MMC Norilsk Nickel PJSC ADR (NILSY)

[JD400]

DGAP-News: MMC Norilsk Nickel: NORILSK NICKEL PRESENTS ITS ANNUAL STRATEGY UPDATE
DGAP Corporate News
Monday May 19, 2014 8:30 AM

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MMC Norilsk Nickel: NORILSK NICKEL PRESENTS ITS ANNUAL STRATEGY UPDATE



19.05.2014

/ 18:30

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NORILSK NICKEL PRESENTS ITS ANNUAL STRATEGY UPDATE



London

,

May 19th, 2014

- MMC Norilsk Nickel (hereinafter,

Norilsk Nickel

or
the Company), the world's largest nickel and palladium producer, hosted
today its annual strategy update providing the investor community with a
comprehensive review of its progress on the new strategy approved in 2013.

The new approach to managing the business with its focus on the return on
capital produced results already in 2013 as Norilsk increased its
year-on-year cash flow by a factor of five despite an unfavorable commodity
market environment and declining nickel prices.

Today the company unveiled the reconfiguration program for its downstream
assets. The program entails modernizing processing facilities,
consolidation of smelting and refining capacity to maximize the economies
of scale for the operations and a corresponding shutdown of outdated
facilities, including the Nickel Plant in the city of Norilsk.

Capital


investment in the program of downstream restructuring will amount to

$1.5bn


and will cover upgrading Talnakh concentrator facility and expansion of


Nadezhda

smelter in the Polar division as well as upgrading and scaling up
the

Monchegorsk refinery

by 2016-17.

With regard to the planned shutdown of its Nickel Plant in Norilsk by 2016,
the company is engaged in the dialogue with the Government of

Russian
Federation

in order to define a co-investment approach for this important
social and environmental project.

The company has also developed and implemented operational improvement
"roadmaps", which are expected to have a material impact on profitability
already in 2014. Efficiency gains and investments into modernization should
result in additional EBITDA of more than

$650 million

per annum starting
from 2018.

As a part of the ongoing strategic portfolio review,

Norilsk Nickel


received an independent technical assurance for Bystrinsky project
confirming the viability of its financial model. The Company approved the
project at its Investment Committee and is considering project finance
options for Bystrinsky GOK aiming to launch it in 2017.

Important constituents of the new strategic plan are corporate initiatives
targeting additional shareholder value over the period of 2013-2016, which
is expected to be equivalent to an annual EBITDA. The initiatives include
halving of working capital (from

$4 bn

to

$2 bn

), release of more than

$1
bn

of nonproductive capital via exit from non-core and low margin assets,
and a reduction of SG&A and purchasing costs.

Over the 2014-2017 period, the Company is guiding its total capital
investments to be around

$9.5 bn

. The Company is considering non-recourse
funding sources, in particular,

$1 bn

project financing for Bystrinsky GOK
project, which is included in the total capex.

The Company is taking its dialogue with the government to a new level. The
Company is engaged into public-private partnership to develop large
infrastructure projects. Jointly with the Government of the

Russian
Federation

, the Company is preparing accelerated development programs for
Taymyr region, improvements into legislation to stimulate exploration and
long-term growth of non-ferrous and precious metals mineral resources as
well as initiatives for the development of infrastructure.

The CEO,

Vladimir Potanin

commented: "We are delighted to provide
investment community with an updated development strategy for Norilsk. Last
October we defined the main principles of our strategic vision, and laid
down the foundation for our sustainable development. Our 2013 results
confirmed that we are progressing well towards our strategic goals. We
believe that the delivery on our next three-year targets will require an
absolute focus of the management on our objectives and a lot of hard work.
I believe that in the coming years, the world's best mineral resource base
and a highly experienced management team will enable us to open a new
chapter in

Norilsk Nickel's
http://www.kitco.com/news/2014-05-19/DGAP-News-MMC-Norilsk-Nickel-NORILSK-NICKEL-PRESENTS-ITS-ANNUAL-STRATEGY-UPDATE.html