Taimyr Peninsula (Norilsk Nickel’s Polar Division)

Polar Division is the Group’s flagship subsidiary featuring a full metal production cycle that embraces operations ranging from ore mining to the shipment of end products to consumers. This is where the Company has its largest ore deposits.

Mining

Talnakhskoye and Oktyabrskoye Fields are developed by Taimyrsky, Oktyabrsky, Komsomolsky (including Komsomolskaya and Skalistaya mines) and Mayak Mines. Ores are extracted through slicing and chamber mining with flowable backfilling. Norilsk-1 Field is developed by Zapolyarny Mine through open-pit and underground mining. Underground mining is carried out through sublevel (level) caving using front ore passes and mechanised vehicles.

In 2016, Polar Division’s total ore output stood at 17.2 mln t, down 83.4 kt, or 0.5% y-o-y. The production of rich and disseminated ores declined by 15%, whereas the output of cuprous ores spiked by 31% thanks to higher volumes at Oktyabrsky and Komsomolsky Mines. The change in ore output was in line with the annual production plan.

Concentration

Concentration facilities:

• Talnakh Concentrator
• Norilsk Concentrator

Talnakh Concentrator processes rich and cuprous ores from Oktyabrskoye Field to produce nickel, copper and pyrrhotite concentrates. The key processing stages include crushing, breaking, flotation and thickening.

Norilsk Concentrator processes all disseminated and cuprous ores from Talnakhskoye and Oktyabrskoye Fields to produce nickel and copper concentrates. The key processing stages include crushing, breaking, gravitation and flotation enrichment, and thickening.

Thickened concentrates are transported via a pipeline from Talnakh and Norilsk Concentrators to the smelting facilities for further processing.

In 2016, sulphide ore processing volumes at Talnakh Concentrator were up 0.6 mln t y-o-y (8.6 mln t in 2016 vs 8.0 mln t in 2015). 1H 2016 saw the installation of new flotation machines, а semi-autogenous grinding mill (SAG), and fine grinding mills. From 2H 2016, Talnakh Concentrator has been fine-tuning the new technology, which temporarily reduced the recovery rates for 2016. On the flip side, higher nickel and copper content in the collective flotation concentrate, as a result of the upgrade, improved its overall quality as compared to 2015, with the nickel content growing by 0.6% (5.3% in 2016 vs 4.8% in 2015) and the copper content increasing by 2.2% (10.0% in 2016 vs 7.8% in 2015). In the reporting year, the rate of copper recovery in copper concentrate was up 3.2% y-o-y (82.2% in 2016 vs 78.9% in 2015).

In 2016, the ore processing volumes at Norilsk Concentrator were down 0.7 mln t y-o-y (8.1 mln t in 2016 vs 8.8 mln t in 2015), as cuprous ores from Oktyabrsky Mine were processed at Talnakh Concentrator. In 2H 2016, the disseminated ores branch of Norilsk Concentrator processed Copper Plant’s low-grade ores as part of a pilot project, which helped to partially offset the loss of copper volumes from Oktyabrsky Mine. In 2016, nickel content in the collective concentrate produced at Norilsk Concentrator went up by 0.3% y-o-y (3.4% in 2016 vs 3.1% in 2015), while copper content remained almost flat (10.13% in 2016 vs 10.11% in 2015). Copper content in the copper concentrate increased by 0.4% (23.6% in 2016 vs 23.2% in 2015).

Smelting

Smelting facilities:

• Nadezhda Metallurgical Plant
• Nickel Plant (shut down in August 2016)
• Copper Plant
• Smelting Shop (part of Copper Plant)

In 2016, the Company’s smelting operations continued reconfiguring their production capacities, streamlining production processes and improving maintenance of the core production equipment.

In August 2016, Nickel Plant’s Smelting, Roasting, Nickel Electrolysis, and Chlorine and Cobalt Shops were shut down in the Company’s Polar Division. Nickel is now being refined at Kola MMC and Norilsk Nickel Harjavalta.

Prior to the Nickel Plant shutdown, Nadezhda Metallurgical Plant processed most of the nickel concentrate, nearly all of the pyrrhotite concentrate from Talnakh Concentrator, part of the nickel concentrate from Norilsk Concentrator, some of the pyrrhotite concentrate previously stored at Kayerkansky Open Pit Coal Mine (KUR-1) to produce converter matte and elemental sulphur. Pyrrhotite concentrate from Talnakh Concentrator and stored pyrrhotite concentrate from Kayerkansky Open Pit Coal Mine is further leached in Hydrometallurgical Shop to produce steam cured sulphide concentrate. Concentrate from Talnakh Concentrator, steam cured sulphide concentrate and stored pyrrhotite concentrate from Kayerkansky Open Pit Coal Mine are delivered to the flash smelting furnaces. The matte is then blown into high-grade converter matte. From 2H 2016, after the Nickel Plant shutdown, Nadezhda Metallurgical Plant’s pyrometallurgical capacities have been processing all nickel-pyrrhotite concentrate from Talnakh Concentrator and nickel concentrate from Norilsk Concentrator, while the stored pyrrhotite concentrate from Kayerkansky Open Pit Coal Mine has been delivered for processing to its Hydrometallurgical Shop.

Prior to the shutdown, Nickel Plant processed nearly all of the nickel concentrate from Norilsk Concentrator, some of the pyrrhotite and nickel concentrates from Talnakh Concentrator, part of the pyrrhotite concentrate previously stored at KUR-1 and some of the converter matte from Nadezhda Metallurgical Plant to produce commercial nickel and cobalt.

Copper Plant processes all of the copper concentrate from Norilsk and Talnakh Concentrators to obtain commercial copper, elemental sulphur and sulphuric acid for production needs of Polar Division. Smelting Shop (part of Copper Plant) recycles sludge from Copper Electrolysis Shop and Nickel Electrolysis Shop (prior to the Nickel Plant shutdown) to produce concentrates of precious metals, silver metal and selenium.

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

At Polar Division, metals are produced from its own raw materials. From Q4 2016, all nickel converter matte from Nadezhda Metallurgical Plant was processed at Kola MMC due to the Nickel Plant shutdown.

In 2016, the output of key metals at Polar Division was down compared to 2015. That was mainly attributable to the reconfiguration of production facilities, including the Nickel Plant shutdown and pre-commissioning operations at Talnakh Concentrator.