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MMC Norilsk Nickel Annual Report 2009 The key operating assets of Taimyr Peninsula One of the main resources that will enable Norilsk Nickel to overcome the current economic downturn and lay the foundations for future expansion is an efficient management system. This will help the Company to be adaptable, flexible and efficient. Norilsk Nickel has taken the following actions in order to streamline the management structure: • created a management structure suitable for a diversified international major, one with defined areas of responsibility and a high level of transparency; • decentralized responsibility: delegation of the appropriate authority to heads of divisions; • reduced headcount and general and administrative costs; and • improved efficiency of the Company operations. In 2009, the efforts to develop the database of internal management documentation also continued. MINING AND METALLURGICAL BUSINESS UNIT The main goal of the Mining and Metallurgical business unit is to ensure a stable output at minimal cost and in compliance with production plans approved by the head office and the Sales business unit. The development of the Company’s mineral resources, the increase in ore extraction as well as the optimization of Company’s production capacities are key to achieving this. The Mining and Metallurgical business unit comprises extracting, concentrating and metallurgical entities located in Russia (Taimyr and Kola peninsulas), Australia, Botswana, Finland, the USA and the Republic of South Africa. Russia Taimyr Peninsula The Taimyr Peninsula is located in Russia above the Polar Circle, on the 69th parallel. It is linked to other regions of the country via the Yenisei river, the Northern Sea Route as well as by air. Seven Taimyr Peninsula mines produce copper-nickel sulfide ores from the Oktyabrsky, Talnakh, and Norilsk-1 deposits. Ores mined have different contents of nickel, copper, platinum, palladium, cobalt, gold and other useful components. Ore is enriched at the Talnakh and Norilsk Concentrators. The Talnakh Concentrator processes rich ores mined at the Oktyabrsky and Talnakh deposits to produce nickel, copper and pyrrhotite concentrates. The Norilsk Concentrator processes the entire volume of disseminated and cuprous ores from the Oktyabrsky and Talnakh deposits, and stockpiled pyrrhotite concentrate to produce nickel and copper concentrates. Dudinka Nadezhda Metallurgical Plant Alykel airport Talnakh Concentrator Kayerkan Talnakh Mayak mine Copper Plant Zapolyarny mine Oktyabrsky mine Norilsk Norilsk Concentrator Taimyrsky mine Komsomolsky mine Skalisty mine Nickel Plant Medvezhy Ruchey open pit In the Taimyr Peninsula, metallurgical operations include the Nadezhda Metallurgical, Nickel and Copper Plants. The Nadezhda Metallurgical Plant processes all the nickel and pyrrhotite concentrates produced by the Talnakh Concentrator, some of the nickel concentrates from the Norilsk Concentrator (about 15%), and all copper concentrate from high-grade matte separation area of the Nickel Plant roasting shop to produce high-grade matte, copper anodes and elementary sulfur. The Nickel Plant processes the largest part of nickel concentrate produced by the Norilsk Concentrator (about 85%), all enriched stockpiled pyrrhotite concentrate, and some high-grade matte from the Nadezhda Metallurgical Plant, to produce nickel cathodes and cobalt. The Copper Plant processes the entire volume of copper concentrates produced by the Talnakh and Norilsk Concentrators and copper anodes from the Nadezhda Metallurgical Plant to produce copper cathodes, elementary sulfur and sulfuric acid. The Metallurgical Shop, which is a division of the Copper Plant, recycles sludge from the copper electrolysis and the nickel electrolysis shops to produce precious metal concentrate, metallic silver, selenium and tellurium. The Company has outsourced the refining of precious metal concentrates from the Taimyr Peninsula under a tolling agreement to the Krasnoyarsk Precious Metals Plant. 18
1. Management Structure The key operating assets of Kola Peninsula The key operating assets in Australia Roasting shop Tsentralny mine Smelting shop Finland Nickel Concentrator Severny mine Zapolyarny Kaula-Kotselvaara mine Refinery Murmansk Monchegorsk Honeymoon Well Lainster Waterloo Black Swan Cawse Avalon Kalgoorlie Perth Lake Johnston Esperance Sydney Canberra Melbourne Kola Peninsula Kola Peninsula is the largest industrial producer in the Murmansk region and is fully integrated into the transport infrastructure of the North- Western Federal District of Russia. In the Kola Peninsula, three mines extract disseminated sulfide ores containing nickel, copper and other useful components from the Zhdanovskoye, Zapolyarnoye, Kotselvaara and Semiletka deposits. The extracted ore is processed at the Concentrator, producing collective copper and nickel concentrate. The Concentrator produces copper and nickel concentrate that is further transferred to the Roasting Section of the Smelting Shop for further processing. Kola Peninsula’s refining capacities at Monchegorsk process both Kola Peninsula high-grade matte and that received from the Taimyr Peninsula. The key products are nickel and copper cathodes, carbonyl nickel, cobalt concentrate, precious metal concentrates and sulfuric acid. The Company has outsourced the refining of precious metal concentrates from the Kola Peninsula under a tolling agreement to the Krasnoyarsk Precious Metals Plant. Australia Black Swan The mining operation is located 53 km north east from Kalgoorlie in Western Australia. It includes the Silver Swan underground nickel mine which mines a small ore body with high nickel grade and the Black Swan open pit mine which mines disseminated sulfide ores with a lower nickel grade. The mining operation also includes a concentrator and auxiliary infrastructure such as a warehouse, a waste dump and a retention pond. The ore is processed into concentrate with a nickel grade of approximately 18% to 20% using the traditional floatation technique. In late 2008 — early 2009, Black Swan operations were suspended for an indefinite period of time due to unfavorable economic conditions and deterioration of the nickel market. Cawse Norilsk Nickel Cawse, a lateritic nickel project, is located 50 km from Kalgoorlie in Western Australia and includes an open pit mine and an ore leaching facility. The company uses traditional production and concentration technologies combined with a high pressure acid leaching technology (HPAL technology). 19
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