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President of Russia Vladimir Putin: How are the things going, Mr Potanin? How is your combine doing? How are your plans being implemented?

CEO of MMC Norilsk Nickel Vladimir Potanin: We are working, Mr President. We are now completing the third year of our investment programme designed until 2020. It should result in a fundamental upgrade of the combine not only in terms of technology, but also in terms of radical solutions to environmental problems that have accumulated in Norilsk over the years.

The investment will reach about 800 billion rubles over the entire period, with some 300 billion invested into environmental projects alone. This is, of course, an unprecedented project: it involves new technology that has never been used before anywhere in the world, and it is unprecedented in scale – the solution for sulphur emission reduction at the Nadezhda [metallurgical] plant alone will cost about 200 billion rubles.

All this is being done today in a rather complicated situation as the external market conditions are complicated and unfavourable for us. This is the first time we are facing such situation.

Vladimir Putin: Prices have gone down

Vladimir Potanin: They have not just gone down. Our estimates show that about 70 percent of world nickel producers are operating at a loss. It is hard to imagine people going on like this for a long time, but it is happening, this is the reality we have to deal with.

We are nevertheless certain that we will manage to overcome this period without cutting our investment programmes. In other words, we want to ensure the combine’s normal operation after 2020, so that it has a long life span.

At the same time, we are giving a lot of attention to maintaining social standards. Thus, we are now signing a five-year collective labour agreement — for the next five years — without any withdrawals so our staff does not experience the difficulties that the shareholders and management face.

Vladimir Putin: Ok. You try to maintain your social programmes too?

Vladimir Potanin: Yes, we maintain rather high social standards. We spend about 15 billion rubles a year on social programmes, with a significant part of that allocated under the collective labour agreement, but we also do a lot voluntarily, so to speak – we see the bottlenecks and try to help.

I would like to return to our environmental programme for a moment, if you do not mind. This is a huge and ambitious plan and we would like to establish some cooperation with the state. In what way? There is a Government resolution that encourages companies to invest in nature preservation, in other words it stimulates the companies that spend money on elimination of the negative impact of their operations on nature, compensating for the loss. However, there is no programme to reward those who invest in preventing such damage.

I would like to ask you to support this idea and to instruct the Government to develop measures that would stimulate those who invest in the prevention of environmental damage.

Vladimir Putin: Let’s try to translate this into some type of a working document.

Vladimir Potanin: Ok.

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