Nornickel expects capex to grow after 2025 amid intensification of projects in Russia, foresees spending on project in China
MOSCOW. Feb 11 (Interfax) - Norilsk Nickel has confirmed its plans for implementing major development projects in Russia, including constructing the third stage of the Talnakh Concentrator (TOF-3) and developing mining at the Medvezhy Ruchey deposits as well as negotiations with its Chinese partners for relocating part of the capacities of the Norilsk Copper Plant to China.
The intensification of projects in Russia, which have been delayed due to issues with Western components, will lead to increased capital expenditures (capex) after 2025.
"We confirm both of these projects. They are currently in the implementation phase," Nornickel Senior Vice President and Head of Strategy and Business Development Sergei Dubovitsky said on Tuesday.
Regarding the expansion of TOF (the construction of the third stage with a capacity of 8 million tonnes), Nornickel has solved all import substitution issues and is essentially ready to continue the project, Dubovitsky said. The estimated completion date is 2028.
The project to develop the quarry at Medvezhy Ruchey, which aims to achieve production of 7 million tonnes of ore, will be synchronized with TOF-3 and is also expected to reach its planned capacity by 2028.
"These plans are included in our mid-term and long-term forecasts," Dubovitsky said.
Commenting on the plans to relocate the company's copper plant's capacities to China, Dubovitsky said that Nornickel is actively negotiating with its Chinese partners and cannot yet disclose details.
Expenses for this project are accounted for in the financial models for 2025-2026, Dubovitsky said. However, the capital expenditures figure for 2025 ($2.1 billion) does not include these costs, as it pertains to capex related to the company's core assets which are predominantly in Russia. Capex amounted to $2.4 billion in 2024.
The capex estimate for 2025 is below the average level, because the company completed the sulfur project at the Nadezhda Plant last year, Dubovitsky said.
"In 2026-2027, with the intensification of the TOF-3 and Medvezhy Ruchey projects, we expect a certain increase, but not beyond the level we previously planned," he said. The earlier target was set at $2.5-$3 billion.
In late April, Nornickel President Vladimir Potanin told Interfax about plans to relocate the copper plant's capacities from Norilsk to China, creating a joint venture with partners in the country. This move will help resolve the plant's modernization issue, which has been complicated by the inaccessibility of Western equipment, as well as address difficulties with payments and avoid the discounts Nornickel has to offer clients due to voluntary refusals of Russian metals. Additionally, Nornickel hopes to gain competencies in producing battery materials.
Nornickel previously said that its capacities in China will be built by mid-2027, and the process will be synchronized with the phasing out of capacities at the copper plant. Nornickel plans to annually supply around 2 million tonnes of copper concentrate from its Zapolyarny division to the new facility.
