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Nornickel, a Russian metal, expects a negative impact from trade wars and high rates

The Russian mining giant Nornickel announced on Friday that it expects to see its financial results deteriorate in this year due to low metals prices and high interest rates. It also cited the strong rouble, global trade wars, as well as high interest rate.

Nornickel is the largest producer of palladium in the world and also a major producer for refined nickel. Nornickel does not fall under Western sanctions directed at Russia. The sanctions have led to payment problems, limited its access to Western equipment, and caused some Western producers not to buy Russian metal.

The CFO of Nornickel, Sergey Malyshev, said that "this year, extreme geopolitical uncertainties, continued volatility in the target markets in the context of escalating global trade wars, and risks of a slower growth rate in the global economy, as well tight monetary policies, continue to have a negative impact on financial indicators."

Malyshev said that the company also faces low metals prices as a result of the strengthening rouble this year and high inflation, in addition to its debt and costs.

The Bank of Russia’s key rate of 20% has been cited by government officials and business leaders as an important drag on the economy. This year, the economy is expected to be impacted dramatically.

Malyshev stated that Nornickel was forced to reduce its investments and some projects were put on hold due to the difficult conditions. Last month, the company's board recommended that Nornickel not pay dividends based on its 2024 results.

Malyshev stated that it was not appropriate to pay dividends through an increase in debt. (Reporting and writing by Anastasia Lyrchikova, Editing by Mark Trevelyan).

(source: Reuters)