Copper Plant of MMC Norilsk Nickel is set to become the first strategic metallurgical enterprise in Russia to be shut down and relocated to China. Known as the "Copper Heart of Taimyr," the plant has operated for 89 years and ranks among the world's top ten copper producers. Statistics indicate that every second ton of Russian copper and every 40th tonne globally has been smelted in Norilsk.
According to the most widespread explanation, Norilsk Nickel decided to divest from the plant because it is unwilling to invest in the so-called Sulfur Program. This program aims to reduce harmful emissions from production by a factor of 10. The first stage of the program at Norilsk Nickel's Nadezhda Plant cut sulfur dioxide emissions by 45% but cost a staggering 180 billion rubles (1,752 billion dollars). The Copper Plant would require even larger investments.
Another theory suggests that Nornickel is relocating to evade Western sanctions on Russian nickel and copper, which cost the company 20% of its revenue in 2022.
As a result, Nornickel has concluded that moving the plant to China is more cost-effective than investing in Russian environmental initiatives. Vladimir Potanin, the owner of Norilsk Nickel, announced that the smelting facilities of the Copper Plant will be relocated abroad by 2027.
Potanin has pledged to replace the "dirty" Copper Plant with a modern and "aesthetic" 3D printing facility. However, the necessity of establishing such an enterprise in the world's northernmost city remains unclear. Some speculate that Potanin is trying to offer hope to the 2,000 employees who face layoffs.
Most experts, however, doubt the viability of 3D printing in the Arctic. They fear the workforce will be abandoned, the regional budget will lose tax revenues, and the Copper Plant's site will be repurposed as a warehouse for raw materials—specifically, copper concentrate from the Taimyr deposit.
Norilsk Nickel plans to transport this concentrate via the Northern Sea Route to China, reportedly to Fangchenggang in Guangxi, according to Bloomberg. To achieve this, the company intends to commission several icebreakers from China and South Korea. This move, coupled with abandoning higher-value-added production, further benefits China at Russia's expense.
By relocating the plant to China, Nornickel jeopardizes its domestic partners. For instance, Russian Platinum had planned to process its metals at Norilsk facilities. The fate of Krasnoyarsk Non-Ferrous Metals Plant, Russia's largest refining enterprise, also hangs in the balance.
Nornickel appears to be voluntarily transforming Norilsk from an industrial hub into a raw material shipping point. This is not an inevitable consequence of the times. For example, neighboring Kazakhstan is launching a copper smelter in its Abay Region in collaboration with China. This plant, set to produce 300,000 tonnes of copper annually, will create over 1,000 jobs.
While Kazakhstan's smelter will commence operations in 2028, it won’t rival Norilsk Nickel's Chinese facility, as Guangxi already hosts a copper plant with an annual capacity of 600,000 tonnes, managed by China's state-owned Jinchuan Group. Chinese copper market players are reportedly displeased about the arrival of a new competitor from Russia.
Nevertheless, this does not deter Nornickel. Rumors suggest the company plans to continue relocating strategic production out of Russia. According to sources from the Telegram channel Captain Arctic, in the first half of 2024, Norilsk Nickel held negotiations with Chinese entities to build a nickel plant in China, relying on Russian semi-finished products.
This facility would focus on nickel sulfate production for battery manufacturing and could consume up to a quarter of Nornickel's annual nickel output—about 50,000 tonnes per year. Additionally, Norilsk Nickel is considering launching a modern platinum production facility in Bahrain.
Source: Metal and Mineral
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