Strategy for Sustainable Development
Nornickel’s development strategy through 2030 aims to ensure the efficient implementation of the potential of the Group’s unique mineral resource and production base for the benefit of its key stakeholders.
The global transition to a low-carbon energy mix offers unique opportunity for Nornickel to become one of the leaders in the market of metals required to accomplish the energy transition. The Company has an opportunity for long-term dynamic growth through an increased demand for its core products which are essential for improving the energy efficiency of transportation and renewable energy development.
However, sustainable growth through the expansion of mining and metal production alone is impossible in the existing conditions. The growing ESG requirements of major consumers, investors, and regulators require an in-depth modernisation of the main production facilities, ensuring the highest health, safety, and environment standards, and implementation of comprehensive programmes for the development of local communities.
Thus, the ESG agenda inevitably becomes both the main driver and the main requirement for Nornickel’s strategic initiatives and major investment projects through 2030, which include mining volume growth, upgrade and expansion of processing facilities, contribution to combating climate change, large-scale reduction of sulphur dioxide emissions, and other areas of focus.
Through the efficient use of 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 realise their aspirations for development and technological progress.
Key areas and performance targets under the sustainable growth strategy through 2030
Mining volumes growth in the Norilsk Industrial District*:
to 24–26 mt
to 32‒34 mt
Increase in metal output (2030+)*:
Reduction of SO2 emissions*:
85% (7 x) by 2021 (completed, with actual reduction totalling 90%)
- In 2021, we completed modernisation of Ust-Khantayskaya HPP, replacing hydroelectric units that had reached the end of their service life with modern ones (7 units with a capacity of 73 MW each). The project was run in 2012–2021, with ramp-up to design capacity in January 2022.
- For 2022–2030, we are planning a major modernisation project at Kureyskaya HPP to replace five hydroelectric units, main and auxiliary equipment of hydropower turbines and generators, as well as other equipment.
Thermal power facilities:
- In 2021, we completed the replacement of power unit No. 1 at HPP-2 with a capacity of 110 MW. In 2022, work is underway to replace power unit No. 2. By increasing the installed capacity of HPP-2, we will be able to cover future needs of the Company’s industrial consumers in the vicinity of Talnakh.
- We started replacing two power units at HPP-2 and building two new units at HPP-3.
Gas power facilities:
- The Company is running a major programme to upgrade its gas field infrastructure, including projects to upgrade power supply systems, build booster compressor stations, and modernise tank farms at gas fields.
- As part of developing our gas transmission system, we are implementing a modernisation programme to replace the main gas, condensate, and methanol pipelines, with plans to build new ones at the Pelyatkinskoye–Messoyakha section.
- In 2024–2026, we intend to drill additional wells and construct new gas headers and inter-field pipelines.
- A major upgrade is underway at the Norilsk, Dudinka and Kayerkan oil depots.
- Reducing Scope 1+2 GHG emissions by 28% to 7.7 mtpa taking into account the expected production growth and Sulphur Programme 2.0.
- Reducing carbon intensity from operations by 37%* to 5.0 t of СO2 equivalent per t of Ni equivalent by 2028.
- Zero tolerance policy on workplace deaths.
Estimated CAPEX for strategic projects through 2030
The implementation of those strategic objectives will allow the Company to considerably increase supplies of its core products to customers, significantly improve industrial reliability, industrial safety and energy efficiency performance, and address the most acute environmental problems in the regions where it operates as early as in the medium term. The total investment in the implementation of the strategy through 2030 will be USD 35 bn. The planned capital investments increased y-o-y due to the expansion of the perimeter of energy and logistics infrastructure upgrading, expansion of the environmental programme, and an increase in the estimated total inflation of construction costs for the projects that are underway.
Long-term trends supporting consumption growth for the metal basket and the Company’s strategic prospects
Nornickel meets the growing needs of the Russian and global economies for materials that are actively used in car manufacturing, electronics, electrical engineering, petrochemical and oil refining, power generation, construction, consumer goods, healthcare, and other industries.
Nickel consumption is predominantly driven by the stainless steel industry, with the steels used in multiple sectors — from mechanical engineering and construction to renewable energy. Another critical nickel consumer is the battery industry, which has been growing on the back of the electrification of transport, a rise in the number of electric cars and hybrid vehicles, and the cathode material production gravitating towards nickel-rich types. The main application of palladium is in automotive catalysts of gasoline engines. This metal is used in catalytic converters to detoxify exhaust fumes. In most countries, such converters are legally required to be installed on all cars. Palladium is also used in electronics, dentistry, and jewellery manufacturing.
The automotive industry is also the main consumer of platinum. Over 30% of platinum in this industry is used to manufacture exhaust gas catalysts for diesel vehicles. Another important consumer of platinum is the jewellery industry, which likewise accounts for about 30% of consumption. Platinum is also used in glass manufacturing to produce glass fibre and optical glass, and in electronics.
A variety of platinum group metals, including palladium, platinum, rhodium, ruthenium, and iridium are also extensively used as catalysts to manufacture key chemicals.
The electrical conductor industry, including the manufacture of various cables and wires, consumes up to 60% of the global refined copper output. This makes copper a key material for renewable energy development.
Key trends impacting Nornickel’s metals consumption through 2030
The key global trend is the tightening of requirements for the environmental safety of motor vehicles manufactured.
For more details on this and other trends relating to global decarbonisation and their impact on the Company’s business, please see the Climate Change section.
In general, the estimated potential demand and supply under the International Energy Agency’s Sustainable Development Scenario through 2040 indicate good prospects for stable market growth as regards metals produced by the Company.