Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Russia's Nornickel ups investment forecast by $6 billion over next decade

Published 11/29/2021, 08:17 AM
Updated 11/29/2021, 08:22 AM
© Reuters. FILE PHOTO: An employee works at Nadezhda Metallurgical Plant of Nornickel company, the world's leading nickel and palladium producer, in the Arctic city of Norilsk, Russia August 23, 2021. REUTERS/Tatyana Makeyeva/File Photo

© Reuters. FILE PHOTO: An employee works at Nadezhda Metallurgical Plant of Nornickel company, the world's leading nickel and palladium producer, in the Arctic city of Norilsk, Russia August 23, 2021. REUTERS/Tatyana Makeyeva/File Photo

By Anastasia Lyrchikova and Polina Devitt

MOSCOW (Reuters) - Russia's Norilsk Nickel said it has raised its 2021-2030 investment estimate by $6 billion to $35 billion to reflect higher construction costs and increased investment in energy infrastructure upgrades.

This will allow the world's largest producer of palladium and refined nickel to invest more in upgrading its production infrastructure, its senior vice president in charge of strategy said, raising the mining group's 2030 output forecast.

"Within 10 years, we see an increase of up to $6 billion in addition to the figures we have given. But the bulk of the increase is on the horizon beyond 2025. We are essentially talking about extending our investment cycle," Sergey Dubovitsky told Reuters in an interview.

The amount invested by the mining group is important for its largest shareholders, businessman Vladimir Potanin and aluminium producer Rusal, who have a history of disputes over the size of Nornickel's dividends.

The company, whose investments were previously expected to pass their peak in 2026, now expects this to happen in 2028.

Dubovitsky said Nornickel regards 2021 as a transitional year when it enters its investment cycle after spending an average of $1.7 billion a year in the previous eight.

Nornickel recommended an interim dividend of $3.2 billion and its management expects to stick to its dividend policy with the final payment for 2021, he added.

© Reuters. FILE PHOTO: An employee works at Nadezhda Metallurgical Plant of Nornickel company, the world's leading nickel and palladium producer, in the Arctic city of Norilsk, Russia August 23, 2021. REUTERS/Tatyana Makeyeva/File Photo

From the additional spending of $6 billion, about $1 billion is the result of rising prices for materials used in construction projects amid global inflation driven by the COVID-19 pandemic.

The rest of the extra capital expenditure, $5 billion, is needed for an upgrade of Nornickel's main energy and production infrastructure, which has been in the spotlight for investors after a spate of accidents in 2020-2021.

Latest comments

hello sir
hello sir
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.