Russian mining giant Nornickel on Tuesday said it was not changing its long-term view on the metals sector and that it would continue to carry out its plans, despite acknowledging logistical issues.
“On the long-term horizon, we are not changing our view in principle,” said Senior Vice President Sergei Dubovitsky told employees. “We are continuing to realise our investment plans.”
He described the current situation with prices for metal and oil as “an anomaly”. The London Metal Exchange (LME) last Tuesday halted nickel trading and cancelled trades after prices rocketed to more than $100,000 per tonne in a surge sources blamed on short covering by one of the world’s top producers.
“We assume that our trading will continue, our sales will continue,” said Dubovitsky. “Our metals are in demand on markets. And none of our customers are planning to break contracts now. It goes without saying that there are some logistical problems.”
Nornickel’s biggest shareholder, Vladimir Potanin, on Saturday said the company had managed to secure alternative routes for its palladium deliveries.
Dubovitsky said Nornickel, the world’s largest producer of palladium and refined nickel, was considering diverting metals supplies to alternative markets, including Asia, but called this “plan B”.
“Our task at the moment is to maintain our key markets, our key customer base,” Dubovitsky said. “Our task in very turbulent conditions is to maintain our supply chains.”
Nornickel was also looking into possible supplies of equipment from elsewhere in Russia and Asia for its investment plans and that the schedule for realising some projects may be changed, he said.
In November, Nornickel raised its 2021-2030 investment estimate by $6 billion to $35 billion.
Another senior vice president, Sergei Stepanov, said Nornickel has supplies of spare parts for production processes to last three months.