Russian group’s African operations show divergent production trends

23rd August 2013 By: Keith Campbell - Creamer Media Senior Deputy Editor

Russian mining group MMC Norilsk Nickel has reported that second quarter 2013 production of nickel in concentrate by South African operation Nkomati Nickel was 26% higher than its output during the first quarter. Nkomati is a 50:50 joint venture between the Russian company and South Africa’s African Rainbow Minerals.

Norilsk recently released its production results for both the second quarter and the first half of this year. Nkomati is one of the two major operations that are grouped into Norilsk Nickel Africa, the other being Tati Nickel, in Botswana. Tati Nickel is 85%-owned by Norilsk and 15% by the Botswana government. In sharp contrast to Nkomati, Tati’s quarter-on-quarter nickel production fell by 13%.

In numbers, Norilsk’s 50% share of Nkomati’s production came to 3 339 t during the second quarter, compared with 2 651 t during the first quarter. The respective figures for Tati were 1 912 t and 2 191 t. For the first half of the year, the Russian share of Nkomati’s production was 5 990 t, compared with 3 995 t in the corresponding period last year. This amounted to an increase of 50%. For Tati, first half 2013 output was 4 103 t, which represented a 25% drop in relation to the 5 438 t produced during the first half of 2102.

Norilsk described Nkomati’s results as “[n]otable” and attributed them to “the stable and well-coordinated work of con- centration facilities and higher nickel grade in ore”. Regarding Tati, the “key reason for the decrease was lower nickel grades in the processed ore”.

Both Nkomati and Tati produce copper, palladium and platinum as by-products. The Norilsk share of Nkomati’s copper in concentrate production during the second quarter came to 1 310 t, up 15% on the first quarter figure of 1 138 t. For the first half of the year, the number was 2 448 t, an increase of 17% on the 2 100 t for the corresponding period last year. For Tati, second-quarter copper in concentrate production was 1 668 t, compared with 1 777 t in the first quarter, which amounted to a decline of 6%. For the first semester, production was 3 445 t, down 30% from the first semester 2012 production of 4 953 t.

Palladium and platinum are also produced in concentrate and the production of both is measured in troy ounces. For the second quarter, the Norilsk share of Nkomati palladium production was 23% higher than for the first quarter – 11 000 oz, compared with 9 000 oz. First semester 2013 output was 41% higher than during the corresponding period in 2012, at 20 000 oz, compared with 14 000 oz. For Tati, quarter-on-quarter palladium production was down 14% and semester-on-semester output dropped 30%. In numbers, Tati produced 12 000 oz during the second quarter, compared with 14 000 oz in the first, and 26 000 oz in the first half of the year, compared with 37 000 oz during the first six months of last year.

Regarding platinum, the Russian group’s production share at Nkomati came to about 4 000 oz in the second quarter, compared with some 3 000 oz in the first – Norilsk reported it as a 40% increase. For the first half of this year, the number was 8 000 oz, compared with 5 000 oz during the corresponding period last year, amounting to a 43% jump. For Tati, and in contrast to its nickel, copper and palladium production, plati- num output remained steady in the first and second quarters, reaching 2 000 oz in each quarter. However, first-semester- on-first-semester production fell 33%, being 4 000 oz this year, compared with 7 000 oz last year.