The extra money is required to upgrade energy infrastructure, the company said.
Russia’s Norilsk Nickel said it has raised its 2021-2030 investment estimate by $6 billion to $35 billion to reflect higher construction costs and increased investment in energy infrastructure upgrades.
This is reported by Reuters.
This will allow the world’s largest producer of palladium and refined nickel to invest more in upgrading its production infrastructure, raising the mining group’s 2030 output forecast.
The company, whose investments were previously expected to pass their peak in 2026, now expects this to happen in 2028. Nornickel regards 2021 as a transitional year when it enters its investment cycle after spending an average of $1.7 billion a year in the previous eight.
Nornickel recommended an interim dividend of $3.2 billion and its management expects to stick to its dividend policy with the final payment for 2021.
From the additional spending of $6 billion, about $1 billion is the result of rising prices for materials used in construction projects amid global inflation driven by the COVID-19 pandemic.
The rest of the extra capital expenditure, $5 billion, is needed for an upgrade of Nornickel’s main energy and production infrastructure, which has been in the spotlight for investors after a spate of accidents in 2020-2021.