Russian mining giant intends on moving copper smelting production to China
Date
4/25/2024 4:15:28 AM
(MENAFN) In response to mounting sanctions pressure from Western nations, Norilsk Nickel, the world’s largest nickel producer, has announced a significant strategic move: transferring some of its copper smelting production to China. In an interview with Interfax, Norilsk Nickel’s chief executive, Vladimir Potanin, revealed that the company is exploring alternative avenues to maintain its presence in international markets amidst sanctions targeting Russian-origin aluminum, copper, and nickel.
Potanin emphasized that the imposition of sanctions compelled the company to devise unconventional strategies to ensure the continued distribution of its products. One such measure involves establishing a joint venture in China to construct a new plant, slated for completion by mid-2027. This venture will receive approximately 2 million metric tons of copper concentrate annually from Norilsk Nickel, with the final product marketed as Chinese goods.
Potanin highlighted the advantage of Chinese goods being less susceptible to sanctions within China compared to Russian-origin products.
The decision to shift production to China also aims to shield Norilsk Nickel’s exports from the escalating sanctions pressure on financial transactions involving Russia. Potanin cited challenges in conducting settlements, even in friendly jurisdictions, as a major impediment to normal business operations.
Moreover, Norilsk Nickel is diversifying its settlement mechanisms by reducing reliance on the United States dollar. Recent reports indicate that the company is opting to sell metal on the spot market in yuan, leveraging a combination of London and Shanghai prices. This strategic move underscores Norilsk Nickel’s efforts to adapt to evolving geopolitical dynamics and mitigate risks associated with traditional currency transactions.
In addition to its production relocation, Norilsk Nickel is strategically aligning itself with China’s burgeoning battery technology sector. Potanin revealed the company’s intentions to access China’s advanced battery technologies, with the aim of enhancing domestic production capabilities. This move signifies Norilsk Nickel’s commitment to innovation and sustainability, as it seeks to capitalize on emerging market trends and technological advancements.
Norilsk Nickel’s decision to transfer production to China reflects a proactive response to geopolitical challenges, demonstrating the company’s agility and resilience in navigating complex international dynamics. By embracing strategic partnerships, diversifying settlement mechanisms, and tapping into new markets and technologies, Norilsk Nickel aims to sustain its global leadership position in the face of adversity.
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