Russian nickel and palladium mining and smelting company Norilsk Nickel is planning to increase its capital expenditure to between $2.3bn and $2.5bn per year in 2019 and 2020.
The capital expenditure, which stays at $2bn for 2018, is directed at implementation of the company’s environmental programme and infrastructure modernisation plans.
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Under the environmental programme, the company will focus on the implementation of SO2-capturing technologies and reconfiguration of the copper production chain.
Meanwhile, the modernisation exercise involves the implementation of equipment replacement strategies.
Nornickel president Vladimir Potanin was quoted by Reuters as saying: “In the next three years, we are budgeting for an increase in capital investments that will allow us not only to maintain metal production volumes but also put a solid foundation under new-perspective projects.”
Growth opportunities beyond 2022 include an increase in operational efficiency and development of Talnakh deposit.
Nornickel also intends to achieve a reduction of 75% in total SO2 emissions in the Norilsk Industrial Area by 2023.
The company expects its net working capital to remain around $1bn, while the ratio of net debt to earnings before interest, taxation, depreciation and amortisation (EBITDA) is anticipated to be in the range of 1.5-2.5.
The company is targeting annual cost reduction by $200m to $300m from 2020.
A feasibility study is currently in progress at the company’s South Cluster project, with the final investment decision expected to take place in the first half of next year.
