Russia's Norilsk Nickel plans to increase capital expenditure to an average of $2.3 billion to $2.5 billion a year in 2019 and 2020 from about $2 billion in 2018 due to an environmental project and infrastructure modernisation, it said on Monday.
Nornickel, part-owned by Russian businessman Vladimir Potanin and aluminium giant Rusal, is the world's top palladium producer and second-largest nickel producer. "In the next three years, we are budgeting for an increase in capital investments that will allow us not only to maintain metal production volumes, but also put a solid foundation under new perspective projects," Potanin, also Nornickel's president, told an Investor Day in London.
The environmental project aims to reduce sulphur dioxide emissions in Nornickel's Russian assets by 75 percent by 2023. The assets are based near the city of Norilsk, which has a reputation as one of the most-polluted places in the world. Chief Operating Officer Sergey Dyachenko also told Reuters the company planned to cut costs by $200 million to $300 million a year by 2020 through modernising its assets, shutting down outdated capacity and implementing automation systems.
The company's management confirmed its medium-term target level of net working capital of $1 billion, with the ratio of net debt to earnings before interest, taxation, depreciation and amortisation (EBITDA) expected in the range of 1.5-2.5.
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