Russia: Nornickel set a record in terms of spending on social projects

The Russian mining giant Norilsk Nickel’s spending on social projects doubled in 2021 and reached $1 billion, the company mentioned in its consolidated financial statement.

«Social spending doubled to just over USD 1 billion mostly as result of provisions related to the agreements on social and economic development of Norilsk city and the Krasnoyarsk region,” Nornickel informed in the statement.

Social spendings were planned for the reconstruction of housing and infrastructure in Norilsk.

According to the statement, total budget of city renovation planned till 2035 raised up to 120 billion rubles.

Among other major social projects, Norilsk Nickel has a program to support the indigenous peoples of the North, for that program 17 million dollars will be allocated until 2025. In addition, the company continues the construction and development of industrial, social and other infrastructural projects, which are part of the agreement between the company and the government of the Zabaykalsky Krai and 23 million dollars has been allocated for this purpose.

The agreement with the Murmansk Regional Government on socio-economic development and construction of social infrastructure facilities, as well as the agreement with the Krasnoyarsk Krai Government on investment support for a number of social and infrastructure projects until 2028 also allocated 26 and 67 million dollars respectively.

Nornickel expects that social spendings for 2022 will remain at the same level as in the previous year. However, one-off contributions to the reconstruction of Norilsk are not taken into account.

Previously, Sergei Dubovitsky, Senior Vice President of Nornickel, stated that the company planned to invest 600 billion rubles in the development of infrastructure in the north of the Krasnoyarsk region until 2030.

Early Nornickel presented plans for investment in programs for monitoring permafrost, improving air quality, modernizing production sites, follows from the speeches of the company’s top officials.

“We have started to roll-out a permafrost monitoring system in Norilsk and have committed to a major renovation of our energy infrastructure and upgrade of equipment. In addition to a better management of climate change related risks, we anticipate to get significant carbon dioxide emission cuts as the energy losses will reduce and the efficiency of our power generating equipment should improve.

On the social front, we have committed to a number of major programs, which aim to transform the city of Norilsk into a modern city with high quality living standards.

Over business cycles, our metals basket has shown its natural resilience to changes in underlying demand for commodities. Our course forward is towards integration into the new green economy. Higher focus on the global climate agenda drives up demand for our key metals and reconfirms our strategy to grow production. I believe that transformational investments will result in higher value for Nornickel and its shareholders combining industry-leading profitability and top-notch ESG standards,” Nornicвkel’s President Vladimir Potanin said.

Russia to provide 712 million Euro loan for construction of copper processing plant in Uzbekistan

Russia’s State Development Corporation VEB.RF will finance supply of Russian equipment for the largest copper processing plant in Uzbekistan.

A 712 million Euro loan agreement was signed between VEB.RF and Almalyk mining and metallurgical complex ahead of visit of President of Uzbekistan Shavkat Mirziyoyev to Russia.

The loan will be spent for construction of the copper processing plant in Almalyk.

The project will support development of Yoshlik mine and its prospective consolidation with Kalmakyr mine. The united mine will become one of the world’s biggest copper mines. The loan funds will be used for procurement Russian equipment and services under the project, financing of a part of project expenditures.

Almalyk mining and metallurgical complex (AMMC) intends to increase copper processing up to 160 million tons a year. This would allow to achieve production of copper cathodes up to 400,000 tons a year by 2028.

AMMC intends to produce around 270 tons of silver and 50 tons of gold a year by 2028.

Construction of the plant will require $2 billion. Gazprom Bank and Export Insurance Agency of Russia will be involved in financing of the project.

VEB.RF earlier provided loans to AMMC for purchase of quarry trucks and mining equipment.


Russia plans a further major increase of domestic gold mining in years to come

Russia plans a further major increase of domestic gold mining in years to come that will be achieved through the development of new gold mines and accelerating the further development of the already existing gold mines, according to recent statements made by representatives of some leading Russian gold mining companies and local media reports.

In terms of gold reserves, Russia currently ranks first in the world with a share of about 13%, while ranking 3rd in terms of production with a share of about 9%. Last year, gold production in Russia amounted to 340.17 tons, slightly less than in 2019 with a reduction of 0.98%. There is a possibility that gold production in Russia may have already significantly increased this year.

The majority of gold produced in Russia in 2020 was sold for exports, the volume of which amounted to about 320 tons. While a few years ago, exports were insignificant, as the bulk of domestic gold was purchased by the Bank of Russia, the situation has changed in recent years.

Alexey Kalachev, a senior analyst at FINAM Group, one of Russia’s leading analyst agencies in the field of mining and finance, said in an interview with the local Regnum newswire, “active gold purchases by the Central Bank supported the domestic gold mining industry during the period of low prices and allowed the state to form significant gold  reserves”.

According to recent statements made by the Minister of Natural Resources of Russia, Alexander Kozlov, “at the current rate of production, gold reserves in Russia will be enough to ensure stable production for the next 40 years”.

Mr. Kozlov goes on to say, “Russia regularly increases its resource base for gold.” This is reflected by official data, since 2010 the country has increased its gold reserves by about 6,000 tonnes.

Over the past decade, three large area plays have been further explored, among them are the Natalkinskoye and Pavlik gold deposits in the Magadan region, the Gross gold deposit in Yakutia and the Verninskoye in the Irkutsk region. Kozlov added, “the Sukhoi Log field in the Irkutsk region and several large areas in the Far East are also being prepared for development”.

According to local analysts, a significant increase in gold production in Russia can be expected from 2026, when production will start at the Polyus owned Sukhoi Log field, one of the largest gold fields in Russia and the world with 40 million ounces proven and probable gold reserves and 67 million ounces measured, indicated and inferred mineral resources.

In recent years, Polyus has significantly strengthened its position in the domestic market as one of the largest gold producers in Russia, which accounts for approximately every fourth ounce of gold mined in Russia at present.

With Sukhoi Log reaching full capacity, the company will increase its production by about 80% and will be one of the top three gold mining companies in the world.

In general, with the commissioning of Sukhoi Log in 2026 total gold production in Russia could grow by about 20%.

According to Deputy Prime Minister and Plenipotentiary of the President of Russia in the Far Eastern Federal District Yuri Trutnev, hopes are also put on the intensification of geological exploration in the Magadan Region, the least populated region of Russia, which could become a new center of gold mining in Russia in years to come.  In 2020, the region’s mining enterprises extracted 49.14 tons of gold from ore and placer deposits. That became a record result over the past 45 years, when 49 tons and 600 kg of gold were mined within a territory of the region in 1974.

In addition, a further increase of production is planned for Kamchatka, where a new underground mine and a new stage of processing complex will be established on the basis of the Ametistovoe region in the Kamchatka priority development area, which is the largest gold mining enterprise in Kamchatka.

In general, the authorities of Kamchatka plan to increase gold production to 10 tons by 2022 by commissioning new mining and processing plants. These include an enterprise at the Kumroch gold deposit with a capacity of up to 500,000 tons of ore per year and a processing complex with a capacity of 600,000 tons of ore per year at the Ozernovskoye gold deposit.

For 30 years after the collapse of the USSR, Russia has been developing its gold mining industry. During this time, the country produced more than 6,000 tonnes (194 million ounces) of gold, including associated, secondary and gold in concentrates, providing about 10% of the annual world production.

Source: Resource World

Norilsk is no longer Russia’s most polluted city

By placing environmental protection at the core of its operations, mining giant Nornickel is cleaning up what was hitherto one of the planet’s most polluted areas.

Norilsk, the world’s northernmost city with more than 100,000 inhabitants, and for much of the 1970s and 1980s synonymous with severe industrial pollution, is no longer the dirtiest city in Russia, according to the German publication Blick, which cites a new report from the Russian Service for the Supervision of Consumer Protection, which classifies cities in Russia according to their respective levels of pollution.

While the report lists a number of cities, including Novokuznetsk, Omsk, Krasnoyarsk, Cherepovets and Lipetsk, as heavily polluted, the name of Norilsk no longer appears at the top of the list.

The improvement in the city’s environment can in large part be put down to the policies of Russian mineral giant Norilsk Nickel (Nornickel), the world’s largest producer of palladium and high-quality nickel and a major producer of platinum, cobalt and copper, based in the city.

Norilsk Nickel’s production sites have long brought suffering to inhabitants of the cities in which it operates and neighbouring areas, including Norwegians living close to the border Russia, but the firm is fast becoming a leader in environmental initiatives.

Significant improvement

According to Blick, “this is a significant achievement, which became possible thanks to the long-term strategy and methodological efforts of Norilsk Nickel to reduce emissions and air pollution in the city and throughout the region. Thanks to all these measures, the ecology of Norilsk will significantly improve over the next few years and pollution will decrease significantly”.

The environment at Norilsk Nickel’s industrial sites is being improved by reducing sulphur dioxide emissions and reducing environmental impact.

This improvement is not accidental, but the result of the company’s strategic direction achieved over many years of implementation.

Environmental activists in neighbouring Finland and Norway have also welcomed the positive impact of Nornickel’s environmental modernisation.

Paul Eric Asfolm, a researcher at the Norwegian Institute for Bioeconomic Research, said earlier this year that, “from the perspective of nature protection, stopping sulphur dioxide and other pollutant emissions will allow nature to recover slowly”.

“Already, there are some changes in nature as a response to lower emissions since the 1990s. The process of recovery is slow but visible”.

Investment in conservation

In recent years Nornickel has made environmental protection a key part of company policy, reducing not only air pollutant emissions but also wastewater discharges.

In 2019, Norwegian news agencies reported that the country was highly appreciative of Nornickel’s protection of the environment and ecology from pollution and expressed the hope that the company will continue such effective activities.

Norway has also positively welcomed the activities of the Russian government to create and implement environmental legislation and standards, which sooner or later should ensure a significant improvement in the environmental situation.

Norilsk Nickel’s management says that it remains committed to environmental protection and is making every effort to implement its strategy.

The firm’s board of directors recently released plans to approve a new environmental strategy that includes investment of more than 5.5 billion US dollars.

According to the plans, the company plans to invest 3.6 billion US dollars in measures to reduce air emissions, 1.1 billion US dollars in measures to protect water resources, 0.6 billion US dollars to minimise harm from industrial waste, and 0.3 billion US dollars in the reclamation of lands affected by the construction and development of the company’s deposits, climate change and conservation of biological diversity.

Source: Emerging Europe

Russian Alrosa produced 7 million carats of diamonds in Q2

Russian mining giant Alrosa produced 7 million carats of diamonds in the second quarter of 2021 – a fall of 8% quarter-on-quarter but a rise of 22% year-on-year, Rough & Polished reports.

Alrosa has also reported sales of 11.4 million carats and $1.2 billion in revenue for Q2 2021. Rough sales fell 26% quarter-on-quarter. The average selling price of gem-quality diamonds reached $145 per carat. Alrosa reported that demand for jewelry remains strong in all key markets, then added: “At the same time, against the background of a structural decline in diamond production at a number of diamond fields, the stocks of mining companies approached their minimum values; the Company estimates that mining companies’ ability to scale up production is limited. There is a decrease in the levels of rough and polished stocks in the diamond manufacturing sector”.

In other Alrosa news, the miner has re-opened the Zarnitsa open-pit mine in Yakutia, Russia. Zarnitsa stopped production in May 2020 as the market slumped but resumed operation on July 1, IDEX Online reports. Last month, Alrosa re-opened another low-output deposit, the Zarya open pit, also in Yakutia.




After reporting on Russian coal producer, Sakhalin Newspaper shut down

Sakhalin Island port town has some 10,000 residents.  On July 14th events moved quickly at the offices of the municipal newspaper; around 10 a.m., two deputy directors of the Eastern Mining Company (VGK), Aleksandr Bosoi and Andrei Motovilov, showed up at the office of newspaper Editor in Chief Zinaida Makarova to discuss “the direction” of the paper’s coverage of the company.

According to audio of the tense confrontation posted on the newspaper’s Telegram channel the same day, Makarova challenged the men to find any errors in the paper’s journalism, pledged to continue telling “the truth” to local residents, and urged VGK to “mine coal and not interfere” in other areas of the life of the region.

Meanwhile, other staffers were preparing the latest issue of the weekly Uglegorskiye Novosti featuring a front-page feature on an ecological crisis caused when a coal dump at the firm’s open-pit mine collapsed into and blocked the Zhyoltaya River.

At 4 p.m. the same day, Makarova was summoned to the mayor’s office, where she was handed formal notice that she had been fired.

“Literally five or seven minutes after [Makarova] left for the mayor’s office, about 10 men entered the editorial office,” journalist Alina Goloskok, who wrote the feature on the accident, told RFE/RL. “Three of them went straight into the accounting office and began copying files from the computers. The others took up positions in the corridor. They acted like they owned the place.”

According to Goloskok, one of the men told staff that “Makarova is no longer your boss.”

“We were completely shocked since we were just doing what we always do, putting together the latest edition,” she recalled. “And suddenly this takeover.”

When Makarova returned to the office, the electricity had been turned off.

“The office is on the first floor of a five-story residential building,” she said. “The power was only off on our floor. Electricians said the cable was severed.”

Nonetheless, power was briefly restored just as Uglegorsk Mayor Sergei Doroshchuk appeared.

“He demanded that everyone leave,” Makarova recalled. “We said that we needed to put out the paper, but he insisted that we leave. Then the power went out again.”

A repair crew did not show up until July 16. As of July 19, the power was still out. As of July 21, the newspaper’s website was unavailable, and no issues have been published.

A press release from Doroshchuk’s office on July 15 said Makarova had been dismissed “after the discovery of financial violations.”

“In order to secure the office space and property for the newly appointed director, the premises were placed under guard,” the statement added.

“When he came to order us home, we asked Doroshchuk why Makarova had been fired,” Goloskok said. “We didn’t get a coherent answer. And then we asked why the electricity had been turned off if it was just a matter of changing the management. But there was no need to guess the reason — it was about my article about the coal-dump collapse that was being prepared for publication. As far as I know, there has never been an emergency situation as bad as this in Uglegorsk.”

Coal Island


VGK was formed in 2013 with initial capital of 10,000 rubles ($300). It is 99 percent owned by a Cyprus-registered holding called Altraso Venchurz Ltd. Although Altraso’s ownership is unclear, it is believed to be controlled by businessman Oleg Misevra, who runs the company and is listed as its “founder and coproprietor,” although formally he holds only a 0.55 percent stake. VGK’s two major assets are the Solntsevsky coal mine and the Sakhalin Island port of Shakhtyorsk — both in the Uglegorsk district.

It is the 26th-largest coal firm in Russia, as of 2016, and accounts for about 70 percent of the coal produced on Sakhalin. Virtually all of its production is exported through the Shaktyorsk port. In 2019, it reported 46 billion rubles ($618 million) in profits and paid 192 million ($2.6 million) in taxes. Its tax burden is substantially reduced because Uglegorsk is a free-trade zone.

Directly employing more than 1,000 people, VGK is the region’s major employer. Various local construction, transportation, food-production, and other firms, although formally independent, are connected with VGK.

Locals consider Misevra the unofficial head of the region. In 2019, he was named Russia’s “exporter of the year.”

“I believe the VGK management, having learned about the article we were going to publish, ordered Doroshchuk to prevent its appearance — both in print and on television. And so I was fired,” Makarova said.

VGK did not respond to repeated requests from RFE/RL for comment. It has not issued any public statements about the newspaper’s situation.

Throughout her eight years running the newspaper, Makarova has “constantly felt the unspoken presence” of Misevra, she said.

“Mayor Doroshchuk told me directly that he had no problem with me but that he has to do what Misevra told him,” Makarova said. “I heard that all the time. Either Doroshchuk was proposing closing the newspaper because ‘no one reads it’ or he was saying the printing press needed to be closed down to save money or that there was no need for a television channel. ‘Misevra says it is better to develop YouTube,’ he’d say.”

Locals in Uglegorsk — the name means ‘Coal Mountain’ in Russian — have been complaining about VGK polluting local waterways for many years now. In addition, the trucks from the mine pass directly through Uglegorsk on their way to the port and a dark cloud of coal dust regularly engulfs the entire area. Residents regularly recorded videos on the topic for President Vladimir Putin’s annual Direct Line call-in show, but their appeals were never broadcast, although Uglegorskiye Novosti reported on them locally.

On July 9, Uglegorskiye Novosti published a letter from local resident Sergei Bondaryov warning that coal-dump was in a critical state. The next day, it suffered two major collapses, dumping tons of rock and debris into the Yellow River channel.

“There are houses in that area, families live there,” Bondaryov told RFE/RL. “I immediately began calling the Emergency Situations Ministry, the forestry service, and Uglegorskiye Novosti, because they had to report what was going on. The situation could not remain as it was — people had to know about it and act. I reported about the danger to everyone I could think of. Everyone knew — right up to the governor’s office…. Everyone knew but no one did anything.”

A press statement from the office of the governor of Sakhalin Island on July 18 said the regional administration was in charge of “liquidating the consequences of the collapse in the Uglegorsk region.”

It quoted Solntsevsky mine Deputy Director Aleksei Sharabarin as saying the company was building an emergency canal for the river around the site of the collapse and that construction was “70 percent complete.” He promised to begin releasing the damned-up water as early as July 21.

Makarova and her team at Uglegorskiye Novosti have seen a wave of support since the story about her dismissal broke. The Union of Journalists has asked the Investigative Committee to look into the legality of Doroshchuk’s actions, while about 1,200 people have signed an online petition calling for the mayor’s resignation.

“What has happened to Uglegorskiye Novosti is part of our overall misfortune,” said former Sakhalin State University journalism lecturer Irina Kudina.

“I can’t avoid using the word ‘politics,’” she said. “It is the desire to create a false bubble of positive news. And it is the attitude of the region’s ‘master’ to the ‘little people.’… There was nothing in the article that was not a fact. Did the coal-dump collapse into the river? Yes. There are photographs. Are people worried? Yes. The journalists did their job — they described what was happening.”

The staff of Uglegorskiye Novosti continue reporting on events through the paper’s Telegram channel.

“I’ve never had a complaint about my editorial policies in eight years,” Makarova said. “The people want to hear the truth. Not the mayor’s truth, but the truth about the mayor and about what is happening in this region.”




Nornickel resumes production at a mine in Russia after a flood

After successfully dealing with the flood, Russian miner Nornickel, has resumed production at the Oktyabrsky mine. The mine’s workings have been drained; mining operations are restarting ahead of schedule.

The company said that the plan to restore normal operations has been updated. The Oktyabrsky mine (5.0 mtpa of ore) is expected to resume production in full by the end of April. The mine’s capacity has already reached 60% of the target level. The expected date of production restart at the Taimyrsky mine (4.3 mtpa of ore) remains unchanged and is scheduled for early June.

Nornickel added that its strategy to backfill the entire perimeter of the workings extensively has paid off — water inflow has been stopped. The company is now focused on water discharge and accelerated production restart in compliance with all industrial safety and environmental standards. Nornickel will announce an updated metal output guidance for FY 2021 once the plan to step up safety and reliability of the Norilsk Concentrator has been finalised.



Gold mining operation in Russia so large it’s visible from space

Central Aldan is one of Russia’s largest gold ore districts, with the mineral occurring in numerous deposits, or “lodes,” in the fractured rock. One of the largest lodes lies in the Kuranakh deposit, a shallow, ribbon-like orebody (up to 50 meters thick and 25 kilometers long) sandwiched between Cambrian limestone below and Jurassic sandstone above.

In places such as the Central Aldan ore district in the Russian Far East—where concentrations of the precious metal have been discovered—mining operations are large enough to be seen from space – on September 11, 2019, the Operational Land Imager (OLI) on Landsat 8 acquired natural-color image showing part of the ore district in the Republic of Sakha (Yakutia). The image is centered about 25 kilometers (15 miles) northwest of the gold-mining town of Aldan, and about 450 kilometers southwest of the regional capital city, Yakutsk.

The Kuranakh gold deposit was discovered in 1947, and a moderate amount of gold was extracted by 1955. Ten years later, large-scale open-pit mining began and continues today. Open-cut, drilling, and blasting techniques are now used to access the ore, which is processed at an onsite mill. In 2019, the Kuranakh mine produced 224,700 ounces of refined gold. Not all of the region’s gold shows up as lode deposits. In areas where a lode has been eroded, pieces of gold can become concentrated by rivers and streams into placer deposits. The second image, centered west of the town of Nizhny Kuranakh, shows the excavation site of buried placer along a tributary of the Aldan River. To excavate the placer, bucket-lined dredges scoop up material in the front and dump the tailings behind in curved piles. The accumulation of arc-shaped piles forms the long, maze like-pattern, which is visible in the image above. From April to December in the 2019 mining season, three dredges extracted 18,600 ounces of gold from the Bolshoy Kuranakh placer deposit.



Closure of Nornickel’s plant, Barents region’s biggest air polluter

Oligarch and Nornickel CEO Vladimir Potanin first announced the closure of the plant last fall, a move affecting about 800 workers. With just six weeks before the shutdown, only two workers have not chosen any of the options offered by the company.

Damage to human health, the environment and cross-border relations with Norway have made the town of Nikel in the Murmansk region infamous much further than its acid rain has damaged the fragile taiga forest on the Kola Peninsula and northern Scandinavia. Tens of thousands of tons of sulfur dioxide and other hazardous gases have annually been emitted from the chimneys of Nornickel’s factory in the town named after the metal produced there.

By Dec. 25, the last workers involved in smelting production will be transferred to new jobs. After that, according to the company’s human resources and social policy director Anna Krygina, the remaining workers will work in customer service and taking apart equipment. This work is scheduled to continue to the end of 2021. In an interview with the Nornickel-sponsored TV21 television channel, Krygina said many of the workers will retire, while many others will fill vacancies at Nornickel’s subsidiary Kola Mining and Metallurgical Combine. The company operates mines in Zapolyarny while the production now shutting down in Nikel will partly be transferred to the larger factory complex in Monchegorsk.

“Today we are talking about plans for the workers. Now, the documentation and implementation of all these plans are starting. So we still have two months of hard work,” Krygina said in the interview.

Nikel is a typical ‘monogorod,’ a town whose economy centers around a single major company or industry. Many locals fear their town is doomed, but officials have made promises to compensate the job losses. Transitions to other industries, like tourism, have been named as a priority by both Nornickel and regional authorities. Successful or not, many of the current employees at the plant will move elsewhere. The Barents Observer has previously reported on unsold apartments in Nikel on the market for 100,000 rubles ($1,300), or about as much as a new iPhone.  The smoke will be gone by Christmas Day, but the factory will still dominate the town’s skyline. Production machinery and equipment are to be transferred to other divisions of Nornickel in the Murmansk region and on the Taimyr Peninsula in Siberia. The buildings will be demolished by 2025 and will be followed by a two-year land reclamation period. By 2027, the smelter that was erected a few years after World War II will be history.

In the late 1980s and early 1990s, the smelter received ore from Norilsk which contained much more sulfur than from the local mines in Nikel and Zapolyarny. At their peak, annual emissions reached up to 400,000 tons of sulfur dioxide (SO2). In the last two decades, SO2 emissions have been reduced to less than 90,000 tons per year. The smoke brings additional tons of heavy metals into the air which also spread across the border to Norway, where the maximum allowed SO2 limits for air quality have notoriously been violated.




Orsu Metals’ letter of intent for more assets in Russia

The Alexandrovskoye open pit gold mining project and mining processing plant – GOK assets are located immediately west of the Orsu Metals’s Sergeevoskoe project in Russia and the company has entered into a nonbinding letter of intent (LoI) to acquire a portfolio of core assets, including GOK.

Orsu and GOK are conducting a bulk test of the Sergeevoskoe mineralised material to determine the metallurgy and amenability to processing at the GOK plant. Pursuant to the LoI, Orsu has the exclusive right to conduct due diligence and agree on the structure and terms of the execution of a definitive agreement by February 28, 2021. The proposed transaction is subject to the completion of due diligence by each of Orsu and GOK, the negotiation and finalisation of a binding definitive agreement for the transaction, the approval of the transaction by the boards of directors of each of Orsu and the sellers, and the approval of the TSX-V.