MMC Norilsk Nickel announces preliminary consolidated production results for 1st quarter 2008

MMC “Norilsk Nickel” (“Norilsk Nickel”, “the Company”) announces preliminary consolidated production results for the first quarter of 2008 at its Polar and Kola Divisions in Russia and international operations in Finland, Australia, Botswana and South Africa.

 

Notes:
¹ Production from Black Swan nickel concentrate, Cawse nickel carbonate and other purchased materials.
² Production from tolled feed.
³ Production of Lake Johnston and Waterloo.
⁴ Tati Nickel on a 100% basis.
⁵ Totals may vary from sum of numbers as a result of rounding.

The Polar and Kola Divisions in Russia produced 57 038 metric tonnes of saleable nickel from January to March 2008 in line with production plans. In late first quarter of 2008 the Polar Division began the planned reconstruction and expansion of flash smelting line # 1 at the Nadezhda smelter to increase its nickel concentrate processing capacity to 1.2 mln metric tonnes per year, bringing total capacity of both lines at Nadezhda to 2.05 mln metric tonnes. Norilsk Nickel reaffirms its 2008 full year nickel production target at the Polar and Kola operations in line with overall previous guidance.

In the first quarter of 2008 extraordinary winter weather conditions at the Taimyr Peninsula impeded timely dispatch of cuprous ore from the Komsomolsky mine to the Norilsk Concentrator. Lower processed volumes of cuprous ore resulted in decreased concentrate feed to the Copper Plant and the Metallurgical Shop (precious metals production). In addition, refining of precious metals at the Krasnoyarsk Precious Metals Plant was lower than planned due to delays in air deliveries of PGM concentrates from Norilsk to Krasnoyarsk.

As a result, in the first quarter of 2008 the overall saleable copper, palladium and platinum production at the Polar and Kola Divisions declined to 99 020 metric tonnes of copper, 590 thousand ounces (18.4 metric tonnes) of palladium and 135 thousand ounces (4.2 metric tonnes) of platinum. For the full year 2008, Norilsk Nickel reaffirms expected copper and PGM production targets at the Polar and Kola operations in line with overall previous guidance.

The Tati Nickel and Nkomati operations in Southern Africa produced 5 606 metric tonnes of saleable nickel in the first quarter of 2008. At Nkomati the new 100 thousand metric tonnes per month concentrator plant is currently operating at above 95% of planned capacity.

The Lake Johnston and Waterloo operations in Western Australia produced 3 554 metric tonnes of saleable nickel in the first quarter of 2008. Major ground support rehabilitation at Maggie Hays, following a ground fall in March 2007, has been concluded with a return to full production during the quarter.

Norilsk Nickel Harjavalta in Finland produced a total of 13 738 metric tonnes of refined nickel from January to March 2008, including 8 374 metric tonnes of own nickel and 5 364 metric tonnes of tolled nickel.

For 2008 Norilsk Nickel expects its overall saleable metals production to remain unchanged at 300-305 thousand metric tonnes of nickel, 415-420 thousand metric tonnes of copper, 3.02 - 3.07 mln ounces of palladium and 710-720 thousand ounces of platinum.

The stated production volumes do not include production figures of Stillwater Mining Company.