Russian miner Norilsk Nickel will create a joint venture to construct a new copper producing plant, its CEO has said
Russian mining giant Norilsk Nickel will move some copper smelting production to China in the wake of Western sanctions pressure, the company’s chief executive Vladimir Potanin said in an interview with Interfax on Monday.
The US and UK have targeted Russian-origin aluminum, copper, and nickel in an attempt to reduce Moscow’s export revenues.
“This [sanctions] pressure forced us to think about how to get our goods to the distribution market in the right way,” Potanin told the news outlet, adding that “one of these non-standard solutions is to transfer part of production to markets of direct consumption.”
The businessman highlighted that Norilsk Nickel would create a joint venture in China to build a new plant, which is expected to be constructed by mid-2027, and would supply it with about 2 million metric tons of copper concentrate a year.
According to Potanin, the final product will be sold as Chinese goods, which are “much more difficult to sanction in China than Russian goods coming to China.”
The initiative would reportedly also protect the company’s exports from growing sanctions pressure on financial transactions with Russia. “Settlements are one of the biggest obstacles even in friendly jurisdictions, they don’t let exporters and importers work normally,” Potanin argued.
According to a recent Bloomberg report, as part of a shift away from the US dollar in settlements Norilsk Nickel is selling metal on the spot market in yuan using a mix of London and Shanghai prices.
Potanin also told Interfax that the company was seeking to gain access to China’s battery technologies in order to scale up domestic production.
China has become a major destination for Russian commodity exports in the wake of Western sanctions. This month, the US and UK prohibited metals exchanges from accepting new Russian-origin aluminum, copper, and nickel and barred imports of the metals.
However, the Kremlin described the new sanctions as a weapon that cuts both ways, claiming the “illegal” restrictions will backfire on the countries that imposed them.
Russia currently accounts for 6% of the global nickel supply, 5% of aluminum, and 4% of copper. According to Forbes, most analysts agree that the new sanctions will lead to an increase in Russian supplies of metals to China.
China, the world’s top copper consumer, is expected to account for more than half of Norilsk Nickel’s metal sales, according to Potanin.
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