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The Company in 2003 Anton Berlin Head of Market Analysis & Development Norilsk Nickel Group One of the global leaders in metals mining sector Employs over 80,000 Revenue over US$5 billion in 2003 Core activities: prospecting, mining, smelting and refining base and precious metals
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The Company in 2003 Anton Berlin Head of Market Analysis & Development
Norilsk Nickel Group • One of the global leaders in metals mining sector • Employs over 80,000 • Revenue over US$5 billion in 2003 • Core activities: prospecting, mining, smelting and refining base and precious metals • Core products: Nickel, Copper, Palladium, Platinum, Gold • By-products: Cobalt, Silver, Rhodium, Ruthenium, Iridium, Selenium,Tellurium
Global Presence Norilsk Nickel Europe London KOLA DIVISION, Murmansk Norimet Ltd. London HEADQUARTERS Moscow Norilsk Nickel USAPittsburg MATROSOV MINE, Magadan GIPRONIKEL, St-Petersburg LENZOLOTO, Irkutsk STILLWATER MINING COMPANY, Montana USA Market Share ZAO POLYUSKrasnoyarsk POLAR DIVISION, Norilsk GOLDFIELDS, South Africa Norilsk NickelAsia
A Global Leader In Metals Market Share 13% 18% 3% Metal >40% 14% 1.5%
Market Position in 2003 10 8.9 12 10 10 7 8 6.7 6.4 8 6.5 6 4.6 5.2 5.1 4.7 6 3.6 3.5 4 3.2 3 2.9 4 1.3 2 2 0 0 KGHM Codelco Barrick Rio Tinto Rio Tinto AngloGold Newmont Gold Fields BHP Billiton Norilsk Nickel Grupo Mexico Placer Dome Phelps Dodge Norilsk Nickel Harmony Gold Norddeutsche Aff Largest Nickel Producers (% share of world production) Largest Palladium Producers (% share of world production) Largest Platinum Producers (% share of world production) Largest Gold Producers (in millions of ounces, proforma for NN) Largest Copper Producers (% share of world production) (*) Based upon estimates by \HSBC
Marketing policy • Consumer-oriented sales policy • Wide range of services to each and every client • Priority to long-term relationships • Flexibility in commercial terms
Norilsk-Stillwater Deal • On June 23, 2003, Norilsk Nickel completed the investment in the Stillwater Mining Company of Montana • Norilsk Nickel paid Stillwater US$132 million in cash and 877 thousand ounces of palladium metal for those shares
Norilsk Winnings • Demonstration to the world market that we believe the misfortunes of palladium to be a temporary event • Restore confidence in the palladium market • A high-grade asset
Stillwater Winnings • Financial debt resolved • Additional metals to supply to US consumers • Independent directors on behalf of Norilsk • Norilsk Nickel and Stillwater remain independent producers and world competitors in the mining and marketing of metals
Stillwater Winnings Norilsk Nickel completes the investment in Stillwater Mining
Palladium Supply Fundamentals • Primary supply • South African expansions • Developments elsewhere • Secondary supply • Recoveries from converters installed in early 90s will peak in 2007
Palladium Demand Fundamentals • Automotive sector • Stockpile depletion • Diesel technology developments • Jewellery • White gold • Palladium jewellery • Electronics • Stockpile depletion • Hydrogen Economy
Palladium Market Development • On November 10, 2003 Norilsk Nickel signed an agreement on hydrogen economy development with the Russian Academy of Science - a National body for fundamental and application research uniting hundreds of institutes and research centers. • The program is set to continue for at least 3 years with financing up to US$40 million per annum
The Markets in 2003 Denis Lepetukha Managing Director
Demand in 2003 • Automotive/Electronics demand matches usage • Jewellery increased • Dental/Chemical stable
Supply in 2003 • More coming out of SA • Increased recoveries from secondary material
PGM Prices Platinum & Palladium Price (LPPM)(in USD per ounce) Platinum/Palladium Price Ratio 3-year average
Palladium Sales in 2003 America Europe Palladium Production Palladium Sales Asia • In 2003 we sold all the metal produced • Achieved sales price without discount to the annual average