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26 May 2014

"Norilsk Nickel": cancellation of the duty will save ...

According to Vladimir Potanin, General Director of Norilsk Nickel, in connection with the cancellation of the export duty on copper and nickel this year the company has a unique opportunity to save a significant amount of 11 billion rubles. The cancellation of duties was the final result of signing an agreement with regional and federal authorities on the developed program for the accelerated closure of the obsolete nickel production plant. The funds received by canceling duties are planned to be invested in the closure program. The contract examines the implementation of the investment program of Norilsk Nickel, aimed at eliminating production nickel capacities that are not subject to further reconstruction. The program for the closure of the Nickel Plant is planned to be implemented simultaneously with the start of the technical reconstruction of the Norilsk industrial site, the amount of investments in which is expected to amount to 70 billion rubles.

It is expected that the Russian government, in turn, being guided by the need to implement other approaches aimed at stimulating the modernization of domestic metallurgy, will agree to early zeroing of duties on the export of copper cathodes, undoped nickel, cathode sections to zero products in accordance with accepted obligations when entering into WTO. The funds raised by the company through early zeroing are planned to be fully invested in the targeted investment program aimed at carrying out environmental and social activities with a budget that will exceed 4 billion rubles by 2016.

The issue, which supposes the abolition of duties for the export of copper and nickel this year (previously the date of the decision was planned for 2016), will be considered by the government commission in the near future - in any case, this is what V. Potanin is counting on. According to him, the conclusion of the agreement will enable Norilsk Nickel to close the Nickel Plant in an accelerated mode, while maintaining current production volumes. In addition, the investments received as a result of the agreement will help improve the socio-economic and environmental situation in the region.

The conservation program of the Nickel Plant, which was built in 1930, is obsolete and has lost its effectiveness, will be launched in 2016. Norilsk Nickel's management expects that there will be no shortage of capacity, given the improved levels of nickel concentrate in the Talnakh concentrator.

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