OPERATIONAL PERFORMANCE

The Norilsk Division is the Group’s flagship asset boasting a full metals production cycle from ore mining to the shipment of finished products to customers. The Norilsk Division includes the Company’s two major production assets – the Polar Division and Medvezhy Ruchey (100% stake), as well as a number of transport and support assets. The Norilsk Division’s assets are located on the Russian Taimyr Peninsula – in the Norilsk Industrial District in the north of the Krasnoyarsk Region in the Arctic Circle, and linked to other regions by the Yenisei River, the Northern Sea Route, and by air.

The Norilsk Division operates the largest deposits in the Company’s portfolio: Talnakhskoye and Oktyabrskoye, as well as the Norilsk-1 deposit, with a combined annual output of over 17 mln t of copper-nickel sulphide ore.

In 2021, the Norilsk Division accounted for 78% of copper and 41% of PGMs in the Group’s total finished products.

Mining production

The Norilsk Division mines copper-nickel sulphide ores of three grades: high-grade ores with a higher content of base and precious metals; cuprous ores with a higher copper content as compared to nickel; and disseminated ores with a lower content of all metals.

The Polar Division of the Norilsk Division develops the Talnakhskoye and Oktyabrskoye deposits through underground mining at the Taimyrsky, Oktyabrsky, Komsomolsky, Skalisty, and Mayak Mines. The mines deploy slicing and room-and-pillar methods with the cut-and-fill system. Stopes are refilled with backfill mixtures, with their composition adjusted in each case depending on technological requirements for mine backfill durability.

The Norilsk-1 deposit is developed by the Zapolyarny Mine (Medvezhy Ruchey – South Cluster project), through open-pit and underground mining. Underground mining is carried out through sublevel (level) caving using front ore passes and self-propelled vehicles.In 2021, total ore production by the Norilsk Division was 17.5 mln t, down 1.4 mln t y-o-y (–7%). High-grade and disseminated ore production decreased by 19% and 3%, respectively, while production of cuprous ores increased by 1%. The year-on-year decrease in production was caused by the temporary suspension of operations at the Oktyabrsky and Taimyrsky Mines due to flooding by groundwater. Both mines have currently resumed their operations in full.

Deposit/mine, ore type	2019	2020	2021
Total ore	18.42	18.82	17.46
high-grade	7.35	7.48	6.07
cuprous	5.75	5.49	5.55
disseminated	5.32	5.85	5.84
Oktyabrskoye deposit	9.45	9.58	7.39
Oktyabrsky Mine (underground)	5.37	5.34	4.79
high-grade	0.88	0.80	0.58
cuprous	3.38	3.41	3.41
disseminated	1.11	1.13	0.80
Taimyrsky Mine (underground)	4.08	4.24	2.60
high-grade	4.08	4.24	2.60
Talnakhskoye and Oktyabrskoye deposits	7.34	7.55	7.98
Komsomolsky Mine (underground)	4.00	4.25	4.26
high-grade	0.10	0.14	0.35
cuprous	2.28	1.81	1.85
disseminated	1.62	2.30	2.06
Skalisty Mine (underground)	2.34	2.54	2.79
high-grade	2.25	2.27	2.50
cuprous	0.09	0.27	0.29
Mayak Mine (underground)	1.00	0.76	0.93
high-grade	0.04	0.03	0.04
disseminated	0.97	0.73	0.89
Norilsk-1 deposit	1.63	1.69	2.09
Zapolyarny Mine (open-pit/underground)
disseminated

Project portfolio aimed at shifting to safe, green and efficient digital operation driven by innovation, big data analytics and unmanned mining technology. Nornickel was the first Russian company to put unmanned autonomous haul trucks into commercial operation at the Skalisty Mine in 2021.

Concentrators

CONCENTRATION

Talnakh Concentrator

Processes high-grade, cuprous and disseminated ores from the Oktyabrskoye and Talnakhskoye deposits to produce nickel-pyrrhotite and copper concentrates, and metal-bearing products. The key processing stages include crushing, milling, flotation, and thickening.

automating

80%

of processes

Its automation algorithms generate recommendations for the ore flotation process in real time to increase metal recovery into concentrate. The project also uses machine vision to monitor ore sizes on several conveyors before it is fed into a semi-autogenous grinding mill, which is essential for optimal grinding control.

Norilsk Concentrator

Processes all disseminated ores from the Norilsk-1 deposit, cuprous and disseminated ores from the Oktyabrskoye and Talnakhskoye deposits, and low-grade ores from Copper Plant to produce nickel and copper concentrates. The key processing stages include crushing, milling, flotation, gravity concentration, and thickening.

The resulting thickened concentrates from Talnakh Concentrator and Norilsk Concentrator are transported via slurry pipelines to the metals operations of the Norilsk Division for further processing. In 2021, the Company’s concentration facilities processed a total of 16.5 mln t across all types of ore feedstocks.

In 2021, Talnakh Concentrator decreased its ore processing by 7% to 10.1 mln t due to a temporary decline in production caused by the flooding of the Taimyrsky and Oktyabrsky Mines. Recovery of nickel from ore into bulk flotation concentrate, including the output of metal-bearing pyrrhotite product, remained almost flat year-on-year at 87.4% (down 0.5%).

In 2021, the Norilsk Concentrator reduced its ore processing to 6.4 mln t, down 1.2 mln t y-o-y, as a result of a temporary suspension of processing operations due to an accident. Recovery of nickel from ore into bulk concentrate was 70.0%, down 0.6% y-o-y, due to the concentrator temporarily shifting to processing (crushing) ores from the Talnakhskoye deposit during and after the accident response.

НItem	2019	2020	2021
Ore processing, mln t
Talnakh Concentrator	10.7	10.9	10.1
Norilsk Concentrator	7.5	7.6	6.4
Nickel recovery, %
Talnakh Concentrator	85.9	87.9	87.4
Norilsk Concentrator	71.3	70.6	70.0

Smelting

DOWNSTREAM FACILITIES

Production chain

The produced concentrates, including steam cured sulphide concentrate, secondary materials, and metal-bearing feed from Kola MMC, are fed into flash smelting furnaces at Nadezhda Metallurgical Plant. Steam cured sulphide concentrate is leached at the hydrometallurgical shop of Nadezhda Metallurgical Plant from products with low metal content, such as Talnakh Concentrator’s metal-bearing products, products from Nadezhda Metallurgical Plant’s tailings facility, and concentrates from tailings ponds. The matte produced in flash smelting furnaces is then converted into high-grade converter matte.

Copper Plant processes all of the copper concentrate from the Company’s concentrators and also a copper cake with Norilsk Nickel Harjavalta to obtain copper cathodes, elemental sulphur, and sulphuric acid for the operational needs of the Norilsk Division.

Copper Plant’s metallurgical shop recycles sludge from the copper tankhouses of Copper Plant and Kola MMC to produce precious metal concentrates, commercial selenium, and tellurium.

The precious metals produced by the Norilsk Division are refined at Krastsvetmet and Urals’ Innovative Technologies under tolling agreements.

The decrease in copper and PGM output in 2021 was caused by the temporary suspension of operations at Norilsk Concentrator due to an accident, and at two mines due to flooding.

Products	2019	2020	2021
Copper, t	355,706	351,413	315,511
Palladium, koz	1,042	1,180	1,058
Platinum, koz	251	302	271

The Kola Division includes Kola MMC, Nornickel’s wholly owned subsidiary. The Kola Division is another key production asset of the Company in Russia, which is located on the Kola Peninsula in the Murmansk Region.

In 2021, Kola MMC accounted for 76%, 5% and 58% of the Group’s total nickel, copper, and PGM finished products, respectively.

Mining production

Kola MMC mines disseminated copper-nickel sulphide ores at four deposits: Zhdanovskoye, Zapolyarnoye, Kotselvaara, and Semiletka.

Kola MMC uses various ore mining methods. The Zhdanovskoye and Zapolyarnoye deposits use three mining methods: gravity caving with front ore passes, sublevel caving with room-and-pillar ore removal, and room-and-pillar mining. The Kotselvaara and Semiletka deposits primarily use stoping from sublevel drifts and sublevel caving. Room-and-pillar short-hole and long-hole stoping is also used on a limited scale.

In 2021, Kola MMC produced 7.2 mln t of ore (down 6% y-o-y). The decrease in ore production was due to the fact that the concentrator stopped processing off-balance (sub-economic) ores from the open-pit section to enhance the technical and economic performance in producing sulphide concentrate.

Deposit/mine	2019	2020	2021
Total ore	7.91	7.65	7.16
Zhdanovskoye deposit:	7.25	7.08	6.55
Severny Mine (underground section)	6.49	6.43	6.48
Severny Mine (open-pit section)	0.77	0.65	0.07
Zapolyarnoye deposit:	0.06	0.05	0.03
Severny section (underground)	0.06	0.05	0.03
Kotselvaara and Semiletka deposits:	0.60	0.52	0.58
Kaula-Kotselvaara mine (underground)	0.60	0.52	0.58

Concentration

CONCENTRATION FACILITIES

The concentrator produces nickel sulphide concentrate, which is then sold via third parties or partially shipped to the Norilsk Division for further processing. In 2021, the concentrator processed 7.1 mln t of ore.

Item	2019	2020	2021
Ore processing, mln t	7.60	7.96	7.11

Smelting

DOWNSTREAM FACILITIES (Monchegorsk)

In 2021, Kola MMC used only Nornickel’s own Russian feedstock in metals production. The decrease in saleable nickel and PGM production was primarily caused by lower supplies of raw materials from the Norilsk Division due to the temporary suspension of operations at the Oktyabrsky and Taimyrsky Mines, and at Norilsk Concentrator. The decrease in saleable copper output was due to the closure of the copper shop in March 2021.

The precious metals produced by the Kola Division are refined at Krastsvetmet and Prioksky Plant of Non-Ferrous Metals under tolling agreements.

Products	2019	2020	2021
Nickel, t	166,265	172,357	145,817
from own Russian feed	166,265	172,357	145,817
Copper, t	86,976	70,618	21,609
from own Russian feed	86,976	70,618	21,609
Palladium, koz	1,826	1,630	1,529
from own Russian feed	1,826	1,630	1,529
Platinum, koz	439	390	363
from own Russian feed	439	390	363

Norilsk Nickel Haijavalta located in Haijavalta, Finland, is Nornickel’s wholly owned subsidiary, acquired by the Group in 2007. The Haijavalta is apart of the Kola Duvision and processes Nornickel’s Russian feedstock and nickel-bearing raw materials sourced from third-party suppliers.

Founded in 1959, it is Finland’s only nickel refinery and one of the largest nickel producers in Europe. Harjavalta’s capacity is 66 ktpa of nickel products.

The facility uses sulphuric acid leaching with metal recovery rates above 98%, which is a best practice in the global mining and metals industry.

In 2021, Norilsk Nickel Haijavalta accounted for 24%, 1% and 1% of the Group’s total nickel, copper and PGM finished products, respectively.

Smelting

During 2021, Norilsk Nickel Harjavalta mainly processed nickel feed from Kola MMC’s refining operations. Third-party feedstocksand nickel salts from other suppliers, were supplied regularly in small amounts throughout 2021. Metal recovery remained high.

In 2021, Norilsk Nickel Harjavalta reduced its nickel production by 26% due to lower supplies of nickel concentrate from Kola MMC. The production of copper in copper cake totalled 1.9 kt, down 23% y-o-y, while the output of saleable palladium and platinum in copper cake increased by 43% y-o-y. The increase was due to increased supplies of crushed converter matte to match operational needs.

Products	2019	2020	2021
Nickel, t	62,422	63,352	47,189
from the Company’s own Russian feed	58,939	60,175	44,128
Copper (in copper cake), t	12,948	2,491	1,923
from the Company’s own Russian feed	12,667	2,121	1,897
Palladium (in copper cake), koz	54	17	30
from the Company’s own Russian feed	51	11	29
Platinum (in copper cake), koz	12	4	7
from the Company’s own Russian feed	9	2	7

The Trans-Baikal Division includes Bystrinsky GOK, the construction of which was started by Nornickel in 2013 (put into commercial operation in 2019). In 2021, Bystrinsky GOK reached its design capacity.In 2021, the Trans-Baikal Division produced 17% of the Group’s total copper output.

17%

In 2021, the Trans-Baikal Division produced 17% of the Group’s total copper output

Mining production

Bystrinsky GOK mines gold-iron-copper ores of the Bystrinskoye deposit.

Mining asset	2019	2020	2021
Total ore	10.49	16.04	16.55
Bystrinskoye deposit:	10.49	16.04	16.55
Verkhne-Ildikansky open-pit mine	8.60	11.57	13.34
Bystrinsky-2 open-pit mine	1.89	4.47	3.21

Concentration

CONCENTRATION FACILITIES

The facility processes ores of the Bystrinskoye deposit into copper, iron ore and gold concentrates. Its key processing stages include crushing, milling, flotation, thickening, filtration, and end product packaging. The concentrator has two processing lines. In 2021, it processed 10.47 mln t of ore (2019: 9.76 mln t). The increase was due to scheduled ramp-up to design capacity.

Copper and iron ore concentrates are sold via third parties, while gold concentrates are further processed at the Norilsk Division.

Products	2019	2020	2021
Ore processing, mln t	7.50	9.76	10.47
Copper (in copper concentrate), t	43,489	62,663	67,798
copper content in the concentrate, %	25.50	24.65	22.87
Gold (in copper and gold concentrates), koz	177	241	258
gold content in the concentrate, g/t	4,034	3,050	2,627
Iron ore concentrate, kt	1,311	2,047	2,582
iron content in the concentrate, %	64.60	64.22	63.72