History
Mining began in the Norilsk area in the 1920s.[10] The Soviet government established the Norilsk Combine in 1935 and passed control to the NKVD. In 1943, Norilsk produced 4,000 tonnes of refined nickel, and by 1945, it had reached the target figure of 10,000 tonnes. The mining and metal production originally used forced labour from the Gulag system.
In 1993, after the fall of the Soviet Union, a joint-stock company called RAO Norilsk Nickel was created. Two years later, control over the deeply indebted company, which was bleeding cash at a rate of about $2 million a day against the background of falling nickel prices, was sold to a private company, Interros. By the end of privatization in 1997, the company had turned a profit, and workers were being paid. The current average pay exceeds $1,000 per month[11] with an annual paid leave of two to three months. Nevertheless, the working and living conditions in Norilsk remain harsh, although they are improving as the company shuts down old factories that are the source of excessive pollution.[12]
In July 2000, Norilsk Nickel joined forces with the St. Petersburg Research Institute of the Arctic and Antarctic, to investigate the potential use of decommissioned nuclear powered submarines, both from the United States and Russia, to transport materials along the Northern Sea Route .[13] Overhaul and refit costs came to $72–80 million per submarine, which included modifying its ice-breaking bow to cut through ice up to 215 cm (85 in) thick in seawater and up to 150 cm (59 in) in the freshwater mouth of the Yenisei. Decommissioned Typhoon submarines were expected to transport up to 12,000 tonnes of supplies and nickel between Dudinka and either Murmansk or Arkhangelsk.[13] In 2000, the Murmansk Shipping Company (MMP or MSCO) provided icebreaker services at a charge of $11.35 per tonne of cargo.[13] Three submarines - the project feasibility threshold - were scheduled for refit and overhaul between 2000 and 2003.[13]
However, the stakeholders failed to reach an agreement as to who would conduct and cover the refit and overhaul of the submarines. Furthermore, money was not the only issue. Under existing international agreements, decommissioned nuclear-powered submarines from the navies of the two countries had to be dismantled. Should this obstacle be addressed, subsequent ownership of the refitted submarines also remained unclear: whether they would remain the assets of the Ministry of Defense or would be transferred to another governmental agency. One of the options suggested by Nornickel was to establish a joint transportation company that would lease the vessels.[13]
In 2002, Nornickel accounted for most of MMP's shipping along the Northern Sea Route.[14] In 2008, Aker Yards signed a contract with Norilsk Nickel for the delivery of four container/cargo ships for Arctic operations, with an option for a fifth.[15][12]
In 2002, MMC Norilsk Nickel began purchasing gold mining assets, which were spun off in 2005 as Polyus Gold.
In 2003, the company took control of Stillwater Mining Company, the only palladium producer in the U.S. Stillwater operates a platinum group metals (PGM) facility in Stillwater, Montana. In November 2010, Norilsk Nickel announced the sale of Stillwater.[16]
Throughout 2007, Norilsk acquired a host of mining and metallurgical assets abroad, transforming into a multinational company with operations in Australia, Botswana, Finland, Russia, South Africa, and the United States. Norilsk Nickel signed its key deal on 28 June 2007, acquiring approximately 90 percent of Canada's LionOre Mining International Ltd., the world's tenth-largest nickel producer at the time. This takeover, valued at $6.4 billion, was the biggest foreign acquisition by a Russian company at the time, making Norilsk Nickel the world's largest nickel producer.[17][18]
On February 27, 2008, Norilsk Nickel diversified into the coal mining industry through North Star LLC by obtaining mining rights to the amount of 33.6 million rubles for the estimated 5.7 billion tonnes of coal at the Syradasai Field near the port of Dikson in the Taymyrsky Dolgano-Nenetsky District .[19][20][21] In the coal mining industry, it competed with Rio Tinto and BHP Billiton.[19] By the estimates of North Star LLC, a firm affiliated with Nornickel, developing the field would require an investment of $1.5 billion, which including the necessary expansion of the port of Dikson, another Nornickel asset.[19] The only competitor for the rights to the Syradasai Field was Golevskaya Mining Company LLC .[20]
In 2018, North Star LLC was acquired by businessman Roman Trotsenko's AEON Group, changing its ownership. Neither Nornickel nor AEON disclosed the terms of the ownership transfer.[25]
In the Arctic Environmental Responsibility Index (AERI), Norilsk Nickel is ranked No. 38 out of 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle.[26]
In April 2024, the United States and the United Kingdom announced a ban on imports of Russian aluminum, copper, and nickel.[27] Due to sanctions, Norilsk Nickel planned to move some of its copper smelting to China and establish a joint venture with a Chinese company.[28] Finished copper products would be sold as Chinese products to avoid Western sanctions.[29] China is Norilsk Nickel's largest export market since 2023.[30] Nickel is a critical metal in electric vehicle batteries, and palladium is critical element in catalytic converters, a component in natural gas vehicles.[31] This plan was motivated not only by circumventing Western sanctions,[32] but also China's significantly less stringent environmental standards than those in Russia.
