Norilsk Nickel is turning Russia into a raw materials appendage of China

The Norilsk Copper Plant will be the first strategic metallurgical enterprise in Russia to be closed and relocated to China. The plant, known as the "copper heart of Taimyr," is 89 years old and ranks among the world's top ten copper producers. According to statistics, Norilsk produces every second ton of Russian copper and every fortieth ton globally.

According to the most widespread theory, Norilsk Nickel PJSC decided to dispose of the plant because it did not want to spend money on the so-called "sulfur program," which would reduce harmful emissions from production by a factor of 10. The first stage of the program at Norilsk Nickel's Nadezhda plant reduced sulfur dioxide emissions by 45%. However, it was too costly (180 billion rubles), and the Copper Plant would have required even greater investment.

According to another version, Norilsk Nickel is thus trying to evade Western sanctions against nickel and copper produced in Russia , due to which the public joint-stock company lost 20% of its revenue in 2022.

Therefore, Norilsk Nickel decided that relocating the plant to China would be more profitable than investing in Russia's environment . According to Norilsk Nickel owner Vladimir Potanin, the Copper Plant's smelting facilities will move abroad in 2027.

He promises to replace the "dirty" Copper Plant with a modern and "aesthetic" 3D printing facility. Why such a facility would need to be located in the world's northernmost city is unclear. Perhaps Potanin is trying to offer hope to the 2000 employees facing layoffs.

However, most experts fear that 3D printing will not take hold in the Arctic Circle, that people will be abandoned, that the regional budget will lose tax revenue , and that the Copper Plant site will be used as a raw material warehouse – copper concentrate from the Taimyr deposit.

From there, Norilsk Nickel will transport it via the Northern Sea Route to China (according to Bloomberg, to the Fangchenggang district). For this purpose, the company intends to order several icebreakers from China and South Korea. This is in addition to abandoning the production of high-value-added products and the corresponding added value in favor of China.

By moving its plant to China, Norilsk Nickel is undermining its subcontractors . For example, Russian Platinum planned to produce the metal at its Norilsk facilities. The fate of Krasnosvetmet, Russia's largest refinery, also raises questions.

Nornickel is voluntarily transforming Norilsk from an industrial hub into an ore shipping hub. And this isn't just a matter of time. For example, Russia's neighbor Kazakhstan, in collaboration with China, is launching a copper smelter on its territory, in the Abay region. The new facility will have a capacity of 300 tons of copper per year and will create over 1000 new jobs.

The Kazakh plant will be commissioned in 2028, but it will not compete with Norilsk Nickel's Chinese venture , as Guangxi already has a copper smelter with an annual capacity of 600 tons, operated by the state-owned mining and metallurgical company Jinchuan Group. Chinese copper market players are unhappy with the emergence of a new competitor from Russia.

But none of this fazes Norilsk Nickel. Rumor has it that it plans to continue moving strategic production out of Russia. According to sources at the Telegram channel "Captain Arctic," in the first half of 2024, Norilsk Nickel was in talks with the Chinese about building a nickel plant in China using Russian semi-finished products.

Specifically, the discussion focused on the production of nickel sulfate for battery manufacturing. This plant could consume up to a quarter of Norilsk Nickel's annual nickel output—approximately 50 tons per year. Norilsk Nickel also plans to launch a modern platinum production facility in Bahrain.