Norilsk Nickel is putting a number of projects on hold because of the bad market conjuncture, company Deputy President Pavel Fyodorov told journalists this week.
Among the projects affected is the Severny Gluboky mine in Zapolyarny, Murmansk Oblast, Prime.ru reports. The mine, which was officially opened in 2008, is today the company’s biggest mining complex in the Kola Peninsula.
The mine is operated by the Kola GMK, a regional company subsidiary. It produces up to seven million tons of ore per year. It is located near Zapolyarny, a border town with about 15,000 inhabitants.
The closure of the mine could have dramatic consequences for the local social and economic situation in the town.
Nickel prices have fallen almost 40 percent over the past year and is near the lowest since 2008. Nickel was trading at $9,840/mt Tuesday this week. According to the company representative Fyodorov, the halted production has a value of $500 million for next three years.
When opened in 2008, the Severny Globokii project marked a shift from open pit production to underground extraction. Before that, the Kolskaya GMK was dependent on open pit production from the big Tsentralny mine.
Despite the raw material price drop, Norilsk Nickel still makes good money. Earlier this year, the company paid $2.1 billion of dividends to owners.