Norilsk Nickel taps into precious metal ETCs

Norilsk Nickel’s clean-up work after a fuel spill at an Arctic power plant in May 2020. (Image courtesy of Norilsk Nickel.)

Russia’s Norilsk Nickel, the world’s largest producer of palladium and nickel, has launched a blockchain-based range of exchange traded products to track prices of gold, silver, platinum and palladium.

The move marks the first time a miner introduces tracker products. The Exchange Traded Commodities (ETCs), which started trading on Deutsche Börse on Monday, are debt securities backed by physical metal.

They will be run by Norilsk Nickel’s Global Palladium Fund (GPF), which was created in 2016 to advance the development of metals in technologies used by the aerospace, electronics and car sectors.

The company, owned by an oligarch with ties to the Kremlin, said it planned to expand its new ETCs to the London Stock Exchange within a few days.

The platform uses blockchain technology for security and proof of ownership. They will also trace the way the metals were produced and include the producer’s credentials of environmental standards.

“Our way of digitalization of commodities allows one to capture and trace the source of underlying metals and the way they were produced, coupled with ESG credentials,” Alexander Stoyanov, GPF chief executive, said in a media statement.

ESG considered

Anton Berlin, vice-president, sales and distribution at Norilsk Nickel noted that environmental, social and governance standards would also be included in the ETCs.

“Metals will be sourced on a ‘best efforts’ basis from producers and suppliers that support the UN Sustainable Development Goals and other global responsible mining initiatives,” Berlin said.

Norilsk Nickel has said it plans to launch similar ETCs for nickel and copper in the future.

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