financial statements
are authorised for issue, the schedule,
amounts and terms of financing
of the programme’s individual
activities, as well as the mechanism
for their implementation, have not
been approved. The implementation
of the programme is subject
to the Company’s verification
procedures and corporate approval,
which have not been received
as of the date these consolidated
financial statements were authorised
for issue.
During the year ended 31 December
2023, the Group also accrued
USD25 million (for the year
ended31 December 2022:
USD121 million; for the year ended
31 December 2021: USD127 million)
of social provisions under various
social programmes and contributions
other than those referred to above.
development of the regions,
including the construction of social
infrastructure facilities.
At 31 December 2023 the provision
recognised with respect to the above-
mentioned agreements in Social
liabilities in the consolidated statement
of financial position amounted
to USD74 million(31 December 2022:
USD67 million and 31 December 2021:
USD115 million).
Comprehensive Social and Economic
Development Plan for Norilsk
In February 2021, the Group entered
into a four-party agreement with
the Ministry for the Development
of the Russian Far East and Arctic,
the Krasnoyarsk Territory
Government, and the Norilsk
Municipality to implement
comprehensive social and economic
development programmes in Norilsk.
In December 2021, the Government
of the Russian Federation approved
the Comprehensive Social
and Economic Development Plan
for Norilsk (the “Comprehensive
Plan”), which includes a schedule
of mutual financial commitments
of the Government of the Russian
Federation, the Krasnoyarsk
Territory Government, and the Group
for the social and economic
development of the city up
to 2035. The Comprehensive
Plan covers housing renovation,
the overhaul and modernisation
of the city’s engineering and utilities
infrastructure, construction, repair,
reconstruction and development
of social infrastructure facilities
and resettlement of Norilsk
and Dudinka citizens to areas
with more favourable living conditions.
In addition, the Comprehensive
Plan provides for the preparation
and subsequent update of the Norilsk
development strategy setting
the city as a core hub for Taimyr
development, designing the concept
of regional tourism development
and implementation of support
programmes for small and medium-
sized businesses in Norilsk.
The financial commitments
of the Company for 2021–2035 amount
to RUB81.3 billion (USD1,094 million
at the USD exchange rate
at 31 December 2021).
In line with the Group’s accounting
policy (Note 4), in respect of the part
of its obligations under the four-party
agreement and the Comprehensive
Plan amounting to RUB69.3 billion,
the Group recognised a provision
in its consolidated income
statement for the year ended
31 December 2021 at the present
value of cash outflows in the amount
of RUB37.9 billion (USD514 million).
The remaining RUB12 billion
(USD162 million at the USD exchange
rate at 31 December 2021)
of financial commitments under
the Comprehensive plan will
be recognised in the consolidated
statement of financial position as part
of property, plant and equipment once
the expenditure is incurred.
At 31 December 2023, the Group
recognised USD2 million under
the Comprehensive Plan within
property, plant and equipment
in its consolidated statement
of financial position (at 31 December
2022: USD2 million).
In case of any changes to the nature,
timing or amount of financing
of particular measures stipulated
by the Comprehensive Plan during
its implementation, the Group will
update the amount of social provisions
in its consolidated financial statements
accordingly.
1 2 3 4 5 6 7
28. Trade and other payables
FINANCIAL LIABILITIES
Trade payables
Payables for acquisition of property, plant and equipment
Other creditors
Total financial liabilities
NON-FINANCIAL LIABILITIES
Advances received on contracts with customers
Total non-financial liabilities
TOTAL
2021
2022
2023
At 31 December
416
417
397
994
994
2,224
614
546
171
50
50
1,381
422
561
206
84
84
1,273
The maturity profile of the Group’s financial liabilities with their remaining contractual maturities was as follows:
FINANCIAL LIABILITIES
Due within 1 month
Due from 1 to 3 months
Due from 3 to 12 months
TOTAL
29. Employee benefit obligations
Wages, salaries and bonuses
Provision for annual leave
Other
Total obligations
Less: non-current obligations
CURRENT OBLIGATIONS
2021
2022
2023
At 31 December
854
312
64
1,230
2021
190
238
31
459
(42)
417
950
340
41
1,331
2022
302
341
35
678
(93)
585
694
225
270
1,189
At 31 December
2023
287
276
22
585
(30)
555
Amounts recognised in the consolidated income statement in respect of employee benefits were as follows:
Wages and salaries
Social security costs
Other employee benefits
TOTAL
For the year ended 31 December
2021
1,718
368
151
2,237
2022
2,586
488
188
3,262
2023
2,120
456
207
2,783
Wages and salaries in the table above include provisions for employee benefits with related social security costs.
278
279
Annual Report 2023NornickelAdditional Information Defined contribution plans
Amounts recognised in the consolidated income statement in respect of defined contribution plans were as follows:
Social Fund of the Russian Federation
Corporate pension plans (non-state pension fund)
Other
TOTAL
30. Dividends
2021
325
8
3
336
For the year ended 31 December
2022
454
11
–
465
2023
408
9
3
420
Dividends declared and paid in Russian
roubles were translated to US dollars
using prevailing RUB/USD rates
at the declaration date and payment
date, respectively, as presented
in the table below.
Dividends
for the period
Declaration period
Dividends declared
Dividends paid
Per share
RUB
Per
shareUSD
Total
USD million
9 months 2023
December 2023
915.33
Annual 2021
June 2022
1,166.22
9 months 2021
December 2021
1,523.17
Annual 2020
May 2021
1,021.22
9.87
18.94
20.81
13.86
Payment
period
January
2024
1,508
2,895
June 2022
3,181
January
2022
2,193
June 2021
Total
SD million
1,475
3,146
3,050
2,198
Receipt of dividends not
remitted to shareholders
and ADR holders
Total USD million
–
544
–
–
At 31 December 2021 dividends
payable in the amount
of USD3 146 million in the consolidated
statement of financial position mainly
included dividends for 9 months
2021 in the amount of USD3 134 million.
At 31 December 2022 dividends
payable in the amount
of USD496 million in the consolidated
statement of financial position
mainly included annual dividends
for 2021 not remitted primarily
to holders of American Depositary
Receipts (ADRs) due to restrictions
placed by the Decree the President
of the Russian Federation No. 95 at 5
March 2022 and the decision
of the Board of Directors of the Central
Bank of the Russian Federation
at 10 June 2022 in the amount
of USD460 million. The dividends not
received by the ADR holders were
transferred to JSC NSD, subsequently
returned to the Group and continue
to remain on demand by the recipients
at 31 December 2023.
At 31 December 2023 dividends
payable in the amount
of USD1 924 million in the consolidated
statement of financial position mainly
included annual dividends for 2021 not
remitted primarily to holders
of American Depositary Receipts
(ADRs) as referred above in the amount
of USD359 million and dividends
for 9 months 2023 in the amount
of USD1 560 million. As of the date
these consolidated financial
statements were authorised for issue,
the Company had transferred
USD1 475 million to the Company’s
registrar and JSC NSD for further
remittance to the shareholders.
31. Related parties transactions
and outstanding balances
Related parties include major
shareholders and entities under
their ownership and control;
associates, joint ventures and joint
operation; non-state pension fund,
transactions with which are disclosed
in Note 29; and key management
personnel. The Group defines major
shareholders as shareholders, which
have significant influence over
the Group activities. The Company
and its subsidiaries, in the ordinary
course of their business, enter
into various sale, purchase and service
transactions with related parties.
Transactions between the Company
and its subsidiaries, which are related
parties of the Company, have been
eliminated on consolidation and are not
disclosed in this note. Transactions
and outstanding balances are included
in / excluded from the disclosure
starting the date an entity has
become / or ceased to be a related
party, respectively.
Details of transactions between
the Group and other related parties
are disclosed below.
1 2 3 4 5 6 7
Entities under ownership and control of the Group’s
major shareholders
Associates, joint ventures and joint operation
For the year
ended
31 December
2021
For the year
ended
31 December
2022
For the year
ended
31 December
2023
For the year
ended
31 December
2021
For the year
ended
31 December
2022
For the year
ended
31 December
2023
–
–
–
103
–
–
–
–
–
–
–
800
10
10
116
4
4
1
1,025
41
–
–
225
11
11
5
1
1
–
–
–
–
–
–
–
–
66
–
–
–
–
–
–
–
–
–
–
36
–
–
12
–
–
–
–
–
–
–
13
–
–
12
3
–
30
27
Entities under ownership and control of the Group’s
major shareholders
Associates, joint ventures and joint operation
At 31 December
2021
At 31 December
2022
At 31 December
2023
At 31 December
2021
At 31 December
2022
At 31 December
2023
13
1
–
–
–
26
–
258
225
21
12
–
–
–
–
5
10
–
–
–
–
1
–
–
–
1
2
–
3
–
TRANSACTIONS
WITH RELATED PARTIES
Repayments of loans
and borrowings
Interest expense repaid
Interest expense accrued
Purchase of assets
and services and other
operating expenses
Interest received
Interest income accrued
Sales of goods and services
and other income
Proceeds from loans
and borrowings
Fair value gain on the cross-
currency interest rate swap
contracts
Loans issued
Repayments of loans issued
OUTSTANDING BALANCES
WITH RELATED PARTIES
Accounts payable and lease
liabilities
Accounts receivable
Cash and cash equivalents
Loans and borrowings
Derivatives (liabilities)
During the year ended 31 December
2023 the Group declared
and paid dividends in the amount
of USD349 million to a related party,
which is a non-controlling interest
owner.
During the year ended 31 December
2021, the Company acquired own
shares from the entities under
ownership and control of the Group’s
major shareholders for a consideration
of USD1,421 million (Note 22).
At 31 December 2023 the Group had
no guarantees received in respect
of advances to its suppliers
from a related party (31 December
2022: 42 million USD and 31 December
2021: none).
Transactions with related parties
are made on terms equivalent
to those that prevail in arm’s length
transactions.
Compensation of key management
personnel
Key management personnel
of the Group consists of members
of the Management Board
and the Board of Directors.
For the year ended 31 December
2023 remuneration of key
management personnel of the Group
including salary and performance
bonuses amounted to USD90 million
(for the year ended31 December 2022:
USD80 million and for the year ended
31 December 2021: USD91 million).
280
281
Annual Report 2023NornickelAdditional Information 32. Commitments
Capital commitments
At 31 December 2023, contractual
capital commitments amounted
to USD2,292 million (31 December 2022:
USD2,299 million and 31 December
2021: USD3,338 million).
Leases
The Group is a party to a number
of lease contracts with variable
lease payments that do not depend
on an index or market rental rates,
and hence are not recognised as lease
liabilities. At 31 December 2023 total
future non-discounted variable lease
payments under such contracts with
the maturity up to 2072 amounted
to USD280 million (31 December 2022:
USD358 million and 31 December 2021:
USD322 million).
33. Contingencies
Legal contingent liabilities
The Group has a number
of legal contingent liabilities
with the probability of outflow
of economic benefits being assessed
by the management of the Group
as possible, including matters arising
from claims and disputes of a civil law
and public law nature. At 31 December
2023 these liabilities amounted
to USD4 million (31 December 2022:
USD14 million and 31 December 2021:
USD3 million).
Taxation contingencies in the Russian
Federation
The Russian Federation currently
has a number of laws related to various
taxes imposed by both federal
and regional governmental authorities.
Applicable taxes include value-added
(VAT), income tax, mandatory social
security contributions to non-budget
funds, mineral extraction tax and other
levies. Tax returns, together with other
legal compliance areas (for example,
customs and currency control matters),
are subject to review and investigation
by government authorities, which
are authorised by law to impose severe
fines, penalties and interest charges.
Generally, tax returns remain open
and subject to inspection for a period
of three years following the fiscal year.
While the management of the Group
believes that it has recognised
adequate provisions for tax liabilities
based on its interpretation of current
and previous legislation, the risk
remains that the tax authorities
in the Russian Federation could
take a different view with regard
to interpretive issues. This uncertainty
may expose the Group to additional
taxation, fines and penalties.
In March 2022, amendments
to the Russian tax legislation were
adopted. According to them, foreign
exchange gains are accounted for tax
purposes in the reporting period,
when the underlying asset or liability
is settled. Starting from 1 January
2023, the same tax accounting rules
apply to foreign exchange losses.
In December 2022 amendments
to the Russian tax legislation allowed
an early adoption of the above tax
treatment of foreign exchange losses
for the year ended 31 December
2022 at a taxpayer’s option. The Group
used this option.
In accordance with Article 3 of Federal
Law No. 302-FZ dated 3 August 2018,
the agreement, which had established
the consolidated taxpayers
group (CTG), expired on 1 January
2023. Therefore, all entities
of the Group that were previously part
of the CTG started to accrue and pay
income tax on an individual basis from 1
January 2023.
On 1 January 2023, amendments
to the Tax code of the Russian
Federation were adopted. According
to them, each company of the Group
located in the Russian Federation pays
taxes in a single tax payment (STP)
to a unified taxpayer account.
Transfer pricing legislation enacted
in the Russian Federation starting
1 January 2012 provides for major
modifications making local transfer
pricing rules closer to the OECD
guidelines, but creating additional
uncertainties as regards the actual
application of tax legislation.
The impact of any additional taxation
in relation to transfer pricing may
be material to the financial statements
of the Group. Yet, the probability
of such additional taxation cannot
be reliably assessed.
The transfer pricing rules provide
for an obligation for the taxpayers
to prepare transfer pricing
documentation with respect
to controlled transactions and stipulate
the principles and mechanisms
for accruing additional taxes
and interest in case prices
in the controlled transactions differ
from the market level.
Current Russian transfer pricing
legislation requires businesses
to conduct transfer pricing analysis
for the majority of cross-border
and major domestic inter-company
transactions. Starting 2019, transfer
pricing control, as a general rule,
is applied to domestic transactions
only if both criteria are met:
the parties apply different income
tax rates, and the annual turnover
of transactions between them exceeds
RUB1 billion (USD11 million at RUB/
USD rate at 31 December 2023).
In addition to performing transfer
pricing audits, Russian tax authorities
may also review prices used in intra-
group transactions. They may impose
additional taxes if they conclude that
taxpayers have received unjustified
tax benefits as a result of those
transactions.
According to Russia’s Ministry
of Finance, foreign states that take
hostile actions against the Russian
Federation, its legal entities
and individuals have effectively
stopped sharing information for tax
purposes with the Russian Federation.
It complicates tax control of pricing,
including identification of the fact
that parties to a transaction
are related. The list of states
and territories providing preferential
tax treatment and/or not disclosing
and sharing information on financial
transactions (offshores) has been
amended by including “unfriendly”
states. Thereby transactions
with counterparties from these
1 2 3 4 5 6 7
countries may be recognised
as controlled for tax purposes starting
from 1 January 2024.
In August 2023 in accordance
with the Presidential Decree
No. 585 the core provisions
of 38 double taxation agreements
between Russia and “unfriendly”
countries were suspended.
The suspension effectively leads
to application of standard withholding
income tax rates as opposed
to previously applied reduced
rates in relation to the main types
of passive and other income received
by residents of these countries.
The Group continues to analyse
the impact of the above regulatory
changes.
The Russian Government’s Regulation
No. 988 dated 25 June 2021 introduced
temporary export duties on some
of the base metals produced
by the Group for the period from 1
August 2021 to 31 December 2021.
The Russian Government’s Regulation
No. 1538 dated 21 September
2023 introduced export customs
duties on Group`s metal products
for the period from 1 October
2023 to 31 December 2024.
In November 2023 amendments
to the Tax Code of the Russian
Federation introduced a mechanism
for secondary adjustment of transfer
pricing and providing for additional
withholding tax with respect
to the tax base transferred
outside Russia as a result of non-
compliance with established transfer
pricing control rules. In addition,
the amendments significantly
increased tax penalties for transfer
pricing offenses.
Environmental matters
The Group is subject to extensive
federal, regional and local
environmental controls and regulations
in the countries where it operates.
The Group’s operations result in air
and water pollutant emissions,
as well as generation and disposal
of production waste. The Group
recognises expenditure on negative
environmental impact levies as other
levies in Costs of metal sales.
The Group periodically evaluates
its environmental provisions pursuant
to the environmental legislation
in the countries where it operates.
Such provisions are recognised
in the consolidated financial
statements as and when obligating
events occur.
The management of the Group
believes that there are no material
obligations for environmental damage
other than those recognised in these
consolidated financial statements.
However, potential liabilities,
which may arise due to changes
in environmental laws and regulations,
cannot be reliably estimated but
may be material. The Group is unable
to predict the timing or extent to which
environmental laws and regulations
may change. Such change, if it takes
place, may require that the Group
modernise its technological processes
to meet more stringent statutory
requirements.
Russian Federation risk
The Group’s operations are primarily
located in the Russian Federation.
Consequently, the Group is influenced
by the economic and financial
markets of the Russian Federation,
which display the characteristics
of an emerging market. The legal, tax
and regulatory frameworks continue
to develop, which poses a risk of their
varying interpretations and frequent
change. This, together with other
legal and fiscal impediments, creates
additional challenges for entities
operating in the Russian Federation.
Starting 2014, the United States
of America, the European Union
and some other countries have
imposed and gradually expanded
restrictive economic measures
against a number of Russian
individuals and legal entities. Starting
February 2022, the above countries
have been imposing additional
stringent restricitve measures against
the Russian Government, large
financial institutions and other legal
entities and individuals in Russia.
In addition, restrictions were imposed
on exports and imports of certain
goods and business-relevant services,
including accounting, auditing,
tax and management consulting
and certain legal, engineering,
architectural and IT consulting
services, as well as aviation
and maritime transportation
sectors. In light of the imposed
restrictive measures, a number
of large international companies
from the USA, the European Union
and some other countries ceased,
materially reduced or suspended
their activities in the Russian
Federation and business relationships
with Russian citizens and legal
entities. Moreover, there is a risk
that further restrictive measures
and similar types of pressure will
be imposed. In response, the Russian
Government has implemented a set
of economic measures in order
to secure and stabilise the Russian
economy, as well as retaliatory
restrictive measures, currency control
measures, a number of key interest
rate changes and other special
economic measures.
The imposition and further tightening
of the restrictive measures has
led to an increased economic
uncertainty, including the lowering
of liquidity and high volatility
in the equity markets, volatility
of the Russian rouble exchange rates
and key interest rate, a reduction
in both local and foreign direct
investment inflows, procedural
difficulties in currency payments
for Russian issuers and significant
limitations in the availability of debt
financing. In addition, many Russian
companies are practically devoid
of access to international stock
and debt capital markets, thus
having to look for alternative ways
to raise financing and growing more
dependent on the state support.
The Russian economy is in the process
of adaptation, involving
the substitution of export markets
that become unavailable, replacement
of procurement and technology
import markets, as well as changes
in the logistics and production chains.
On 28 February 2022, the stock market
of the Moscow Exchange discontinued
trading in shares and corporate bonds.
Trading in shares and corporate
bonds on the Moscow Exchange
was resumed in late March 2022,
while restrictions continue to apply
to a number of securities transactions
282
283
Annual Report 2023NornickelAdditional Information made by non-residents of Russia.
On 3 March 2022, the London
Stock Exchange suspended trading
in depositary receipts (ADRs)
issued for the Company’s ordinary
shares. In accordance with Federal
Law No. 114-FZ On Amendments
to the Federal Law On Joint-Stock
Companies and Certain Legislative
Acts of the Russian Federation
an automatic and a forced conversion
of ADRs into the Company’s shares
was implemented in 2022. ADRs
the rights to which are recorded
by Russian depositories were
converted automatically. ADRs
the rights to which are recorded
by foreign depositaries
could have been converted
based on an application until
10 November 2022. Before the end
of the 2022 as part of the forced
conversion, the Company’s shares
were credited to the applicants that
submitted the required documents.
On 28 April 2023, the permit
for circulation of the Company ADRs
outside Russia lapsed. In accordance
with clause 5 of Article 6 of Federal
Law No. 114-FZ On Amendments
to the Federal Law On Joint-Stock
Companies and Certain Legislative
Acts of the Russian Federation dated
16 April 2022, starting that date
the Company’s shares, which remain
accounted for on depo accounts
of depository programs are not
vested with voting rights for holders,
not considered for counting votes
and no dividends are accrued on them.
Under the terms and conditions
of the deposit agreement ADR
holders retain the right to surrender
their ADRs in exchange for obtaining
the Company’s shares. Аt the same
time, a foreign issuing bank has
closed the conversion of ADRs
into Company’s shares with
the date of opening currently being
unknown. Unpaid dividends may
be claimed by those who were ADR
holders as of 28 April 2023 and who
received the Company’s shares
upon conversion of the ADRs
belonging to them in accordance
with the procedure established
by the Federal Law “On Joint Stock
Companies” for the unclaimed
dividends.
On 23 May 2023, the ADRs were
removed from the list of securities
admitted to trading on the London
Stock Exchange. According
to the latest information available
to the Group, the percentage
of Company`s shares remaining
on depo accounts of depository
programs was 6.7% of the share capital
of the Company at 13 November
2023 (the date of drawing up the list
of shareholders entitled to participate
in the extraordinary General meeting
of shareholders of the Company dated
7 December 2023).
On 21 July 2022 and on 26 July
2022 the European Union and Great
Britain respectively, introduced a ban
against the import of gold of Russian
origin on top of other restrictive
measures.
On 16 December 2022, the European
Union, among other restrictive
measures, introduced a ban
on investments in the mining
industry in Russia and also banned
the supply of various equipment,
including industrial. At the same time
in accordance with the European
Union ruling these restrictive measures
do not apply to mining and production
of palladium, nickel, copper, cobalt,
rhodium and iron ore.
On 24 February 2023 the US
Department of the Treasury’s Office
of Foreign Assets Control (OFAC)
identified the mining and metallurgical
sector of the Russian economy
as a sector against which further
sanctions may be imposed.
On 29 June 2022, the United Kingdom
imposed personal restrictions against
Potanin V. O. These restrictions
are mandatory within the UK and for all
British citizens and legal entities
registered in the UK. According
to the advice of an external legal
counsel and the management’s
assessment, these restrictions
do not expand to the Group
and its subsidiaries. On 15 December
2022, OFAC updated Specially
Designated Nationals and Blocked
Persons List (SDN List) to include
Potanin V. O. SDN list also included
legal entities associated with one
of the major shareholders.
OFAC also stated that the restrictive
measures do not apply
to the Company. In the current
geopolitical circumstances, as each
counterparty doing business with
the Group independently decides
on the application of its own internal
restrictions on interaction with Russian
legal entities, the management has
to assume that some counterparties
might reconsider their trade, financial
or other operations with the Group.
On 14 December 2023, the United
Kingdom adopted amendments
to the sanction legislation, which,
among other things, establish a ban
on trade in a number of metals which
originate or are located in Russia.
These restrictions are applicable to,
among some other metals to nickel,
copper and cobalt that are produced
by the Group. At the same time, the UK
Government published a Trade License
authorizing UK persons to purchase
warrants for Russian metals
on international metal exchanges,
provided that such trade does not
involve physical delivery of such
metals to the territory of the United
Kingdom or to UK persons.
The longer-term effects of potential
additional restrictive measures
are difficult to determine. Still,
they may have a significant impact
on the Group`s business.
Supply and distribution channels
reconfiguration
In 2022, a number of suppliers
fully withdrew from the Russian
market, while others suspended
deliveries of goods and services
to Russian legal entities. As a result,
procurement from these suppliers
has become unavailable to the Group.
Although the Group has started
transition to alternative suppliers,
full replacement of suppliers
who left the Russian market may
take a considerable time and involves
additional costs and rescheduling
of certain investment projects
and capital commitments.
Due to the need to replace some
of the components, the Group
is actively looking for alternative
suppliers and substituting imports
in order to fulfill the production
program for 2024. The Group is also
1 2 3 4 5 6 7
in the process of reconfiguring
its distribution channels, which led
to extended sales logistics chains
and alongside with restrictive
measures and time-consuming
processes of reengineering
the Company`s customer base
and sales markets significantly
increased finished goods inventories.
At 31 December 2023 the Group
reduced the stocks of finished goods
accumulated in 2022 for most metals.
The Group’s management also expects
that the stocks of finished goods
accumulated in 2022 will continue
to decrease in 2024 in line with
the Group’s sales plans for 2024.
Impact of the COVID-19 outbreak
on the Group’s operations
On 11 March 2020, the World
Health Organization declared
COVID-19 outbreak a pandemic.
The spread of COVID-19 led
to lockdown and business disruption
in many countries, which triggered
increased volatility of financial
markets, including commodity markets,
and general economic uncertainty.
The wave-like distributional pattern
of the coronaviral infection continues
to create uncertainty in business
environment.
The Group operates primarily
in exploration, extraction, refining
of ore and nonmetallic minerals
and sale of base and precious metals
produced from ore, which have not
been subject to significant adverse
impact by the outbreak of coronavirus.
Based on the results of the analysis
of possible outcomes and their
consequences for the economic
environment and operations
of the Group, the Group’s
management has developed
and implemented a number
of measures to ensure normal
operating activities.
In May 2023, the World Health
Organization declared that
COVID-19 was no longer a global health
emergency.
Overall impact of risks
and uncertainties on the Group’s
financial position and financial results
These consolidated financial
statements provide the management’s
point of view on the level of impact
of the current business environment
in the Russian Federation
on the Group’s operations and financial
position. Taking into account
the measures taken by the Group
in respect of the risks stemming
from imposed economic restrictions
and overall changes in business
environment, Group management
does not expect a significant adverse
impact on the financial position
and financial results of the Group
for at least 12 months after
31 December 2023. The actual impact
of the future business environment
may differ from the management’s
assessment.
The management will continue
to monitor the situation closely and will
implement necessary measures
to mitigate negative consequences
of possible future events
and circumstances, as they occur.
34. Financial risk management
Capital risk management
The Group manages its capital
in order to safeguard the Group’s
ability to continue as a going
concern and to maximise
the return to shareholders through
the optimisation of debt (long
and short-term borrowings) and equity
(share capital and retained earnings)
structure.
Management of the Group regularly
reviews its level of leverage calculated
as the ratio of Net Debt to EBITDA
to ensure that it is in line with
the Group’s financial policy aimed
at preserving investment grade credit
ratings.
At 31 December 2023,
2022 and 2021 the Company
maintains credit ratings from Russian
rating agency Expert RA at RUAAA
investment grade level.
Financial risk factors and risk
management structure
In the normal course of its operations,
the Group is exposed to a variety
of financial risks: market risk (including
interest rate and currency risk), credit
risk and liquidity risk. The Group
has an explicit risk management
structure aligned with internal control
and analysis procedures that enable
it to assess, evaluate and monitor
the Group’s exposure to financial
risks, including their change
due to the current economic situation
and imposition of restrictive economic
measures.
Interest rate risk
Interest rate risk relates to changes
in interest rates that could adversely
impact the financial results
of the Group. The Group’s interest rate
risk arises from borrowings at floating
rates.
In order to minimise and manage
the risk, the Group maintains
the structure of debt portfolio,
which includes loans and borrowings
with fixed and floating interest
rates. The Group also considers
impact of this risk factor together
with changes in the macroeconomic
environment, particularly stage
of economic growth and increase
in commodity prices, generally
accompanying the increase of base
rates.
During the year ended 31 December
2023 the key interest rate of the Bank
of Russia was increased from 7,5%
to 16% by the end of December. During
the year ended 31 December 2022,
the key interest rate was changed
several times following restrictive
measures imposed by the USA,
the EU and other countries
and changes in key macroeconomic
parameters, such as inflation rate
and rouble exchange rate. The key
interest rate was increased to 20%
in the end of February 2022,
followed by a gradual decrease
to 7.5% by the end of December
2022. The negative impact
of the increase in the key interest
rate in 2023 and 2022 on the amount
of the Group’s interest expenses
was not significant. There were no
284
285
Annual Report 2023NornickelAdditional Information significant fluctuations during 2021.
At 31 December 2023, the amount
of loans and borrowings of the Group
with the rate linked to the key interest
rate of the Central Bank of the Russian
Federation was 29% of the total
amount of loans and borrowings
and at 31 December 2022: 15% (see
Note 24).
Management believes that the Group’s
exposure to interest rate risk
fluctuations is at an acceptable level.
In 2023 a fundamental reform
of major interest rate benchmarks
was implemented globally, including
the replacement of some interbank
offered rates (IBORs) with alternative
nearly risk-free rates (referred
to as ‘IBOR reform’). The Group
monitors market developments
and manages transition to alternative
rates. The Group’s unsecured US
dollar-denominated floating rate
loans used USD LIBOR1M rates, which
ceased to be published after 30 June
2023. The Group signed amendments
to certain loan agreements to replace
LIBOR rate with the alternative rate –
Term Secured Overnight Financing
Rate (Term SOFR) not later than
USD LIBOR publication stop date
and switched the remaining loan
agreements with floating interest rates
to the alternative rates in 2023.
Currency risk
Currency risk relates to changes
in the fair value or future cash flows
of a financial instrument denominated
in foreign currency because
of changes in exchange rates.
There were no significant fluctuations
in the exchange rate during 2021.
Taking into account the exchange rates
at 31 December 2023, 2022 and 2021,
the Group preserves its financial
stability.
The major part of the Group’s revenues
and related trade accounts receivable
are denominated and/or settled in US
dollars and Chinese Yuans, while
expenditure is primarily denominated
in Russian roubles and therefore
the Group is exposed to fluctuations
of the USD and CNY exchange rate.
Currency risk arising from other
currencies is assessed by management
of the Group as immaterial.
Restrictive measures imposed
by the USA, the EU and some
other countries with respect
to the Central Bank of the Russian
Federation and Russia’s international
reserves as well as the counter-
measures of the Russian government
and the Central Bank relating
to capital flows controls and currency
control led to an increased volatility
of the rouble exchange rate.
The RUB/USD exchange rate ranged
from 67.57 roubles for 1 US Dollar
to 101.36 roubles for 1 US Dollar during
the year ended 31 December 2023
(during the year ended 31 December
2022: from 51.16 roubles for 1 US Dollar
to 120.38 roubles for 1 US Dollar).
The currency risk is managed
by analysis of currency position,
efficiency control of currency
exchange operations and the best
possible matching of cash inflows
and cash outflows denominated
in the same currency, although
the restrictive measures and Russia’s
respective counter-measures
limit the efficiency and availability
of the above mentioned instruments
of the Group currency risk
management.
If necessary, the Group uses derivative
financial instruments, primarily cross-
currency interest rate swaps to reduce
exposure to currency risk by balancing
revenue cash flows denominated
mostly in US dollars and liabilities
denominated in Russian roubles.
At 31 December 2023, 2022 and 2021,
the carrying amounts of monetary
assets and liabilities, excluding
cross-currency interest rate swaps,
denominated in foreign currencies
other than functional currencies
of the individual Group entities were
as follows:
At 31 December 2021
At 31 December 2022
At 31 December 2023
USD
CNY
Other
currencies
USD
CNY
Other
currencies
USD
CNY
Other
currencies
Cash and cash
equivalents
Trade and other
receivables
Other assets
Total assets
Trade and other
payables
Loans and borrowings
Lease liabilities
Other liabilities
Total liabilities
2,811
792
55
3,658
353
9,862
107
23
10,345
Given that the Group exposure
to the currency risk for the USD-
and CNY-denominated monetary
liabilities is offset by the revenue
from metal sales denominated
18
–
–
18
–
–
–
–
–
41
35
20
96
122
24
15
–
161
1,169
266
1,425
22
2,616
761
7,798
12
7
–
–
266
3
1,265
–
–
70
134
53
257
63
20
11
8
879
992
2
1,873
556
4,425
13
2
759
90
–
849
7
1,260
–
–
8,578
1,268
102
4,996
1,267
228
66
15
309
95
15
11
–
121
in respective currencies,
as well as the high correlation
of the CNY and the USD, management
believes that the Group’s exposure
to the currency risk is at an acceptable
level.
1 2 3 4 5 6 7
The sensitivity analysis of interest rate and currency risks
INTEREST RATE RISK
1 p.p. USD rate increase impact
1 p.p. RUB rate increase impact
1 p.p. CNY rate increase impact
CURRENCY RISK
USD20% strengthening against RUB
CNY 20% strengthening against RUB
Increase/(decrease) of profit before tax for the year ended
31 December
2021
2022
2023
(35)
(8)
–
(1,421)
4
(45)
(17)
(7)
(1,261)
(200)
(24)
(35)
(7)
(695)
(84)
The sensitivity analysis is prepared
including cross-currency interest
rate swap effects and assuming that
the amount of loans and borrowings
at floating rates outstanding
at the reporting date was outstanding
for the whole reporting period.
Credit risk
Credit risk means that a debtor will
default on its contractual obligations
as they fall due resulting in a financial
loss to the Group. Credit risk arises
from cash and cash equivalents,
bank deposits, uncollateralised trade
and other receivables, as well as loans
issued.
The Group mitigates the credit risk
through its allocation to a large number
of counterparties and respective
credit limits approval based
on counterparties’ financial position
analysis and uses, if possible, trade
financing and insurance instruments,
bank guarantees and documentary
forms of settlement.
To analyse counterparty solvency,
the Group uses information
from credit rating agencies about
the counterparty’s assigned credit
ratings and projections for its changes;
should such information be lacking,
financial stability and overall
creditworthiness is assessed
by calculating financial indicators
and analysing the counterparty’s
financial statements for several
reporting periods.
The outstanding balances of five
financial institutions and five largest
customers are presented below.
In accordance with the conservative
liquidity management policy
the Group’s cash and cash equivalents
are placed at Russian and international
credit and financial institutions, which
mostly had сredit rating for Russian
banks according to the national
scale Expert RA not lower than
RUAA and for international banks
on the international Fitch scale
not lower than A at 31 December
2023 (at 31 December 2022: mostly
not lower than RUAAA for Russian
banks and on the international
Fitch scale mostly not lower
than A for international banks
and at 31 December 2021: mostly not
lower than BB+ on the Fitch scale).
CASH AND CASH EQUIVALENTS
Bank A
Bank B
Bank C
Bank D
Bank E
Other
TOTAL
Outstanding balance at 31 December
2021
2022
2023
1,548
902
572
405
1,579
5,547
510
366
258
88
456
1,882
616
476
183
134
593
2,139
286
287
Annual Report 2023NornickelAdditional Information 1 2 3 4 5 6 7
times a month the Group updates
its rolling cash flow forecast model
with a horizon of up to 12 months.
The Group manages liquidity risk
by maintenance of liquid funds
and a portfolio of committed credit
facilities and overdrafts with a number
of banks at a level, which is sufficient
to cover possible revenue fluctuations
taking into account market risks.
In particular, the Group had
available committed debt facilities
and overdrafts to finance its day-
to-day liquidity requirements
of USD3,819 million at 31 December
2023 (31 December 2022:
USD2,788 million and 31 December
2021: USD3,500 million).
The Group continues its activities
on expansion of credit limits
capacity of its portfolio of confirmed
and treasury credit lines. In order
to optimise the average duration
of liabilities and minimise risk of excess
concentration of debt payments
the Group considers all available
options for arranging financing
on the Russian market and holds
negotiations with international financial
institutions pursuing proactive debt
portfolio management.
In accordance with the permissions
received on a regular basis
from government agencies on foreign
currency payments of debt
and interest to foreign creditors,
the Group continues to service
its debt in compliance with the terms
of respective loan or bond facilities,
including timing and currency
of payments.
In September 2022, the consent
of the holders of all 5 Eurobond issues
of the Group was obtained to amend
the transaction documentation,
according to which the Company
received the right to make payments
to holders of Eurobonds in Russian
depositories, bypassing a foreign
paying agent, which allowed
to (a) ensure compliance with
the requirements of Russian legislation
and (b) continue payments to foreign
depositories through a payment agent.
The following table shows the maturity
profile of the Group’s borrowings, lease
liabilities and derivative instruments
(maturity profiles for trade and other
payables are presented in Note 28)
based on contractual undiscounted
payments, including interest,
in accordance with management’s
plans and contractual terms regarding
the maturity profile:
At 31 December 2023
Total
Due in the
first year
Due in the
second year
Due in the
third year
Due in the
fourth year
Due in the
fifth year
Due
thereafter
FIXED RATE
BANK LOANS
AND BORROWINGS
Principal
Interest
FLOATING RATE
BANK LOANS
AND BORROWINGS
Principal
Interest
LEASE LIABILITIES
2,872
211
3,083
6,859
1,476
8,335
1,032
121
1,153
3,310
548
3,858
1,340
76
1,416
1,100
353
1,453
500
14
514
597
308
905
–
–
–
788
204
992
–
–
–
1,064
63
1,127
–
–
–
–
–
–
Lease liabilities
868
98
107
101
92
87
383
TRADE AND OTHER RECEIVABLES
Customer A
Customer B
Customer C
Customer D
Customer E
Other
TOTAL
Outstanding balance at 31 December
149
24
19
18
13
245
468
163
160
47
38
34
404
846
93
90
86
65
46
384
764
Management of the Group
believes that the credit risk
associated with cash and cash
equivalents and trade and other
receivables is at an acceptable
level due to the high credit rating
of the banks where these cash
and cash equivalents are placed,
as well as the implementation
of measures to manage the credit
risk associated with counterparties
the Group interacts with.
At 31 December 2023, the Group does
not expect a significant increase
in expected credit losses on trade
and other receivables and other
financial assets.
The Group is not economically
dependent on a limited number
of customers because the majority
of its products are metals traded
on the global commodity markets.
Information on sales to the Group’s
customers is presented below:
For the year ended 31 December
2021
For the year ended 31 December
2022
For the year ended 31 December
2023
Revenue
USD million
3,431
6,169
9,600
8,252
17,852
%
19
35
54
46
100
Revenue
USD million
1,950
5,861
7,811
9,065
16,876
%
12
35
47
53
Revenue
USD million
1,292
4,904
6,196
8,213
100
14,409
%
9
34
43
57
100
Largest customer
Next 9 largest customers
Total 10 largest customers
Remaining customers
TOTAL
The following table provides
information about the exposure
to credit risk for financial assets:
Cash and cash equivalents
Loans and other long-term receivables
Trade and other receivables (excluding
trade receivables measured
Bank deposits not included in cash
and cash equivalents
Note
20
19
2021
59
220
46
2022
100
283
11
At 31 December
2023
46
264
11
Liquidity risk
Liquidity risk is the risk that the Group
will not be able to settle all liabilities
as they fall due.
The Group’s centralised treasury
regularly monitors forecast
and actual cash flows and analyses
the repayment schedules to take
timely and appropriate measures
in order to minimise potential
adverse effects, including through
liquidity management and proactive
loan portfolio management aimed
at minimising the amount of short-term
debt and maintaining the weighted
average term of the loan portfolio
at an acceptable level.
Current liquidity management involves
detailed budgeting procedures,
as well as analysis and structuring
of a daily payment position
for a 30-day period. The payment
position is calculated separately
for each currency and bank account.
In addition to the continuous analysis
of the payment position, at least three
288
289
Annual Report 2023NornickelAdditional Information At 31 December 2023
Total
Due in the
first year
Due in the
second year
Due in the
third year
Due in the
fourth year
Due in the
fifth year
Due
thereafter
CROSS-CURRENCY
INTEREST RATE SWAP
Payable
Receivable
364
(271)
93
364
(271)
93
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
TOTAL
12,379
5,202
2,976
1,520
1,084
1,214
383
At 31 December 2022
Total
Due in the
first year
Due in the
second year
Due in the
third year
Due in the fourth year
Due in the
fifth year
Due
there- after
FIXED RATE BANK
LOANS AND
BORROWINGS
Principal
Interest
FLOATING RATE
BANK LOANS
AND BORROWINGS
Principal
Interest
LEASE LIABILITIES
4,022
387
4,409
1,000
155
1,155
7,488
480
7,968
3,303
240
3,543
1,105
134
1,239
2,084
147
2,231
1,417
84
1,501
1,675
80
1,755
500
14
514
414
13
427
–
–
–
7
–
7
–
–
–
5
–
5
Lease liabilities
522
63
54
34
23
21
327
CROSS-CURRENCY
INTEREST RATE SWAP
Payable
Receivable
375
(368)
7
11
(23)
(12)
TOTAL
12,906
4,749
364
(345)
19
3,543
–
–
–
3,290
–
–
–
964
–
–
–
28
–
–
–
332
At 31 December 2021
Total
Due in the
first year
Due in the
second year
Due in the
third year
Due in the
fourth year
Due in the
fifth year
Due
there- after
FIXED RATE BANK LOANS
AND BORROWINGS
Principal
Interest
FLOATING RATE
BANK LOANS
AND BORROWINGS
4,591
407
4,998
1,504
193
1,697
1,000
97
1,097
1,087
76
1,163
500
27
527
500
14
514
–
–
–
Principal
5,676
107
2,166
2,100
614
676
13
1 2 3 4 5 6 7
At 31 December 2021
Interest
LEASE LIABILITIES
Total
221
5,897
–
13
68
–
–
–
81
Due in the
first year
Due in the
second year
Due in the
third year
Due in the
fourth year
Due in the
fifth year
Due
there- after
88
195
71
2,237
40
2,140
14
628
8
684
Lease liabilities
279
65
50
45
31
20
CROSS-CURRENCY
INTEREST RATE SWAP
Payable
Receivable
TOTAL
426
(409)
17
11,191
12
(24)
(12)
12
(24)
(12)
402
(361)
41
–
–
–
–
–
–
1,945
3,372
3,389
1,186
1,218
Reconciliation of changes in liabilities and cash flows from financing activities:
Loans
and borrowings
Lease
liabilities
Balance at 1 January 2021
Proceeds from loans and borrowings
Repayments of loans and borrowings
Payments of lease liabilities
Proceeds on exchange of flows under cross-currency interest rate swaps
Changes from financing cash flows
Other non-cash changes:
Recognition of lease liabilities
Changes in fair value of the cross-currency interest rate swap
Effect of changes in foreign exchange rates
Borrowing costs and amortisation of loans at effective interest rate
BALANCE AT 31 DECEMBER 2021
Proceeds from loans and borrowings
Repayments of loans and borrowings
Payments of lease liabilities
Payments on exchange of flows under cross-currency interest rate swaps
Changes from financing cash flows
Other non-cash changes:
Recognition of lease liabilities
Changes in fair value of the cross-currency interest rate swap
Effect of changes in foreign exchange rates
Сhanges arising from disposal of subsidiaries
Borrowing costs and amortisation of loans at effective interest rate
Other
BALANCE AT 31 DECEMBER 2022
Proceeds from loans and borrowings
Repayments of loans and borrowings
Payments of lease liabilities
9,634
1,000
(415)
–
–
585
–
–
(4)
11
10,226
9,104
(7,775)
–
–
1,329
–
–
153
–
(224)
–
11,484
5,569
(6,642)
–
262
–
–
(55)
–
(55)
37
–
(9)
–
235
–
–
(50)
–
(50)
169
–
(17)
(96)
–
(8)
233
–
–
(45)
Total
Derivatives
financial
instruments
(liabilities)
136
10,032
–
–
–
4
4
–
(68)
–
–
72
–
–
–
(19)
(19)
–
18
(4)
–
–
–
67
–
–
–
1,000
(415)
(55)
4
534
37
(68)
(13)
11
10,533
9,104
(7,775)
(50)
(19)
1,260
169
18
132
(96)
(224)
(8)
11,784
5,569
(6,642)
(45)
290
291
Annual Report 2023NornickelAdditional Information 1 2 3 4 5 6 7
At 31 December 2020 other
current liabilities measured at fair
value through profit or loss
included a liability on the execution
of a put option held by owners of 13.3%
non-controlling interest in the share
capital in LLC “GRK “Bystrinskoye”
in the amount of USD428 million.
Since the non-controllling interest
owners did not exercise their
right under the put option before
its expiry date of 31 December 2021,
the Group derecognised the liability
on the execution of the put option
as at 31 December 2021. The Group
presented derecognition of the liability
directly in the consolidated statement
of changes in equity as Other
effects related to transactions
with non-controlling interest owners
in the amount of USD490 million,
which was its fair value
at 31 December 2021 immediately
before derecognition. The fair
value of the liability at all applicable
dates was determined based
on the discounted cash flows
of LLC “GRK “Bystrinskoye” less its net
debt taking into account the amount
of working capital at the reporting
date and with the relevant discount
reflecting the non-controlling
ownership interest. The fair value
estimate is within Level 3 of fair
value hierarchy. The most significant
estimates and assumptions used
in determination of the fair value were
as follows:
• Future cash flows were forecast
up to 2044 based on budgeted
amounts, taking into account
actual results for the previous
years as well as capital expenditure
budgets;
• Prices for metal concentrates
and iron ore were estimated
by the Group’s management using
consensus forecasts for commodity
prices;
• Metals concentrate (copper and iron
ore concentrate) production
and sales forecast was based
on production reports available
at the reporting date and the life
of mine plan taking into account
the current production capacity
and current estimates of metal
content in ore reserves;
• The inflation and exchange rate
forecasts were based on Oxford
Economics data consistent
with a consensus forecast
of investment banks. Forecast
for exchange rate was made based
on expected RUB and USD inflation
indices;
• An after-tax nominal RUB discount
rate of 13.9% at 31 December
2021 was estimated by reference
to the weighted average cost
of capital and the management’s
estimates of the risks specific
to the asset.
Change in the fair value of the liability
on the execution of the put option
for 2021 till the date of derecognition
amounted to USD66 million
included in the finance costs
of the consolidated income statement.
Proceeds on exchange of flows under cross-currency interest rate swaps
Changes from financing cash flows
Other non-cash changes:
Recognition of lease liabilities
Changes in fair value of the cross-currency interest rate swap
Effect of changes in foreign exchange rates
Borrowing costs and amortisation of loans at effective interest rate
BALANCE AT 31 DECEMBER 2023
Loans
and borrowings
Lease
liabilities
Derivatives
financial
instruments
(liabilities)
–
(1,073)
–
–
(705)
6
9,712
–
(45)
417
–
(85)
–
520
8
8
–
60
(19)
–
116
Total
8
(1,110)
417
60
(809)
6
10,348
Interest payable on loans and borrowings and lease liabilities (Notes 24 and 25) arising from financing activities is short-term
and is paid within 12 months from the date of accrual.
35. Fair value of financial
instruments
Financial instruments that
are measured at fair value subsequent
to initial recognition, are grouped
into Levels 1 to 3 of fair value hierarchy
based on the degree to which their fair
value is observable as follows:
• Level 1 fair value measurements
are those derived from quoted
prices (unadjusted) in active markets
for identical assets or liabilities;
• Level 2 fair value measurements
are those derived from inputs
other than quoted prices included
within Level 1 that are observable
for the assets or liabilities, either
directly or indirectly; and
• Level 3 fair value measurements
are those derived from valuation
techniques that include inputs
for the assets or liabilities that
are not based on observable market
data.
The fair value of financial liabilities
is determined as follows:
• the fair value of fixed and floating
cash flows, discounted at the best
management estimate of market
interest rates.
rate corporate bonds (Level 1 of fair
value hierarchy) was determined
as their market price at the reporting
dates;
• the fair value of loans
and borrowings and fixed rate
corporate bonds (Level 2 of fair value
hierarchy) at 31 December 2023,
2022 and 2021 was determined
as the present value of future
cash flows (principal and interest),
discounted at the market interest
rates, which are determined
as of the reporting date based
on the currency of a loan or a bond,
its expected maturity and credit risks
attributable to the Group;
• the fair value of trade and other
long-term payables (Level
3) at 31 December 2023,
2022 and 2021 was determined
as the present value of future
The management believes that
the carrying value of financial
instruments such as cash and cash
equivalents (Note 20), other
financial assets, trade and other
receivables except for trade and other
receivables at fair value through
profit or loss (Note 19) and current
accounts payable (Note 28) either
approximates to their fair value
or may not significantly differ from it.
The fair value of trade and other
receivables at fair value through profit
or loss, as well as the level of the fair
value hierarchy and the method
of measuring are disclosed in Note 19.
The information below presents
financial instruments not measured
at fair value, including loans
and borrowings (Note 24), trade
and other long-term payables (Note
28).
At 31 December 2021
At 31 December 2022
At 31 December 2023
Carrying value
Fair value
Carrying value
Fair value
Carrying value
Fair value
Fixed and floating rate bonds
(Level 1)
Floating rate loans and
borrowings (Level 2)
Fixed rate bonds (Level 2)
Fixed rate loans (Level 2)
Trade and other long-term
payables (Level 2)
TOTAL
4,574
5,648
–
4
55
10,281
4,639
5,439
–
4
55
10,137
4,156
6,766
562
–
56
3,323
6,535
562
–
56
11,540
10,476
3,668
5,480
561
3
51
9,763
3,155
5,183
557
3
50
8,948
292
293
Annual Report 2023NornickelAdditional Information Glossary
Anode. Crude metal (nickel or copper)
obtained from anode smelting and fed
for electrolytic refining (electrolysis)
whereby it is dissolved.
Cake. Solid residue from filtering pulp
during leaching of ores, concentrates
or metallurgical intermediates, and
purification of processing solutions.
Refinement. The process of extracting
high purity precious metals through
their separation and removal
of impurities.
Rich ores. Ores with high sulphide
content (over 70%) and the following
metal grades: 2–5% for nickel, 2–25%
for copper, and 5–100 g/t for platinum
group metals.
Probable ore reserves. Estimated
based on the economically mineable
part of indicated and, in some
circumstances, measured mineral
resources, including possible dilution
and losses during mining operations.
Disseminated ores. Ores containing
5% to 30% sulphides, with
the following metal grades: 0.2–1.5%
for nickel, 0.3–2% for copper, and 2–10
g/t for platinum group metals.
Leaching. Selective dissolution
of one or several components
of the processed solid material
in organic solvents or water solutions
of inorganic substances. Kinds
of leaching: acid leaching (leaching
with acids as reagents), chlorine
leaching.
Proven ore reserves. Estimated
based on the economically mineable
part of measured mineral resources,
including possible dilution and losses
during mining operations.
Metal extraction. The ratio between
the quantity of a component
extracted from the source material
and its quantity in the source material
(as a percentage or a fraction).
Cathode. Pure metal (nickel or copper)
obtained as a result of electrolytic
refining of anodes.
Conversion. Oxidation process to turn
matte into converter matte (in smelting
copper-nickel concentrates)
or blister copper (in smelting copper
concentrates) and remove slag
(carbon, sulphur, iron and other
impurities).
Concentrate. A product of ore
concentration with a high grade
of the extracted mineral, which gives
its name to the concentrate (copper,
nickel, etc.).
Cuprous ores. Ores containing 20%
to 70% sulphides, with the following
metal grades: 0.2–2.5% for nickel,
1.0–15.0% for copper, 5–50 g/t
for platinum group metals.
Roasting. Heating ore to high
temperatures to trigger chemical
changes that enable subsequent metal
recovery processes.
Concentration. Artificial improvement
of metallurgical feedstock mineral
grades by removal of a major
portion of waste rock not containing
any valuable minerals.
Oxide. A compound of a chemical
element with oxygen.
Tailings pit. A complex of hydraulic
structures used to receive and store
mineral waste / tailings.
Vanyukov furnace. An autogenous
smelter for processing concentrates,
where smelting is performed in a bath
of slag and matte, with intensive
injection of air-oxygen mixture.
The heat from oxidation reactions
is actively used in the process.
mixed with a gaseous oxidiser (air,
oxygen), which holds melted metal
particles suspended. The heat from
oxidation reactions is actively used
in the process.
Pyrrhotite concentrate. By-product
of copper-nickel ore concentration.
Smelting. Pyrometallurgical
process carried out at temperatures
that ensure complete melting
of the processed material.
Sublevel caving. An underground
mining method in which ore blocks
are developed from top to bottom
via sublevels, and ore is extracted
by blasting or causing sublevels
to cave in. The voids formed after
extraction get filled with fractured
rock.
Pulp. A mixture of finely ground rock
with water or a water solution.
Ore. Natural minerals containing
metals or their compounds
in economically valuable amounts and
forms.
Mine. A mining location for extraction
of ores.
Thickening. Separation of liquid
(water) and solid particles in dispersion
systems (pulp, suspension, colloid)
based on natural gravity settling
of solid particles in settlers and
thickeners, or centrifugal settling
of solid particles in hydrocyclones.
Metal grade. The ratio between
the weight of metal in the dry material
and the total dry weight of the material
expressed as a percentage
or grammes per tonne (g/t).
Sulphides. Compounds of metals and
sulphur.
Flash smelter. An autogenous
smelter for processing dry
concentrates, where the smelted
substance is finely ground feedstock
Drying. Removal of moisture from
concentrates performed in designated
drying furnaces (to a moisture level
below 9%).
LENGTH
1 lb
1 g
.4535924 kg
.03215075 oz t
Currency exchange rates
in 2021–2023
Index
2021
2022
2023
Average
rate Russian
Rouble / US
Dollar
Average
effective
rate Russian
Rouble /
US Dollar
(for CAPEX)
73.65
68.55
85.25
73.42
66.96
84.86
1 2 3 4 5 6 7
Tolling agreement. An agreement
to process feedstock with subsequent
shipping of finished product.
The feedstock and end product
are exempt from customs duties.
Converter matte. A metallurgical
intermediate produced as a result
of matte conversion. Depending
on the chemical composition,
the following types of converter matte
are distinguished: copper, nickel and
copper-nickel.
Filtration. The process of reducing
the moisture level of the pulp
by forcing it through a porous medium.
Flotation. A concentration process
where specific mineral particles
suspended within the pulp attach
to air bubbles. Poorly wettable mineral
particles attach to the air bubbles and
rise through the suspension to the top
of the pulp, producing foam, while
well wettable mineral particles do
not attach to the bubbles and remain
in the pulp. This is how the minerals
are separated.
Tailings. Waste materials left over
after concentration processes and
containing mostly waste rock with
a minor amount of valuable minerals.
Ore mixture. A mixture of materials
in certain proportions needed
to achieve the required chemical
composition of the end product.
Slag. Melted or solid substance with
a varying composition that covers
the surface of a liquid product during
metallurgical processes (resulting
from ore mixture melting, melted
intermediate processing and metal
refining) and includes waste rock,
fluxes, fuel ash, metal sulphides and
oxides, and products of interaction
between the processed materials and
lining of melting units.
Sludge. Powder product containing
precious metals settling during
electrolysis of copper and other
metals.
Matte. Intermediate product
in the form of an alloy of sulphides
of iron and non-ferrous metals with
a varying chemical composition. Matte
is the main product accumulating
precious metals and metal impurities
the feedstock contains.
Electrolysis. A series
of electrochemical reduction-oxidation
reactions at electrodes immersed
in an electrolyte as a result of passing
of an electric current from an external
source.
Electrowinning. Electrodeposition
of metal from ores that have been
put in solution. Ore or concentrate
is leached with agents that dissolve
metal-containing minerals or the entire
material, so that the metal is deposited
on the cathode. The electrolyte
is typically reused in the process.
The end product is high-purity metal
cathode.
Measurement units
LENGTH
1 km
1 m
1 cm
1 mi
1 foot
1 in
AREA
1 sq m
1 sq km
1 ha
1 sq ft
1 sq m
1 acre
WEIGHT
1 kg
1 metric
tonne
1 short
tonne
1 troy ounce
.6214 mi
3.2808 ft
.3937 in
1.609344 km
.3048 m
2.54 cm
10.7639 sq ft
.3861 sq mi
2.4710 acres
.09290304 sq m
2.589988 sq km
.4046873 ha
2.2046 lb
1,000 kg
907.18 kg
31.1035 g
294
295
Annual Report 2023NornickelAdditional Information Contacts
MMC Norilsk Nickel
Corporate Trust Line
Investor relations and ESG issues
For shareholders
Public relations
15 1st Krasnogvardeysky Drive, Moscow,
123100, Russia
Phone: +7 495 787 7667
E-mail: gmk@nornik.ru
Website: https://nornickel.com
Mailing address: Corporate Trust
Line of MMC Norilsk Nickel, 15 1st
Krasnogvardeysky Drive, Moscow, 123112,
Russia
Phone: 8 800 700 1941 (45)
E-mail: skd@nornik.ru
Vladimir Zhukov
Vice President, Investor Relations
and Sustainable Development
Mikhail Borovikov
Head of Investor Relations
Oksana Kuznetsova
Head of the Share Capital
Division
Andrey Chuprasov
Head of the Corporate
Communications Department
Phone: +7 495 786 8320
E-mail: ir@nornik.ru
E-mail: ESG@nornik.ru
Phone: +7 495 797 8244
E-mail: gmk@nornik.ru
Phone: +7 495 785 5800
E-mail: pr@nornik.ru
Company’s share registrar
IRC – R.O.S.T.
ADR depositary
BNY Mellon
Raiffeisenbank
Auditor
Kept
Head office: 18 Stromynka Street, Building
5B, Moscow, 107076, Russia
Phone: +7 495 989 7650
E-mail: info@rrost.ru
Website: www.rrost.ru
240 Greenwich Street, 22nd Floor West,
New York, NY 10286, USA
Phone: +1 212 815 4158
Website: www.bnymellon.com
28 Smolenskaya-Sennaya Square, Moscow,
119002, Russia
Phone: +7 495 721 9900
10 Presnenskaya Embankment,
Naberezhnaya Tower complex, Block C,
Moscow, 123112, Russia
Phone: +7 495 937 4477
E-mail: moscow@kept.ru
Website: www.kept.ru/en/
1 2 3 4 5 6 7
Disclaimer
The information herein relies
on the data available to MMC Norilsk
Nickel as at the date of this Annual
Report. After this Annual Report
was prepared, the Company’s
operations as well as forecasts and
overview of the current situation
contained herein may have been
affected by external or other
factors, including the escalation
of the geopolitical conflict in Ukraine,
sanctions imposed by the United
States of America, the European
Union, the United Kingdom, and
other nations against the Russian
Federation, Russian individuals and
legal entities, Russian Federation’s
response to sanctions, economic and
other measures introduced to maintain
the economic and financial stability
of the Russian Federation, and other
factors beyond the Company’s
control. In particular, the United
States of America, the European
Union, the United Kingdom, and other
nations have imposed export controls
against the Russian Federation that
restrict, among other things, supply
of industrial equipment to the Russian
Federation. These export controls
may have a negative impact
on the manufacturing capabilities
of MMC Norilsk Nickel should
it be unable to purchase and deliver
equipment to the Russian Federation.
The Annual Report discloses
the Company’s short-, medium-,
and long-term goals and plans.
All plans and intentions outlined
in this Annual Report are provisional
and subject, among other things,
to a number of economic, political,
and legal factors, including the factors
mentioned above, beyond Company’s
control. Forward-looking statements
are subject to risks and uncertainties
as they refer to events and depend
on circumstances that may or may
not occur in the future. Forward-
looking statements are not guarantees
of the Company’s future operational
and financial performance, and
actual results of the Company’s
operations, its financial position,
liquidity, prospects, growth, strategy,
and the development of the industry
in which MMC Norilsk Nickel operates
may differ materially from those
expressed or implied by the forward-
looking statements contained
in this Annual Report. MMC Norilsk
Nickel hereby disclaims any liability
for any loss resulting from the use
of this Annual Report and assumes
no obligation to update any forward-
looking statements contained herein.
Information about market
share and other statements
regarding the industry in which
MMC Norilsk Nickel operates,
as well as the Company’s position
relative to its competitors
are based on publicly available
information published by other
metals and mining companies
or obtained from trade and business
organisations and associations.
Such data and statements have
not been independently verified,
and the financial and operational
performance metrics of MMC Norilsk
Nickel’s competitors used to assess
and compare positions may have been
calculated differently from the method
used by MMC Norilsk Nickel.
This Annual Report is not part
of a securities advertisement, an offer
or invitation to sell, issue, or offer
the right to sell or subscribe for MMC
Norilsk Nickel shares and other
securities.
In line with global best practices,
the Annual Report is also prepared
in the XBRL format. Considering
that report disclosures in this
format are voluntary, the Company
does not assume any obligation
to comply with any legal requirements
for the disclosure of its statements
in this format.
Any and all logos and trademarks used
in this Annual Report are the property
of their immediate owners, and use
thereof in this Annual Report should
not be construed as a promotion
or advertisement for those owners’
goods or services.
296
297
Annual Report 2023NornickelAdditional Information