Chairman’s letter

Despite all these headwinds, Nornickel fully met its production targets for the year and ramped up its output of all metals following unscheduled production downtimes in 2021.

Dear shareholders!

Having barely recovered from the COVID-19 pandemic and industrial incidents at the Taimyrsky and Oktyabrsky Mines, we faced new, even more daunting challenges in 2022. The unprecedented sanctions regimes imposed by a number of countries against Russia have had a significant negative impact on our business, challenging us to promptly adapt our operations, procurement, sales, and financial activities to the new normal.

Despite all these headwinds, Nornickel fully met its production targets for the year and ramped up its output of all metals following unscheduled production downtimes in 2021. I would particularly note that, as we restored operations at the two mines and Norilsk Concentrator, we maintained our focus on improving our health and safety management, making tangible progress in this area. The number of fatal accidents has decreased by almost three times from 11 to 4, but we are far from satisfied with this, and we will make every effort to achieve zero fatalities at the workplace.

We continue to make progress on the Sulphur Project, our flagship sustainability initiative to dramatically reduce sulphur dioxide emissions in the Norilsk Industrial District. Over 2022, we completed the bulk of the project’s first phase, including the construction of furnace gas recovery facilities, a sulphuric acid neutralisation line and related infrastructure at Nadezhda Metallurgical Plant. We can confirm that these facilities will come online before 2023-end.

Amidst strong geopolitical turbulence and economic uncertainty, it is vital for any business to remain socially responsible. As such, we decided to support our employees and their families by indexing salaries above inflation in Russia, as well as paying extra bonuses last April. On top of this, we also launched a long-term programme in 2022 to renovate housing and social infrastructure in Norilsk, for which the Company plans to disburse over RUB 81 billion by 2035.

Of course, the new operating environment has forced the Company to completely rethink the scope and timelines of many investment projects. Although we remain committed to all of our previously stated strategic environmental, mining and downstream priorities, many projects in these areas are being redesigned as we need to substitute imported process equipment, source new suppliers and build alternative supply chains.

In closing, I am proud to say that despite all these challenges, Nornickel has retained its leadership in non-ferrous and precious metals, and our products remain in demand and consistently generate strong revenues and operating profit. The Company has a robust balance sheet, ready to fully meet its obligations to employees, partners, society, and the government, while retaining a compelling investment case for shareholders.

Andrey Bougrov Chairman of the Board of Directors MMC Norilsk Nickel