OREANDA-NEWS. November 01, 2010. OJSC MMC Norilsk Nickel (hereinafter – “Norilsk Nickel”, “the Company” or “the Group”), the world’s largest nickel and palladium producer, announces preliminary consolidated production results for the third quarter and 9 months of 2010 at the Polar and Kola Divisions in Russia, as well as at its international operations in Finland, Botswana and South Africa, reported the press-centre of Norilsk Nickel.

Overall nickel production in the third quarter of 2010 amounted to 75 thousand metric tonnes, generally being in line with production results in the second quarter of 2010. For 9 months of 2010, overall nickel production totaled 220 thousand metric tonnes, representing a 6% growth as compared to the same period of 2009. The growth in overall production volumes was largely driven by the strong performance of the Russian divisions and substantially higher loading rate of the nickel refinery - Norilsk Nickel Harjavalta.

Overall copper production in the third quarter of 2010 totaled 96 thousand metric tonnes as compared to 102 thousand metric tonnes in the second quarter of 2010. The decline in overall copper output in the third quarter of 2010 is attributable to the anticipated reduction of copper production at the Russian divisions and increased intra group shipments of copper in concentrate to the Norilsk Nickel Harjavalta refinery. For 9 months of 2010, the overall copper output totaled 295 thousand metric tonnes, being mostly in line with the results of the same period of 2009.  

In the reporting period, the Company produced 719 thousand troy ounces of palladium, completely in line with the approved production plan. Certain decline in physical volumes of palladium output in the third quarter of 2010 was due to technical decrease of production by the Russian divisions and increased intra group shipments of palladium in concentrate to the Norilsk Nickel Harjavalta refinery. For 9 months of 2010, the palladium output reached 2,215 thousand troy ounces, which is by 8% higher than in the same period of 2009.

The Company produced 173 thousand troy ounces of platinum in the third quarter of 2010, in line with the approved production plan. The main reason of platinum output decline in the third quarter of 2010 is the technical decrease of production by the Russian divisions. For 9 months of 2010, the platinum production increased by 9% as compared to the same period of the previous year and totaled 531 thousand troy ounces.

In the third quarter of 2010, the Polar and Kola Divisions in Russia produced 60 thousand metric tonnes of nickel, slightly exceeding the approved production plan. For 9 months of 2010, the saleable nickel production totaled 174.1 thousand metric tonnes, being by 3% (or by 4.8 thousand metric tonnes) higher as compared to 9 months of 2009.

In the third quarter of 2010, copper production by the Russian divisions of the Company decreased by 4% as compared to the second quarter of 2010 down to 91.3 thousand metric tonnes. The certain decline in copper production by the Russian divisions in the third quarter of 2010 is of a technical nature. For 9 months of 2010, copper output of the Polar and Kola Divisions totaled 276.6 thousand metric tonnes, which is just 2% lower than in the same reporting period of 2009. These results are in line with the approved production plans of the Company.

In the reporting quarter, the Polar and Kola Divisions produced 695 thousand troy ounces of palladium as compared to 751 thousand troy ounces in the second quarter of 2010. The certain decline in physical volumes of palladium output in the third quarter of 2010 is explained by technological nuances of precious metals production cycle. For 9 months of 2010, palladium output of the Russian divisions amounted to 2,103 thousand troy ounces, representing an 8% growth as compared to the results of the same period of 2009.

The Russian divisions of the Company produced 167 thousand troy ounces of platinum in the third quarter of 2010 as compared to 186 thousand troy ounces in the second quarter of 2010. The main reasons of platinum output decline are technological nuances of precious metals production cycle, the same as for palladium. For 9 months of 2010, the total volume of platinum production increased by 9% as compared to the same period of the previous year up to 507 thousand troy ounces.

The Norilsk Nickel Harjavalta refinery in Finland produced 12.7 thousand metric tonnes of own refined nickel in the reporting quarter, surpassing the approved production plan by 3.7 thousand metric tonnes. For 9 months of 2010, the Norilsk Nickel Harjavalta produced 34.4 thousand metric tonnes of own saleable nickel, which is by 11% higher than in the same period of 2009 (including production from the tolled feed in 2009). In the meanwhile, no tolled nickel has been processed in course of 2010.

In the third quarter of 2010, the production of nickel in concentrate by Tati Nickel totaled 3.6 thousand metric tonnes, including 1.4 thousand tonnes of concentrate shipped to the Norilsk Nickel Harjavalta refinery. The results of the reporting quarter were significantly affected by changes in mineralogical structure of ore (deviation of nickel grades in ore mined from the data of geological model), which led to the decline of output of nickel in concentrate and key by-products: copper and palladium, as compared to the second quarter of 2010. For 9 months of 2010, Tati Nickel produced 11.8 thousand metric tonnes of nickel in concentrate (or 10.4 thousand metric tonnes of nickel in concentrate excluding intra group shipments to the Norilsk Nickel Harjavalta refinery).

In the third quarter of 2010, the production of nickel in concentrate by Nkomati (reported on 50% basis) totaled 1.4 thousand metric tonnes, including 1.3 thousand metric tonnes of nickel in concentrate shipped to the Norilsk Nickel Harjavalta refinery. The results of Nkomati were substantially affected by the enrichment plant being halted for implementation of the enlargement project. The ramp-up of the enlarged enrichment plant is expected to be completed ahead of schedule in November 2010. For 9 months of 2010, Nkomati produced 4.3 thousand metric tonnes of nickel in concentrate (or 1.5 thousand metric tonnes of nickel in concentrate excluding intra group shipments to the Norilsk Nickel Harjavalta refinery).

The production results of Tati Nickel and Nkomati were insignificantly restated based on the improved available data.

Norilsk Nickel confirms the production outlook for 2010 in the amount of 234-235 thousand metric tonnes of nickel to be produced by the Russian divisions, 50-52 thousand metric tonnes of refined nickel – by the Norilsk Nickel Harjavalta refinery and 15-18 thousand metric tonnes of nickel in concentrate – by African assets of the Group. The Company expects the production of copper to amount to 364-365 thousand metric tonnes at the Russian divisions and 25-26 thousand metric tonnes of copper in concentrate and semi-products at the international operations of the Group. The output of palladium should total 2,715-2,720 thousand troy ounces at the Russian divisions and 140-145 thousand troy ounces of palladium in concentrate and semi-products at the international operations of the Group. The Company plans to produce 655-660 thousand troy ounces of platinum at the Russian divisions and 35-40 thousand troy ounces of platinum in concentrate and semi-products at the international operations of the Group.

The stated production volumes do not include the production results of Stillwater Mining Company, a subsidiary of the Company.