As reported by Reuters, Russia’s Norilsk Nickel is dialing up its long-term investment forecast, tacking on another $6 billion to its 2021–2030 budget, bringing the total to $35 billion. The reason? Soaring construction costs and a renewed focus on modernizing its energy and production infrastructure.
Sergey Dubovitsky, the company’s senior VP of strategy, said in an interview with Reuters that most of the additional spending will come after 2025, as the company stretches out its investment cycle further than previously planned.
“This isn’t just a bump in costs—it’s a strategic extension,” Dubovitsky told Reuters. “We’re seeing the need to invest more heavily after 2025, especially in our energy systems and core facilities.”
Nornickel is positioning itself for the long haul. While part of the extra $6 billion—roughly $1 billion—is chalked up to inflation and rising material prices thanks to global supply chain strains, the majority of it ($5 billion) will go toward overhauling the Company’s energy and industrial systems. Those upgrades are critical, especially in light of recent environmental and operational incidents that have drawn investor scrutiny over the past two years.
Dubovitsky noted that 2021 marks a transition year for the company, with investments ramping up after eight years of relatively modest annual spending (around $1.7 billion per year). The investment surge signals Nornickel’s intent to not only maintain but expand its role in the global battery metals and precious metals markets, even as it navigates rising costs and infrastructure challenges. The move, if they want to remain in the top tier of the food chain, is wise. A lot of players with a lot of deep pockets are making moves in the nickel space – with M&A, mine development and refining operations – and this trend looks set to continue for a long time to come.
Anthony Milewski
Chairman, Nickel 28 Capital
