Kola Peninsula (Kola MMC)

Mining

Kola MMC is currently developing Zhdanovskoye, Zapolyarnoye, Kotselvaara and Semiletka Fields. Severny Mine (including Kaula-Kotselvaara mine) produces disseminated sulphide ores containing nickel, copper and other commercial components. Severny Mine leverages various ore mining methods as follows:

• Zhdanovskoye Field uses sublevel longwall caving with front ore passes, block caving (limited scope of application), and open-pit mining (at the open pit sections, for example, at Yuzhny Open Pit) methods.
• At Zapolyarnoye Field, in 1H 2016, ores were extracted through chamber mining with deep-hole stoping from sublevel drifts and flowable and dry backfilling.
• Kotselvaara and Semiletka Fields primarily use stoping from sublevel drifts and sublevel caving, as well as room-and-pillar short-hole and long-hole stoping (limited scope of application).

Kola MMC is the Company’s second largest production asset.

In 2016, Kola MMC’s total ore output amounted to 7.6 mln t, down 347 kt, or 4% y-o-y.

The comparison of actual ore outputs in 2016 and 2015 shows:

• a 72% decline in Severny Mine’s output at Zapolyarnoye Field due to additional development of the Field’s balance ore reserves;
• a 4% decline in Kaula-Kotselvaara mine’s output due to the five-day working week;
• the decline in output at Zapolyarnoye Field and Kaula-Kotselvaara mine in line with the mining plan for 2016.

Concentration

Concentration facilities:

• Zapolyarny Concentrator

The Concentrator produces briquetted copper-nickel concentrate. Nkomati concentrate also undergoes briquetting. Briquettes are delivered to Smelting to produce converter matte.

In 2016, Kola MMC’s Concentrator processed 7.568 mln t of ore, down 282 kt y-o-y as a result of lower mining volumes.

In 2016, the rate of metals recovery in collective concentrate was below the 2015 level due to a higher content of hard-to-process finely disseminated and talcose ores in the ore mixture.

Smelting

The refining facilities of Kola MMC in Monchegorsk process converter matte from Smelting Shop and Polar Division, and copper cake from Norilsk Nickel Harjavalta.

Precious metals produced by Kola MMC are refined at Krasnoyarsk Gulidov Non-Ferrous Metals Plant under a tolling agreement.

In 2016, Kola MMC produced more metals as compared to 2015. The main driver behind this growth was the increased converter matte supply from Polar Division owing to reconfiguration of the production facilities.

Smelting facilities:

• Smelting Shop (Nickel)
• Metallurgical Shop (Nickel)
• Refining Shop (Monchegorsk)
• Nickel Electrolysis Shop (Monchegorsk)