OREANDA-NEWS. August 07, 2008. In view of the statement published by UC Rusal, the holder of 25% +2 shares in MMC Norilsk Nickel (hereinafter – MMC Norilsk Nickel or the Company), the Company informs as follows, reported the press-centre of Norilsk Nickel.  

MMC Norilsk Nickel is currently the largest Russian public company with diversified mining and metallurgical assets, and its openness in information disclosure, operation transparency and corporate governance standards were highly appraised by independent experts both in Russia and abroad on more than one occasion.

Over the last years the Company has transformed itself in a serious global miner and producer of non-ferrous and precious metals, which is proved by its stable production rates and reliable metal deliveries to the customers.

The management of MMC Norilsk Nickel sees its primary mission in the protection of interest of all its shareholders and creation of additional shareholder value. This may be illustrated by the fact that the Company’s capitalization in the period from 2001 to the present day increased by more than 30 times almost to USD 40 bln. Last year this indicator grew to the record USD 63.5 bln as the result of well-thought-out and balanced policy of the management, availability of a comprehensible long-term strategy for production development, and successful acquisition of nickel assets abroad.

Therefore, the Company considers improper the UC Rusal’s statement of “poor” operating and financial results of MMC Norilsk Nickel. In line with the approved corporate development strategy, the Company’s production facilities ensure uninterrupted metal supply to the market, and through its overseas acquisitions in 2007 MMC Norilsk Nickel was able to boost refined nickel output to 276,339 thousand metric tonnes (after the acquisitions), thus showing a year-on-year output growth of 13%.

In 2008 saleable nickel production is expected to increase to 300-305 thousand metric tonnes and saleable copper production to 415-420 thousand metric tonnes. 2008 paladium production is estimated at 3.00-3.05 million ounces (93-95 metric tonnes) and platinum production is expected in the range of 710-720 thousand ounces (around 22 metric tonnes).

It is also worth noting that the Company’s financial results in 2007 were the best in its history. Revenues grew by 44% to USD 17.1 bln, EBITDA increased by 31% to USD 10.2 bln, profit before non-cash charges amounted to USD 7.2 bln. These charges were made on paper only and did not affect either cash flow or profitability of the Company. MMC Norilsk Nickel’s EBITDA margin was 60% in 2007, i.e. one of the highest in the world’s mining and metal industry.

The Board of Directors of MMC Norilsk Nickel is currently comprised of three UC Rusal representatives, three HC Interros representatives and three independent directors who represent minority shareholders’ interests. Thus, the existing Board of Directors protects interests of all shareholders of MMC Norilsk Nickel.

The management of the Company confirms its commitment to act in compliance with high corporate governance standards while being equally guided by the interests of all shareholders of MMC Norilsk Nickel.