OJSC MMC Norilsk Nickel announces preliminary consolidated production results for the third quarter and 9 months of 2010 at the Polar and Kola Divisions in Russia, as well as at its international operations in Finland, Botswana and South Africa.

Overall nickel production in the third quarter of 2010 amounted to 75,000 tonnes, generally being in line with production results in the second quarter of 2010. For 9 months of 2010, overall nickel production totaled 220,000 tonnes, representing a 6% growth as compared to the same period of 2009. The growth in overall production volumes was largely driven by the strong performance of the Russian divisions and substantially higher loading rate of the nickel refinery Norilsk Nickel Harjavalta.

Overall copper production in the third quarter of 2010 totaled 96,000 tonnes as compared to 102,000 tonnes in the second quarter of 2010. The decline in overall copper output in the third quarter of 2010 is attributable to the anticipated reduction of copper production at the Russian divisions and increased intra group shipments of copper in concentrate to the Norilsk Nickel Harjavalta refinery. For 9 months of 2010, the overall copper output totaled 295,000 tonnes, being mostly in line with the results of the same period of 2009.

In the reporting period, the company produced 719,000 ounces of palladium, completely in line with the approved production plan. Certain decline in physical volumes of palladium output in the third quarter of 2010 was due to technical decrease of production by the Russian divisions and increased intra group shipments of palladium in concentrate to the Norilsk Nickel Harjavalta refinery. For 9 months of 2010, the palladium output reached 2,215,000 ounces, which is by 8% higher than in the same period of 2009.

The company produced 173,000 ounces of platinum in the third quarter of 2010, in line with the approved production plan. The main reason of platinum output decline in the third quarter of 2010 is the technical decrease of production by the Russian divisions. For 9 months of 2010, the platinum production increased by 9% as compared to the same period of the previous year and totaled 531,000 ounces.

In the third quarter of 2010, the Polar and Kola Divisions in Russia produced 60,000 tonnes of nickel, slightly exceeding the approved production plan. For 9 months of 2010, the saleable nickel production totaled 174,100 tonnes, being by 3% (or by 4,800 tonnes) higher as compared to 9 months of 2009.

In the third quarter of 2010, copper production by the Russian divisions of the company decreased by 4% as compared to the second quarter of 2010 down to 91,300 tonnes. The certain decline in copper production by the Russian divisions in the third quarter of 2010 is of a technical nature. For 9 months of 2010, copper output of the Polar and Kola Divisions totaled 276,600 tonnes, which is just 2% lower than in the same reporting period of 2009. These results are in line with the approved production plans of the company.

In the reporting quarter, the Polar and Kola Divisions produced 695,000 ounces of palladium as compared to 751,000 ounces in the second quarter of 2010. The certain decline in physical volumes of palladium output in the third quarter of 2010 is explained by technological nuances of precious metals production cycle. For 9 months of 2010, palladium output of the Russian divisions amounted to 2,103,000 ounces, representing an 8% growth as compared to the results of the same period of 2009.

The Russian divisions of the company produced 167,000 ounces of platinum in the third quarter of 2010 as compared to 186,000 ounces in the second quarter of 2010. The main reasons of platinum output decline are technological nuances of precious metals production cycle, the same as for palladium. For 9 months of 2010, the total volume of platinum production increased by 9% as compared to the same period of the previous year up to 507,000 ounces.

The Norilsk Nickel Harjavalta refinery in Finland produced 12,700 tonnes of own refined nickel in the reporting quarter, surpassing the approved production plan by 3,700 tonnes. For 9 months of 2010, the Norilsk Nickel Harjavalta produced 34,400 tonnes of own saleable nickel, which is by 11% higher than in the same period of 2009 (including production from the tolled feed in 2009). In the meanwhile, no tolled nickel has been processed in course of 2010.

In the third quarter of 2010, the production of nickel in concentrate by Tati Nickel totaled 3,600 tonnes, including 1,400 tonnes of concentrate shipped to the Norilsk Nickel Harjavalta refinery. The results of the reporting quarter were significantly affected by changes in mineralogical structure of ore (deviation of nickel grades in ore mined from the data of geological model), which led to the decline of output of nickel in concentrate and key by products: copper and palladium, as compared to the second quarter of 2010. For 9 months of 2010, Tati Nickel produced 11,800 tonnes of nickel in concentrate (or 10,400 tonnes of nickel in concentrate excluding intra group shipments to the Norilsk Nickel Harjavalta refinery).

In the third quarter of 2010, the production of nickel in concentrate by Nkomati (reported on 50% basis) totaled 1,400 tonnes, including 1,300 tonnes of nickel in concentrate shipped to the Norilsk Nickel Harjavalta refinery. The results of Nkomati were substantially affected by the enrichment plant being halted for implementation of the enlargement project. The ramp up of the enlarged enrichment plant is expected to be completed ahead of schedule in November 2010. For 9 months of 2010, Nkomati produced 4,300 tonnes of nickel in concentrate (or 1,500 tonnes of nickel in concentrate excluding intra group shipments to the Norilsk Nickel Harjavalta refinery).

Norilsk Nickel confirms the production outlook for 2010 in the amount of 234,000 to 235,000 tonnes of nickel to be produced by the Russian divisions, 50,000 to 52,000 tonnes of refined nickel by the Norilsk Nickel Harjavalta refinery and 15,000 to 18,000 tonnes of nickel in concentrate by African assets of the Group. The company expects the production of copper to amount to 364,000 to 365,000 tonnes at the Russian divisions and 25,000 to 26,000 tonnes of copper in concentrate and semi products at the international operations of the Group. The output of palladium should total 2,715,000 to 2,720,000 ounces at the Russian divisions and 140,000 to 145,000 ounces of palladium in concentrate and semi products at the international operations of the Group. The company plans to produce 655,000 to 660,000 ounces of platinum at the Russian divisions and 35,000 to 40,000 ounces of platinum in concentrate and semi products at the international operations of the Group.

The stated production volumes do not include the production results of Stillwater Mining Company, a subsidiary of the Company.

Norilsk Nickel Polar and Kola Divisions Russia

Norilsk Nickel Finland

Norilsk Nickel Africa

In tonnes
In '000 ounces