Nornickel Gmk · RUS:GMKN

Nornickel Gmk — Nornickel — Investor Day (November 2019)

93 slides from Nornickel Gmk's investor day presentation, November 2019

  1. Slide 1: Expanding the Horizons of Sustainable Growth

    Expanding the Horizons of Sustainable Growth London, November 2019

  2. 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

  3. Slide 3: CEO Vision

    CEO Vision Vladimir Potanin President Chairman of the Management Board

  4. Slide 4: 2013-2019: Delivery on Strategy

    2013-2019: Delivery on Strategy ESG  Material progress in environmental programme: shutdown of Nickel Plant resulting in 30-35% emissions reduction within Norilsk residential area  Continuous improvement on Health & Safety metrics and independent ESG assessments Industry leading Shareholder Return

  5. Slide 5: Vision 2030: Expanding the Horizons of Sustainable Growth

    Vision 2030: Expanding the Horizons of Sustainable Growth Expanding the horizons… Holistic Environmental Programme:  …From 5-year planning to  Launching Sulphur Programme 2.0: longer term 10-year vision staged journey towards best practice SO2 capturing  …From environmental compliance to  Mainta

  6. Slide 6: Critical Contribution to Global Sustainability Agenda: Enabling the Shift to Cleaner Mobility

    Critical Contribution to Global Sustainability Agenda: Enabling the Shift to Cleaner Mobility Clean Mobility 2030 Megatrends Nornickel’s 2030 Enabling Potential Supplying enough resource to produce: Hybridization and Tightening 25-40 mn PGM-Loaded Autocatalysts (1) Emission Standards CO NOx Potentia

  7. Slide 7: Nornickel to Maintain One of the Lowest CO2 Footprints Among Peers

    Nornickel to Maintain One of the Lowest CO2 Footprints Among Peers CO₂ emissions Scope 1 and 2, Mt 44% 30.3 2016-2018 average share 28.2 of renewable electric power consumption in the Norilsk region (39% for the Group) 16.5 16.1 14.2 10.0 (1) Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Source: Companies’ fil

  8. Slide 8: Sulphur Programme 2.0: Staged Journey Towards Best Practice SO2 Capturing

    Sulphur Programme 2.0: Staged Journey Towards Best Practice SO2 Capturing Advancing Programme at Kola: Comprehensive Environmental Solution at Polar Division: Complete shutdown of nickel smelter Implementation of anchor sulphur utilization project at Nadezhda Smelter to located in the Russia-Norway

  9. Slide 9: Sustainable Path to Unlock Nornickel's Resource Base Potential

    Sustainable Path to Unlock Nornickel’s Resource Base Potential Mining Concentrators Smelting & Refining Ambitious targets to unlock the potential of Fit-to-size expansion of Downstream capacities Nornickel’s unique resource base to address increasing demand in our core markets Ore mining in Norilsk

  10. Slide 10: Rebalancing Capital Allocation to Accommodate for Investment Peaks

    Rebalancing Capital Allocation to Accommodate for Investment Peaks While Sustaining Leading Shareholder Returns Through the 10-Year Cycle Phase 1: “Scaling Up” Phase 2: “Investment Peak” Phase 3: “Back to Normal”  Staged roll-out of construction  Active execution of major growth  CapEx steadily d

  11. Slide 11: Operations Update

    Operations Update Sergey Dyachenko First Vice-President Chief Operating Officer

  12. Slide 12: Health & Safety: Steady Improvements

    Health & Safety: Steady Improvements Accident Statistics Improved by Almost LTIFR Reduced by Almost 60% since 2013 70% since 2013 LTIFR (1*10-6) Employees -59% ~70% Fatal Lost time injury 0.80 12 0.62 14 0.48 0.44 0.35 8 8 0.33 13 94 0.23 74 56 6 8 52 43 26 27 2013 2014 2015 2016 2017 2018 2019YTD (

  13. Slide 13: Health & Safety: Strong Performance Relative to Industry

    Health & Safety: Strong Performance Relative to Industry LTIFR Remains Below the Global Mining Assessment of Occupational Safety Culture: Industry Average Score Significantly Improved Since 2014 LTIFR (1) per 200k hours Bradley Curve Indicator (2) 0.87 Industry average 2.8 0.60 2.5 2.6 Industry aver

  14. Slide 14: The World's Best Tier-1 Mining Assets

    The Worlds’ Best Tier-1 Mining Assets Nickel (Mt) Copper (Mt) Palladium (Moz) Platinum (Moz) Nornickel 6.9 12.1 93.0 24.7 Proven and probable Proven and probable Proven and probable Proven and probable 15.3 23.5 195.9 55.4 Measured and indicated Measured and indicated Measured and indicated Measured

  15. Slide 15: Converting Unique Resource Base into Development Projects

    Converting Unique Resource Base into Development Projects Reserves and Resources, Polar Division + South Cluster Mt Resources for further review 2,149 2,103 Reserves and Resources considered in the scope of PFSs Reserves and Resources 31% covered by approved projects  New development projects at Ta

  16. Slide 16: Charging Up Mining Growth at Polar Division

    Charging Up Mining Growth at Polar Division Norilsk Industrial District: Ore Mining Profile Key Upstream Growth Projects Mt 30 “South Cluster” Project 20 Skalisty Mine Development New Development Projects at Talnakh Mines  Oktyabrsky  Komsomolsky  Taimyrsky  Mayak Base-line production and projec

  17. Slide 17: New Development Projects at Talnakh Mines – Update

    New Development Projects at Talnakh Mines – Update Incremental Reserves Mining Project Project Details Stress-tested IRR (1) Project Stage in Development  +385 Mt of ore  Throughput: +2 Mtpa  +1.4 Mt of Ni  LOM extension: +46 years Komsomolsky  +2.8 Mt of Cu >20%  Next stage to be launched in

  18. Slide 18: Skalisty Mine Development Update

    Skalisty Mine Development Update Project Description  Production capacity: 2.5 Mtpa  Ore reserves: 66 Mt  CapEx 2013–2019: US$1.6 bn  CapEx 2020–2023: ~US$0.6 bn  Autonomous operations being considered Project Update  Commissioned mining capacity in 2016-2019: ~1.4 Mtpa  Expected launch in 20

  19. Slide 19: South Cluster Project Update

    South Cluster Project Update Project Description  Large-scale, long life (25+ years) brownfield asset at the bottom of the global PGM cost curve  Project resources (1): 165 Mt of ore @ 3.9 g/t PGMs; 0.2% Ni; 0.3% Cu  O/P and U/G operations leveraging off the existing infrastructure  Waste stripp

  20. Slide 20: Kola Concentrate Loading Unit – Project Update

    Kola Concentrate Loading Unit – Project Update Project Description  Environmental project enabling re-direction of Kola concentrates to other facilities post shutdown of nickel smelter resulting in eradication of SO2 emissions in Nickel town (cross-border zone with Norway)  Key Objects: – Construc

  21. Slide 21: Kola Nickel Refinery Upgrade – Status Update

    Kola Nickel Refinery Upgrade – Status Update Project Description  Modernization of Tankhouse-2 with 20% capacity increase (from 120 ktpa to 145 ktpa)  Additional improvements:  increased nickel recovery from high-grade matte by over 1.0%  work-in-progress inventory optimization  reduction of en

  22. Slide 22: Energy Infrastructure Modernization to Support New Growth Cycle

    Energy Infrastructure Modernization to Support New Growth Cycle Project Description  New production growth targets to be accompanied by the staged upgrade of the energy infrastructure  Energy projects scheduled for 2020-2025: Severo- Pelyatkinskoye Soleninskoye Dudinka – Replacement of 2 and insta

  23. Slide 23: Bystrinsky Project Update

    Bystrinsky Project Update Project Description  The largest greenfield project in the Russian mining industry  Location: Chita, Zabaikalsky region  The 10 Mtpa concentrator was fully commissioned in August  Regulatory approvals for supporting infrastructure expected by 2019YE  Ore reserves: 341

  24. Slide 24: Technological Breakthrough

    Technological Breakthrough  Nornickel’s “Technological Breakthrough” – ongoing programme aiming at the roll-out of advanced digital designing, planning and operational control of mining activities of the Company  To date, the following tasks have been accomplished: – Complete resource model of all

  25. Slide 25: Efficiency Programme Delivery: Strong Momentum To Continue into 2020

    Efficiency Programme Delivery: Strong Momentum To Continue into 2020 Targets Announced in 2018 Delivery in 2019 Selected Initiatives NiEq production (1)  Roll-out of advanced mine Production growth +7% planning, including simulation in 2019-2020 modeling 5-8%  Improving equipment utilization rates

  26. Slide 26: Production Guidance for 2019-2022

    Production Guidance for 2019-2022 (1) Ni Cu Excluding Bystrinsky project Pt+Pd kt kt t 225-235 454 106-108 105-115 217 220-225 215-225 430-450 420-440 105 103-106 209 390-420 101 365 2015- 2018 2019E 2020E 2021- 2015-2017 2018 2019E 2020E 2021- 2015- 2018 2019E 2020E 2021- 2017 2022E 2022E 2017 2022

  27. Slide 27: Strategic Ambitions for 2030+ Metal Production

    Strategic Ambitions for 2030+ Metal Production (1) Ni Cu Pt+Pd kt kt t +30-95% +15-30% +20-40% 160-205 250-280 520-560 240-260 480-520 140-150 210 398 105 2017 Strategic 2017 Strategic 2017 Strategic ambition 2030 ambition 2030 ambition 2030 Arctic Palladium Note: 1. Metals produced from own feedsto

  28. Slide 28: The Strategy of Sustainable Growth

    The Strategy of Sustainable Growth Sergey Dubovitskiy Vice-President for Strategy & Strategic Projects

  29. Slide 29: Holistic Environmental Programme: Progressing on Sustainability Journey

    Holistic Environmental Programme: Progressing on Sustainability Journey Arctic Circle 66°33′47.8″ Kola Division Polar Division Sustainable Operations Sustainable Arctics Commitment to Sulphur Programme 2.0: sustainable future for our home regions Target: up to 20x (1) Collaboration with reduction in

  30. Slide 30: Holistic Environmental Programme: Action Plan

    Holistic Environmental Programme: Action Plan Sulphur Programme 2.0 • Introduce efficient solution for SO2 capturing at Polar Division, an upgrade to Sulphur Programme 1.0 • Progress further on a comprehensive multi-stage journey towards global industry benchmarks in environmental footprint Sustaina

  31. Slide 31: Sulphur Programme 2.0: Environmental Roadmap

    Sulphur Programme 2.0: Environmental Roadmap  Smelter Nickel town Copper Plant Kola Division  Copper line (Refinery) Norilsk Monchegorsk Nadezhda Smelter 2020 Polar Division Nickel Plant (Shut down in 2016)  Optimization of smelting operations in Nickel town 2021 to cut SO2 emissions in Complete

  32. Slide 32: Sulphur Programme 2.0: Eradicating Emissions at Kola Cross-Border Area

    Sulphur Programme 2.0: Eradicating Emissions at Kola Cross-Border Area Norway Kola Division  Finland Kola Concentrator Zapolyarny Smelter (1939) Nickel Murmansk Kola Refinery Monchegorsk 2020 2021  Transition to concentrate briquetting -50%  Complete shutdown of smelting -100% technology (complet

  33. Slide 33: Sulphur Programme 2.0: Dramatically Reducing Emissions at Kola Division

    Sulphur Programme 2.0: Dramatically Reducing Emissions at Kola Division Norway Kola Division  Finland Kola Concentrator Zapolyarny Smelter (1939) Nickel Murmansk Kola Refinery Monchegorsk 2021  Complete shutdown of Copper line at Kola Refinery eliminating the major source of refinery’s SO2 emissio

  34. Slide 34: Sulphur Programme 2.0: Comprehensive Environmental Solution for Polar Division

    Sulphur Programme 2.0: Comprehensive Environmental Solution for Polar Division Nadezhda Smelter:  Phase 1: Anchor project to capture Kola Division Talnakh Polar Division furnace gases at Nadezhda and establish acid neutralization facilities and infrastructure (incl. gypsum storage) – to be complete

  35. Slide 35: Sulphur Programme 2.0: Nadezhda Smelter (Polar Division)

    Sulphur Programme 2.0: Nadezhda Smelter (Polar Division) 2023 Strategic Objective: Achieve 45% SO2 reduction for Polar Division by 2023 and establish scalable solution for sulphuric acid neutralization Scope (Phase 1 to be completed by 2023):  2 lines of SO2 capturing from flash SO2 capturing, clea

  36. Slide 36: Sulphur Programme 2.0: Copper Plant (Polar Division)

    Sulphur Programme 2.0: Copper Plant (Polar Division) Sulphuric Acid Based Technology  Adopting proven technology (Double Contact Process) to achieve stated strategic objectives  Leveraging off existing design solutions of Phase 1 Action Plan - 2020: (at Nadezhda Smelter) 2025  Leveraging off / sc

  37. Slide 37: Sulphur Programme 2.0: Progressing to More Efficient SO2 Capturing

    Sulphur Programme 2.0: Progressing to More Efficient SO2 Capturing Sulphur Programme 1.0 Sulphur Programme 2.0 Gas Capturing / Gas Capturing / Cleaning Cleaning (construction initiated) Sulphuric Acid Continuous Sulphuric Acid  Enough space left for Production Converting Unit Production potential s

  38. Slide 38: Strategic Roadmap of Downstream Development

    Strategic Roadmap of Downstream Development Polar Division Ore Production Growth Kola Refining Hub Ni Modernized Ni refining operations by 2020 South Cluster Cu Cu conc. from separation of matte Talnakh Mines Upgrade of Concentrators New project for on-site Copper Refining based on leaching technolo

  39. Slide 39: 3rd Stage of Talnakh Concentrator Upgrade – in Execution

    3rd Stage of Talnakh Concentrator Upgrade – in Execution Project Description  3rd stage upgrade of Talnakh concentrator capacity up to 18 Mtpa (+8 Mtpa) to process growing ore volumes  Proven technology to achieve higher recoveries (+4-7% for all key metals) delivering US$150 mn+ in incremental EB

  40. Slide 40: Option for Further Growth: Arctic Palladium – Tier 1 Asset

    Option for Further Growth: Arctic Palladium – Tier 1 Asset Confirmed Project Description  Potentially the world’s largest greenfield PGM cluster EBITDA margin (750+ Mt M&I resources(1) @5.2g/t PGM, 0.3% Ni, 0.4% Cu) > 40%  Pre-feasibility study confirmed the project as a Tier 1 Asset with over 50

  41. Slide 41: CAPEX Guidance

    CAPEX Guidance CapEx (1), US$ bn Environmental (incl. related infrastructure) Downstream development (incl. related infrastructure) Share of investment projects at FS/post-FS stage Mining Other commercial projects Stay-in-business 3.5-4.0 3.0-3.4 2.5-2.8  <2.0 1.3-1.5 2019E 2020E 2021E Average Aver

  42. Slide 42: Finance and IT: Supporting Growth

    Finance and IT: Supporting Growth Sergey Malyshev Senior Vice-President Chief Financial Officer

  43. Slide 43: Highest EBITDA Since 2007 on the Back of Strong Operating Performance

    Highest EBITDA Since 2007 on the Back of Strong Operating Performance and Favorable Macro Environment Industry Leading EBITDA Margin Leading EBITDA Margin (1) in Global Through the Cycle Diversified Mining (2) US$ bn % 59% 59% 53% 54% 50% 48% 47% 46% 44% 6.2 5.7 33% 4.3 3.9 4.0 3.7 19% 14% 2014 2015

  44. Slide 44: Margins Supported by the 15% Decline in Unit Costs

    Margins Supported by the 15% Decline in Unit Costs Nickel Unit Cash Production Costs US$/tonne NiEq (1) (15%) 4,087 3,923 3,883 3,790 3,344 1H2017 2H2017 1H2018 2H2018 1H2019 Production volumes, kt NiEq 455 434 418 415 386 Note: 1. Ni equivalent calculated based on 1H17 average metals prices 44

  45. Slide 45: The Company Outperformed All of 2017 Financial Targets

    The Company Outperformed All of 2017 Financial Targets 2017 guidance 2018-2019 Expected Results  US$200-300 mn of additional Over US$400 mn of additional EBITDA EBITDA per annum due to in 2019 compared to 2017 due to higher volumes and lower increase in production volumes, labour unit costs product

  46. Slide 46: OpEx and EBITDA Targets Achieved Due to Higher Production Volumes

    OpEx and EBITDA Targets Achieved Due to Higher Production Volumes at Core Operations Efficiency improvement programme targeting annual cost reduction of US$200-300 mn by 2020 compared to 2017 2020 Target EBITDA contribution (ex. FX and inflation) Flat or lower total cash costs in real terms on the b

  47. Slide 47: Digital Solutions are Implemented Across the Value Chain

    Digital Solutions are Implemented Across the Value Chain AI assistant for flotation operator Detection of Improved recoveries Short-circuit detection in uncrushable material through control of flotation copper electrolysis on the conveyor belt chemicals, pulp levels Automated thermal imaging Reducin

  48. Slide 48: Examples of Initiatives Being Tested and Deployed

    Examples of Initiatives Being Tested and Deployed Detection of uncrushable material on Industrial exoskeletons the conveyor belt AI-assisted system automatically detects Wearable exoskeletons improve worker strength uncrushable material, such as tramp metal, and performance when loading, unloading a

  49. Slide 49: Finance Costs Reduced Significantly

    Finance Costs Reduced Significantly Reduction of Сash Finance Costs and Gross Debt (1) Decrease of Average Cost of Debt … US$ bn average for the period Forecast  … despite growth in base interest rates (LIBOR) in +4.0% 2017-2018 9.1 +3.5%  … despite an increase in the average gross debt 8.7  … ow

  50. Slide 50: Solid Credit Quality Supported by Prudent Debt Management

    Solid Credit Quality Supported by Prudent Debt Management Comfortable Debt Repayment Schedule Well-balanced Debt Structure US$ bn Term Currency Interest rate YE2018 Current liquidity covers debt 6.5 maturities over the next 3 years Current 40% Non- Floating 46% RUB LT 89% 97% 97% 97% 4.7 Fixed 54% 6

  51. Slide 51: Strong Financial Standing Expected Throughout the Capex Cycle

    Strong Financial Standing Expected Throughout the Capex Cycle Reduced Leverage Provides For Greater Flexibility Going Forward Current Standing and Outlook Net Debt/EBITDA, x 2.2  Credit ratios have improved markedly on the 2.2 Leverage range back of macro environment, higher production 2.0 providin

  52. Slide 52: Markets Update

    Markets Update Anton Berlin Head of Strategic Marketing

  53. Slide 53: Challenging Macro Environment

    Challenging Macro Environment Global Economic Growth in Major Markets is China is One of the Largest Consumers of Subdued Norilsk Nickel’s Core Metals IMF Forecast for 2019-2020 GDP growth, % 6.6 USA 7% Other 19% Other 15% 6.1 5.8 EMEA 16% Other 33% Japan 13% Japan 12% Asia 25% Japan 4% (ex. China)

  54. Slide 54: Long Term Trends Supporting Consumption Growth for Nornickel's Metal Basket

    Long Term Trends Supporting Consumption Growth for Nornickel’s Metal Basket Fuel cells Vehicles electrification Reducing diesel market share Rising global stainless steel demand in 6% China on construction, urbanization 6% 25% and living standards growth Tightening of emission USD 5.9 bn 1H 2019 met

  55. Slide 55: Metal Markets Outlook — View on Fundamentals

    Metal Markets Outlook — View on Fundamentals Metal Ni Cu Pd Pt 6% Share of 25% Nornickel metal 40% sales (1H 2019) 23% kt (325) kt (420) Moz (1.4) Moz +0.8 Other Stocks, elastic Non- Non- days of exchange exchange Other Other consumption non-elastic Exchange 64 149 Exchange 8 7 ETF 46 23 ETF 12 14 1

  56. Slide 56: Nickel Exchange Stocks Reached 7-years Lows

    Nickel Exchange Stocks Reached 7-years Lows Drawdown of Exchange Inventories Inventories Declined by Over 80% from Continues: -129 kt 2019 YTD Peak Levels to Normal Levels Ni, kt Days of consumption 92 (392 Kt) 486 37 45 15 410 14 (2) 15-25 (1) 8 44 Cu Nickel Spot Ni Normal Ni Historical Nickel High

  57. Slide 57: China Stainless Growth to Lose Steam in 2020

    China Stainless Growth to Lose Steam in 2020 Strong Stainless Production Growth in China Growth of 300 Stainless Steel Should be in 2019 YTD Supported by Indonesia in 2020 kt Y-o-Y Mt 1,300 Jan-Oct 2019 YoY +9% 1,100 2.5 +25% 900 2 -9% 2.2 700 0.7 Jan-Oct 2019 YoY +17% 500 +7% +1% Jan Feb Mar Apr Ma

  58. Slide 58: Nickel Consumption in Batteries — Continues to Rise From a Small Base

    Nickel Consumption in Batteries — Continues to Rise From a Small Base Market Share of Ni-intensive NCM / NCA Within NCM Cathodes Chemistry Shifting Cathodes Expected to Reach 80% in 2019 (1) towards Higher Ni Loadings kt Breakdown of Global PCAM Production by Type, 2019E 800 2% 80% NCM 111 600 25% 5

  59. Slide 59: Nickel Expected to be a Balanced Market in 2019-2020

    Nickel Expected to be a Balanced Market in 2019-2020 Demand: Battery Demand Continues to Grow, Stainless Growth Sways between China and Balanced Market in 2019-2020 Indonesia kt Y-o-Y +6% kt +4% 2,565 9 30 2,425 96 Surplus 2,341 33 4 200 66 6 (25) 150 150 100 2018 Non-China 2019E 2020F Alloys& Alloy

  60. Slide 60: Neutral Impact of the Indonesian Ban on the Market Balance in 2020

    Neutral Impact of the Indonesian Ban on the Market Balance in 2020 Lower growth in Uncertainties over China & ore shipments Indonesia? from Indonesia in (27) November and (28) December (93) 30 35 Possible disruptions? Will be a complete Ravenstorpe halt of supply 90 Poseidon (270) from Tawi-Tawi? Av

  61. Slide 61: Nickel Demand: Positive Long Term Outlook to Keep Market in Deficit

    Nickel Demand: Positive Long Term Outlook to Keep Market in Deficit Growing Stainless Consumption to Compete for Ni Units with the Battery Sector kt Battery CAGR 17% (2018-2030E) 787 433 87 2018 2025 2030 Stainless Steel Alloys xEVs Other Battery Plating Other Long term Trends Supporting Ni Consumpt

  62. Slide 62: Copper: Demand Concerns Prevail in 2019

    Copper: Demand Concerns Prevail in 2019 Copper Supply Disruptions in 2019: Moderating China’s Copper Demand Still the Disruption Risks Rising Sharply in 2H 2019 Main Driver of Global Consumption Growth Mt Y-o-Y Mt Y-o-Y +2% 3 9% 8% 8% 2.5 7% +1% 6% 6% 6% 0% +1% 2 5% 6% 6% 5% 5% 5% 23.9 5% Historical

  63. Slide 63: Copper Market is Developing Small Deficit, Inventories Trending Lower

    Copper Market is Developing Small Deficit, Inventories Have Been Trending Lower Visible Copper Inventories Remain Near Copper Market Balance: Multi-Year Lows Marginal Deficits to Reduce in 2020 US$/t Days kt 9,000 18 160 150 15 100 6,000 12 9 3,000 6 (20) 3 (40) (70) (60) 0 0 Nov-13 Nov-14 Nov-15 No

  64. Slide 64: Long-term Copper Outlook: Supply Set to Grow While Demand Growth Moderating

    Long-term Copper Outlook: Supply Set to Grow While Demand Growth is Moderating Supply Addition: Over 4 Mt May Be Added By While China Copper Consumption Growth 2030E Rates are Rapidly Normalizing Mt CAGR 2018-2030E 6.6% 0.8 0.9 1.2 3.2 3.0% 27.9 1.8% 1.2% 23.4 0.8% 0.6% 2018 New Expansions Probable

  65. Slide 65: Long-term Copper Consumption Outlook

    Long-term Copper Consumption Outlook Uncertain Long-term Global Consumption … Leading to Wide Range of Market Balance Outlook… Forecasts Mt CAGR 2018-2030E kt Balanced Balanced Deficit CAGR 2.1% 29.0 CAGR 1.3% 1.1 Mt (1.1 Mt) 27.9 2025E (Base 2030Е (Base case) case) 2025E (Bull 2030Е (Bull case) cas

  66. Slide 66: Palladium Market Remains in Structural Deficit

    Palladium Market Remains in Structural Deficit A Recovery of Supply is Expected in 2019 as a Global Palladium Market Balance: Result of Work-in-Progress Inventories Major Apparent Deficit (1) Holds Release Moz Moz Y-o-Y +3% +4% 0.1 10.7 0.2 0.2 10.4 0.0 0.2 0.1 (0.2) 10.0 (0.01) (0.1) (0.4) (0.4) 20

  67. Slide 67: Platinum: Market Surplus is Absorbed by Strong Investment Demand

    Platinum: Market Surplus is Absorbed by Strong Investment Demand Platinum Market Balance (1): Surplus is Expanding in 2019, but Strong Investment Increase in Supply in 2019 Driven by Release Demand Should Absorb Some Excess Supply of Work-in-Progress Inventories Moz Moz Y-o-Y +4% -2% 0.8 0.22 0.11 8

  68. Slide 68: Automotive Sales Decline but PGM Loadings Increase

    Automotive Sales Decline but PGM Loadings Increase Expected Increase in Pd Loadings in 2019 due Global Automotive Sales (1) Decreased by 6% to Stricter Emission Regulations and in 9M 2019 Y-o-Y Introduction of RDE Despite Engine Downsizing Change in 9M 2019, Y-o-Y Average PGM loadings per vehicle, c

  69. Slide 69: Long-term Palladium Demand to Remain Strong

    Long-term Palladium Demand to Remain Strong Autocatalysts Will Remain Key Driver of Automotive Market Is Going To Be Demand Growth in the Next 10 Years ICE-dominated (>80% Consumption) M vehicles Moz 129 +21% 116 13% 6% +14% 3% 8% 97 Vehicles with ICE and catalysts 14% 1.8 3% 1.9 24% 18% 2.2 16% 10%

  70. Slide 70: EV Sales are Very Sensitive to Subsidy Policy: the Case of China

    EV Sales are Very Sensitive to Subsidy Policy: the Case of China Sales of NEV Decreased over the Last The Shift from Tax Subsidies to Dual Credit 4 Months Due to Tightening Subsidy Policies System Subsidy per BEV (1) '000 units Jan-Oct 2019, YoY ∆% RMB 250 90,000 -75% 60,000 +11% 30,000 200 0 2017 2

  71. Slide 71: Premium of Palladium to Platinum is Sustainable in the Mid-Term

    Premium of Palladium to Platinum is Sustainable in the Mid-Term Palladium Established a Sustaible Premium to … as Pd Loadings in Gasoline Vehicles are Platinum on Stronger Fundamentals… Supported by Higher Fair Value-in-Use US$/oz Palladium Platinum 2,500 Higher Lower Thermal 2,000 durability 1,500

  72. Slide 72: Key Auto Trends Impacting Metals Demand

    Key Auto Trends Impacting Metals Demand Demand Implications Ni Pd PGMs Pt Sustainable global automotive production growth  Substitution of diesel for gasoline vehicles   Growth of hybrid market share   Growth of SUV market share and engine downsizing termination  Strengthening emissions legisl

  73. Slide 73: Nornickel's Metal Basket Content by Light Vehicle Type

    Nornickel’s Metal Basket Content by Light Vehicle Type Hybrid (2) (3) Gasoline Diesel incl. PHEV (1) BEV FCEV CAGR (3) (1%) (1%) +24% +26% +30% Market Share (4) 59% 14% 17% 8% <1% Stainless Steel & Parts +Batteries Ni 2-3 kg 2-4 kg 2-4 kg 5-15 kg 30-110 kg Wires & Parts +Electric Motor, Generator Wi

  74. Slide 74: Auto Driven Metal Demand Growth in 2030E vs. 2018

    Auto Driven Metal Demand Growth in 2030E vs. 2018 Metal Pd Ni Cu Moz kt Mt % of current demand (1) 26% % of current demand (1) 33% % of current demand (1) 15% +2.7 +787 +3.6 +1.8 +0.3 (0.1) +433 +73 +1.6 +38 +0.6 +25 (0.1) +1.6 +297 +0.8 +0.4 (4) (3) Hybrids PHEV(2) ICE only (3) 2025 2030 BEV (4) PH

  75. Slide 75: Sales & Marketing Strategy

    Sales & Marketing Strategy Strategic principles Objectives Diversification of nickel sales into Fully captive global sales & marketing non-stainless applications (alloys, plating, network batteries, etc.) Strong alliance with the evolving battery Sales of 100% of metals produced within sector throug

  76. Slide 76: Digitalization Of Sales Contracts

    Digitalization Of Sales Contracts A new era in metal trade  Digitalization of metal sales contracts is opening new exciting prospects in physical metal trade and industrial value chain – a new and better ecosystem for consumers as well as traders and commodity investors  Digital assets (tokens) ar

  77. Slide 77: Sustainable Development

    Sustainable Development Andrey Bougrov Deputy Chairman of the Board Senior Vice-President

  78. Slide 78: Russia Significantly Reduced Its Carbon Footprint

    Russia Significantly Reduced Its Carbon Footprint Renewable Energy: Russia – One of the World’s CO2 Emissions: Russia Reduced CO2 Emissions The Largest Producers as % of Electricity Generation Most Among Industrial Nations Since 1990 % Mt 12,000 +354% 36% 10,000 8,000 0% 17% 17% 6,000 -20% 4,000 9%

  79. Slide 79: Nornickel Approach to Climate Change

    Nornickel Approach to Climate Change Leading global supplier of materials critical to building a low-carbon economy GHG Emissions Energy efficiency Water 10 Mt 44% 86% of CO2 emissions (1) electric power generated reused and recycled water from renewable sources of total water consumed by the Group

  80. Slide 80: Nornickel – Critical Facilitator of the Global Low-Carbon Future

    Nornickel – Critical Facilitator of the Global Low-Carbon Future Supplying the materials critical for the development of a low-carbon economy 50-100 Mt of CO2 emissions 170-270 Mt of air pollutants (1) Potential savings per EV lifecycle Potential savings per autocatalyst lifecycle enabled by nickel

  81. Slide 81: Best-in-class Corporate Governance Standards

    Best-in-class Corporate Governance Standards Gareth Peter Penny – Independent Chairman of the Board Balanced Board Led • Member of the Strategy Committee by Independent • 22 years work experience with De Beers and Anglo American Chairman • CEO of De Beers in 2006-2010 Roger Munnings – Independent Di

  82. Slide 82: Majority Independent Board Led by Independent Chairman

    Majority Independent Board Led by Independent Chairman The majority of the Board is independent for the first time in the Company’s history as a public company, 3 key Board Committees chaired by independent Directors Key Expertise of Directors 7 4 Olderfrey Independents Financial Expert 9 13 Directo

  83. Slide 83: How Well ESG Ratings Know the Corporates

    How Well ESG Ratings Know the Corporates ASSESSMENT OF NORNICKEL vs NORNICKEL FACT 2% Open pit mine Surface copper mining, MINING & 12% Underground mine Underground and Surface PRODUCTION ferroalloy mining Nornickel structure by ASSETS Downstream 61% 29% operations Category not included in the asses

  84. Slide 84: ESG Ratings are Relative … but to What?

    ESG Ratings are Relative … but to What? ASSESSMENT OF NORNICKEL vs NORNICKEL FACT Red flag due to profitability ratios above industry average Financial Performance Leading profitability in global mining industry  No strikes since 1990s – TOP High risk of labour unrest due to Labour historically the

  85. Slide 85: ESG Assessment Highlights

    ESG Assessment Highlights Gradual Improvement of Independent ESG Assessment Sustainalytics ESG Score: 69 points (out of 100), MSCI ESG Score: Rated «B» since 2017 Rated «Average Performer» since 2017 Rating in the global industry #13/45 #61/70 B B 69 58 Average CCC CCC 46 49 performer Under performe

  86. Slide 86: Closing Remarks

    Closing Remarks Gareth Peter Penny Chairman of the Board of Directors

  87. Slide 87: Q&A

    Q&A

  88. Slide 88: Appendices

    Appendices

  89. Slide 89: Global NPI Production Volumes Continue to Set Records

    Global NPI Production Volumes Continue to Set Records Total NPI Production: Potential NPI Supply Chinese NPI Growth Dependent on Ore Cut of Just 80 kt Ni After the Introduction of Availability: Up to 100 kt Ni in Ore May be the Ban Imported to China by the Year End of 2019 kt, Ni units Ore, Mwmt Jan

  90. Slide 90: Growing Supply of Low Grade Ni Feed Unlocks Class 1 Ni

    Growing Supply of Low Grade Ni Feed Unlocks Class 1 Ni for Other Applications Sources of Ore 2018 Production / Consumption Flow Ni units, Mt Ni units, Mt Ni Feed Ni Products Ni Consumption 0.1 Batteries Cathode/Briqs/ Alloys/ Sulphide Ore 0.7 0.5 Special Steel/ Special Forms (Ni 99.9%) 0.9 Class 1 N

  91. Slide 91: Fleet Electrification Targets Imply Active Hybridization

    Fleet Electrification Targets Imply Active Hybridization Major Automakers’ Plans: Hybrids and Internal Industry Expectations: Hybrids to Dominate in the Combustion Engines to Dominate Electric Vehicles Mix in the Long-term LV production ‘000 (%) share in global LV production 17% VW 26% 74% by 2025 3

  92. Slide 92: Technical Challenges in Substituting Palladium

    Technical Challenges in Substituting Palladium Catalyst Installation in a Vehicle Exhaust Resonator manifold Muffler ~¼ of PGMs Close-coupled catalyst ~¾ of PGMs Underfloor Lower temperatures, easier to catalyst substitute Pd with Pt, but lower Higher temperatures, loadings hard to substitute Pd wit

  93. Slide 93: IR Contact Details

    IR Contact Details Vladimir Zhukov Mikhail Borovikov Vice-President Investor Relations Head of Investor Relations Department Deputy Head of Investor Relations MMC Norilsk Nickel MMC Norilsk Nickel Tel: +7 495 797 8297 Tel: +7 495 787 7662 E-mail: ZhukovVLS@nornik.ru E-mail: BorovikovMA@nornik.ru 93

Nornickel — Investor Day (November 2019) on 6ix