13.6 C
Belgrade
Supported byspot_img
spot_img

Russia Norilsk Nickel's projects 2016 CAPEX budget

Member of Europium Groupspot_img
Supported byspot_img
MMC Norilsk Nickel’s board has approved a capital expenditures budget of RUB145bn for 2016 including RUB40bn for the Chita project.

The company says all key investment projects planned for 2015 have been completed on time and on budget with capital expenditures at around RUB100bn, including approximately RUB11.5bn for Chita.

The company says the 2016 budget has been prepared in line with Norilsk Nickel’s corporate strategy approved in 2013, which put the focus on the development of tier-1 assets, generating return on invested capital and providing for the company’s sustainable development including the realisation of major HSE initiatives.

The budget also incorporates new cost savings and operational efficiencies initiatives, which were announced by the management in 4Q2015.

Supported by

The company says that despite the challenging macroeconomic environment and depressed global commodity markets the budget underlines a high level of social responsibility. In 2016, the company has budgeted an indexation of the production personnel salaries and wages in line with the collective bargaining agreement, maintenance of the ongoing social and charity initiatives, continued relocation program for the residents of the city of Norilsk as well as the development of Norilsk urban infrastructure jointly with the federal and local authorities.

The 2016 capital expenditures have been budgeted at RUB 145 billion (including RUB 40 billion for Chita project). Investment priorities for 2016 are fully in line with the corporate strategy and on the part of commercial projects, should deliver superior returns even amidst spot commodity prices. The investment priorities for 2016 include the continued downstream modernization program (the scheduled shutdown of Nickel Plant, the second phase of the modernization and expansion of capacity of Talnakh concentrator, the expansion of capacity of Nadezhda metallurgical plant and modernization and expansion of refining capacity of the Kola division) as well as investments into high-IRR brownfield upstream projects in the Polar division as well as continued execution of the Chita project aiming at launch in 2017. The proportion of non-RUB nominated capital expenditures in 2016 is expected to increase to approximately up to 25% of total mainly as result of Chita project entering an active stage of construction and completion of the modernisation of the Talnakh concentrator.

Chief financial officer Sergey Malyshev said: “The 2016 budget approved by the board of directors is well balanced and fully sufficient to fund our strategic priorities even amid very challenging commodity markets. In 2015, we have managed to control our production costs and deliver on our capital investments targets. We monitor very closely the situation on global commodities markets and taking into account the recent downturn, we have launched a number of new cost optimisation initiatives aiming to deliver savings of RUB12bn in 2016 as well as planning to continue optimisation of already approved capital expenditures budgets.

“While focusing on cost controls in 2016 we will continue to invest into projects, which yield superior returns even at spot metal prices, as we believe that the successful delivery on these projects comprises the main competitive advantage of Norilsk Nickel relative to our global peers. The 2016 budget allows us to maintain financial stability, conservative leverage and access to long-term capital on favourable terms, which we believe is increasingly important in current markets.”

stockmarketwire
Supported byElevatePR Digital

Related News

Buenos Aires Governor establishes lithium cooperation agreement with Mexico’s LitioMx

Buenos Aires Governor Axel Kicillof has formalized a cooperation agreement with Mexico's state lithium company, LitioMx, through the Argentine province’s scientific research commission, CIC....

Brazil takes steps to boost critical minerals development with new investment fund

Brazil is making significant strides in developing its critical minerals sector, aiming to diversify its mining industry while attracting global interest. The federal development...

Environmental and Economic groups criticize Australia’s coal mine expansions

Environmental and economic organizations have strongly condemned the Australian government’s decision to approve the expansion of three coal mines in New South Wales, labeling...

From gold discovery to global copper giant: The rise of Zijin Mining

Chen Jinghe was a fresh geology graduate when a government official tasked him with a life-changing mission: to find gold at Zijin Mountain in...
Supported by
Supported by
Supported by
error: Content is protected !!