OREANDA-NEWS. August 01, 2011. OJSC MMC Norilsk Nickel (hereinafter – “Norilsk Nickel”, “the Company” or “the Group”), the world’s largest nickel and palladium producer, announces preliminary consolidated production results for the second quarter of 2011 and the first half of 2011 at the Polar and Kola Divisions in Russia and international operations in Finland, Botswana and South Africa, reported the press-centre of Norilsk Nickel.

 Overall nickel production in the second quarter of 2011 amounted to 65 thousand metric tonnes as compared to 71 thousand metric tonnes in the first quarter of 2011. The changes in nickel output in the reporting period are due to early seasonal suspension of sea navigation in course of spring flood for Russian assets and due to certain decrease in production volumes at the international assets of the Group. In the first half of 2011 nickel production totaled 136 thousand metric tonnes.

Overall copper production in the second quarter of 2011 amounted to 90 thousand metric tonnes as compared to 94 thousand metric tonnes in the previous quarter. The reasons for the decline of copper output in the reporting period are similar to the reasons of changes in nickel production. Overall copper production in the first half of 2011 totaled 184 thousand metric tonnes.

The Company produced 744 thousand troy ounces of palladium in the reporting quarter, representing a 63 thousand troy ounces increase as compared to the first quarter of 2011. In the first half of 2011 the overall output of palladium amounted to 1,425 thousand troy ounces.

Overall platinum output in the reporting period reached 190 thousand troy ounces, being 20 thousand ounces higher as compared to the first quarter of 2011. In general, in the first half of 2011 the Company increased platinum output up to 360 thousand troy ounces.

 In the second quarter of 2011 the Polar and Kola Divisions in Russia produced 54 thousand metric tonnes of nickel. In the first half of 2011 the production of nickel totaled 110 thousand metric tonnes which represents a 3% decrease as compared to the results of the first half of 2010.
In the second quarter of 2011 copper production of the Russian divisions of the Company amounted to 87 thousand metric tonnes. In the first half of 2011 the production of copper totaled 176 thousand metric tonnes, being 5% less than in the first half of 2010.

Decrease in nickel and copper production at the Russian divisions of the Company in the first half of 2011 as compared to the same period of 2010 is explained by early seasonal suspension of sea navigation in course of spring flood. This caused certain delay in deliveries of semi-products (high grade matte) of the Polar Division to Kola MMC for further treatment and refining. In the second half of 2011 the Company plans to catch up with annual production plans in terms of nickel and copper output at Russian divisions.

In the reporting period palladium production at the Kola and Polar Divisions amounted to 711 thousand troy ounces. In the first half of 2011 the output of palladium totaled 1,363 thousand troy ounces, being in line with the approved production plan.

The Russian divisions of the Company increased platinum output in the second quarter of 2011 up to 183 thousand troy ounces. In the first half of 2011, the Polar and Kola Divisions produced 347 thousand troy ounces of platinum, slightly surpassing the results of the first half of 2010.

In the second quarter of 2011 the Harjavalta nickel refinery in Finland produced 9 thousand metric tonnes of nickel. In the first half of 2011 the production at the Harjavalta refinery totaled 20 thousand metric tonnes of nickel, exceeding the approved production plan.

In the second quarter of 2011 overall combined production of nickel in concentrate by Tati Nickel and Nkomati totaled 4 thousand metric tonnes. In the first half of 2011 these assets produced 8 thousand metric tonnes of nickel in concentrate, which is by 1.7 thousand metric tonnes less than in the first half of 2010. The operational results of Tati Nickel were affected by changes in the mineralogical structure of ore mined. In the first half of 2011 the mining works at Nkomati were carried out at the top of the open pit where metal grades are lower. As mining works go deeper, the nickel grade should rise in the ore of the open pit.

In the reporting period in accordance with production plans of the Group in Australia, Lake Johnston was carrying out test works and tuning of the technology. Currently test runs and optimisation of the equipment is being finalised, which will be followed by the ramp-up of this operation.