Page 31 - BNE_magazine_12_2019 dec19

bne December 2019 Cover story I 31
in companies with poor environmental records and NorNickel has been in the front line of this trend, as the company remains one of the heaviest polluters in Russia thanks to its metal works in the Arctic city of Norilsk.
During the capital markets day NorNickel’s management went out of its way to reiterate its plans to cut pollution. The company has already ploughed more than $2bn into technologies that already capture 90% of the sulphur dioxide the company produces, and another $3.5bn will be invested in the ecological goals under the new capex programme.
The measures include a complete shutdown of smelting operations in the town of Nickel and the copper line on the Kola Peninsula near Norway, which will result in a 85% reduction in sulphur emissions from the Kola division. There will also be investment into capturing furnace and convector gases at the Nadezhda plant on the Taymir peninsula and other facilities to cut sulphur emissions further.
The company already has one of the lowest carbon emissions levels in the industry because it sources about 40% of its electricity from hydro-power stations, with the rest coming from gas.
The medium term plan is to reduce emissions by a total of 90% by 2025.
“The strategic priorities of Norilsk Nickel are based on the principles of environmental safety,” Dubovitsky told investors in London.
In addition to investing in more sulphur dioxide reduction technology, NorNickel will also shutter some of its facilities as part of its ESG drive. Two
while the shareholders agreement remains in effect, but the plan is to ramp up investment from 2023 after
it expires and this will almost certainly mean the dividend policy will have to be renegotiated with shareholders.
In particular, the company has allocated a peak investment period in 2022-2025, when the average annual level of capital investments will expand from $2.5- 2.8bn in 2020 to $3.5-4bn. After 2026,
“The strategic priorities of Norilsk Nickel are based on the principles of environmental safety”
workshops on the Kola Peninsula that cannot be modernised – a smelter in the town of Nickel and a metallurgical smelter in Monchegorsk – will be closed down, which will reduce emissions on the peninsula to zero. As part of this effort the company says it will reduce emissions two-fold by 2020 and seven- fold by 2021 compared to 2015 levels.
NorNickel’s management says the dividend payments will not be changed
the level of capital investments will normalise again and investments return to the level of less than $2bn that has been the norm since 2013.
"For a 10-year period, we want to ensure in any case a level of return to shareholders that exceeds the industry average," Dubovitsky emphasised.
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