2021 sustainability report

Research and
development,
digital technologies

Research and development

R&D and innovations are necessary to achieve Nornickel’s strategic priorities of increasing output, improving efficiency, and reducing the negative impact on the environment.

The Company’s innovative development is driven by Gipronickel Institute and Nornickel Digital Lab both forming part of the Group.

Gipronickel Institute is the main research and design platform of Norilsk Nickel Group. It is one of Russia’s largest research and design centres for mining, metallurgy, concentration, and processing of minerals. The institute studies samples of ore deposits and rocks, as well as valuable non-ferrous feedstock, such as nickel, cobalt, copper, aluminium, tin, tungsten, molybdenum, mercury, sulphur, etc. A significant part of the work carried out by the Institute is focused in some way or other on addressing environmental issues.

Since 2013, Nornickel has had an R&D Panel working to improve the quality of the scientific and technical solutions.

The Company also engages Russian and foreign R&D and engineering companies, and collaborates with numerous national universities to carry out its projects.

In 2021, most of research, development and technical and economic studies were aimed at adjusting the Company’s strategic development, developing production, technical and economic solutions for mining and processing facilities, assessing the environmental impact of projects and developing environmentally friendly solutions. The main strategic priorities are drastic improvements in environmental protection and occupational safety, development and implementation of upgrading projects for existing production operations and construction of new production operations in order to increase production volumes and supplies of key metals to the global market, as well as preserving the Company’s financial stability during the transition of major investment projects into an active phase.

241.4
RUB mln total funding for R&D and feasibility studies

Key innovative projects

Nornickel’s mining operations are among the most innovative ones in the industry. The Company regularly rehabilitates and upgrades its mine hoisting units, increasing their reliability and performance efficiency, and ensuring a high degree of automation. Given a significant increase in the volume of mine workings, monitoring systems are introduced for mine ventilation networks and ore quality control at the outlet of each mining operation.

Comprehensive development projects for all mines provide for the introduction and use of battery-operated and autonomous self-propelled machinery for drilling, loading and delivery of ore, emulsion explosives, and other technical solutions to improve the efficiency and the environmental and industrial safety of mining operations.

Adoption of state-of-the-at technologies in metallurgy

To address the environmental problems in the Norilsk Industrial District by eliminating the existing converter operations at Polar Division’s Copper Plant, we initiated the construction of a continuous converting facility consisting of two sequentially operating units. The continuous converting technology will solve the main environmental problems of copper production by transferring the sulphur content of the feedstock into a continuous stream of highly concentrated gases ready for disposal as contemplated by the new converting process*.

In 2021, the copper production operation was discontinued in Monchegorsk to cut sulphur dioxide emissions. In 2022–2024, copper will only be produced by Polar Division. Kola MMC is planning to launch copper production in 2025 based on the roast-leachelectrowin technology. This technology is designed to process sulphide copper concentrates from flotation-based matte separation by using a modern and environmentally friendly technology, with the output to total 150 kt of marketable-quality copper cathodes.

The roast-leach-electrowin technology will reduce the cost of finished products by cutting operating costs, losses, and turnover, ensure that regulatory environmental requirements are met through obtaining a flow of SO2- containing gases, which flow is constant in terms of composition, and their capturing, and increase direct copper extraction for marketable products*.

Vertical of Innovation projects

In 2021, Nornickel created the Vertical of Innovation, with the Digital Lab projects switching to it. Since its establishment, over 400 ideas have been collected at production operations. All the ideas were subjected to an expert review to select the most cost-effective projects focusing on the environment and industrial safety. The potential effect of the initiatives that have already been implemented exceeds RUB 800 mln.

For example, a hardware-software system prototype was created by the converter matte discharge section. The system uses video analytics to determine the presence of personnel in a hazardous zone and send a beam with a warning sign onto the floor. Also, Hovermap helped develop smart mobile scanning to guide people out of hazardous zones.

The Vertical of Innovation actively supports environmental projects (30% of all initiatives in the portfolio), including:

  • digital monitoring of the quality of effluents discharged for compliance with the statutory water use requirements, with reference to the development of a system for the collection, analysis, and visualisation of information from the “Automatic Laboratories”;
  • setting up an electronic record keeping system for the results of industrial environmental control across all areas of the negative impact on the environment with automated generation of reports, declarations, etc.;
  • monitoring of waste disposal sites using a quadcopter, including to prevent the risks of unauthorised waste disposal.

Together with the Southwest State University, the Company is developing industrial exoskeletons* to reduce the physical load on people involved in metallurgical operations. In 2021, the Company was making arrangements for producing a pilot batch of heavy industrial exoskeletons. They were tested by Norilsk Division’s production sites, with special training courses organised at Norilsk Nickel Corporate University and the needs and costs of large-scale production assessed and estimated*.

The state standard for industrial exoskeletons is scheduled for publishing in the first half of 2022. The Digital Lab experts help draft testing standards and regulations for the development, production, and pilot operation of exoskeletons as part of Rosstandart’s Technical Committee on Personal Protective Equipment.

Application of robotisation solutions

2021 saw the active development of Norilsk Nickel’s Robotisation Service continue. By late 2021, robots built on the basis of the RPA platform helped the Company save more than 23,000 mandays by performing more than 920,000 operations for employees.

Thanks to the cumulative effect of the robots that are already in operation and the increased development of new solutions in 2021, the number of man-hours saved by using robots quadrupled y-o-y.

The Company’s demand for RPA solutions is growing every year, with the service developing more than 110 initiatives at the moment.

Digital technology

The development of digital technologies is one of Nornickel’s most important tools for improving production safety and efficiency, ensuring decarbonisation, and gaining other competitive advantages. The company strives to obtain leadership and unique competencies in the field.

In 2021, the Company adopted a new IT development strategy, with a new business unit to be set up, which will not merely perform IT transformation functions, but will act as an equal business partner and tech leader.

This functional area will be responsible for:

  • supporting the Company’s strategic goals;
  • facilitating and coordinating the process for making digital business decisions;
  • implementing and developing jointly made decisions;
  • creating unique expertise and staff for breakthrough technologies;
  • training and involving all employees of the Group in the transformation process.

Nornickel’s IT Development Strategy is aimed at improving such performance indicators as reliability and accessibility, speed and flexibility, efficiency and technological leadership.

Technological Breakthrough 2.0

In terms of practical application of digital technologies, the Company is actively working in several areas. Since 2020, the Company has been implementing the Technological Breakthrough 2.0 project pipeline which aims to transition to safe, environmentally friendly, and efficient digital production based on innovations, big data analytics, and unmanned mining technologies.

Technological breakthrough 2.0 affects the entire production chain of the Company. In 2021, we identified 15 priority areas which include more than 70 initiatives.

In 2021, Nornickel became Russia’s first company to put unmanned mining dump trucks into commercial operation at the Skalisty mine. The project based on Sandvik AutoMine, an underground automation technology, won Global CIO’s Project of the Year Award in the Metallurgy and Continuous Production category.

Priority areas of Technology Breakthrough 2.0

Contribution to UN Sustainable Development Goals (SDGs)
Benefits from previously created tools
Autonomous mine
Key new tools

Contribution to UN Sustainable Development Goals (SDGs)

  • Monitoring and control of environmental risks
  • Control over occupational health, safety, and environmental protection
  • Implementation of projects aimed at achieving the SDGs through 2030

Contribution to UN Sustainable Development Goals (SDGs)

  • Monitoring the implementation and application of the tools provided by the preceding Technological Breakthrough 1.0 programme in mining operations
  • Rollout of effective products and solutions (Metal Balance, dispatching control, simulation modelling system, etc.)
  • Implementation of new effective digital tools

Autonomous mine

  • Increasing production efficiency through unmanned technologies
  • Increasing production safety by removing people from hazardous areas

Key new tools

  • Technical monitoring of all energy resources consumption and energy efficiency
  • Control of concentration and metallurgical processes by using “advisors”
  • Autonomous and remotely controlled mine machinery
  • Simulation modelling of all process stages, risk management using the ebitda@risk model
  • Digital mine surveying

IT infrastructure and automation of management processes

Nornickel uses a host of digital systems that are regularly updated. To reduce the Company’s environmental footprint, the corporate infrastructure monitoring was supplemented with a capacity management process in 2021, which enabled the effective monitoring and scheduling of the disposal of IT infrastructure resources.

To increase the speed and flexibility of infrastructure provision for achieving the Company’s objectives, the design of a corporate cloud platform was completed in 2021. The platform was made as userfriendly as possible. It will simplify the ordering model for cloud services and streamline the approval process.

Understanding the growth prospects for business needs and the external risks, the Company continues to implement a programme for the provision of capacity reserves in data processing centres (DPCs) and server rooms. The reserves will cover development plans and provide a buffer for urgent business needs that arise in response to rapidly changing environment.

The SAP ERP-based resource management platform continues to play a leading role in organising Nornickel’s business processes. In 2021, nine support companies joined it. In the future, that system will also be replicated at the Company’s foreign assets, finally closeing the management loop for the global supply chain and ensuring that the entire chain can be traced from the production assets to the end consumer.

In 2021, the Company’s Head Office and Kola MMC launched a risk management and internal control system based on the SAP GRC platform. The system aims to ensure the effective functioning of the risk management processes and the internal control system through the automation of information collection, consolidation, and processing.

In 2021, we also launched an internal audit management system based on the SAP Audit Management platform, which will help standardise the processes used by the Group’s internal audit functions and increase the maturity level of the internal audit processes across the Company, as well as create a shared information environment.

Nornickel Booking project

In 2021, we automated the selection process for travel services in accordance with the Company’s rates for administrative and business expenses and travel policies. Thanks to the automation, the average cost of business trips is expected to drop by about 23%.

Training young AI professionals

Nornickel is actively implementing a data-driven approach to management in its technological and management processes. The Company jointly with the MIPT centre for educational programmes launched a master’s programme, “AI Transformation in Industry”, which was developed with the participation of the metallurgical concern’s best experts.

ПThis is unique programme, as it was created directly for the needs of the mining company. Students will undergo multi-disciplinary training in mathematics, programming, and IT. The masters will also have sufficient practical work experience through constant application of their knowledge in addressing the Company’s current business needs.

Data Lake and artificial intelligence

In 2021, Nornickel completed a Data Lake prototype based on the machine learning and artificial intelligence technologies. This digital platform is designed to tackle a wide range of production and non-production tasks, with the time to market significantly reduced. In 2021, the information systems of several production sites were integrated into the Data Lake, with work commencing to integrate the process solution of the artificial intelligence platform which will be used to prototype and pilot a number of process optimisation scenarios.

In 2021, we also continued the development and testing of a number of optimisation systems for concentration processes at Talnakh Concentrator based on the machine learning technology. The algorithms provide realtime recommendations for ore grinding and flotation to increase the metal recovery in concentrate.

The concentration process optimisation algorithm was also successfully tested at one of Bystrinsky GOK’s flotation sections. Talnakh Concentrator uses computer vision for real-time monitoring of ore sizes on several conveyors upstream of the semi-autogenous grinding mill. This system is essential for optimum grinding control.

Digitalisation in regions of operation

GRI 203-2

Communication systems development

The Company adopted a development plan for communication systems seeking to provide ubiquitous access to Nornickel’s services and information systems, improve personnel mobility, and meet information security requirements. A large-scale programme for service networks development at production sites and mines which is being rolled out through 2025 will create a basic infrastructure for the implementation of Nornickel’s industrial facility development plans.

In 2021, the following steps were taken by the Company to ensure high-quality digital communication:

  • The upgrade of the corporate network of regional segments was completed
  • Internet traffic filtering stations were built
  • A basic standardised Wi-Fi infrastructure was built in the most popular office areas
  • The design of a corporate telephone network spanning the entire Group was completed
  • In cooperation with MTS, work was carried out to improve LTE quality at the Company’s transportation and logistics infrastructure facilities, which will enable the implementation of automation systems for warehouse operations in 2022 by using SAPbased mobile terminals.

In 2021, the implementation of the Fibre Optic Communication Line (FOCL) Construction Project in Norilsk continued, providing for the construction of a more than 956 km fibre optic communication line from Novy Urengoy to Norilsk.

The project aims to provide the Company’s production operations with high-speed communication as well as to improve the quality of life in the Norilsk Industrial District by the creation of conditions for providing broadband Internet access, enhancing the quality of services, expanding the range of communication services provided, and raising the quality of public services provided as part of the existing government initiatives. The implementation of the project also forms a foundation for the further development of infrastructure on the Taimyr Peninsula.

Electronic services for employees and local communities

Nornickel implements digital programmes that are focused on improving not only its own infrastructure, but also on meeting the digital needs of local communities and employees.

2021 saw the launch of a unified software system for Your Home corporate housing programme. Its participants will be able to pay for utilities and make instalment payments online. In addition, the system can be used to register the very fact of housing acquisition, enter into a contract, and collect a package of documents.

The Company is actively promoting the City Online social project which aims to improve the quality of life of people living in small and medium-sized towns in the Far North and the Far East by providing infrastructure and digital services in various areas of life and making habitual services more accessible to remote areas.

The City Online platform is available as a web version and a mobile application in as many as five cities and can be accessed at https://city.online/. More than 145,000 users are registered on the platform. Since its launch, the platform has been visited by more than one million unique users. As at the end of 2021, the web and mobile versions of the platform had 35 and 16 services respectively. The most popular services are GO.Media, Playbill, Broadcasts (web version), Map, and Transport*

In 2021, the City Online launched an infrastructure service to create an air quality monitoring system in Norilsk seeking to improve the urban environment quality and the comfort of people’s lives as well as to reduce the social tension related to the environment.

Any further development of the platform will be focused on maintaining the popular online services and identifying anchor social services and their “extension” into complete products, as well as on the introduction of infrastructure products represented by hardware and software systems.