01. Statement
of the President

of the President
and Chairman
of the Management

Vladimir Potanin
President, Chairman of the Management Board
MMC Norilsk Nickel:

In 2017, we took
on a variety of exciting
and ambitious challenges.
We retained the industry
leadership and reputation
of a rapidly developing

The past year of 2017 was successful for Nornickel. The Company contributed new achievements to its history.

The upgrade of production assets went hand in hand with the processes of real development of mining, concentration and metallurgical operations. Growth of capacities and advances in technology have been intertwined with solving environmental issues more closely than ever, as we see ourselves not just as an industry leader, but also as a forward-looking company that cares about the world around us.

In December 2017, the tank-house of Kola MMC saw the launch of Stage 1 of new electrolysis cells. The new highly efficient electrowinning technology that will phase out smelting of nickel anodes is set to significantly reduce sulphur dioxide and dust emissions into the atmosphere, minimise metal losses and improve the product quality. Earlier, the Company has put into operation a disposal facility for salt effluent from nickel refining, which will nearly halt the discharge of untreated waters at Monchegorsk site. In summer 2017, the Company launched the Sulphur Project, Nornickel’s largest ever environmental initiative to minimise aggregate sulphur dioxide emissions in Polar Division. We will build installations for capturing sulphur-rich gases at Nadezhda Metallurgical Plant in order to produce sulphuric acid and neutralise it afterwards. Concurrently, we will be upgrading sulphur dioxide capturing facilities at Copper Plant. At our site in Zapolyarny, after introducing the innovative separation of high and low grade concentrates, we will be able to solve the problem of emissions in the neighbouring area by almost halving them. Once again, this proves that since joining the UN Global Compact in 2016, not by words alone, but rather by the efforts it makes, the Company has demonstrated its commitment to supporting the Ten Principles of the UN Global Compact in the areas of human rights, labour, environment and anti-corruption. Importantly, we take this cooperation with the UN as an opportunity to adopt the best global practices, as well as to share our own experience with others. Also, the sustainability principles are an integral component of the Company’s long-term strategy.

I am confident that we will stick to this approach in developing our business going forward. I would also like to draw your attention to the key production events. On 31 October 2017, Bystrinsky GOK – one of the most environmentally friendly facilities in the industry – was brought on-stream. The first concentration line, fed with ore from two open pits of the Bystrinskoye Field under development, moved on to the pre-commissioning stage. Once fully ramped-up, it will bring 10 mt of ore, up to 70 kt of copper, 250 koz of gold in concentrates, and 2.9 mt of magnetite concentrate per year to the Company. Our top priority is still the social sphere. The Company has traditionally supported the highest level of its social programmes, and strictly complied with all the provisions of the Collective Bargaining Agreement. We keep financing the relocation of residents from Norilsk and Taimyr to regions with a more comfortable environment and running in-house My Home and Our Home programmes to aid employees in purchasing apartments. Recreation of our employees and their children and their relevant travelling expenses were also to a considerable degree financed by the Company. We consider this as a solid contribution to sustaining effective production, attractive working conditions and daily life.

We made much effort last year to develop the territories where our employees live and work. The Company connected Norilsk to broadband internet, and is currently testing service lines to bring reliability to the highest level. We invested billions of roubles primarily to make sure that life in Norilsk, beyond the Arctic Circle, is the same as in other cities around the world, and that people have more opportunities for development and growth. The salary that the Company pays in time, remains among the highest industry-wide and exceeds RUB 104,000. Nornickel retains its leadership in Russia in terms of social responsibility, as a business that makes extraordinary and successful decisions in developing the territories of its operation and improving the quality of life for its people. Located in three regions of Russia, our assets make major contributions to local budgets and participate in the country's economic and social programmes. That is why partnership with authorities and rapid progress towards transparency and dialogue with public entities are essential for us. The Company continues to actively develop programmes supporting charity and volunteering, creates new jobs and runs major projects in the field of culture, education, development of mass sports and the Olympic movement.

We are proud of the progress we made in the area of health and safety. In 2017, tough management decisions helped almost halve the number of fatalities at the industrial sites of Nornickel. Despite the robust downward trend in figures, the management team is closely monitoring the situation and doing its best to deliver on the target number one – zero injuries. In 2017, we took on a variety of exciting and ambitious challenges. We retained the industry leadership and reputation of a rapidly developing company. The professionalism of all Nornickel’s employees was the key driving force behind that. One can fully unlock one's professional potential only in an environment of social responsibility in line with corporate values lying at the heart of a company. 102-14