Nornickel rejects $2.1 billion fuel spill charge

The Ambarnaya River ran red with a layer of petrochemicals up to 20 cm thick following the fuel spill. Image courtesy of Greenpeace.

MMC Norilsk Nickel PJSC said it disagreed with a Russian watchdog’s 148 billion-ruble ($2.1 billion) estimate of the damage caused by a fuel spill from one of its storage tanks in the Arctic.

The Federal Service for Supervision of Natural Resources, known as Rosprirodnadzor, used the highest damage coefficient, which assumes the company did nothing to mitigate the impact of the spill, Nornickel said. That isn’t correct, said the miner, which called in a specialist clean-up team from Murmansk after the accident.

The estimate is “based on principles that led to distortion of the results and needs to be adjusted,” Nornickel said in a statement on Wednesday.

In June, the company spent more than 5 billion rubles on clean-up costs for the spill

The damage estimate announced by the ecological watchdog on Monday would represent the largest environmental fine in Russian history. Nornickel reiterated its commitment to fund the clean-up, which it estimated at $150 million in June, excluding any fines.

Nornickel has sent a letter to the watchdog, outlining the flaws in its damage estimate. That includes using incorrect figures for the amount of fuel that leaked into the water.

The watchdog didn’t immediately comment, although Dmitry Kobylkin, Russia’s natural resources and environment minister, told Interfax that the he stands by the estimate. If the company can prove that it didn’t cause such extensive environmental damage, it has the right to do so in court, he said.

Nornickel shares rose as much as 2.2% in Moscow and were trading up 1.1% at 12:46 p.m. local time.

In June, the company spent more than 5 billion rubles on clean-up costs for the spill. More than 33,000 tons of water and fuel mixture has been collected in the area and over 172,000 tons of contaminated soil have been removed.

(By Yuliya Fedorinova)

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