Norilsk-Nickel profit up 434 percent

Nikel makes both very big money and very big ecological damage.

Major Barents Region polluter Norilsk-Nickel posted a first-half net profit of USD 2,35 billion, up from last year’s USD 439 million. Still, nothing is spent on reducing the emission from the plant’s smelter few kilometers from the border to Norway.


Monday’s profit announcement was beating the analyst forecasts due to increased growth in metal prices on the global marked.  The first-half 2010 preliminary results are posted on the company’s website.

Norilsk-Nickel is the world’s largest nickel and palladium producer, with mines and smelters in Norilsk in Siberia and in Nikel, Zapolyarny and Monchegorsk on the Kola Peninsula. The company is also by far the largest air-polluter in the Barents Region. The smelter in Nikel alone has an emission of 100,000 tons of SO2, or four to five times the total emission of SO2 from all Norwegian sources.

Revenue USD 6.84 billion
The company’s earnings before interest, taxation, depreciation and amortization reached USD 3.37 billion, up from USD 1.4 billion the same period last year. Revenue for the first six months of 2010 reached USD 6.84 billion, up from USD 4.08 the same period 2009, according to the financial statements.

Interviewed by BarentsObserver, the Norwegian Minister of Environment, Mr. Erik Solheim, says Norway has a rather discouraging experience discussing possible efforts to reduce the pollution from the plant in Nikel.

- Norilsk-Nickel has not to any extent been influenced neither by Norwegian pressure or offers to support cleaning of the emission, says Erik Solheim.

Read moreSO2 emission from Nikel will increase

Measurements on the Norwegian side of the border shows that the pollution is still a serious problem in the border area. And the fallout of heavy metals is increasing. The fallout of cobber, nickel and arsenic on the Norwegian side of the border near Russia’s Nikel factory were four to seven times higher in the summer periods 2004 to 2008 than in the 15 years before, BarentsObserver reported last fall.

Monitoring station “hot-potato”
For Norwegian authorities it has been important to have a close cooperation with Russia regarding measuring of the pollution in the border area. Therefore, Norway has paid for a measurement station in Nikel on the Russian side of the border, but Russian authorities then closed it down. The embarrassing situation with the measurement station has since then developed into a “hot-potato” in the Norwegian-Russian environmental relations.

Last year, State Secretary Heidi Sørensen in the Norwegian Ministry of Environment was supposed to re-open the Norwegian financed measurement station in Nikel, but the opening was canceled the day before so Sørensen had to stop in the Norwegian border town of Kirkenes without crossing over to Russia. 

State Secretary Sørensen also raised the issue when she met with here Russian counterpart Sergei Donskoi at the Barents Environmental Minister meeting in Tromsø in February this year. The talks ended without results.

Finally rejected
Today, Environmental Minister Erik Solheim tells BarentsObserver that he has been informed by the Russian side that the federal authority that issues permits for use of foreign instruments on the Russian territory has rejected the opening of the measurement station in Nikel.

Instead the station will be replaced by a Russian monitoring station to be included in the upgraded Russian network.

BarentsObserver: What initiatives does the Minister plan to raise in order to have Norilsk-Nickel to reduce the emission from Nikel? 

- We have a rather discouraging experience discussing possible efforts to reduce the pollution from the plant in Nikel, says Solheim.

- We have therefore in recent years mainly concentrated our efforts against the Russian authorities with a view to getting them to set harder regulations regarding the emission from the enterprise, says Solheim.

Nikel on Medvedev’s agenda
The Norwegian Prime Minister raised the issue when President Medvedev visited Oslo in April and then again in Murmansk in mid-September.

- Both the Prime Minister and I raised the Norilsk-Nickel case in our talks with President Medvedev when we visited Murmasnk for the signing of the Barents Sea delimitation agreement in September, says Erik Solheim.

- In the joint statement from the political talks it is recognized that the situation gives cause for concern and that Russian authorities will help to reduce emissions to a level that does not harm health and the environment in border areas, explains the Norwegian Environmental Minister.

- It also appears that environmental monitoring will be strengthened and that the control will be reinforced. We have also been informed that it has been appointed a working group with representatives from four different Russian ministries and Norilsk Nickel under the leadership of the Natural Resources Ministry. This working group will look at different options to reduce the emission and environmental improvements in the area. From our side we will pay close attention to what this working group comes up with. We will continue to raise this matter with ourour Russian neighbors until we have found a solution that serves both the environment and good neighborly relations, says Erik Solheim to BarentsObserver.

20 years without results
The pollution from Nikel was first raised as an issue when Jens Stoltenberg visited Nikel back in 1988. At that time he was head of Norwegian Labour Youth. In 1990, the Nikel-pollution was included in the first Soviet-Norwegian environmental protocol. However, no cleaning facilities has been installed in Nikel since then.

Nikel is not the only near-border-factory own by Norilsk-Nickel that pollutes Norwegian territory. The emission of sulphur dioxid from the nickel briquetting process in the town of Zapolyarny is also damaging the nature in the area.

Emission moved from one plant to another
Norway has paid NOK 20,6 million for the modernization of the new briquetting process in Zapolyarny with the aim to reduce the emission of SO2. But, instead of being emitted from the briquetting process, the contained sulphur will be emitted as SO2 from the smelter in the neighboring town of Nikel.

The two projects, modernization in Zapolyarny and the modernization of the smelter in Nikel, have from the Norwegian side all the time been seen as one project to reduce the total emission.

-Give us the money back
Therefore the Norwegian Ministry of Environment has informed Norilsk-Nickel that they want the money back. But, despite ending the eco-deal, Norilsk-Nickel don’t want to pay back the Norwegian money.

Asked about the already transferred money, the Norwegian Minister of Environment Mr. Erik Solheim says: - No, we have not got the money. We are considering what to do from the Norwegian side when the agreement formally expires.

Read alsoNorilsk-Nikel backs out from eco-deal