2021 sustainability report

Development
of local
communities

Key regions of operation

Krasnoyarsk Territory

Area 2,366,800 sq km
Population 2,366,800 people
Mineral resources
Industry
Nornickel’s performance in the Krasnoyarsk Territory

Mineral resources

  • Oil, gas, coal, platinum and PGMs, copper, nickel, cobalt, lead, zinc, bauxite, gold, silver, iron

Industry

  • Non-ferrous metallurgy
  • Mining
  • Solid fuel–based power and hydropower generation

Nornickel’s performance in the Krasnoyarsk Territory

  • Taxes and other payments: RUB 131.4 bn*
  • Headcount: 52,800 employees*
  • Average monthly salary: RUB 138,700
  • Employee-related social expenses: RUB 4.1 bn

Key areas of cooperation with the Krasnoyarsk Territory

Economic
Social
Environmental

Economic

  • Cooperation on major investment projects in the Krasnoyarsk Territory
  • Heat and power supply to the communities and companies of the Norilsk Industrial District
  • Implementation of the Northern Supply Haul programme in the Arctic
  • Development of the tourism cluster as one of the drivers of the economy
  • Promotion of commercial activity of indigenous communities of the North — launching new processing enterprises that support the traditional use of natural resources, and other activities as part of the Comprehensive Support Programme for Indigenous Peoples of the North until 2024
  • Improvement of the existing sports infrastructure and construction of new state-of-the-art facilities in the Krasnoyarsk Territory
  • Development of transport and the telecommunication infrastructure

Social

  • Assistance in containing the spread of COVID-19
  • Improvement of the existing sports infrastructure and construction of new state-of-the-art facilities in the Krasnoyarsk Territory
  • Support for vocational and supplementary education
  • Implementation of the World of New Opportunities programme, supporting and promoting regional public initiatives
  • Construction of modern housing and utilities, city and village improvement initiatives

Environmental

  • Implementation of the Sulphur Programme 2.0 and other initiatives to improve the environmental performance of production capacities
  • Restoration and landscaping of urban territories
  • Rehabilitation of areas affected by environmental incidents
  • Development of Taimyr’s specially protected natural areas
  • Organisation and backing of environmental campaigns

Murmansk Region

Area 144,900 sq km
Population 724,179 people
Mineral resources
Industry
Nornickel’s performance in the Murmansk Region

Mineral resources

  • Apatite, nickel, iron, copper, cobalt, palladium, platinum and PGMs, peat

Industry

  • Mining
  • Metallurgy
  • Fishing

Nornickel’s performance in the Murmansk Region

  • Taxes and other payments: RUB 27.8 bn
  • Headcount: 11,700 employees
  • Average monthly salary: RUB 103,700
  • Employee-related social expenses: RUB 724.8 mln

Key areas of cooperation with the Murmansk Region

Economic
Social
Environmental

Economic

  • Implementation of investment projects and development of production capacities
  • Social and economic development of municipalities that are home to Kola MMC’s operational activities
  • Development of the transport infrastructure in the Arctic
  • Development of a new tourism-driven economy along with the catering and hotel sector

Social

  • Assistance in containing the spread of COVID-19
  • Implementation of the World of New Opportunities programme, supporting and promoting regional public initiatives
  • Development of social entrepreneurship

Environmental

  • Implementation of the Sulphur Programme 2.0 and other initiatives to improve the environmental performance of production capacities
  • Cooperation on environmental protection, preservation of the Kola Peninsula’s natural ecology and landscapes
  • Organisation and backing of environmental campaigns

Trans-Baikal Territory

Area 431,900 sq km
Population 1,042,993 people
Mineral resources
Industry
Nornickel’s performance in the Murmansk Region

Mineral resources

  • Copper, uranium, molybdenum, titanium, gold, tungsten, iron, zinc, silver, lead, coal

Industry

  • Mining
  • Production and distribution of electricity, gas and water
  • Non-ferrous metallurgy
  • Machinery and equipment manufacturing
  • Food production

Nornickel’s performance in the Murmansk Region

  • Taxes and other payments: RUB 3.9 bn
  • Headcount: 2,700 employees
  • Average monthly salary: RUB 130,000
  • Employee-related social expenses: RUB 59.3 mln

Key areas of cooperation with the Trans-Baikal Territory

Economic
Social
Environmental

Economic

  • Bystrinskoye Deposit development
  • Social infrastructure development

Social

  • Assistance in containing the spread of COVID-19
  • Training of mining industry employees
  • Improvement of urban areas
  • World of New Opportunities charitable programme

Environmental

  • Cooperation on environmental protection, preservation of natural ecology and landscapes
  • Organisation and backing of environmental campaigns

The Company’s contribution to the development of local communities

Nornickel is one of the major employers and largest taxpayers in Russia as well as a mainstay of local economies*. On top of that, the Company makes a significant contribution to the social and economic development of local communities by implementing a range of social programmes and initiatives aimed at facilitating their economic growth and infrastructural advancement.

Nornickel has in place an assessment system for social projects that helps set out its social priorities and short-list the most relevant social initiatives and projects that the Company is willing to support.*

The Group’s key areas of operation in Russia include the cities of Norilsk and Monchegorsk, the Taimyrsky Dolgano- Nenetsky Municipal District of the Krasnoyarsk Territory, the Pechengsky Municipal District of the Murmansk Region, the Tazovsky District of the Yamal-Nenets Autonomous Area, and the Gazimuro-Zavodsky District of the Trans-Baikal Territory. Saratov hosts Nornickel’s Shared Services Centre. In the Tver Region, the Company is engaged in the construction of housing for its employees under the dedicated programmes (Our Home and My Home).

GRI 203-2

THE GROUP'S OPERATIONS AS A BACKBONE OF LOCAL ECONOMIES

CONTRIBUTION TO ECONOMIC DEVELOPMENT

  • Budget payments
  • Employment of local population
  • Cooperation development
  • Development of social infrastructure as part of the Group operations (power, transport, food retail)

INFRASTRUCTURE DEVELOPMENT

  • Bridge and road reconstruction
  • Land improvement
  • Housing construction
  • Construction and reconstruction of sports, cultural, entertainment and research facilities
  • Provision of access to high-speed internet connection in Norilsk
  • Improvement of efficiency of utility services (Smart City initiative)

IMPROVING THE LIVING STANDARDS FOR LOCAL COMMUNITIES

  • Regular charitable programmes
  • Promotion of sports and culture
  • Corporate volunteering
  • Vocational training sponsorship
  • Activities of territorial development agencies

Budget payments

Tax and non-tax payments to local, regional and federal budgets, RUB bn*

Budget
2017
2018
2019
2020
2021

Budget

Total tax and non-tax payments,

2018

102.0

2019

120.3

2020

198.3

2021

176.0

2021

287.4

including to

Federal budget

2018

15.8

2019

23.0

2020

37.7

2021

34.2

2021

82.0

Krasnoyarsk Territory consolidated budget

2018

47.8

2019

55.9

2020

104.2

2021

85.1

2021

131.4

Norilsk budget

2018

5.0

2019

5.2

2020

8.0

2021

9.8

2021

14.5

Murmansk Region budget

2018

8.2

2019

10.6

2020

19.9

2021

18.2

2021

27.8

Trans-Baikal Territory budget

2018

0.9

2019

1.2

2020

3.2

2021

2.6

2021

3.9

Employment of local population

GRI 203-2

The Company provides ample job opportunities for local communities across its key regions of operation. To boost employment in Norilsk, MMC Norilsk Nickel and Norilsk Employment Centre signed an agreement aimed at retraining those out of work for the most needed blue-collar jobs.

The target audience of career guidance events are more than 31,000 children and young people under 35 years old. The Company builds partnerships with educational organisations and engages young workers, while also providing robust support for teachers, engineering training and whipping up interest in engineering and blue-collar jobs.

Nornickel also provides financial support to Norilsk’s institutions of secondary and higher vocational education by buying books and specialised equipment for students, contributing to the maintenance works, and thus improving the quality of training. The Company primarily focuses on the training of specialists for the most in-demand jobs.

Unemployment in key communities*

Unemployment rates
2017
2018
2019
2020
2021

Unemployment rates

Norilsk

2017

0.8%

2018

0.7%

2019

0.6%

2020

1.4%

2021

0.3%

Unemployment rates

Taymyrsky Dolgano-Nenetsky Municipal District

2017

1.0%

2018

0.9%

2019

0.8%

2020

1.2%

2021

0.7%

Unemployment rates

Krasnoyarsk Territory

2017

1.0%

2018

0.8%

2019

0.8%

2020

3.5%

2021

0.8%

Unemployment rates

Monchegorsk

2017

2.2%

2018

2.2%

2019

2.2%

2020

2.2%

2021

1.7%

Unemployment rates

Zapolyarny

2017

1.7%

2018

2.1%

2019

2.0%

2020

1.9%

2021

1.6%

Unemployment rates

Nickel

2017

1.9%

2018

2.5%

2019

3.3%

2020

3.0%

2021

2.2%

Unemployment rates

Murmansk Region

2017

1.6%

2018

1.5%

2019

1.7%

2020

2.7%

2021

1.4%

Cooperation development

As part of its social and economic partnership agreements, Nornickel has been cultivating cooperation with the companies across the regions of its operation. Integration of local businesses into the Group’s production chain (mainly through long-term contracts) contributes to the economic development of the regions, particularly by supporting small and medium-sized businesses.

Cooperation development in figures

2019
2020
2021
Indicator
Krasnoyarsk Territory
Murmansk Region
Krasnoyarsk Territory
Murmansk Region
Krasnoyarsk Territory
Murmansk Region

Indicator

Procurement tenders for goods and services held by the Company

2019 Krasnoyarsk Territory

1,863

2019 Murmansk Region

501

2020 Krasnoyarsk Territory

1,905

2020 Murmansk Region

460

2021 Krasnoyarsk Territory

1,985

2021 Murmansk Region

732

Indicator

Locally awarded procurements as a share of tenders held by the Company, %

2019 Krasnoyarsk Territory

59.8

2019 Murmansk Region

41.7

2020 Krasnoyarsk Territory

50

2020 Murmansk Region

39

2021 Krasnoyarsk Territory

35

2021 Murmansk Region

33

Indicator

The Group's spending on local procurements, RUB bn

2019 Krasnoyarsk Territory

15.6

2019 Murmansk Region

1.7

2020 Krasnoyarsk Territory

22.3

2020 Murmansk Region

1.6

2021 Krasnoyarsk Territory

29

2021 Murmansk Region

3.3

including

Indicator

services

2019 Krasnoyarsk Territory

13.1

2019 Murmansk Region

0.3

2020 Krasnoyarsk Territory

18.6

2020 Murmansk Region

0.2

2021 Krasnoyarsk Territory

23.4

2021 Murmansk Region

0.3

Indicator

materials

2019 Krasnoyarsk Territory

1.6

2019 Murmansk Region

1.4

2020 Krasnoyarsk Territory

3.0

2020 Murmansk Region

1.4

2021 Krasnoyarsk Territory

4.8

2021 Murmansk Region

3.0

Indicator

food supplies

2019 Krasnoyarsk Territory

0.9

2019 Murmansk Region

2020 Krasnoyarsk Territory

0.7

2020 Murmansk Region

2021 Krasnoyarsk Territory

0.8

2021 Murmansk Region

Developing local social infrastructure

GRI 203-1

Amid increasing pressure from governments and communities globally, today’s businesses tend to elevate their contribution to supporting singleindustry towns.

In 2021, the Company scaled up its commitment to the development of local communities by implementing a range of social programmes and projects that address current and potential future issues.

The key programmes and projects are implemented jointly with government authorities and are enshrined in relevant agreements.

“At Nornickel, we have long-standing traditions of corporate social responsibility and engaging in social support. So we focus on reinstating and honouring our existing commitments rather than making new ones. Still, our social efforts, their scope and content face rapid changes, and we need to proactively adapt them to today’s challenges. This means our traditions are a solid springboard to build upon.»

Vladimir Potanin,
President of MMC Norilsk Nickel

Krasnoyarsk Territory (Norilsk)

In February 2021, the Company signed a four-party Agreement on Cooperation for Comprehensive Social and Economic Development of Norilsk for the period through 2024 and further through 2035. Apart from Nornickel, the parties to the agreement are the Ministry for the Development of the Russian Far East and Arctic, the Krasnoyarsk Territory, and Norilsk. The document provides for housing renovation, construction and reconstruction of social facilities, modernisation and overhaul of the utilities, transport and engineering infrastructure, creating a comfortable and safe urban environment, and relocation of Norilsk and Dudinka residents to areas with favourable climate conditions.

In pursuance of the agreement, the Russian government approved the Comprehensive Plan of Social and Economic Development of Norilsk, which envisages the drafting and subsequent updating of Norilsk’s development strategy, designing the concept of regional tourism development, as well as the implementation of programmes to support small and medium-sized businesses in Norilsk.

The total investment in Norilsk’s social and economic development through 2035 under the agreement is estimated at RUB 120 bn, with RUB 81.3 to be contributed by Nornickel.

The Company’s funding for the additional measures to spur Norilsk’s social and economic development will be provided on top of its existing regional programmes and commitments. Additional measures that have already started include:

Initiative
Progress in 2021

Initiative

Construction of an innovative children’s education centre for up to 1,100 students in the Central District of Norilsk (estimated project cost: RUB 4 bn)

Progress in 2021

The project concept was developed and approved by the City Planning Council of Norilsk; the terms of reference were agreed with municipal authorities; the contractor bidding process is underway.

Initiative

Construction of the Arctic Museum of Modern Art in the Central District of Norilsk

Progress in 2021

The development of extended terms of reference for a reconstruction project is underway. Design and surveying is in progress. Project cost is estimated at RUB 3 bn.

Initiative

Overhaul of the Polar State University (estimated project cost: RUB 4 bn)

Progress in 2021

Terms of reference for the overhaul were developed and agreed upon; the contractor bidding process was launched for surveying and design work.

Initiative

Construction of the Ice Arena in the Central District of Norilsk (estimated project cost: RUB 6 bn)

Progress in 2021

The concept was developed; terms of reference for the design were prepared; bidding process for selecting the design contractor was launched.

Initiative

Overhaul of buildings, reconstruction of utilities or dismantling of dilapidated buildings

Progress in 2021

Works worth a total of RUB 259.45 mln were completed.

Initiative

Demolition (dismantling) of dilapidated housing stock and the housing stock qualifying as dilapidated in Norilsk

Progress in 2021

The Company and the Norilsk city administration entered into agreements for the demolition of three residential buildings free of charge. Nornickel carried out a competitive bidding process and selected a contractor for the project. The total project cost to be paid by Nornickel will exceed RUB 60 mln.

Initiative

Construction (reconstruction) of two multi-storey residential buildings located in 50th October Anniversary St. in Norilsk.

Progress in 2021

The Company and the Norilsk city administration entered into agreements for the demolition of three residential buildings free of charge. Nornickel will allocate nearly RUB 2 bn to finance the project.

Initiative

Construction (reconstruction) of low- and mid-rise residential buildings in the Central District and the Talnakh Disrtict of Norilsk

Progress in 2021

Terms of reference for the project design were developed and agreed upon with the Norilsk city administration, with development site locations approved.

Initiative

Overhaul of the building at 20 Bohdan Khmelnytsky St. in Norilsk with a view to hosting the Norilsky Social Services Centre

Progress in 2021

A donation of funds agreement for a total amount of RUB 270 mln was signed in line with the Company’s commitment to finance the overhaul of the Norilsky Social Service Centre.

Initiative

Construction of a polyclinic in Norilsk for 1,000 visits per shift

Progress in 2021

A letter of intent to donate real estate was signed between the local government and the Company. Nornickel is expected to invest over RUB 2 bn in the project.

Initiative

Reconstruction of the municipal sewage system

Progress in 2021

The Company and the Norilsk city administration entered into an agreement for the overhaul of three sewers in Norilsk free of charge. Nornickel is expected to invest over RUB 1.2 bn in the project.

Initiative

Construction of a water intake on the Norilskaya River

Progress in 2021

A contract was signed for a total amount of over RUB 456 mln to develop design and cost estimate documents for the construction of a new water intake on the Norilskaya River.

Initiative

Construction of a prefabricated fire station in the Oganer municipal area of Norilsk

Progress in 2021

The construction was completed; the Company’s investment in the project totalled RUB 306 mln.

In 2021, the Company allocated RUB 1,236.7 mln for programmes and projects implemented in partnership with the local authorities, regional and federal government bodies, and public institutions of Norilsk, among other things as part of certain projects run by the Company’s Polar Division, including:

  • landscaping of the Dolgoye Lake area;
  • expanding the existing regular passenger and luggage bus service;
  • provision of free hot meals for the low-income population of Norilsk;
  • renovation of the Arktika Sports Arena with sports equipment procurement;
  • financing summer work teams of school students;
  • organising the preparation and holding of an interagency experimental and research drill for the emergency protection of the Russian Arctic territories;
  • renovating the sports and fitness centre of the Norilsk Production Association for Passenger Transport;
  • refurbishing a non-residential building to accommodate a multifunctional public and municipal service centre and Norilsk City Archives;
  • repairing the fire alarm and warning systems in the buildings of the Norilsk Industrial Engineering and Service College.

In 2021, the Company allocated RUB 245.6 mln towards the projects and programmes implemented jointly with non-profit, public and religious organisations of Norilsk1, and as part of the Secure City initiative. Another RUB 45.6 mln was used to finance the projects and programmes run in partnership with local administrations, regional and federal public institutions operating in Taimyr, and non-profit organisations, as well as to support the development of Tazovsky and Turukhansky districts.

Murmansk Region

In 2021, Nornickel continued the implementation of its cooperation agreement with the government of the Murmansk Region.

As part of the agreement, the Company started the construction of unique sports facility in Monchegorsk — a universal 110.0 x 65.0 m ice arena designed in line with international standards. The ice arena will be used for training and holding competitions at various levels (from municipal to international) in six sports, including bandy, ice hockey, speed skating, short-track speed skating, figure skating, and curling. It will also host large-scale cultural events and exhibitions. The facility construction is expected to be completed by the end of 2024.

In Monchegorsk and the Pechengsky Municipal District, work continued to ensure comprehensive safety and energy savings at kindergartens and schools, an initiative that is critical in the harsh climate conditions of the north. In 2021, the Company committed RUB 15 mln to those efforts.

In addition, Nornickel drafted, agreed upon and embarked on the Social and Economic Development Programme for the Pechengsky Municipal District of the Murmansk Region for 2021–2025. The programme was created on the basis of a concept developed jointly by Nornickel, Kola MMC, the local government and the municipal authorities to facilitate the district’s sustainable development following the closure of Kola MMC’s smelting facilities in the town of Nickel.

It envisages some 50 initiatives across four main focus areas: new economy, social sector, housing and infrastructure upgrades, and comfortable urban environment.

Kola MMC also closely cooperates with the municipalities where its facilities operate, which includes providing support to social and cultural institutions. For example, Library Branch No. 1 in Zapolyarny was named one of the best model libraries in a country-wide contest run as part of the Culture national project. The competition provided for co-financing of the winning projects by Kola MMC, which allocated nearly RUB 1.5 mln towards updating the library’s book collection.

Tula Region

In October 2021, Tula welcomed the opening of a sports complex built with the support of Nornickel. Named Tula Arena, it features venues for martial arts and game sports tournaments, as well as training space for ca. 800 athletes, and can accommodate 2,000 spectators. The infrastructure of the sports complex is suitable for holding regional, interregional, all-Russian and international tournaments.

Supporting regions of operation during the COVID-19 pandemic

The COVID-19 pandemic has brought unprecedented global challenges for the global community. However, in the face of this adversity, we were able to protect the health and safety of our employees and effectively adapt the Company’s business processes to the new reality.

In 2021, Nornickel continued to implement comprehensive measures to counter the COVID-19. The Company keeps in place a business continuity task force, which involves Nornickel’s senior executives. The team is charged with ensuring continuity of the Company’s production, procurement and sales processes while taking all necessary measures to protect the Company’s people. Local quick response task forces are also maintained across our sites. To ensure greater effectiveness of its response action, Nornickel continues active interactions with federal and regional government authorities.

As the pandemic continues, the Company offers its employees an additional payment on top of the temporary disability allowance for those feeling unwell after vaccination, as well as additional payments for employees required to selfisolate and therefore unable to perform their job duties. In some of the regions across our footprint, employees are reimbursed for the cost of taking a taxi to and/or from their place of work.

Vaccination promotion campaigns, including webinars with scholars and medical experts, were held across all the Group companies. A Q&A section was added to the corporate portal and the virtual assistant Nika, and coronavirus hotlines were set up. A series of master classes for executives on employee protection during the pandemic were held, with relevant guidelines published. Efforts to raise vaccination awareness among employees included a series of corporate dialogues, video conferences and live streams with Nornickel’s vice presidents.

The Company average vaccination rate is 69%. At many of the Group companies, including such large enterprises as NTEC and Kola MMC, the share of vaccinated employees exceeded 80%. Overall, the Company has adapted to running its business safely during COVID-19.

In 2021, Nornickel continued to support the authorities, healthcare facilities, small and medium-sized businesses, educational institutions, and non-profit organisations across its footprint in fighting against the coronavirus. Joint efforts of the Company and local administrations in the regions where Nornickel operates helped prevent a massive spread of COVID-19 cases.

To this end, the Company allocated over RUB 2.5 bn to support the Krasnoyarsk Territory, including over RUB 1.5 bn provided to healthcare facilities in Norilsk and the Taimyrsky Dolgano-Nenetsky Municipal District. Direct donations of funds were made to healthcare facilities in the Norilsk Industrial District and the Krasnoyarsk Territory. Norilsk and Dudinka received consumables, personal protective equipment and advanced medical devices (e. g. a CT scanner, analysers, ultrasound scanners, an ECG machine and more). At COVID-19 hospitals in Norilsk and Dudinka, the Company helped install a centralised oxygen system, set up a state-of-the-art PCR testing laboratory, procured in-demand reagents used in tests, and upgraded the healthcare facilities’ bed capacity. To run on-site vaccination campaigns for employees in Norilsk, healthcare professionals were engaged from other cities, with the Company paying for their accommodation. The pandemic and the pressure of self-isolation took a heavy toll on small and medium-sized businesses. The Company looked for ways to support entrepreneurs during the restrictions by arranging a grace period for them, which led to the shortfall in income of approximately RUB 5.15 mln. In addition, we also supplied various companies of Norilsk and Dudinka with UV germicidal irradiation devices, dispensers, etc.

In 2021, Kola MMC donated 31 ventilators to healthcare facilities in the Murmansk Region, including the Murmansk Region’s Bayandin Clinical Hospital and the Severomorsk, Kola, and Monchegorsk central district hospitals.