Norilsk Nickel to work on the side – the company to start to sell semi-finished products to other metallurgical companies

Norilsk Nickel, bound by its strict obligations on the payment of dividends to shareholders, has reviewed its strategy. The company has decided against vertical integration and large costs; it will get rid of its low-profit assets and intends to start to supply not only finished metal, but semi-finished products to other metallurgical companies. Selling semi-finished products, the company will lose a part of the margin, but will be able to “monetize resources” more quickly, analysts believe.

Yesterday, the Norilsk Nickel’s Board of Directors approved the main directions of the company’s new strategy. Now the company is focused on work with “assets of the first class” – the projects, which give over $1 billion of the proceeds per year, show over 40% of the EBITDA profitability and are provided with profitable reserves for over 20 years. Norilsk Nickel has such asset in its structure – the Zapolyarny subsidiary; the Kola mining and metallurgical company and the Chitinsk project in Transbaikal must also become “assets of the first class”. But assets in Australia, Botswana and the Republic of South Africa that don’t correspond to these standards will be sold in 2013-2014.