INTERVIEW: Russia’s Norilsk to spend 6.5 bln rbl to upgrade Kola Mining Co in ‘12

Interview with Yury Filippov, Norilsk Nickel’s acting first deputy CEO

MOSCOW, Feb 9 (PRIME) -- Russian metals giant Norilsk Nickel plans to spend about 6.5 billion rubles on capital construction and upgrade of equipment at Kola Mining and Metallurgical Company, or KGMK, in 2012, Yury Filippov, Norilsk Nickel’s acting first deputy CEO, told PRIME in an interview.

“The major part of investment will be used to replace outdated equipment, acquired in 2005-2008 for construction and exploitation of the Severny-Gluboky mine,” he said.

According to Norilsk Nickel's strategy to 2025, the total ore mining at the Polar division is expected to increase to 39 million tonnes with KGMK contributing about 9 million tonnes per year.

The Severny-Gluboky mine, which is now under construction, and operating Severny mine are the main sources of raw materials for KGMK.

“In addition, the company plans to start mining at the Sputnik deposit and other perspective areas. At the same time, with the development of the resource base, the company plans to reconstruct the refinery, which will allow for increased processing capacity by 1 million tonnes to 9.5 million tonnes per year,” Filippov said.

Speaking about the possible development of off-balance resources, Filippov said that it would depend on market conditions.

“Kola Mining Company has large off-balance reserves, which may be involved in production. The use and volume of such low-content raw materials with the nickel content below 0.3% depend on market conditions and the forecasted prices on extracted metals. The more effective use of such ores is preliminary enrichment,” Filippov said.

In late December 2011, Norilsk Nickel said that it planned to spend a total of U.S. $10.9 billion on the development of its resource base in Russia by 2025 under the company’s strategic framework.

The company plans to spend $632 million on exploration operations in the Norilsk area and the Murmansk Region by 2025.

By 2025, Norilsk also plans to increase its ore reserves on the Kola Peninsula by 70 million tonnes, including 750,000 tonnes of nickel and 340,000 tonnes of copper.

Norilsk Nickel’s board of directors approved the company’s development strategy worth over $35 billion for the period through 2025 in October 2011.

(29.6930 rubles – U.S. $1)

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