Nornickel Gmk · RUS:GMKN
Nornickel Gmk — Nornickel — Investor Day (November 2021)
104 slides from Nornickel Gmk's investor day presentation, November 2021
Slide 1: Navigating the Transition to a Net Zero World
Navigating the Transition to a Net Zero World Strategy Day November 2021
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared using information available to PJSC MMC Norilsk Nickel (“Norilsk Nickel” or “Nornickel” or “NN”) at the time of preparation of the presentation. External or other factors may have impacted on the business of Norilsk Nickel and the content
Slide 3: Introduction
Introduction A year of 2021 for Nornickel • Resilience of the business model enhanced • Delivery on the comprehensive environmental programme: interim milestones achieved • Ramp-up of the investment programme on track “Sustainable Growth” strategy for core operations intact, focus on emerging challe
Slide 4: Sustainable Development Update
Sustainable Development Update Andrey Bougrov Senior Vice-President
Slide 5: Sustainable Development Performance Highlights
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Sustainable Development Performance Highlights Environment & Corporate Climate Change Social Governance • Global nickel’ industry lowest • Proven track record of acting • Revamped corporate governance carbon footprint per tonne
Slide 6: Sustainable Development Strategic Focus
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Sustainable Development Strategic Focus Environment & Corporate Climate Change Social Governance • Cleaning up legacy pollution • Achieving zero fatalities • Embedding new sustainable and environmental rehabilitation development
Slide 7: HPP-3 Incident: Full Environmental Remediation in Progress
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update HPP-3 Incident: Full Environmental Remediation in Progress 2020: Completion of Phases 1&2 2021+: Phase 4 (clean-up) and Phase 3 (transportation (rehabilitation) in progress and utilization of contaminated materials) • Over 90% o
Slide 8: Clean-up and Collection of Legacy Waste in Norilsk Area
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Clean-up and Collection of Legacy Waste in Norilsk Area Before The first phase of the clean-up and removal program for legacy industrial and construction waste in Norilsk area launched • A dedicated Department, Work with Territo
Slide 9: Environmental Program: Reduction of SO2 Emissions on Track
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Environmental Program: Reduction of SO2 Emissions on Track Norilsk Division: SO2 Emissions Practically Strategic target: achieve industry-leading SO2 Unchanged in 2020, Sulphur Programme in Active utilization rates Construction
Slide 10: Climate Change: Industry's Lowest Carbon Footprint
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Climate Change: Industry’s Lowest Carbon Footprint in Terms of Scope 1,2&3 Emissions and per Tonne of Ni Equivalent Greenhouse Gas Emissions Share of Renewables Nornickel’s CO2 Nickel Emissions (3) Scope 1&2 (CO2e) (1), 2020 (pe
Slide 11: Industry's Lowest Carbon Footprint of the Entire Commodities Basket
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Industry’s Lowest Carbon Footprint of the Entire Commodities Basket Global Warming Potential (GWP 100 years) Independent verification [kg CO2e per kg of product] [Base metals (1)] and confirmation Nornickel 2020 Industry average
Slide 12: Climate Change Strategy: Reducing Carbon Intensity and Maintaining Absolute Emissions
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Climate Change Strategy: Reducing Carbon Intensity and Maintaining Absolute Emissions GHG Emissions from Operations, Scope 1&2 Reduction of Carbon Intensity [mt CO2e] per Ni Equivalent (3) [per tonne of Ni equivalent] 31.5 -16%
Slide 13: Biodiversity: Reducing a Negative Impact
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Biodiversity: Reducing a Negative Impact Support of natural reserves and protection of rare animal species • Support of Russia’s largest natural reserves, study and protection of rare and endangered species listed in the Red Boo
Slide 14: Social: Investing into Local Communities and Charity
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Social: Investing into Local Communities and Charity ~ $500 mln Breakup of Charity Expenditures in 2020 10% total spending in 2020 on social infrastructure development, charity 15% and sponsorship programmes Public initiatives 3
Slide 15: Social: Reducing Negative Impact on Local Communities, Improving Local Healthcare
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Social: Reducing Negative Impact on Local Communities, Improving Local Healthcare • Since the closure of the Nickel Plant in Norilsk in 2016, SO2 emissions within city limits reduced by 30-35% Reducing Impact on • According to t
Slide 16: Social: Major Renovation Programme for the City of Norilsk until 2035
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Social: Major Renovation Programme for the City of Norilsk until 2035 • Social & economic development program for Norilsk city until 2035 Norilsk Social & is being prepared Economic • ₽120 bn until 2035 four-party agreement with
Slide 17: Habitat of Indigenous People in Taymir Peninsula
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Habitat of Indigenous People in Taymir Peninsula: Far from Operating Sites • There are approximately 20k of indigenous people living in the Taymir Peninsula comprised primarily by 5 nations: nents, ents, nganasans, evenks Karaul
Slide 18: Social: Support of Indigenous People
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Social: Support of Indigenous People • Nornickel has historically supported local indigenous communities via various social programs, provided transportation services, materials and equipment, helped to preserve the unique cultu
Slide 19: Case Study: Free Prior Consent from Indigenous People for Resettlement
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Case Study: Obtaining a Free Prior Consent from Indigenous People for a Resettlement Project in Tukhard Settlement • The free, prior and informed consent procedure is a UN-developed standard guaranteeing the right of indigenous
Slide 20: Corporate Governance: Adjusting Organizational Structure
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Corporate Governance: Adjusting Organizational Structure to Respond to New Challenges Sustainable Development and Board of Directors Climate Change Committee Increased focus on sustainable development and climate change Нeaded b
Slide 21: Adjusting Sustainable Development KPIs for the Management
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Adjusting Sustainable Development KPIs for the Management 40% Team Annual KPIs Long-term KPIs (pending approval (1)) Health Area Environment Environment & Climate Change and Safety of team annual KPIs are linked to ESG performan
Slide 22: Strengthening the Reputation as a Responsible Supplier
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Strengthening the Reputation as a Responsible Supplier Nornickel is Progressing Well with Global Responsibility Certifications and Standards. Completed Carbon neutral nickel – certified low carbon product In-progress for stainle
Slide 23: ESG Ratings – on Par or Above Global Mining Industry Averages
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update ESG Ratings – on Par or Above Global Mining Industry Averages Governance Environment Social Industry average – “B” B B B B BB CCC 7 6 • ESG Risk Rating “High” Reiterated 3 3 1 3 • ESG Risk Rating (1) improved to 36.9/100 (from 3
Slide 24: Selected International Sustainable Development Initiatives
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Selected International Sustainable Development Initiatives • ESG rating 48/100 as of April’21 • Compliance with GRI (global reporting • Signatory to UN Global Compact (vs.33/100 as of September’20) initiatives) and RSPP public v
Slide 25: Advancing Sustainable Development Agenda
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Advancing Sustainable Development Agenda 2021 2022 2023 • Prepare sustainable development • Prepare and review “green • Issue a Climate change report strategies at the divisional level financing” opportunities • Compliance with
Slide 26: Operations Update
Operations Update Sergey Stepanov Senior Vice-President Chief Operating Officer
Slide 27: Health and Safety Update
Norilsk Nickel Capital Markets Day 2021| Operations Update Health and Safety Update Number of Fatal Accidents Unchanged in 2021 Over 90% of major and fatal accidents occurred: Due to the Incident at Norilsk Concentrator [Employees] While performing the following types of work… Lost time injury • Min
Slide 28: Reduction of Fatal Accidents is the Main Focus for 2022-2025
Norilsk Nickel Capital Markets Day 2021| Operations Update Reduction of Fatal Accidents is the Main Focus for 2022 - 2025 Key Health and Safety Initiatives Mining operations • Setting up a management expert group with the sole purpose to assess and raise safety standards in mining operations • Enhan
Slide 29: Recovery of Oktyabrsky and Taimyrsky Mines and Norilsk Concentrator
Norilsk Nickel Capital Markets Day 2021 | Operations Update Recovery of Oktyabrsky and Taimyrsky Mines and Norilsk Concentrator – Full Capacity Resumed by December Mines Norilsk Concentrator • On February 24th, the two underground mines of Norilsk • Norilsk Concentrator (9.2 mtpa) includes dissemina
Slide 30: Climate Change: Physical Risk Mitigation Programme – Energy Infrastructure
Norilsk Nickel Capital Markets Day 2021 | Operations Update Climate Change: Comprehensive Physical Risk Mitigation Programme – Energy Infrastructure • Ad-hoc audit of all industrial buildings and facilities (in progress), with a prime focus on fuel storage (completed) Reassessment • Inspection of te
Slide 31: Physical Risks: Monitoring of Permafrost-Based Foundations in Norilsk
Norilsk Nickel Capital Markets Day 2021 | Operations Update Physical Risks: Monitoring of Permafrost-Based Foundations in Norilsk In 2020, satellite monitoring of permafrost-based Geotechnical monitoring system structures launched in 4 priority areas: Norilsk, IDS (1) Dudinka, Snezhnogorsk and Svetl
Slide 32: Physical Risks: Roll-Out of Online Permafrost Monitoring
Norilsk Nickel Capital Markets Day 2021 | Operations Update Physical Risks: Roll-Out of Online Permafrost-Based Foundations Monitoring in Norilsk in Progress Selected 2021 targets: • Install over 1,200 sensors, including over 450 thermistor strings, over 700 inclinometers, over 60 humidity and tempe
Slide 33: Major Addition to Mineral Resource Base of Taimyr Peninsula
Norilsk Nickel Capital Markets Day 2021 | Operations Update Major Addition to Mineral Resource Base of Taimyr Peninsula P&P Contained Metal • “Technological breakthrough 1.0” reinvented our traditional Reserves (1) in Reserves approach to resource base management and unlocked additional value in res
Slide 34: Technological Breakthrough: Delivering Tangible Results
Norilsk Nickel Capital Markets Day 2021 | Operations Update “Technological Breakthrough”: Delivering Tangible Results • Digital models for all of the Company’s deposits, over 2 bn tonnes of ore +246 mln t mineral resources increase • Mining operations planning and design in 3D ranging from one day t
Slide 35: Skalisty Update: Autonomous Mine Solutions
Norilsk Nickel Capital Markets Day 2021 | Operations Update Skalisty Update: Autonomous Mine Solutions Project overview • Launch of autonomous mining in 2025 • The deepest mine in Eurasia – over 2 km • Ore body depth – over 1,550 m • Ore reserves – over 32 mln t of rich ore • Current production – ov
Slide 36: Technological Breakthrough 2.0
Norilsk Nickel Capital Markets Day 2021 | Operations Update “Technological Breakthrough 2.0” Focus on HSE and AI Implementation in Downstream Zeroing in on HSE • Environmental monitoring solutions • Health and safety solutions powered by advanced video analytics Scaling production solutions and reap
Slide 37: Bystrinsky Update
Bystrinsky Update • One of the largest greenfield projects in the Russian mining industry • 50.01% owned by Nornickel • Ore reserves: 301 Mt @ Cu ~0.7%; Fe ~22.4%; Au ~0.84 g/t (1) • Reserve life – 31 years • Target capacity achieved in 2Q 2020 • 1H 2021 EBITDA: $566 mln Operating Performance Outloo
Slide 38: South Cluster: Ramping-up
“South Cluster”: Ramping-up • Large-scale (156+ Mt of disseminated ore (1)), long life (25+ years) brownfield asset at the bottom of the global PGM cost curve • FS, detailed engineering and contractors selection tenders completed in 2021 • Expansion of open-pit ore mining to commence in Q1 2022 Ramp
Slide 39: Production Guidance for 2021-2024
Norilsk Nickel Capital Markets Day 2021 | Operations Update Production Guidance for 2021-2024 (1) Ni Pt+Pd Cu [kt] [t] [kt] 233 108 109 100-115 436 424 217 215-230 95-105 205-215 90-95 365-385 370-390 190-200 335-355 2017- 2020 2021E 2022E 2023- 2017- 2020 2021E 2022E 2023- 2017- 2020 2021E 2022E 20
Slide 40: Strategic Ambitions for 2030+ Metal Production
Norilsk Nickel Capital Markets Day 2021 | Operations Update Strategic Ambitions for 2030+ Metal Production1 Ni Pt+Pd Cu [kt] [t] [kt] Strategy day 2020 targets Strategy day 2020 targets Strategy day 2020 targets +25-35% +50-60% +25-35% 260-280 160-170 500-540 250-270 150-160 490-530 210 398 105 2017
Slide 41: Strategy Update
Strategy Update Sergey Dubovitskiy Senior Vice-President Strategy, Strategic Projects, Logistics & Procurement
Slide 42: Nornickel's Strategic Priorities
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Nornickel’s Strategic Priorities • Full completion at Kola Division: 85%+ reduction MORE... Sulphur Programme 2.0: in SO2 emissions delivered Execution on Track • Sulphur Programme in Norilsk Division entered active construction phase ...GREE
Slide 43: Sulphur Programme 2.0: Environmental Roadmap
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Sulphur Programme 2.0: Environmental Roadmap Copper Plant Smelter Nickel town Norilsk (Shut down in December 2020) Nadezhda Smelter Kola Division Norilsk Nickel Plant Division (Shut down in 2016) Cu refining line Monchegorsk (Shut down in M
Slide 44: Sulphur Programme 2.0 at Kola Division – Completed
Sulphur Programme 2.0 at Kola Division – Completed Smelter in Nickel town – shut down in December 2020 • Complete eradication of cross-border emissions Copper refining line in Monchegorsk – shut down in March 2021 • Phase-out of obsolete production facilities • Significant air quality improvement in
Slide 45: Sulphur Programme 2.0: CAPEX
Sulphur Programme 2.0: CAPEX Norilsk Division $4.1-4.3 bn Nadezhda Smelter: Flagship Project Construction of furnace gases capturing, sulfuric acid neutralization line and supporting infrastructure: • All key contracts signed • Piling, steel works, gypsum storage dam raising – in progress • Project
Slide 46: Production Flow and Key Projects Update
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Production Flow and Key Projects Update Upgrade of Talnakh concentrator Mining Concentration Smelting Refining in progress (from 10 to 18 Mtpa by 2024YE, EBITDA +USD 150 mln) New Norilsk concentrator in scoping study division Norilsk Norilsk
Slide 47: Evolution of Concentration Facilities Upgrade
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Evolution of Concentration Facilities Upgrade (Norilsk Division) Upgrade Completed Under Construction PFS/FS Processing capacity, Norilsk Division 100% [Mtpa] >2x capacities 36 upgraded Expansion New Norilsk Upgrade 9 Concentrator 27 (2nd lin
Slide 48: Upgrade of Talnakh Concentrator: Phase-3
Upgrade of Talnakh CAPEX Concentrator: Phase-3 $1 bn Project overview Major capacity expansion based on proven technology to process growing Talnakh ore volume and to unlock strategic optionality of the “South Cluster” development project Project update • Piling in progress • All tender procedures f
Slide 49: New Norilsk Concentrator
New Norilsk Concentrator Project overview Construction of a new concentrator to replace outdated facilities and further expand concentrating capacities to support growth plans Project rationale • Complete renovation and expansion of processing capacity to process increasing feed from Norilsk Divisio
Slide 50: Evolution of Smelting Facilities Upgrade
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Evolution of Smelting Facilities Upgrade (Norilsk Division) Upgrade Completed Under Construction Smelting facilities throughput [Mtpa] 5.8 Expansion 4.4 4.6 Upgrade 3.9 New +30% furnace 2,0 Copper smelter +8% +26% 2.4 2.6 3.8 Furnaces upgrade
Slide 51: Expansion of Nadezhda Smelter: New 3rd Furnace
Expansion of Nadezhda CAPEX Smelter: New 3rd Furnace $1.4 bn Project overview • Target: increase total throughput and provide a back-up capacity when either of two existing furnaces is shutdown for maintenance • Fits into the Nadezhda Smelter’s existing production site • New line to be fully integra
Slide 52: Evolution of Refining Capacities Upgrade and Expansion
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Evolution of Refining Capacities Upgrade and Expansion Upgrade Completed Under Construction Nickel Refinery Kola Division [Ktpa] • Tankhouse-2: Technological upgrade & capacity expansion Expansion 230+ 240+ 240+ • NN Harjavalta (NNH) capacity
Slide 53: New Copper Refinery
New Copper Refinery: Modern Environmentally- CAPEX Friendly Technology $1.4 bn Project overview • New copper refining hub based on a modern efficient technology of “roasting-leaching-electrowinning” at Kola Division • Fully environmentally compliant Project update Investment decision made in June 20
Slide 54: Harjavalta Nickel Refinery: Capacity Expansion
Harjavalta Nickel Refinery: Capacity Expansion Project overview • Capacity expansion of high quality Ni product offering • Leverage operational synergies from existing infrastructure Project rationale • Decision to increase capacity is driven by growing European market demand for battery raw materia
Slide 55: Areas For Strategic Consideration: Battery Materials Value Chain
Areas For Strategic Consideration: Battery Materials Value Chain Targeting a substantial market share in the battery segment through supply agreements and deeper integration into the European battery value chain: • Capacity expansion of Ni products fit to serve the forming battery materials ecosyste
Slide 56: Expanded and Accelerated Energy Infrastructure Modernization
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Expanded and Accelerated Energy Infrastructure Modernization Programme CAPEX Contribution to Decarbonization Expansion Rationale: & Energy Efficiency: $8+ bn New energy and infrastructure projects have Reinforced emphasis on higher productivi
Slide 57: Logistics Infrastructure Development Program
Logistics Infrastructure Development Program Programme Rationale • Growing shipment of construction equipment and raw materials volumes as investment programme is entering an active phase • Accelerated pace of production equipment renovation • Expansion of Northern Sea Route operations and contract
Slide 58: New Era of Russian Arctic Development
Norilsk Nickel Capital Markets Day 2021 | Strategy Update New Era of Russian Arctic Development: Challenges and Opportunities Russian Arctic Development: From Remote Region… …to Exponential Growth in Investments Northern Sea Route Freight Volumes Northern Sea Route Freight Volumes 2014: 4 Mt 2030: 1
Slide 59: Expanded Investment Cycle
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Expanded Investment Cycle CapEx [$ bn] Growth projects Environmental programme Energy modernization Base investment programme 4.0-4.5 Strategy Day 2020 guidance 4.0 3.0-3.5 2.7-2.8 ~2.5 ~1.7 average 2021E 2022E average average average 2013-20
Slide 60: Developing Capabilities to Deliver on Investment Programme
Norilsk Nickel Capital Markets Day 2021 | Strategy Update Developing Capabilities to Deliver on Investment Programme • Doubling the number of contractors in Norilsk Contractor • Several major construction companies started mobilization in 2020-2021 Pool • Independent supervision services rolled out
Slide 61: Markets Update
Markets Update Anton Berlin Vice President Sales and Distribution
Slide 62: Swan's Lake: Beware of Black Swans!
Norilsk Nickel Capital Markets Day 2021 | Markets Update Swan’s Lake: Beware of Black Swans! COVID Epidemic: How Global Economy: Chip Shortage: Many More Waves? Riding a Roller Coaster When Will It End? SARS-CoV-2 will not stop evolving — The global economic recovery Volkswagen executive sees global
Slide 63: Long-term Macro Backdrop for Commodities
Norilsk Nickel Capital Markets Day 2021 | Markets Update Long-term Macro Backdrop for Commodities: Not All Swans are Black, but Beware of Elephants in the Room Global Liquidity Injection: Chinese’ Construction Sector Aggressive Climate Change Scenarios Inflationary Support of Commodities Slowdown: A
Slide 64: Metal Markets: Outlook on Medium-Term Fundamentals
Norilsk Nickel Capital Markets Day 2021 | Markets Update Metal Markets: Outlook on Medium-Term Fundamentals Metal Ni Cu Pd Pt 20% 18% 43% 4% Share of Nornickel’s Metal Sales, 1H 2021 -115 kt -0.2 moz +0.4 moz Non- -52kt Other Global Stocks, exchange Non- Other Other Days of Consumption Exchange (2)
Slide 65: Stainless Steel: Double Digit Growth in 2021
Norilsk Nickel Capital Markets Day 2021 | Markets Update Stainless Steel (70%+ of Global Ni Demand): Double Digit Growth in 2021 Led by China and Indonesia China Stainless 300s (1,2): Strong 1H21, 2021E Stainless 300s Outlook: +18% y-o-y But Slowdown in 2H21 Due to Power Shortages as China and Indon
Slide 66: Batteries: Strong Rebound in Global NEV Sales in 2021
Norilsk Nickel Capital Markets Day 2021 | Markets Update Batteries (10% of Global Ni Demand): Strong Rebound in Global NEV Sales in 2021 YTD BEV Equivalent Sales (1) in 9M 2021 Battery Materials Production in China: Increased 2.5x Globally, China – Up 3x NCM Increased 2x, LFPs (no Ni/Co) – Up 3x [`0
Slide 67: Nickel Supply: Low Grade/High Carbon Additions
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel Supply: >500kt Addition in Low Grade/High Carbon Supply, but Little in High Grade/Low Carbon in 2021-2022 High-Grade Ni Supply in 2021 Practically Unchanged, Post Incidents Production Recovery to Drive Double Digit Supply Growth in 2022
Slide 68: Nickel Market Balance: Temporary Deficit in 2021, Mild Surplus in 2022
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel Market Balance: Temporary Deficit in 2021, Mild Surplus in 2022 Market Balance: Deficit Due to Production Losses Global Demand: Double-Digit Growth of 2021 Driven and Robust Post-Covid Demand Recovery in 2021 by Stainless Steel and Batt
Slide 69: Copper Market: a Long-Run Balance, with a Temporary Deficit in 2021
Norilsk Nickel Capital Markets Day 2021 | Markets Update Copper Market: a Long-Run Balance, with a Temporary Deficit in 2021 Copper Consumption: Expected Market Balance: Supply Lagging Behind Fast to Increase 4% in 2021 and 3% in 2022 Demand Recovery Caused Temporary Deficit in 2021 [mt] +4% +3% [kt
Slide 70: PGMs: Global Autos Recovery Deferred until 2023
Norilsk Nickel Capital Markets Day 2021 | Markets Update PGMs: Global Autos (83% of Global Pd and 38% Pt Demand) Recovery Is Deferred until 2023 Due to Chip Shortage Global Auto Sales: Strong Post-COVID Global Auto Production: Chip Shortage to Push Recovery in 1H2021, but a Weaker 2H Expected Back R
Slide 71: Palladium Market: Structural Deficits to Moderate in 2021-22
Norilsk Nickel Capital Markets Day 2021 | Markets Update Palladium Market: Long-run Structural Deficits to Moderate in 2021-22 Owing to Temporary Hiccups in Global Autos Demand: 2021 Recovery Somewhat Undermined Market Balance (1): Mild (Relative to Recent by Lower-Than-Expected Auto Production Hist
Slide 72: Platinum Market: Structural Surpluses to Expand in 2021-2022
Norilsk Nickel Capital Markets Day 2021 | Markets Update Platinum Market: Structural Surpluses to Expand in 2021- 2022 as South Africa Increasing Refined Metal Supply Demand: Strong Recovery in ‘21 Driven by Higher Market Balance (1): Surplus to Widen in 2021-2022 HDD Loadings in China and Other Ind
Slide 73: Metal Markets: Outlook on Long-Term Fundamentals
Norilsk Nickel Capital Markets Day 2021 | Markets Update Metal Markets: Outlook on Long-Term Fundamentals Metal Ni Cu Pd Pt 28% 22% 31% 7% Estimated share of Nornickel metal sales 2030(1) Market Balance Forecast Deficit Balanced Surplus Deficit +6% CAGR +3% CAGR +1% CAGR +3% CAGR Supply 2020 2030E 2
Slide 74: Long-term Metals Consumption Outlook and Decarbonization Ambitions
Norilsk Nickel Capital Markets Day 2021 | Markets Update Long-term Metals Consumption Outlook: Short-term Sentiment Is Fueled by (Very!) Long-term Decarbonization Ambitions Carbon neutrality COP26: The initiative to completely decarbonize road transport by 2040 was supported Carbon neutrality by 205
Slide 75: Global Decarbonization – Risk Assessment for Nornickel's Metals
Norilsk Nickel Capital Markets Day 2021 | Markets Update Global Decarbonization – Risk Assessment for Nornickel’s Metals Ni PGMs Cu Growth of market share of BEVs Growth of hybrids Fuel cells Growth of renewables/ low carbon fuel in power generation Storage and grid expansion to support growth of xE
Slide 76: Nickel Demand Long-term Growth Expectations
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel Demand Long-term Growth Expectations: Rising on Aggressive Upward Revisions of Fleet Electrification Targets Revision of Long-Term EVs Outlook: Global Autos: EVs to Increase to 51% in 2030E BEVs in 2030E Up to 28m from 15m 12M Ago from
Slide 77: Nickel Supply Medium-Term Challenge: Wall of Supply
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel Supply Medium-Term Challenge: “Wall of Supply” of High Carbon Footprint and Not a Battery Grade Nickel Long-term Supply: +1.1Mt of High Carbon/Low Carbon Intensity: Indonesian NPI is 9x Grade NPI vs +0.5Mt of High Grade by 2025E Higher
Slide 78: Nickel Supply Long-Term Challenge: Climate Change Risk
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel Supply Long-Term Challenge: Will It Still be There Under a Climate Change Risk (1) China Indonesia The Philippines Limited Sulphide ore production Laterite ore production Impact Nickel metal production Significant 40% 90% 90% 70% 60% Im
Slide 79: Nickel: Wall of Supply vs Long-Term Demand Prospects
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel: “Wall of Supply” of Low-Grade/High Carbon Intensity Material in the Medium-Term vs Long-Term Demand Prospects Nickel Market Balance: Risk of Major Surpluses in the Medium Term Are Overlooked as Long-term Deficit Prospects Excite the Se
Slide 80: Copper Long-Term Outlook
Norilsk Nickel Capital Markets Day 2021 | Markets Update Copper Long-Term Outlook: Strong Demand Prospects Matched by Plentiful Projects in the Pipeline at Early Stage of Development Copper Consumption: Impact from BEVs’ Growth Copper Supply: Plenty in the Pipeline, But [kt] Possible Projects Are Ne
Slide 81: Long-term Outlook for PGMs Demand
Norilsk Nickel Capital Markets Day 2021 | Markets Update Long-term Outlook for PGMs Demand: Risks Emerging Only Beyond 2026, with a Major Uncertainty over BEVs Production of ICEs Including Hybrids A Wide Range of Opinions Regarding Is Strong in the Medium-term the Long-Term Prospects of BEVs Accompa
Slide 82: Palladium: Strong Medium-Term Market Outlook vs Long-term Uncertainty
Capital Markets Day | Markets Update Palladium: Strong Medium-Term Market Outlook vs. Long-term Demand Uncertainty Palladium Market Balance: Structural Deficits to Remain Until 2025+, Risk of Major Surpluses Arising Towards 2030 Subject to a Number of Difficult to Evaluate Major Risks/Uncertainties
Slide 83: A New Era in Metal Trade
Norilsk Nickel Capital Markets Day 2021 | Markets Update A New Era in Metal Trade Nornickel staged for the new era of digital transactions, which will optimize supply chain efficiency and transparency • Nornickel has joined the Responsible Sourcing Blockchain Network (RSBN), an industry collaboratio
Slide 84: Production of Carbon Neutral Nickel Launched
Production of Carbon Neutral Nickel Launched • The first batch of carbon-neutral products totals 5 kt of nickel cathodes produced by the Group’s Kola Division • The carbon-neutral nickel was tokenised on Atomyze, a Blockchain platform, and the tokens are listed on the Vienna Stock Exchange by Nornic
Slide 85: Financial Performance
Financial Performance Sergey Malyshev Senior Vice-President Chief Financial Officer
Slide 86: Reiterating Attractive Investment Case
Norilsk Nickel Capital Markets Day 2021| Financial Performance Reiterating Attractive Investment Case Key Highlights Naturally Diversified Revenue Mix (1) [by Product] • The world’s largest producer of “green” metals, which help 15% to meet stringent emission standards of global auto industry 20% an
Slide 87: High Degree of Upstream and Downstream Integration
Norilsk Nickel Capital Markets Day 2021| Financial Performance High Degree of Upstream and Downstream Integration • Downstream integration of mining into refined metals production with access to captive logistics infrastructure (sea and river fleet) • Full self-sufficiency in power, fuel, water and
Slide 88: Strong Control Over Cash Costs and Production Growth
Norilsk Nickel Capital Markets Day 2021| Financial Performance Strong Control Over Cash Costs Accompanied by Metals Production Growth Delivered Strong Cash Cost Controls: Excluding One-offs Nickel Equivalent Production: Increased 15% by Unit Cash Cost to Reduce 12% by 2021E vs 2017 2020, 2021E – Neg
Slide 89: Managing Labour – a New Strategy for Employee Retention
Norilsk Nickel Capital Markets Day 2021| Financial Performance Managing Labour – a New Strategy of Raising Attractiveness and Improving Retention of Employees Headcount to Increase as Operations Expand Maintaining Competitive Salary: and Environmental Projects Roll-out An Average 20% Upward Revision
Slide 90: Impact from the Changes in Taxation in 2021 and 2022
Norilsk Nickel Capital Markets Day 2021| Financial Performance Impact from the Changes in Taxation in 2021 and 2022 Expected Impact of Changes in Taxation on Changes in taxation in 2021: Nornickel’s MET Payments as % of Annual Revenue • 3.5x increase in Mineral Extraction Tax (MET) effective from 1
Slide 91: Effective Management of Debt and Liquidity
Norilsk Nickel Capital Markets Day 2021| Financial Performance Effective Management of Debt and Liquidity Available Liquidity Covers Debt Repayments Over the Next Almost 3 Years (1) [USD bn] Debt repayments Committed credit lines and overdrafts Cash and equivalents 7.8 3.8 3.6 3.2 1.9 1.5 0.0 Curren
Slide 92: Focus on Maintaining Sustainable Financial Model (FCF)
Norilsk Nickel Capital Markets Day 2021| Financial Performance Focus on Maintaining Sustainable Financial Model (FCF) Sensitivity of Net Debt/EBITDA Projections to FCF-Based Dividend Payouts: Management’s Priority – to Maintain Investment Grade Credit Ratings [x] 2,5 2,0 1,5 1,0 0,5 0,0 2013 2014 20
Slide 93: Gareth Penny, Chairman of the Board of Directors
Gareth Penny Independent Director Chairman of the Board of Directors
Slide 94: Attachments
Attachments
Slide 95: Overview of Key Sustainable Development Initiatives in 2021
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Responding to Sustainable Development Challenges: Overview of Key Initiatives in 2021 Environment Climate Change Social & Corporate Governance • Environmental and Climate Change • New 2028 CO2 carbon intensity • Preparation of N
Slide 96: Selected Environmental and Climate Change Targets
Norilsk Nickel Capital Markets Day 2021| Sustainable Development Update Selected Environmental and Climate Change Targets (1) Total Environmental CAPEX USD6 bn 2020-2030 Climate change Biodiversity • Maintain absolute Scope 1 and 2 GHG emissions from operations below 10 mt by 2028 Reduce a negative
Slide 97: Physical Risks: Satellite Monitoring of Norilsk Area
Norilsk Nickel Capital Markets Day 2021 | Operations Update Physical Risks: Satellite Monitoring of Norilsk Area –the First Evidence Satellite Radar Monitoring of Vertical Displacements Map of Vertical (W-E) of the Earth’s Surface and Infrastructure Facilities Displacements (Norilsk region) • Displa
Slide 98: Nickel Exchange Stocks Decreased in 2021 YTD
Norilsk Nickel Capital Markets Day 2021 | Markets Update Nickel Exchange Stocks Decreased in 2021 YTD as the Market Slipped into Deficit Exchange Inventories Declined Due Nickel Exchange Inventories to Increasing Demand and Market Deficit Currently Stay at Normal Level [kt Ni] [Days of consumption]
Slide 99: Investment Demand – PGM ETF Holdings
Norilsk Nickel Capital Markets Day 2021 | Markets Update Investment Demand (1% of Global Pd and 8% of Pt Demand) – PGM ETF Holdings Shows Mixed Results in 2021YTD Palladium ETF Holdings increased by 34 koz Platinum ETF Holdings decreased by 64 koz in 2021 YTD vs 124 koz decrease in 2020 in 2021 YTD
Slide 100: Cars with ICE vs EVs: Purchase Price and Life Cycle Costs
Norilsk Nickel Capital Markets Day 2021 | Markets Update Cars with ICE Outperform EV’s Both in Terms of the Purchase Price and the Full Life Cycle Costs, So Far…(?) Comparison of Car Purchase Price with Comparison of Total Cost for the Entire Life Cycle ICE and EV in the USA and Europe of Car with I
Slide 101: Global Long-term Consumption Trends: Revenue Opportunity
Norilsk Nickel Capital Markets Day 2021 | Markets Update Global Long-term Consumption Trends: Revenue Opportunity for Nornickel’s Metals Basket Cobalt in batteries, Vehicles electrification Rhodium in cleaner & energy storage ICE-vehicles 12% Increasing stainless steel demand to support construction
Slide 102: Global Decarbonisation – Risk Assessment for Nornickel's Metals
Norilsk Nickel Capital Markets Day 2021 | Markets Update Global Decarbonisation – Risk Assessment for Nornickel’s Metals Gasoline Diesel Hybrid BEV FCEV incl. PHEV CAGR (1) +1% 0% +28% +38% +41% Market Share (2) 57% 11% 20% 12% <1% Stainless Steel & Parts +Batteries - Ni 2-4 kg 2-4 kg 5–15 kg 30–110
Slide 103: 2021E EBITDA Sensitivity to Metal Prices and RUB/USD
Norilsk Nickel Capital Markets Day 2021| Financial Performance 2021E EBITDA Sensitivity to a 10% Change in Metal Prices and RUB/USD Exchange Rate 10% Change in Change from EBITDA, $ mln Exchange rate RUB/USD 73.65 453 Palladium price $2,341/Oz 625 Nickel price $17,917/t 352 Copper price $9,000/t 335
Slide 104: Thank you for your attention!
Thank you for your attention!