HomeBase MetalsNorilsk revenue to fall by more than half in 2009

Norilsk revenue to fall by more than half in 2009

The furnace line at
one of Norilsk’s
Russian operations
Krasnoyarsk, Russia — MININGREVIEW.COM — 20 January 2009 – The world’s top producer of nickel – Russia’s Norilsk Nickel – predicts that the company’s 2009 revenue will fall by more than half, and that it will have to cut costs as the global financial crisis hits demand.

“In the conditions of dwindling profits, we expect the revenues of the whole group of companies of Norilsk Nickel to be around US$8 billion (R80 billion) in 2009, which is substantially less than last year,” CEO Vladimir Strzhalkovsky was quoted as saying by a spokesman.

“We will therefore have to cut our expenses,” Strzhalkovsky is reported to have said in the Siberian town of Krasnoyarsk – the capital of the region where Norilsk’s main mines and plants are located.

He did not provide more figures, but Reuters reports that he said the company planned to halve its investment projects and to halt some foreign assets, namely in Australia and South Africa. It did not plan to retrench staff in Russia.

Last month Norilsk announced that it planned to cut output due to falling demand. The company posted revenues of US$17.1 billion (R170 billion) in 2007 and US$8.31 billion (R83 billion) in the first half of 2008. Its revenues for the full 2008 calendar year are not yet available — Norilsk normally publishes its annual financial results in June.