Russia’s largest mining company, MMC Norilsk Nickel, is exploring several new projects in China, focusing on copper, nickel, and palladium, as international sanctions complicate cross-border payments and shipments.
This month, Nornickel executives engaged in discussions with potential Chinese partners and signed approximately ten memorandums of understanding, covering the full range of metals the company produces. Although Nornickel itself has not been directly sanctioned by the US or the European Union, the broader restrictions imposed since Russia’s 2022 invasion of Ukraine have significantly affected its operations. The London Metal Exchange, for example, has prohibited new deliveries of Russian metal this year.
The sanctions have led European and US banks to halt funding for Russian metal transactions, with some clients ceasing their business dealings with the country altogether. As a result, China has become Nornickel’s primary export market since 2023, accounting for over half of its sales. However, trading with China has become increasingly complex due to expanded US secondary sanctions in June, which broadened the definition of Russia’s military-industrial base, causing Chinese banks to be more cautious with Russian transactions.
In response to these challenges, Nornickel announced in April its plans to establish a copper plant and joint venture with a local partner in China, presenting an innovative solution to navigate the sanctions risks. The company aims to complete the plant by mid-2027 and transport copper concentrate to China via the Northern Sea Route.
Recent talks have focused not only on this copper project but also on other initiatives, including the construction of a nickel plant intended for battery manufacturers. Discussions about the nickel plant have been reported by Reuters.
Nornickel’s spokesperson declined to provide further comments on the ongoing negotiations.
