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MOSCOW, April 27 Russia's Norilsk Nickel
(Nornickel) could miss its 2017 production forecast
for nickel and platinum group metals (PGMs) by up to 3 percent
after first-quarter output fell, it said on Thursday.
Nornickel, one of the world's largest nickel and palladium
producers, added its management was looking at ways to mitigate
this risk and confirmed its previous 2017 production guidance.
This year Nornickel, part-owned by Russian tycoon Vladimir
Potanin and aluminium giant Rusal, plans to produce
from Russian feedstock 206,000-211,000 tonnes of nickel,
377,000-387,000 tonnes of copper, 2.6-2.7 million troy ounces of
palladium and 581,000-645,000 ounces of platinum.
Its first-quarter consolidated nickel production fell 16
percent year-on-year to 53,487 tonnes and palladium output was
down 14 percent to 553,000 ounces.
"The decline in metal production volumes in the first
quarter was scheduled as it was resulting primarily from the
reconfiguration of downstream production facilities progressing
to its completion," Sergey Dyachenko, Nornickel chief operating
officer, said in a statement.
Nornickel also said it planned to complete processing of
previously stored pyrrhotite concentrate this year.
"Taking into account its natural dilution, which has already
negatively affected the first quarter production results, we see
a downside risk to our annual production guidance for nickel and
PGMs by up to 3 percent of their total volume," Dyachenko added.
Analysts at BCS Investment Bank said Nornickel's production
results were a moderately negative surprise, noting the company
expects its metal production volumes to recover by the third
Its shares were down 1.1 percent in Moscow, compared with a
0.7 percent fall in the broader MICEX index.
Nornickel's copper production, however, rose by 8 percent to
94,191 tonnes in the first quarter due to higher copper content
in feed and the start of processing of concentrate purchased
from state conglomerate Rostec in late 2016.
(Reporting by Polina Devitt; Editing by Kevin O'Flynn and Mark