NORNICKEL 2019 EXPANDING THE HORIZONS OF SUSTAINABLE GROWTH OUR COMPANY IN 2019 PB 1 NORNICKEL 2019 CONTENT 2 METAL PRODUCTS AND USES 4 OVERVIEW 6 PERFORMANCE HIGHLIGHTS 8 BUSINESS MODEL 14 PRODUCTION FLOW 16 KEY INVESTMENT PROJECTS 28 POLAR DIVISION AND MEDVEZHY RUCHEY 30 KOLA MMC 32 GRK BYSTRINSKOYE 34 NORILSK NICKEL HARJAVALTA 36 CLIMATE CHANGE 40 MINERAL BASE 42 OPERATING PERFORMANCE 44 SHAREHOLDER INFORMATION 1 NORNICKEL 2019 METAL PRODUCTS AND USES Ni Cu Pd Pt Copper Palladium Platinum High-grade nickel Electrical Batteries wires Chemical Catalysts industry Chemical industry Pipes Medicine Jewellery Medicine Architecture and design Nickel electroplating Investment Electronics Antiseptic Alloys Glass fibre and Oil refining optical glass Stainless Copper rod steel 2 3 NORNICKEL 2019 OVERVIEW COMPETITIVE ADVANTAGES Mineral resources5 Nornickel operates the unique Talnakh ore THE GROUP’S ASSETS deposit on the Taimyr Peninsula ranking the Norilsk Nickel Group (hereinafter world’s best polymetallic deposit in terms of C the size of its minerals resources and contained “the Company” or “Nornickel”) is metal grades. Successful development of 10 the Talnakh deposit is the key driver of the Russia’s largest metals and mining mines Company’s long-term sustainable growth. company and the world’s largest RUSSIA FINLAND producer of palladium and high- Polar Division Norilsk Nickel Harjavalta, The Group operates captive nickel refinery global sales network, fuel grade nickel and a major producer Medvezhy Ruchey (100% stake) and energy assets, river and >80years PROVEN MEASURED 1 sea port terminals, river AND PROBABLE AND INDICATED (South Cluster) of resources at the current (100% stake) fleet and a unique Arctic RESERVES RESOURCES of platinum and copper. The Group cargo sea fleet, in-house production rate capital construction and also produces cobalt, rhodium, Kola MMC П repairs subsidiaries. In (100% stake) addition, Nornickel owns silver, gold, iridium, ruthenium, А one of the Russia’s leading 757 2,193 Nornickel’s core businesses Dividend yield mln t mln t GRK Bystrinskoye are on the exploration, mining and metallurgical of global mining selenium, tellurium, and sulphur. (50.01% stake) mining and processing of R&D centres. majors in 20194 minerals, as well as the (%) production and sale of base Ni Ni Ownership structure as of 31 December 2019, 6.7 mln t 15.2 mln t % of shares held and precious metals. Nornickel 14.9 Peer 7. Cu Cu 34.6 Peer 5.9 11.9 mln t 23.2 mln t Olderferey Holdings Ltd1 Peer 5.8 37.6 Peer 4.5 Other PGMs PGMs GLOBAL INDUSTRY RANKINGS 120 moz 260 moz Nornickel's share of the global markets2 4/ Dividend yield was calculated 1/ The Company’s reserves and resources are reported 27.8 on the basis of dividends in USD according to JORC standards as of 31 December # # # # # # terms as of the date of the Board 2019 and include wholly-owned international 1 EN+ Group IPJSC 1 1 4 4 8 11 recommendation for AGM assets and exclude ore deposits in the Zabaykalsky approval and average annual price Region. PGMs include six platinum group metals: 1/ Indirect ownership via controlled entities. Pd Ni Pt Rh Co Cu of Nornickel ADRs (as reported platinum, palladium, rhodium, ruthenium, osmium, by Bloomberg). and iridium. palladium high-grade nickel platinum rhodium cobalt copper The peers are Anglo American, (41%) (24%) (11%) (9%) (3%) (2%) BHP Billiton, Glencore and Rio 0.28% 7.2% Tinto. Nornickel’s weight in Nornickel’s weight in Global mining industry EBITDA margin ranking in 20193 MSCI Emerging Markets MSCI Russia index (%) 2/ Based on refined metal index as of the end of 2019 as of the end of 2019 production volumes of palladium, nickel, platinum, and rhodium and contained metal production of copper and cobalt. Nornickel 58 3/ The peer group includes Anglo The Company's shares are listed on the Moscow Peer 54 American, BHP Billiton, Glencore, Exchange and included into its Blue Chip Index. Peer 46 Rio Tinto, and Vale. Peer 3 Peer 28 Nornickel American Depositary Receipts (ADRs) trade on the OTC market in the USA, as well as on the OTC markets of the London, Berlin, and Frankfurt stock exchanges. 1/ In 2H 2017, Nornickel established Medvezhy Ruchey, a 100% subsidiary that operates part of the assets of Polar Division. Medvezhy Ruchey open pit and undeground mines comprised investment project South Cluster. R 4 5 NORNICKEL 2019 PERFORMANCE HIGHLIGHTS FINANCIAL OPERATING SUSTAINABILITY HIGHLIGHTS HIGHLIGHTS HIGHLIGHTS Key highlights Nickel Injury rates Work-related (USD bn) (kt) per million hours worked fatalities 0.08 1 6.0 ‘19 ‘19 ‘19 0.32 9 13.6 ’20F 220–225 225 0.05 2 3.1 ‘19 228 3 ‘18 ‘18 ‘18 0.23 6 11.7 ’18 219 217 2 ‘17 217 210 7 0.08 1 2.1 ‘17 ‘17 ‘17 ’16 236 197 39 0.44 9 9.1 LTIFR FIFR Employees Contractors Revenue Net income From own Russian feed From 3d parties feed EBITDA SO2 emissions GHG emissions & EBITDA margin Copper (mln t) (mln t) (kt) (USD bn) ‘19 7.9 58% ’20F 420–440 55–65 ‘18 6.2 ‘19 499 455 43 53% ‘19 9.9 9.8 0.1 ‘17 4.0 ’18 474 454 19 ‘19 1.9 44% ‘17 401 398 3 ‘18 1.9 ‘18 10.0 9.9 0.1 ’16 360 344 16 ‘17 1.8 ‘17 10.3 10.2 0.1 EBITDA EBITDA margin From own Russian feed From 3d parties feed Scope 1 Scope 2 Bystrinsky Project¹ Capital investments 1/ Note: Norilsk Nickel Group owns 50.01% of Bystrinsky Project (Chita Water use Electricity consumption 3 (USD bn) Copper Project). Production results are shown metal in concentrate (mln m ) (TJ) for sale on 100% basis and fully consolidated in total operational results. The concentrator at the Bystrinsky project was launched in 2018 as part 1,172 14,837 ‘19 1.3 of the hot commissioning stage and was fully commissioned in 2019. ‘19 ‘19 0.8 0.4 0.1 1,344 87% 18,501 45% ‘18 1.6 0.7 0.7 0.2 1,210 14,480 ‘17 ‘18 ‘18 2.0 0.7 0.8 0.4 1,412 86% 18,762 44% 1,138 12,175 ‘17 ‘17 Palladium 1,342 85% 20,180 38% Stay-in-business Growth Bystrinsky (koz) CAPEX CAPEX project Total water used Water recycled and reused Electricity consumption Electricity consumption Share of water recycled and reused from natural gas from renewables Share of electricity from renewables Debt ’20F 2,648–2,777 230 (USD bn) ‘19 2,922 2,919 3 ’18 2,729 2,729 ‘17 2,780 2,728 52 ‘19 7.1 0.9x ’16 2,618 2,526 92 ‘18 7.1 1.1x ESG PERFORMANCE ‘17 8.2 2.1x From own Russian feed From 3d parties feed Since 2016 «B» Net debt Net debt/EBITDA SIGNATORY TO THE UN GLOBAL «B» RATING REITERATED COMPACT SINCE 2016 IN DECEMBER 2019 Platinum Dividends (koz) (USD) 37 ↑27 CONSTITUENT OF THE FTSE4GOOD 3 / 5 ‘19 ’20F 611–675 230 26.3 14.9% EMERGING INDEX SINCE 2016 SCORE OF 37 ASSIGNED IN 2019 ‘18 ‘19 702 700 2 21.3 11.8% SCORE OF 3 (OUT OF 5) (RAISED FROM – 27 IN 2018) 653 ‘17 18.8 7.2% ’18 653 ASSIGNED IN JUNE 2019 ‘17 670 650 20 ’16 644 610 34 Dividends per share paid Dividend yield¹ From own Russian feed From 3d parties feed in the reported period 4 2 2 / 100 67 GOVERNANCE ENVIRONMENTAL SOCIAL RATED AVERAGE PERFORMER, SCORE SCORE SCORE SCORE 1/ Dividend yield was calculated on the basis of dividends in USD OF 67 (OUT OF 100) ASSIGNED IN 2019 ASSIGNED IN OCTOBER 2019 terms as of the date of the Board recommendation for AGM approval (1 is low risk, and 10 is high risk) and average annual price of Nornickel ADRs (as reported by Bloomberg). 6 7 GLOBAL ASSET BUSINESS MAP MODEL NORILSK NICKEL HARJAVALTA Finland KOLA MMC Kola Peninsula GRK BYSTRINSKOYE Greenfield project Zabaykalsky Region Nornickel’s new copper, gold and iron concentrate project launched in 2019 POLAR DIVISION AND MEDVEZHY RUCHEY (SOUTH CLUSTER) Taimyr Peninsula The Group owns of50% Nkomati, which operates a nickel mine of the same name NKOMATI Nornickel holds a licence to develop South Africa the Honeymoon Well project, which includes deposits of disseminated In 2019, the Group and its operating nickel sulphide ores. partner, African Rainbow Minerals, reached an agreement to scale down HONEYMOON WELL The asset is slated for sale. production at Nkomati Nickel Mine Australia during 2020. As part of this process, the partners will elaborate in due course a plan contemplating the cessation of the mining operations and the placing of the mine in care and maintenance. 8 9 NORNICKEL 2019 NORNICKEL 2019 NORNICKEL 2019 WHERE WE WHAT WE OPERATE Ore output: DO Ore output: 26 Mtpa 10 Mtpa VALUE Reserve life: REVENUE FROM METAL SALES, 30 years CREATION Proven and probable Proven and probable Proven and probable ( ) reserves reserves reserves USD MLN FOR STAKEHOLDERS 673 85 316 mln t mln t mln t1 Other SHAREHOLDER Polar Division Kola MMC Norilsk Nickel GRK Bystrinskoye NiNickel CuCopper PdPalladium PtPlatinum metals Total RETURNS Kola Peninsula Zabaykalsky Region and Medvezhy Ruchey Harjavalta 3,843 Dividends paid in 2019 Dividend yield in 2019 (South Cluster) Finland 2,452 Taimyr Peninsula 4.1 14.9% 1,109 USD bn 523 630 8,557 1,269 588 246 78 90 2,271 EBITDA SOCIAL 880 1,145 7,923 PERFORMANCE 83 106 12 64 USD mln LTIFR in 2019 Average monthly pay 76 106 182 Sales NET PROFIT 0.32 USD2,000 In 2019, Nornickel maintained its long-standing Sales network OTHER MINING 133 FOR THE YEAR reputation as a reliable supplier of high-quality • Metal Trade • Norilsk Nickel • Norilsk Nickel • Norilsk Nickel ASSETS 65 10 31 8 19 products, shipping products to 37 countries and products registered for delivery against Overseas A.G.