Annual
Report 2015

key investment projects ru

Taimyr Peninsula

Talnakh Concentrator

Project location

Talnakh, Norilsk Industrial District.

The purpose of the project is to ramp up output of processed rich and cuprous ores from 7.7 mtpa to 10.2 mtpa and boost concentration efficiency (after Stage 2 is launched).

Key features

Output

of 10.2 mtpa (after Stage 2 is launched)

Increased nickel content in nickel concentrates

from 8.6% to 13.5%

Reduced shop area costs due

to a 12% decrease in sulphide mass in the concentrate received (starting 2016)

Increased sulphur disposal to tailings

by 16%

2015 CAPEX

of over RUB 15 bn (USD 257 m)

Outstanding CAPEX

of с. RUB 14 bn

IRR (Stages 1–2)

>40%


The main phase of a major Talnakh Concentrator reconstruction project was launched in April 2014, marking completion of the preparatory work and start of the core process equipment assembly. Stage 1 was commissioned in January 2015.

Talnakh Concentrator’s Stage 2 will see expansion of the main building, reconstruction of the reagent preparation building, and construction of several new facilities. This will be equivalent to constructing a new concentrator capable of processing all ores from the Talnakhskoye Field.

Project status

  • Stage 1: put into operation in Q1 2015
  • First stage of the tailings pit: progress — 40%

Project schedule Launch and commissioning
of Stage 1 (maintaining
the existing capacities)
Q1 2015
Launch of processing
capacities at Stage 2

Q2 2016
Commissioning
of Talnakh Concentrator’s
new tailings pit
Q4 2016
Full-scale commissioning
of Stage 2

Q1 2017
Skalistaya Mine

Average metal content

Ni
2.8 %
Cu
3.3 %
Pt
1.7 g/t
Pd
7.8 g/t
Key features

Output

to 2.4 mtpa of rich ore

Reserves

of 58 mt of ore

2015 CAPEX

of c. RUB 16 bn (USD 256 m)

Outstanding CAPEX for 2016–2021

of over RUB 80 bn

IRR

>32%


Project location

Skalistaya mine is located on the Taimyr Peninsula, in the Norilsk Industrial District, on the outskirts of Talnakh.

The project seeks to gradually boost the annual ore output from 0.95 mt to 2.4 mt by 2023.

The targets are to be met by stripping and preparatory operations as regards rich and cuprous ore reserves of the Talnakhskoye and Oktyabrskoye fields.

Project status

  • Stage 1: put into operation in 2015 (ore production facility with an annual capacity of 500 kt of rich ore)
  • Sinking: 235 m of ventilation shaft-10 (1,372 out of 2,053 m completed) and 443 m of skip-cage shaft-1 (895 out of 2,053 m completed); drifting: over 2.2 km
Project schedule Capacity
commissioning
(500 kt)
2015
Capacity
commissioning
(150 kt)
2016
Production
ramp-up
(up to 1.75 mt)
2017
Completion
of ventilation
shaft-10
Q1 2018
Completion
of skip-cage
shaft-1
Q4 2019
Production
ramp-up
(up to 2.4 mt)
2021
Taimyrsky Mine

Average metal content

Key features

Ore reserves

of 63.0 mt

2015 CAPEX

of c. RUB 4 bn (USD 72 m)

Outstanding CAPEX for 2016-2020

of over RUB 18 bn

IRR

>60%

Project location

Taimyrsky Underground Mine produces rich copper-nickel ores from the Oktyabrskoye Field located in the south of the Taimyr Peninsula within the area of Norilsk in the industrial zone of the Talnakh District.

The project seeks to develop the mineral resource base and boost production of rich ore from 3.5 mtpa to 3.9 mtpa by 2020.

Project status

  • Underground workings in 2015: over 7.6 km
  • Capacities commissioned in 2015: 0.8 mtpa

Project schedule Capacity
commissioning
800 тыс. т
2015
Capacity
commissioning
2(200 kt of rich ore)
Q3 2016
Capacity
commissioning
(100 kt of rich ore)
Q3 2017
Capacity
commissioning
(800 kt of rich ore)
Q4 2018
Production
ramp-up
(up to 3.9 mt)
2020
Oktyabrsky Mine

Average metal content

Key features

Ore reserves

of 59 mt

2015 CAPEX

of c. RUB 3 bn (USD 70 m)

Outstanding CAPEX for 2016-2020

of over RUB 9 bn

IRR

>75%


Project location

Oktyabrsky Mine produces rich, disseminated and cuprous ores from the Oktyabrskoye Field located in the south of the Taimyr Peninsula.

The project is aimed at maintaining the current annual production level at 5.2 mt of ore until 2023.

Project status

  • Underground workings in 2015: over 7.1 km
  • Capacities commissioned in 2015: 1.0 mtpa
Project schedule Capacity
commissioning
(1,000 kt)
2015
Capacity
commissioning
(250 kt of disseminated ore)
2017
Capacity
commissioning
(100 kt of rich ore)
Q1 2019
Capacity commissioning
(50 kt of rich ore and 700 kt
of cuprous and disseminated ore)
Q2 2020
Capacity commissioning
(300 kt of cuprous
and disseminated ore)
2020–2025
Komsomolsky Mine

Average metal content

Key features

Reserves

of 24.9 mt of ore

2015 CAPEX

of over RUB 2 bn (USD 45 m)

Outstanding Capex for 2016-2020

of over RUB 15 bn

IRR

>50%


Project location

Komsomolsky Mine is located in the Norilsk Industrial District on the outskirts of Talnakh.


The project is aimed at maintaining the current annual production level at 3.8–4.1 mt of ore until 2020.

Project status

  • Underground workings in 2015: over 4.7 km
  • Capacities commissioned in 2015: 0.7 mtpa
Project schedule Capacity
commissioning
(700 kt of disseminated ore)
2015
Capacity
commissioning
(100 kt of rich ore)
2016
Completion of the western backfilling
shaft at Komsomolskaya mine Maintenance
of the retired capacities (200 kt)
2017
Capacity
commissioning
(300 kt of rich ore)
2018
Capacity
commissioning
(100 kt of rich ore)
2020
Nickel Plant shutdown

Project location

Talnakh, Norilsk Industrial Dinstrict.

Key features

Project status

  • NMP upgrade to process nickel slag from Copper Plant: construction and installation works completed
  • Transfer of the nickel feedstock from Norilsk Concentrator to NMP: completed
  • Flash smelter refurbishment at NMP: completed
  • Transfer of the sodium bisulphate production to Copper Plant: completed
  • Relocation of Nickel Plant’s trunk engineering networks: in progress

Shutdown of All Shop Areas of Nickel Plant from 1 September 2016 and Expansion of Nadezhda Metallurgical Plant’s Pyrometallurgical Capacities to Process All Nickel Feedstock of the Polar Division (a comprehensive project).

Under its strategy, the Company has launched comprehensive reconfiguration of the metallurgical capacities, which envisages processing of all nickel feedstock of Polar Division at Nadezhda Metallurgical Plant and transfer of refining operations to Kola MMC and Harjavalta. As part of this reconfiguration, the Company also plans to shut down Nickel Plant, its oldest asset that was commissioned back in 1942.

The shutdown of the plant located within the urban limits is scheduled for 2016 and will significantly improve Norilsk’s environment, as it emits 400 kt of sulphur dioxide. Talnakh Concentrator upgrade and Nickel Plant shutdown are expected to decrease emissions by 15%.


Sulphur production refurbishment at Nadezhda Metallurgical Plant

Sulphur project

Design and introduction of technical and project solutions to extract elemental sulphur from waste gases of Nadezhda Metallurgical Plant’s flash smelters, and reduction of sulphur dioxide emissions down to the threshold prescribed by regulations.

Key features

Output

of up to 600 ktpa of sulphur

Sulphur dioxide utilisation rate

of at least 95%

2015 CAPEX

of RUB 1.3 bn

Completion projected

for 2019

Project status

  • In 2015, design documents for sulphur production were drawn up
  • Russia’s State Expert Review Board approved the design documents and the results of engineering surveys and inspections
  • The tender for contractor selection is in progress
  • Engineering surveys for the Engineering Documents stage were completed
  • Design documents for power supply infrastructure projects are prepared
  • Preparations on the construction site are underway

Sulphur production refurbishment at Copper Plant

Sulphur project

Design and introduction of technical and project solutions to extract elemental sulphur from waste gases of Copper Plant’s Vanyukov furnaces, and reduction of sulphur dioxide emissions down to the threshold prescribed by regulations.

Основные характеристики проекта

Output

of up to 280 ktpa of sulphur

Sulphur dioxide utilisation rate

of at least 95%

2015 CAPEX

of c. RUB 0.5 bn

Completion projected

for 2020

Project status

  • In 2015, Licence Agreements, Operation Assurance Agreements and Agreements on the Preparation of Final Process Design Packages were signed with technology licensors (LGI and MECS)
  • Preparation of design documents underway