NORNICKEL ENTERS INTO TWO AGREEMENTS TO BOLSTER ITS ENERGY ASSETS

PRESS RELEASE

June 16, 2022

Public Joint Stock Company «Mining and Metallurgical Company «NORILSK NICKEL» (PJSC MMC Norilsk Nickel, Nornickel or the Company)
 

NORNICKEL ENTERS INTO TWO AGREEMENTS TO BOLSTER ITS ENERGY ASSETS

Nornickel will hand over dispatch process control of the Norilsk energy system to the System Operator of the Unified Energy System (SO UES). A relevant agreement aimed at developing Norilsks power supply system was signed today at the St Petersburg Economic Forum by Evgeny Fyodorov, Nornickels Vice President for Energy, and Fedor Opadchy, Chair of the Management Board at the SO UES. The agreement envisages the transfer of dispatch process control of the technologically isolated territorial power supply system in the Taimyrsky (Dolgano-Nenetsky) Municipality to Krasnoyarsks Regional Dispatch Office (RDO), a branch of the SO UES in line with the June 11, 2022 amendments to the Federal Law on Power Generation. The power supply system is currently being managed by Norilsk-Taimyr Energy Company (NTEC, part of Nornickel Group).

The transfer will be gradual and is expected to be completed by the end of 2023, with the parties working closely to expand the scope of dispatcher responsibilities of the SO UES. During the transition period, NTEC will assist Krasnoyarsks RDO in planning and management of the power grid processes, operation of the power system protection tools, development of long-term initiatives to support the power system, alignment of data on equipment failure risks and consideration of measures to improve the reliability of Norilsks power supply system.

On top of that, the parties will bring their information systems in sync with each other to facilitate the exchange of process data between NTEC and the SO UES as part of the dispatch and technological control. This initiative aims to streamline communications and harmonise technologies used by power supply entities across Russia. Going forward, these steps will make it possible to integrate the specifications of the isolated territorial power supply system of the Taimyrsky (Dolgano-Nenetsky) Municipality into the unified information model developed by the UES of Russia in line with the national standards.

At the signing ceremony Fedor Opadchy said: This agreement will enable us to outline how coordinate how we will interact with Nornickel, so that the transfer of functions to the system operator does not disrupt the viability of the grid. One of the core goals we are seeking is to disseminate the common standards and principles applied in Russias unified national grid to this insular network. This project will entail complex technologies, which is why it is imperative to run it in a planned fashion by first building the tech, creating digital duplicates of the system, giving extra training to the staff and building communications networks. This will be a large-scale initiative.

The second energy agreement was signed by Nornickel with Rosseti North-West, a power grid company. The signing ceremony was attended by Andrey Chibis, the Governor of the Murmansk Region.

Nornickel plans to fully abandon the use of fuel oil at the Companys Monchegorsk site. Pursuant to the agreement, the outdated oil fuel-fired boiler will be replaced with advanced electric equipment.

This investment project will help reduce pollutant emissions and facilitate Nornickels transition to modern green technologies, while also contributing to the achievement of the CO2 reduction targets set by the Companys Environmental and Climate Change Strategy for a period until 2030.

The cooperation agreement was signed by Evgeny Fyodorov, Nornickels Vice President for Energy, and Artyom Pidnik, head of Rosseti North-West.

Rosseti North-West intends to build a state-of-the-art power source and all the required power grid infrastructure to provide a capacity of 200 MW for the connection of the new facility to the grid (with all potential future loads considered).

The construction of such a powerful boiler will enable us to fully abandon fuel oil at our production site in Monchegorsk. This project is a part of Nornickels environmental strategy. For us, reduction of environmental impact is an important step forward on our path towards green metals. Furthermore, we will significantly improve the efficiency of production processes by capitalising on a variety of competitive advantages, ranging from lower power source costs to the optimisation of fuel logistics expenses, said Evgeny Fyodorov, Nornickels Vice President for Energy.

The company estimates that switching to the electric boiler will cut down on CO2 emissions by as much as 400 kt per annum.

Artyom Pidnik noted that Arctic development is one of the countrys key economic priorities: More than 460 projects are up and running in this region, with investments exceeding RUB 1.3 tn. The Arctic represents a reserve of environmental resilience not only for Russia, but for the entire planet. Fuel oil and coal are the key sources of air pollutant emissions. The replacement of inefficient and environmentally unfriendly fuel types with electrical power is not only economically reasonable, but also indispensable for environmental protection. Rosseti North-West is ready to build all the necessary infrastructure.

Andrey Chibis emphasised the importance of the agreement for the Arctic environment: Environmental protection is one of the key focus areas outlined in the Arctic Strategy through 2035. Our goal is to upgrade infrastructure in line with the latest requirements, while also preserving the unique landscape of Arctic territories. Most importantly, the new agreement will contribute to the preservation of Arctic habitats in the future. Overcoming the regions dependence on fuel oil is a strategic area of our energy development concept, and today we have made yet another significant step towards that goal.

ABOUT THE COMPANY

MMC Norilsk Nickel is a diversified mining and metallurgical company, the worlds largest producer of palladium and high-grade nickel and a major producer of platinum and copper. The company also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and other products.

The production units of Norilsk Nickel Group are located at the Norilsk Industrial District, on the Kola Peninsula and Zabaykalsky Krai in Russia as well as in Finland.

MMC Norilsk Nickel shares are listed on the Moscow and on the Saint-Petersburg Stock Exchanges, ADRs are accepted for trading on the Saint-Petersburg Stock Exchange.

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