Russia's Nornickel gets closer to top buyer with plan for copper plant in China

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Russia's Nornickel gets closer to top buyer with plan for copper plant in China

China 22 Apr 2024 04:59 PM IST Reuters

Nornickel, struggling to import equipment to sanctions-hit Russia, will close its Arctic copper plant and build one in China with an unnamed partner to gain direct access to the world's biggest metals market, it said on Monday. The project is a major shift for Nornickel, which is simultaneously adapting to sanctions on Russia and to changing buying preferences in its main sales destination, Asia.

Until now, Nornickel has mainly sold refined copper, used in power and construction. "We are transferring our environmental problems, settlement problems, market access problems, problems with customising our goods for the consumer market, in this case, to China, where they will be solved more efficiently," CEO Vladimir Potanin said in an interview with the Interfax news agency, published on Monday.

Potanin said Nornickel would create a joint venture in China to build the plant, which should be constructed by mid-2027, and would supply it with about 2 million metric tonnes of copper concentrate a year. China's copper imports fell by 6.3% in 2023 as domestic production increased, while imports of copper ore and concentrate hit a record-high.

China has become a major destination for Russian companies seeking to export their commodities after the United States imposed sanctions on Russia after it sent its army into Ukraine in February 2022. Asia accounted for 54% of Nornickel's revenue in 2023. "This dependence increases as sanctions pressure increases," Potanin said. "We will not get away from this, but being integrated more into the Chinese economy, we are more protected than if we don't have this."

In addition, Nornickel will find other partners to help it enter the battery production business, Potanin said, using Russian lithium deposits and partnering with state nuclear corporation Rosatom for this purpose. Potanin also said a joint project with German chemicals group BASF in Finland had been put on hold. BASF this month said it had started laying off workers at the site, citing permitting issues from the Finnish authorities.

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Russia's Nornickel gets closer to top buyer with plan for copper plant in China

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