OREANDA-NEWS. December 22, 2011. MMC Norilsk Nickel (MMC Norilsk Nickel or the Company or the Group) announces the start of Nadezhda Metallurgical Plant (NMP) modernization program, which will be implemented as part of the Group’s 2025 production and technical development strategy (approved by the Board of Directors on October 27).

The goal of NMP modernization is to reduce operational expenses by decommissioning obsolete smelting and refining units of the Company’s Polar Division as well as increase saleable output by increasing recovery rate from matte refining.

The Strategy stipulates that despite lower ore grades and implementation of environmental projects, the Company’s profitability on EBITDA basis will remain stable looking forward. The reason for this is the implementation of new technologies in concentration and metallurgy area, which will make it possible to increase metal recovery and optimize expenses. Reconstruction of concentration and metallurgy production units will not only offset negative impact from ore quality reduction and environmental problems: it will ensure significant additional profit and take the Company’s major enterprises to a new level in terms of production quality.

NMP modernization primarily aims at developing pyro metallurgical and nickel refining units.

Consistent capacity increase of NMP’s pyro metallurgical unit for processing all nickel materials will enable to shut down obsolete main units of the Nickel Plant. This will significantly trim Polar Division’s operational expenses for nickel materials processing and help to maintain the Division’s competitive advantages after implementation of costly gas sweetening technologies.

As a result of NMP modernization, nickel and pyrrhotite concentrates will be processed in a single plant – NMP (two modernized flash-smelting process lines in flash-smelting furnaces, slag-cleaning furnaces and horizontal converters) to produce matte.

Entire volumes of the Polar Division’s matte will be processed at NMP’s reconstructed hydrometallurgical unit using the sulphuric acid matte leaching technology to produce nickel and cobalt cathodes and copper cake. Copper cake will be processed at NMP in Vanyukov furnace, converters and anode furnaces to produce copper anodes.

Overall, the Company will invest USD 1.3 billion in NMP modernization.