OREANDA-NEWS. On November 20, 2008 General Director of OJSC MMC Norilsk Nickel (MMC Norilsk Nickel or the Company) Vladimir Strzhalkovsky held a press conference for Russian and international mass media where he outlined the Company’s development plans, reported the press-centre of Norilsk Nickel.

According to Vladimir Strzhalkovsky, MMC Norilsk Nickel, one of the world’s major miners and metal producers, could not remain unruffled by the effects of the ongoing crisis in the world’s metals industry.

In these circumstances the Company is considering opportunities to streamline its operations revising its capital investments program, cutting costs (including the 16% personnel reduction at Head Office and substantially lower compensations to top executives) and exploring various options to improve operational efficiency. However General Director specifically emphasized that further reductions, if any, would not target production personnel.

The baseline development option currently considered by MMC Norilsk Nickel management involves maintaining production in Russia at today’s levels with possible temporary closures of certain operations abroad. The final decision will be made by the Board of Directors at the next meeting early in December.

Vladimir Strzhalkovsky also pointed out that despite the current crisis MMC Norilsk Nickel is in a better position compared to its competitors because today the Company is among the lowest cost nickel producers in the world.

Thus the Company’s management stay committed to further implementation of all projects important for long-term development of the Company.

For instance, the Company will continue the development of Skalisty Mine in Taimyr and Severny-Gluboky Mine in the Kola Peninsula and carry on replacing depleted reserves at its other mines as well.

The expansion and upgrading of the Talnakh Concentrator in the Polar Division of MMC Norilsk Nickel is viewed as a project of strategic importance in ore beneficiation. The project is aimed at raising the Concentrator capacity from today’s 7.5 Mt of ore to 10.5 Mt of ore by 2013. In addition, the introduction of a new process flow sheet at the Talnakh Concentrator will increase the concentrate grade from 9% Ni to 14-16% Ni.

Improvements will continue at The Company’s metallurgical facilities as well – Nadezhda Plant, Copper Plant and Nickel Plant in the Polar Division and Kola MMC – in order to raise their operational efficiency, reduce costs and achieve lower sulfur dioxide emissions in the air.

In particular, this year’s repairs of a process line at the Nadezhda Metallurgical Plant increased its nickel concentrate processing capacity from 1 Mt to 1.2 Mt. At Kola MMC, the 2009-2013 Development Strategy has been approved. Also, the Company’s mid-term plans include the shutdown of the Nickel Plant upstream facilities accompanied by expansion of concentrate processing at the Nadezhda Plant, which will result in environmental improvements in Norilsk. The projects aimed at sulfur dioxide recovery from furnace gases at Copper and Nadezhda plants will continue, and the reconstruction of Kola MMC roaster will be completed.

Another important corporate project, according to the General Director, is the construction of five Arctic type vessels.

Norilsk Nickel’s own sea fleet will make the Company completely self-sustainable in meeting its transport needs and will reduce the costs of production delivery to end users by 25-30%. The Company will put into operation the fourth ship named Talnakh this December, and the fifth vessel – Nadezhda – in February 2009. "The fact that five innovative ice-reinforced vessels will be operated in Russia is an important milestone in the development of national sea fleet", the General Director noted.

Vladimir Strzhalkovsky also focused on the sales policy of the Company and pointed out that even in a crisis situation in metal markets the policy will not be altered. "We carry out all contractual obligations and there is no reason to be concerned about any delays in product delivery to our customers", - the General Director emphasized.

The Company is also ready to meet 100% of domestic demand for metals, including cobalt and other materials of strategic importance for the national economy.