Russia: Nornickel reports H1CY'24 results; projects lower nickel output this year

Russia's Nornickel, the top Class I nickel producer, released preliminary Q2 and H12024 production results and 2024 outlook.

Nickel

In the second quarter of calendar year 2024 (Q2CY'24), Nornickel's consolidated nickel output rose 15% q-o-q to 48,000 tonnes (t), nearly all from Russian feed, driven by improved ore output and operational efficiency. For first half of calendar year 2024 (H1CY'24), total nickel production was stable y-o-y at 90,000 t.

Although Nornickel is not directly impacted by Western sanctions, many Western firms are avoiding business with the company. This has led to a two-year delay in 30 billion roubles worth of repairs due to difficulties in sourcing equipment and technology previously provided by Western companies.

To navigate these challenges, Nornickel is shifting its focus to China and other non-Western markets. The company is planning new smelting and refining projects in China and Bahrain, and remains dedicated to meeting its contractual commitments despite facing increased price volatility and supply uncertainties.

Copper

In Q2CY'24, Nornickel's consolidated copper output, including from the Bystrinsky Copper Project, declined slightly by 1% q-o-q to 109,000 t, all sourced from the company's own feed.

For H1CY'24, total copper output rose 7% to 219,000 t, reflecting a low base from Q1CY'23 and improvements in technological processes at the copper plant of the Norilsk Division, which enhanced copper cathode quality to meet new customer requirements.

The Trans-Baikal Division increased copper in concentrate production by 4% q-o-q to 18,000 t due to higher processed volumes, resulting in a 2% increase to 36,000 t for H1CY'24.

Outlook

Nornickel forecasts nickel production between 184,000 and 194,000 t for 2024, a decrease from 209,000 t in 2023. The reduced nickel output is due to furnace repairs at the Nadezhda smelter, which, once completed, are expected to improve asset reliability.