MOSCOW. Oct 12 (Interfax) - MMC Norilsk Nickel (RTS: GMKN) has redistributed the flows of raw material and semi-finished products for refining between Kola Mining and Metallurgical Company and its Finnish nickel refinery Norilsk Nickel Harjavalta, and it will top up Kola MMC with matte from Brazilian companies that was previously processed at Harjavalta, as well as concentrate from one of its African enterprises, Norilsk's Deputy General Director for Production Yury Filippov told Interfax.
Since Kola MMC's capacities are under-loaded, Norilsk was previously planning on processing concentrate from its Voronezh nickel deposits there. However, Ural Mining and Metallurgical Company (UMMC) won the license to develop these deposits. The profitability of working with ore from the Kola Peninsula is falling, and Norilsk representatives have said that Kola MMC might stop working with such ore in 2015, instead refining nickel matte from the company's Polar branch, which is delivered by sea from Dudinka.
"The Kola MMC will never be shut down. Voronezh fell through, and we are looking for an adequate substitute. We are working on reducing operating costs and costs of goods sold, as well as increasing refining," Filippov said.
"Right now we are topping up Kola MMC's capacities with Brazilian matte, which we are bringing for smelting. We are bringing part of the matte from Finland. We will start delivering concentrate from Africa in November or December," he said.
A Norilsk source told Interfax that the company has partially reoriented Kola MMC's capacities towards matte refining, and that nickel matte, a more metal-rich alloy, is being sent for refining at Harjavalta. Brazilian companies Mirabella Nickel and Fortaleza, which previously worked with Harjavalta, are delivering matte to Kola MMC. In addition, Nkomati, a South Africa-based joint venture between Norilsk and African Rainbow Minerals, is currently providing Kola MMC with concentrate.
Concentrate from Australian mine Lake Johnson, which Norilsk previously sent for refining in Finland, is now sold on-site. "Yesterday it was beneficial to take and resmelt Lake Johnson concentrate at Harjavalta. Today, due to price factors, we have stopped shipping the Australian concentrate and given it to the free market," Filippov said. Chinese metallurgical companies are the buyers, another Norilsk representative said.
Norilsk has already begun converting part of Kola MMC's facilities to cobalt production. Kola MMC could begin producing high-grade electrolytic cobalt in 2015. Norilsk is investing about 2 billion rubles in this project.
In addition to Zhdanovskoye, Kola MMC is developing the Zapolyarnoye, Kotseldvaara and Semiletka deposits. These three mines produce sulfide disseminated ore containing nickel, copper and other elements. Kola MMC processed 8.147 million tonnes of ore in 2011, producing 113,000 tonnes of nickel and 60,000 tonnes of copper.
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