Norilsk Nickel to develop business in Russia

MMC Norilsk Nickel (hereinafter, Norilsk Nickel or the Company), today announced further details of its new strategy in London.

The new strategy aims to realize the full potential of MMC Norilsk Nickel’s unique resource base at the Polar and Kola Peninsulas, increase MMC Norilsk Nickel’s operational efficiency and deliver a step change in the quality of its investment and capital governance.

“We are pleased to unveil our new strategy to investors today, which aims to deliver sustainably higher returns by focusing on our Tier I assets and exercising greater investment discipline, and lead to enhanced operational efficiency. We believe that the market welcomes our strategic vision, and the management will continue implementing our improved strategy, which allows MMC Norilsk Nickel to develop sustainably in any market condition”, said Vladimir Potanin, CEO of MMC Norilsk Nickel.

At the heart of the new strategy is MMC Norilsk Nickel’s commitment to focus on Tier 1 assets and to deliver sustainably high return on capital by owning and efficiently operating assets located in regions with high geological potential, where MMC Norilsk Nickel can build on its competitive edge.

The strategy contemplates that all production assets in MMC Norilsk Nickel’s portfolio are to meet the Tier I asset criteria by 2015. MMC Norilsk Nickel classifies projects as Tier 1 if they are large scale, deliver greater than $1bn in revenue, have an EBITDA margin greater than 40% and have a reserve life of greater than 20 years.

By focusing on Tier 1 assets, Norilsk can better utilize its existing infrastructure and leverage strong geological and technical expertise to deliver greater economies of scale and higher margins throughout the commodity cycle.