Nornickel Sustainability Report 1448-1-38

2018 SUSTAINABILITY REPORT
THE NEW
NORNICKEL:
STRATEGY
IN ACTION
NORNICKEL 2018 SUSTAINABILITY REPORT

102–50 102–54
The 2018 Sustainability Report of Nornickel Group (the “Report”) has been prepared in accordance with the GRI
Standards, Comprehensive option, and is a report on the progress of compliance with the United Nations (UN) Global
Compact principles that discloses the policy of MMC Norilsk Nickel (the “Company” or “Nornickel”) towards achieving
the UN Sustainable Development Goals up to 2030.
In producing the Report, the following documents were The Company’s Social Policy Department and a 2018 SUSTAINABILITY REPORT
also used: GRI Mining and Metals Sector Supplement, dedicated working group along with the key units
THE NEW
Guidance on Social Responsibility ISO 26000:2010, supervised the preparation of the Report. The Report
Reference Performance Indicators of the Russian Union has also been approved by MMC Norilsk Nickel’s
of Industrialists and Entrepreneurs (RSPP), AccountAbility Management Board and Board of Directors.
NORNICKEL:
Standards AA1000SES (2015) and AA1000AP (2018).
Other sources of information about Nornickel Group:
The Company has been publishing annual non-financial • corporate website https://www.nornickel.com;
reports since 2003.
STRATEGY
• Nornickel’s ESG Strategy and ESG Databook at https://
The Report covers activities of Norilsk Nickel Group www.nornickel.com/investors/esg/;
(“Nornickel Group”), including MMC Norilsk Nickel and • annual reports at https://www.nornickel.com/investors/
entities in the corporate structure.
IN ACTION
reports-and-results/; 2018 AR
102–48
• interactive version of the 2018 Sustainability Report
Information provided herein was collected via the at http://csr2018.nornik.ru/home/. WEB
corporate reporting framework and special information
requests in line with the GRI requirements and with
regard to the materiality analysis results. The Report
contains updates of the data for previous years, which is
indicated in the text.
Each year, the Company’s Report undergoes external

assurance procedures, including independent APPROVED APPROVED
professional assessment of the Report’s compliance
by the Board of Directors by the Management Board
with the GRI Standards and the RSPP public verification
procedure. of MMC Norilsk Nickel of MMC Norilsk Nickel
Minutes No. GMK/14-pr-sd of 27 May 2019 102–32 Minutes No. GMK/14-pr-sd of 27 May 2019
As part of the United Nations Conference on Trade and
Development intergovernmental body (UNCTAD) from
the Russian side, Nornickel is pilot-testing performance
indicators quantifying companies’ contribution to
APPROVED
achieving the UN Sustainable Development Goals.
by the Audit and Sustainable
Development Committee of the Board of Directors
Minutes No. 4 of 21 May 2019
Contents
01 02 03 07
Statement of the President Highlights About Norilsk Nickel Regional development
and Chairman of the 6 Group 120
Management Board 8
5 The company's contribution to the
Overview development of local communities
8 120
Assets Development of local communities
04
9 123
Core companies Assessment of social programmes
and business units
08
128
Strategy 10
Transport accessibility
22 Production chart 129
12
Awards and
Context Key social and environmental
projects accolades
24
14 131
Mission and values
26
09
Corporate strategy
26
Sustainable development goals
30 Appendices
132
GRI Content Index

133
05 Scope of data collection

142
Map of material GRI topics
Management (aspects)
42 144
Stakeholder dialogue minutes
06
WEB
GRI indicators
Sustainability management 146 Stakeholder recommendations WEB
44
UNCTAD indicators
Economic efficiency Compliance with the UN Global Compact 155 Opinion of RSPP Council on Non-Financial Reporting
54 74 160
List of abbreviations
Stakeholder engagement 158
57 Human rights Independent assurance report
76 Glossary WEB 164
Supply chain management
65 Labour relations
10
80
Innovations
72 Anti-corruption
98
Transparency
73 Environment Contacts
102 166
2018 SUSTAINABILITY REPORT 5
Statement of the President and

Chairman of the Management Board 102–14
The year 2018 was in many ways important for an all-time low. The management of the Company views
Nornickel. First, we prepared for major production occupational safety and zero workplace fatalities as its
growth associated with the commissioning of new key strategic objective and keeps running dedicated
mining capacity, expansion of concentration facilities health and safety programmes.
and greenfield development. Second, we launched a
number of large-scale modernisation and environmental As for production, 2018 saw an increase in the output
initiatives, the most important of which was the Sulphur of our key metals, primarily copper, thanks to the
Project at our Copper Plant. overall improvement in production efficiency. After we
reconfigured our production facilities, we were able
I believe that we owe our last year’s success to both to almost completely abandon the practice of low-
favourable market for our metals and real progress margin third party feedstock processing and increase
achieved in labour productivity improvement. I am the output of nickel and copper from the Company’s
sure that Nornickel will continue enhancing production Russian feedstock. As a result, our revenue and EBITDA
efficiency, while our best management practices, unique grew 28% and 56% to USD 11.7 bn and USD 6.2 bn
know-how, and digitalisation efforts will drive up the respectively, making Nornickel one of the most profitable
Company’s value no less than our vast ore reserves do. companies among global diversified mining majors.
Strong performance in 2018 and current macroeconomic
Last year we made great progress in developing human trends strengthen our robust position and secure
capital, our key resource. Similar to other business areas, investments in sustainable development, primarily in
we are working towards boosting staff performance and environmental initiatives.
engagement and developing a safety culture. Nornickel
maintains traditionally high social security standards In 2018, we launched the second stage of our ambitious
guaranteed by a new collective bargaining agreement environmental programme, which will help us to achieve
signed between the Company and its employees a fourfold reduction of sulphur dioxide emissions
in 2018. The document preserves and standardises in Norilsk by 2023. The Company plans to halve its
employees’ rights and benefits, as well as enhances emissions in the settlement of Nickel (Kola Peninsula)
them by offering extended health insurance coverage already by the end of 2019. To this end, we started
and adding other companies of Norilsk Nickel Group constructing a concentrate separation facility in 2018 to
to the agreement. reduce the throughput at our Smelting Shop.
Nornickel’s high social security benefits cement its All what is said above proves that after Nornickel
leading position among the industry’s most attractive joined the UN Global Compact in 2016 it has remained
employers. Wages and salaries, which the Company truly committed to the Ten Principles of the UN
always pays in time, remain among the highest industry- Global Compact in the areas of human rights, labour,
wide and average over RUB 111,000. environment and anti-corruption. Nornickel has always
strived to keep pace with change and keeps looking
Health and safety is another domain that saw some to seize new development opportunities. With projects
major changes. In 2018, we reinforced the trend towards launched in 2018, Nornickel is well positioned to become
reduction in the number of production-related accidents. a technology leader in the mining sector both nationally
For the first time in the Company’s history, Polar Division and internationally. The new strategic cycle we are
saw zero fatalities in the reporting year. The lost time currently entering will make Nornickel a growth story in
injury frequency rate (LTIFR) decreased by 48%, reaching the eyes of the investment community.
The new strategic cycle we are currently
entering will make Nornickel a growth
story in the eyes of the investment
community.
Vladimir Potanin
President, Chairman of the Management Board
MMC Norilsk Nickel
6 NORILSK NICKEL GROUP’S 2018 SUSTAINABILITY REPORT 7
Highlights 102–7
Environment Development of local communities
32.5 3,098 457,000 115.6 30.9 410

RUB bn TJ m 3
RUB bn RUB bn social projects
environmental fuel and energy savings increase in effluent volumes payments to budgets spent on social worth
expenditures and costs resulting from energy treated to standard quality of various levels1 programmes, charity, and
in 2018 consumption reduction at treatment facilities social infrastructure in 2018 389.1
and energy efficiency since 2017
improvement initiatives RUB mln
in 2018 funded since 2014
2018 115.6 as part of the World of New
Opportunities programme
2017 100.3
Labour The Company’s position in the industry2
48% 22% RUB 7,500 2,220 mt of ore Nornickel supplies its

improvement of LTIFR increase in occupational health and added to the average salary measured and indicated products to 34 countries
safety expenses resources
2018 0.23 2018 10,563 2018 111.6

2017 0.44 2017 8,708 2017 104.1
No. 1 No. 1 No. 4 No. 4 No. 8 No. 11

palladium refined nickel platinum producer
producer producer (10% market rhodium producer cobalt producer copper producer
(39% market (23% market share) share) (8% market share) (3% market share) (2% market share)
share)
Tax and non-tax payments include all taxes paid, net of VAT and dividend income tax, as well as insurance payments and customs duties.
1
2
In terms of refined metals production for nickel, palladium, platinum and rhodium markets, and in terms of mining for copper and cobalt markets.
About Norilsk Nickel Group
Overview 102–1 102–2 Assets 102–4
Norilsk Nickel Group is In 2018, the Company accounted Production units of the Group are located in three Bystrinsky GOK is located in the Gazimuro-Zavodsky
Russia’s leading metals for 0.7% of Russia’s GDP, 2.6% of countries — Russia, Finland and South Africa.1 District of the Trans-Baikal Territory and is linked to other
regions by rail.
and mining company, the the national industrial output, 11.4% Its core businesses are based in Russia and have a
world’s largest producer of of metals production, and 2.6% of vertically integrated structure. Three main production In Finland, Norilsk Nickel operates Norilsk Nickel
palladium and refined nickel, Russia’s exports. sites in Russia are: Harjavalta (part of the Group), the country’s only nickel
• Polar Division of MMC Norilsk Nickel (“Polar Division”); refining plant.
and one of the biggest
• Kola Mining and Metallurgical Company (“Kola MMC”); In South Africa, the Company owns 50% of Nkomati,
producers of platinum,
Nornickel is the largest industrial player in the • Bystrinsky Mining and Processing Plant (“Bystrinsky a nickel mine developed jointly with African Rainbow
copper and cobalt. On top Russian region of the Arctic, generating over 5.7% of Minerals.
GOK”), which in 2018 started ramp-up towards the
of that, the Group produces its GDP. Around 60,000 of the Company’s employees target parameters.
permanently reside and work beyond the Arctic Circle. MMC Norilsk Nickel runs a global network of
rhodium, silver, gold, iridium,
The Company’s Polar Division is located on the Taimyr representative and sales offices in Russia, China, the
ruthenium, selenium, For the purposes of the 2018 Sustainability Report Peninsula (Krasnoyarsk Territory) beyond the Arctic USA, and Switzerland.
(the “Report”), Norilsk Nickel Group shall refer to MMC Circle. It is linked to other regions by inland waterways
tellurium, and sulphur.
Norilsk Nickel and the entirety of operations forming (the Yenisey River), marine transport (the Northern Sea In addition to geology, energy, logistics, and support
Norilsk Nickel Group. Unless otherwise specified or Route) and air transport. businesses, the Group comprises Gipronickel Institute,
required by the context, the terms “Company”, “Group”, an R&D facility based in St Petersburg with branches in
“Nornickel” or “the Group companies” shall mean Norilsk Kola MMC is located on the Kola Peninsula beyond the Norilsk and Monchegorsk. In total, the Group counts over
Nickel Group. Quantitative indicators for certain areas Arctic Circle. It is the leading industrial facility of the 80 companies.
of sustainable development pertain to the Group’s Murmansk Region and is completely integrated into the
specific operations in accordance with the Scope of Data transport infrastructure of the Northwestern Federal
Collection appendix. District.
See also the 2018 IFRS financial results, page 47 at https://www.nornickel.com/investors/disclosure/financials/.

1
Core companies and business units
PRODUCTION EXPLORATION TRANSPORT AND LOGISTICS SUPPORT FUNCTIONS
POLAR DIVISION NORILSKGEOLOGIYA POLAR TRANSPORT DIVISION PECHENGASTROY
KOLA MMC VOSTOKGEOLOGIYA ARKHANGELSK TRANSPORT DIVISION KOLABYT
GRK BYSTRINSKOE INTERGEOPROEKT MURMANSK TRANSPORT DIVISION NORILSK SUPPORT COMPLEX
MEDVEZHY RUCHEY KRASNOYARSK TRANSPORT DIVISION NORILSKNICKELREMONT
BYSTRINSKY TRANSPORT DIVISION POLAR CONSTRUCTION COMPANY
RESEARCH AND DEVELOPMENT FUEL AND ENERGY NORDSTAR AIRLINES NORNICKEL — SHARED SERVICES
CENTRE
YENISEY RIVER SHIPPING COMPANY
GIPRONICKEL INSTITUTE TAIMYRENERGO PSMK
NORILSK AIRPORT
NORILSKGAZPROM TAIMYR FUEL COMPANY
LESOSIBIRSK PORT
ARCTIC-ENERGO
KRASNOYARSK RIVER PORT
NORILSK-TAIMYR ENERGY COMPANY
NORILSK AVIA
TAIMYRGAZ¹
NORILSKTRANSGAZ
DISTRIBUTION AND SALES FOREIGN ASSETS MMC NORILSK NICKEL’S

NORILSKENERGO (MMC NORILSK
HEAD OFFICE
NICKEL’S BRANCH)
NORMETIMPEX NORILSK NICKEL HARJAVALTA MMC NORILSK NICKEL’S

HEAD OFFICE
METAL TRADE OVERSEAS AG NKOMATI
NORILSK NICKEL ASIA LTD.

(HONG KONG)
NORILSK NICKEL USA, INC.
NORILSK NICKEL METALS

TRADING (SHANGHAI) CO., LTD.
Taimyrgaz was reorganised and merged with Norilskgazprom on 1 March 2019.

1
Production chart
PRODUCTION OF COPPER-NICKEL SULPHIDE CONCENTRATION PRODUCTION SALES
Deposit Mine Concentrator Concentrate, Smelting Refinement Refinement (of

converter matte precious metals)
TAIMYR SITE
THIRD-PARTY
FEEDSTOCK
• OKTYABRSKOYE • ZAPOLYARNY MINE • TALNAKH • COPPER COPPER PGM CONCENTRATOR GULIDOV OWN SALES
DEPOSIT CONCENTRATOR*** CONCENTRATE PLANT** KRASNOYARSK NETWORK
NON-FERROUS
• TALNAKHSKOYE • KOMSOMOLSKY MINE*** METALS PLANT*
• NICKEL NADEZHDA
DEPOSIT
CONCENTRATE METALLURGICAL
• MAYAK MINE • NORILSK PLANT**/***
• NORILSK-1 DEPOSIT
CONCENTRATOR • PYRRHOTITE
• TAIMYRSKY MINE*** CONCENTRATE
• OKTYABRSKY MINE*** * Precious metals are

refined by Gulidov
Krasnoyarsk Non-
• SKALISTY MINE*** Metals Ferrous Metals Plant
(Krastsvetmet), which is
• NICKEL not part of Norilsk Nickel
• PALLADIUM Group. Concentrates are
processed into saleable
KOLA SITE
• COPPER metals under a tolling

• ZHDANOVSKOYE • KAULA- • ZAPOLYARNY • COPPER-NICKEL • SMELTING SHOP • PLATINUM agreement between
DEPOSIT KOTSELVAARA CONCENTRATOR CONCENTRATE (NICKEL) Norilsk Nickel Group and
MINE • COBALT the plant.
• ZAPOLYARNOYE • NICKEL TANK-HOUSE REFINEMENT SHOP • RHODIUM ** Production facilities
DEPOSIT COPPER-NICKEL • MONCHEGORSK**/*** (MONCHEGORSK)*** implementing flagship
• SEVERNY CONVERTER MATTE • IRIDIUM
projects under the
• KOTSELVAARA MINE*** • RUTHENIUM comprehensive
DEPOSIT
• METALLURGICAL environmental programme.
SHOP**/*** CONVERTER • SILVER
MATTE, *** Production facilities
• SEMILETKA • GOLD
CONCENTRATE implementing Nornickel’s
DEPOSIT
COPPER-NICKEL • SELENIUM major investment projects.
For more details, please
• TELLURIUM see the interactive version
• SULPHUR of this report and the 2018
NICKEL REFINING
THIRD-PARTY
FEEDSTOCK
annual report. AR-2018
NORILSK NICKEL
HARJAVALTA
PLANT IN • SODIUM
HARJAVALTA SULPHATE **** Open pits:
(FINLAND) Verkhneildikansky* (since
• SODIUM 2018), Bystrinsky-2 (since
CHLORIDE 2018), Medny Chainik
(planned), Yuzhno-
Rodstvenny (planned).
CHITA
• BYSTRINSKOYE • BYSTRINSKY • BYSTRINSKY • MAGNETITE, COPPER,

DEPOSIT**** GOK CONCENTRATOR*** GOLD CONCENTRATE
GEOLOGICAL EXPLORATION
SERVICE SUBSIDIARIES
SERVICE SUBSIDIARIES (FUEL AND ENERGY, TRANSPORT, LOGISTICS, SUPPORT AND OTHER BUSINESSES)
R&D R&D
Key social and environmental projects
SOCIAL PORTRAIT ZERO NEGATIVE

OF A CITY RESIDENT ENVIRONMENTAL
SURVEY IMPACT CAMPAIGN
Social and economic
partnership
Transport Pechengsky District ENVIRONMENT PROTECTION AND
SUSTAINABLE DEVELOPMENT
IN THE NORTH VII ENVIRONMENTAL
Quality of life FORUM (ORGANISER)
Murmansk Region
Culture MURMANSK
Pasvik Nature
Sports HARJAVALTA Reserve MONCHEGORSK
Education ANNUAL RELEASE Lapland
OF VALUABLE FISH WE ARE THE CITY! SOCIAL
SPECIES INTO WATER Biosphere TECHNOLOGIES FORUM (ORGANISER)
Environment BODIES Reserve
RUSSIAN JUNIOR AND ADULT
CROSS-COUNTRY SKIING CHAMPIONSHIP
Social and economic partnership ST PETERSBURG (GENERAL SPONSOR)
agreement with regional authorities
VIII INTERNATIONAL FORUM ZERO NEGATIVE ENVIRONMENTAL
ARCTIC: TODAY AND THE FUTURE IMPACT CAMPAIGN
(PARTNER) Taymyrsky
World of New Opportunities charitable
programme ANNUAL RELEASE OF VALUABLE FISH Dolgano-Nenetsky
SPECIES INTO WATER BODIES
Municipal District
Cooperation with nature reserves Tver Region

RELOCATION TO REGIONS WITH FAVOURABLE
Corporate volunteer programme CLIMATIC CONDITIONS
CURLING ARCTIC CUP

INTERNATIONAL COMPETITION Putoransky State
Let’s Do It environmental marathon Nature Reserve
MOSCOW
DUDINKA
Agreement with the Federal RUSSIAN ICE HOCKEY FEDERATION (PARTNER) ALL RUSSIAN FEDERATION
Agency for Ethnic Affairs (FAEA) OF DANCE SPORT AND NORILSK
on cooperation aimed at providing RUSSIAN FUTSAL ASSOCIATION (GENERAL ACROBATIC ROCK'N'ROLL
(PARTNER)
support to the indigenous peoples of PARTNER) NORILSK DEVELOPMENT AGENCY INCREASE OF THE TAIMYR HPP
the North NIGHT HOCKEY LEAGUE
CASCADE CAPACITIES
RUSSIAN OLYMPIC COMMITTEE (PARTNER) RECONSTRUCTION OF NORILSK AIRPORT
(GENERAL PARTNER)
SULPHUR PROJECT ENVIRONMENTAL
RECONSTRUCTION OF BRIDGES INITIATIVE
FOOTBALL UNION OF RUSSIA (PARTNER) WORLD LEGENDS HOCKEY
LEAGUE (PARTNER) IN THE NORILSK INDUSTRIAL DISTRICT
PROGRAMME TO BUILD LOCAL
RELOCATION TO REGIONS WITH TREATMENT FACILITIES
RUSSIAN CURLING FEDERATION
CSKA PROFESSIONAL FAVOURABLE CLIMATIC CONDITIONS
ZERO NEGATIVE ENVIRONMENTAL
ARCTIC DAYS IN MOSCOW FEDERAL IMPACT CAMPAIGN
FORUM (PARTNER)
OUR HOME AND MY HOME
EMPLOYEE HOUSING PROGRAMMES LAND REHABILITATION PROGRAMME
SARATOV MULTIMEDIA ART MUSEUM
(PATRONAGE ASSISTANCE)
WE ARE THE CITY! SOCIAL TECHNOLOGIES ANNUAL RELEASE OF VALUABLE
Saratov Region GOLDEN MASK THEATRE FESTIVAL
FORUM (ORGANISER) FISH SPECIES INTO WATER BODIES
(PARTNER)
NORILSK NICKEL FUTSAL CLUB
(GENERAL SPONSOR)
SOCHI
ZAPOLYARYE HEALTH
RESORT
ROSA KHUTOR SKI RESORT

(SPONSORSHIP) AGREEMENT ON SME SUPPORT
Krasnoyarsk AGREEMENT TO SUPPORT

CORPORATE SPORTS
AND DEVELOP THE VOLUNTEER
COMPETITIONS Territory MOVEMENT IN THE TRANS-BAIKAL
TERRITORY
ANNUAL RELEASE OF VALUABLE

FISH SPECIES INTO WATER BODIES
Trans-Baikal Territory
KRASNOYARSK
Relict Oaks State
KRASNOYARSK ECONOMIC FORUM
(GENERAL PARTNER) Reserve
SCIENCE FESTIVAL IN KRASNOYARSK
29TH INTERNATIONAL WINTER

UNIVERSIADE IN KRASNOYARSK
IN 2019 (GENERAL PARTNER) CHITA
FEDERATION OF NORTHERN FIRST TECHNOLOGICAL CLUSTER
MULTISPORT RACES FOR KIDS IN THE TRANS-BAIKAL
TERRITORY
KRASNOYARSK
TERRITORY
REGION OVERVIEW
Area Population Industry
2,366,800 2,876,360 • Non-ferrous metallurgy

• Mining
km2 people
• Solid fuel–based power and hydropower generation
Mineral resources
Iron ore Coal Crude Gold

oil ore
KEY AREAS OF COOPERATION WITH THE KRASNOYARSK TERRITORY
Economic Social Environmental
• Cooperation on major investment • Improvement of the existing sports • Implementation of cutting-edge

projects in the Krasnoyarsk infrastructure and construction of green technologies
Territory new state-of-the-art facilities in the • Reclamation and landscaping of
• Heat and power supply to the Krasnoyarsk Territory urban territories
communities and companies of • Support for vocational and • Development of Taimyr’s specially
the Norilsk Industrial District supplementary education protected natural areas
• Implementation of the Northern • Implementation of the World of New • Organisation and backing of
Supply Haul programme in the Opportunities programme, supporting environmental campaigns
Arctic and promoting regional public
• Development of transport and the initiatives
telecommunication infrastructure • Construction of modern housing and
utilities, city and village improvement
initiatives
NORNICKEL’S PERFORMANCE IN THE KRASNOYARSK TERRITORY
55.9 54,286 104,241 2,480,681.7

RUB bn people 1
RUB RUB thousand
taxes and other headcount average monthly employee-related social
payments salary expenses
1
The Krasnoyarsk Territory and the Norilsk Industrial District. Photo: Stolby National Nature Sanctuary, Krasnoyarsk Territory
MURMANSK
REGION
REGION OVERVIEW
Area Population Economy
144,900 757,600 • Mining industry

• Metallurgy
km2 people
• Fishing industry
Mineral resources
Iron ore Copper Nickel Cobalt

ore ore ore
KEY AREAS OF COOPERATION WITH THE MURMANSK REGION
• Implementation of investment • Implementation of the World of • Cooperation on environmental

projects in the region New Opportunities programme, protection, preservation of the
• Development of production supporting and promoting regional Kola Peninsula’s natural ecology
capacities public initiatives and landscapes
• Social and economic development • Ensuring heat supply to communities • Development of ecotourism
of municipalities that are home to across Kola MMC’s footprint in the nature park of the Rybachy
Kola MMC’s production sites • Development of social and Sredny Peninsulas
• Development of the transport entrepreneurship • Organisation and backing of
infrastructure in the Arctic environmental campaigns
NORNICKEL’S PERFORMANCE IN THE MURMANSK REGION
10.6 12,579 82,443 377,799.5

RUB bn people RUB RUB thousand
Photo: Lapland State Nature Biosphere Reserve, Murmansk Region

TRANS-BAIKAL
TERRITORY
REGION OVERVIEW
Area Population Industry
431,900 1,072,800 •
•
Mining
Production and distribution of electricity, gas and water
km2 people
• Non-ferrous metallurgy
• Machinery and equipment manufacturing
• Food production
Mineral resources
Uranium Copper Tungsten Cobalt

ore ore ore ore
KEY AREAS OF COOPERATION WITH THE TRANS-BAIKAL TERRITORY
• Bystrinskoye Deposit development. • Training of mining industry employees • Development of the Relict Oaks
Over the first 10 years of Bystrinsky • Support and development of the State Reserve located in the
GOK operation, the Company volunteer movement region
plans to contribute around RUB 18
• Improvement of urban areas
bn to the territory’s budget in tax
payments
• Improvement of Bystrinsky GOK’s
transport accessibility
NORNICKEL’S PERFORMANCE IN THE TRANS-BAIKAL TERRITORY
1.2 3,382 86,882 5,667.6

RUB bn people RUB RUB thousand
Photo: Maloe Leprindo Lake in the mountains of the Trans-Baikal Territory

04
STRATEGY
NEW GROWTH
OPPORTUNITIES
October 2018. Dedicated to meeting the growing demand for battery materials
used in electric vehicles, the strategic partnership between BASF and Nornickel
became a landmark event for achieving sustainable development goals. As
BASF’s new production facility will be constructed adjacent to Nornickel's
refining facility in Harjavalta, Finland, this will provide BASF with exclusive
24 Context access to local nickel and cobalt supplies.
26 Mission and values

2020 will see about 300,000 electric vehicles per year using batteries
with components produced as part of the partnership between Nornickel
26
and BASF.
Corporate strategy
30 Sustainable development goals

Strategy Standard/initiative Nornickel
International Platinum Group Metals Association Member
International Information Security Research Consortium Member

Context MMC Norilsk Nickel considers social responsibility
and commitment to the principles of sustainable Nickel Institute Member. Since 2017, Nornickel’s Head of Marketing has
102–15 development as key operational priorities for business been chairing the Institute’s Board of Directors
Significant impact of large companies on the development development, community and investor relations, and
of regional and national industries, as well as their environmental impact management. World Wildlife Fund (WWF) Ranking among the leading environmentally responsible
integration at the global level has made business a key mining companies in Russia according to the WWF
player in addressing modern challenges. The Company became one of the first Russian
National Association of International Information Secu- Member and supporter
companies to sign up, in 2005, to the Social Charter rity
Norilsk Nickel Group is a leader of Russia’s metals and of the Russian Business adopted by the Russian Union
mining industry. The Company meets the Russian and of Industrialists and Entrepreneurs (RSPP). In 2016, Security Charter for Critical Industrial Facilities Charter developer, member and signatory
global economy’s growing demand for materials required Norilsk Nickel Group joined the UN Global Compact,
to manufacture products that are vital for improving the which marked the transition to a new strategic FTSE4Good Index Inclusion in the FTSE4Good Emerging Index
quality of life. development cycle.
Sustainalytics
Assigned independent ESG ratings
The Company’s products are supplied to 34 countries Supporting the United Nations’ Sustainable MSCI
and are in high demand in power generation, electronics, Development Goals and sharing the UN’s call to
transportation, mechanical engineering, construction, transform the business to the benefit of society, Social Charter of the Russian Business adopted by the Member and signatory
consumer goods, healthcare, food, chemical and other environment and the future of the planet, Nornickel RSPP
industries. started implementing its Long-Term Development
Strategy until 2023, which drives its ambition to Anti-Corruption Charter of the Russian Business adopt- Member and signatory
ed by the RSPP
As one of the largest employers and taxpayers in Russia, grow further as an advanced, cost efficient and
Nornickel plays an important role in the social and environmentally responsible company. RSPP Responsibility and Transparency index and Sus- One of the index leaders (in 2014, 2015, 2016, 2017,
economic development of the regions where it operates. tainable Development Vector index and 2018)
RSPP Committee on Corporate Social Responsibility and

Member
NORNICKEL’S SUPPORT FOR SUSTAINABLE DEVELOPMENT INITIATIVES AND STANDARDS Demographic Policies
102–12 102–13
Environmental Charter of the Krasnoyarsk Territory Signatory
Standard/initiative Nornickel
GRI Gold Community Organisational member
UN and International Labour Organisation conventions Declaring support and aligning its by-laws accordingly
UN Global Compact Supporting officially
National Global Compact Network Association (Russia) Member

Nornickel’s products for better quality of life, The most common electronic products use nickel,
Sustainable Development Goals of the UN 2030 Declaring support and aligning governance practices
Agenda accordingly environmental improvements and green economy copper, platinum, palladium, rhodium, iridium, ruthenium,
cobalt, gold, silver and other metals produced by the
ISO 9001:2015 Compliance of Gipronickel Institute's management The Taimyr unique resource base seems to be made to Company.
system with the standards respond to the challenges facing humanity in the 21st
century. It will be impossible to reduce air pollution in urban areas
ISO 14001:2015 Compliance of MMC Norilsk Nickel, Kola MMC, as planned or combat climate change as set out in the
ISO 9001:2015 and Norilsk Nickel Harjavalta management systems
Playing a vital part in contributing to the reduction of air Paris Agreement unless hybrid cars with PGM catalysts
with the standards
pollutant emissions, platinum group metals (PGM) are are used extensively in the coming decades. In the long
OHSAS 18001:2007 Compliance of MMC Norilsk Nickel and Norilsk Nickel used as catalysts for the production of key chemicals, run, roads will be dominated by fully electric vehicles
Harjavalta management systems with the standard including agricultural fertilisers, that are essential for using lithium-ion batteries with high content of nickel and
providing the planet’s growing population with foods. cobalt, as well as by hydrogen vehicles using platinum in
ISO 26000:2010 Declaring support and providing reports Platinum and palladium along with their co-metals are their fuel cells. Electric vehicles will transform the global
widespread in medicine, particularly in its forefront areas nickel and PGM industries. As the world’s leading sup-
GOST R ISO 26000-2012 Declaring support and providing reports
such as oncology and production of pacemakers and plier of these metals, Nornickel is uniquely positioned to
AA1000AP, AA1000SES Declaring support and providing reports other implants. contribute to this change.
Development of renewable energy is also impossible Our mission The next development cycle will be centred around environmentally friendly production. In 2018, the Company
without stainless steel, nickel alloys and fibreglass an unprecedented RUB 150 bn environmental launched the large-scale Sulphur Project at Polar Division’s
as key structural materials used in wind and solar Through the efficient use of natural resources and equity, initiative focusing on the reduction of emissions and Copper Plant as part of its environmental programme.
farms or without special conductive pastes for solar we supply mankind with non-ferrous metals, which
cell surfaces. However, high-quality stainless steel make the world a more reliable place to live in and help
cannot be made without nickel; fibreglass cannot be people realise their aspirations for development and
produced without equipment that uses platinum and technological progress. Roadmap to advanced, efficient and environmentally friendly production
rhodium, and no conductive paste for solar batteries is
made without silver. Apart from renewable generation,
metals produced by Nornickel are essential for envi- Corporate strategy
ronmentally friendly energy storage systems that use
nickel- and cobalt-based batteries or gases (hydrogen Adopted in 2013, Nornickel’s corporate strategy primarily
2019 AFTER 2022
or methane) which are stored and processed also aims to unlock the resource potential of the Taimyr and
using PGM. Kola Peninsulas, improve the Company’s operating Optimisation of the smelting Promising growth projects:
efficiency and raise the quality of investment and capital shop capacity utilisation • Southern Cluster project aiming
The Company provides comprehensive support for management. In 2013–2017, MMC Norilsk Nickel ran to decrease SO2 emissions Reconfiguration programme
at the production ramp-up to
completed:
the green economy both in Europe and worldwide and a number of strategic initiatives that fundamentally 6+ mtpa
reaffirms its commitment to sustainable use of resourc- changed the Company’s technological landscape • Nickel Plant shut down
• Upgrade and capacity
es and its status as a responsible global supplier of and can rightly be considered unique and pioneering. • Talnakh Concentrator and expansion at Talnakh
materials for sustainability purposes. In 2017, the Company completed the first cycle of Smelting Shop
Nadezhda Metallurgical Plant Concentrator–3
its development strategy. As a result, Polar Division facilities upgraded
upgraded dramatically its concentration facilities and Severonickel
Mission and values 102–16 reconfigured its metal production processes with
Kola
Nickel Plant shut down. This significantly reduced
MMC Polar Division
The Company focuses on developing a group- environmental footprint of the Company in the region.
wide corporate culture of mutual respect, trust 2019
and openness shared by its every employee. The In 2018, the Company reaffirmed its ambition to grow
Completion of the upgrade
corporate culture ensures effective implementation further as an advanced, efficient and environmentally and expansion of nickel
of the Company’s strategy based on sustainable responsible company and presented Nornickel’s refining capacities
development principles.1 strategic priorities in sustainable development and
growth areas for the medium and long terms.
Blue-sky projects: feasibility
studies at greenfield
2017–2024 deposits, including
Maslovskoye Deposit,
Nornickel’s corporate values Focus on the intensive Chernogorskoye Deposit
development of mining and the southern part of
operations at Talnakh to Norilsk-1 Deposit.
achieve 20% growth by 2025
EFFICIENCY RELIABILITY GROWTH
Delivering against our targets Ability to address any challenges Effective production ramp- 2023
in due time and at minimum to ensure success for the up and upgrade, leverage of
cost business groundbreaking technologies and Implementation of
development of our people the comprehensive
environmental programme
aiming at 75% reduction of
RESPONSIBILITY PROFESSIONALISM COLLABORATION
SO2 emissions in the Norilsk Chita Project
Industrial District
Desire to honour our Ability to ensure Commitment and ability of
commitments and take on a sustainably strong our employees to achieve
responsibility for our decisions performance goals and objectives through
teamwork
Commissioned
Gradual ramp-up to design
capacity by 2020
Projects under the framework programme
Promising projects under assessment

See also the Business Ethics Code at www.nornickel.com/Investors/Internal Documents and Policies.
1
NORNICKEL’S STRATEGIC
PRIORITIES
• 20% LTIFR reduction each year • 15–20% growth in metals

output in the long term
• Zero work-related fatalities (2025+)
• Implementation of the • Mining projects at the
comprehensive environmental existing deposits of the
programme aiming at a 75% Talnakh Ore Cluster,
reduction in SO2 emissions in the development of the
Norilsk Industrial District Southern Cluster, and
construction of Talnakh
Concentrator–3
FOCUS ON SAFETY AND LONG-TERM PRODUCTION GROWTH

ENVIRONMENT BASED ON THE EXISTING ASSETS
EFFICIENCY ANALYSIS OF NEW

IMPROVEMENT GROWTH OPPORTUNITIES
• 5–8% growth in metals • Evaluation of potentially

output in the short term the world’s largest
greenfield PGM cluster,
• Strict cost control to keep
a unique blue-sky
cost growth below
partnership project (Arctic
the inflation rate
Palladium)
• Up to 15% increase in
labour productivity
(2020 vs 2017)
The mid-term strategic priority for the Company is 2018 non-financial performance CURRENT COSTS AND CAPITAL EXPENDITURES FOR THE MOST RELEVANT UN SDGS
an efficiency improvement programme covering
AS A SHARE OF 2018 CONSOLIDATED REVENUE
highlights:
its entire production chain. Key focus areas of the
programme are upgrade and reconfiguration of
production facilities, introduction of new standards • dramatic improvements in industrial
and processes, innovative management approaches, safety and health: in 2018, the lost
and comprehensive digitisation and automation time injury frequency rate (LTIFR)
of production processes. The programme aims at Breakdown of current costs Number of UN SDG-focused
decreased from 0.44 to 0.23, down and capital expenditures by projects
improving efficiency, increasing labour productivity, most relevant SDG, %
boosting industrial safety and transforming corporate by 48% y-o-y, reaching the Company’s
culture. In 2018–2021, Nornickel plans to invest about record low and remaining below
RUB 5.3 bn in digital technology alone. the average across the metals and 0.7
8.5 0.5 8
mining peers. Over 2013–2018, LTIFR 4.8 10.3
MMC Norilsk Nickel will continue increasing its share in 6.7 2.2
new market segments and industries that are likely to dropped by 65%; 7
generate demand for its products in the future. One of 4
• production launch and phased 3
such fast growing industries is production of materials
for electric vehicles and batteries. capacity ramp-up at Bystrinsky GOK, 2
6
a cutting-edge high-tech facility 3
103–2
When working towards its strategic development compliant with high environmental, 66.3 7
priorities, the Company factors in non-financial risks and technological and social standards;
principles of human rights and environment protection:
• launch of the Sulphur Project at
• unconditional respect for human rights; Polar Division’s Copper Plant,
• comprehensive measures to support indigenous
the Company’s most ambitious
peoples of the North; green initiative aimed at dramatic
improvements in the regional
• lower impact on the climate; 0.2
environment. 0.1
14.2
• alternative energy development (where applicable). 2.2
0.5
1.4
1.0
Sustainable development goals non-financial reports for 2016 and 2017, the 1.8
Goal 3
Company disclosed key sustainability targets and
Goal 4
In 2015, the United Nations adopted the 2030 Agenda performance against relevant UN SDGs.
for Sustainable Development, setting 17 Sustainable Goal 6
Development Goals (SDG) for the global community As the next step of integrating the UN SDGs, 78.6 Goal 7
and 169 associated targets as enablers of the SDG the Company grouped its major projects and Goal 8
achievement. Since the SDGs cannot be achieved by programmes by SDG. For this purpose, 12 SDGs
Goal 9
the efforts of only governments or public organisations, were selected on the basis of a survey conducted Current costs and capital 19.1% share of UN SDG-related
expenditures for the most relevant Goal 10
the UN encourages businesses to focus on the SDGs in among stakeholders. The SDG-based grouping UN SDGs as a share of 2018 costs in 2018 revenue.
their operations. “Business is a vital partner in achieving helped determine actual and budgeted costs per consolidated revenue, % Goals 11 and 12
the Sustainable Development Goals. Companies can project/programme and assess the Company’s actual Revenue
contribute through their core activities, and we ask non-financial performance. The results achieved will
companies everywhere to assess their impact, set be used in 2019 to analyse and prioritise SDGs and
ambitious goals and communicate transparently about concentrate efforts on priority SDGs. National and
the results” (Ban Ki-moon, United Nations Secretary- international contexts of achieving such SDGs will
General). also be analysed to assess their impact on business-
related risks and opportunities.
103–2
Nornickel fully supports the 2030 Agenda for The chart below presents current costs and capital
Sustainable Development and the UN SDGs, expenditures for the most relevant SDG-related
consistently integrating them into the Company’s projects as a share of the Company’s consolidated
strategy and everyday operations. In its public revenue for 2018.
Nornickel’s contribution towards the

achievement of the UN SDGs 103–2
UN SDG SDG target SDG integration Key initiatives and projects Achievements of 2018 Plans for 2019
in Nornickel’s implemented by Nornickel
Strategic corporate
priority governance
framework
3.4 By 2030, reduce by one third

premature mortality from non-
Occupational Health
and Safety Policy
1. Implementation of health
improvement and wellness
5. Air protection projects (activities)
required by the Environmental Action 24,631 employees 24,485 employees
communicable diseases through programmes for employees and their Plan (EAP, section I) other than the and their family members covered by and their family members to be
prevention and treatment and Environmental Impact families1 Sulphur Project2 the health improvement and wellness covered by health improvement
promote mental health and well- Assessment Policy programmes and wellness programmes
being 2. Voluntary health insurance for 6. Water conservation projects
Occupational Health
3.6 By 2020, halve the number and Safety Policy
employees and their families1 (activities) required by the
Environmental Action Plan (EAP, 18,854 employees 50,510 employees
of global deaths and injuries from 3. Comprehensive environmental section II)2 of the Group companies and their of the Group companies and their
road traffic accidents programme for the Norilsk Industrial family members covered by voluntary family members to be covered by
District (the Sulphur Project) 7. Waste management projects health insurance plans voluntary health insurance plans
3.9 By 2030, substantially reduce integrated into the Roadmap to (activities) required by the
the number of deaths and illnesses Reduce Air Pollutant Emissions in Environmental Action Plan (EAP,
from hazardous chemicals and Norilsk (approved by Deputy Prime section III)2
air, water and soil pollution and Minister of the Russian Federation on
contamination 28 December 2018) and the Fresh Air
national project2
4. Implementation of current
occupational safety measures
(providing employees with individual
and collective protective equipment,
special food and milk, maintenance
of health centres, first-aid posts,
medical units, mandatory checkups,
health and safety training and skills
improvement, etc.)1
4.4 By 2030, substantially increase

the number of youth and adults
Strategy 1. Training and development of Norilsk
Nickel Group’s employees3
3. The World of New Opportunities
charity programme: grants for 87,462 employees 312 students
who have relevant skills, including Equal Opportunities educational institutions and projects3 covered by training, including to be covered by Norilsk
technical and vocational skills, Programme 2. Corporate scholarships for university vocational training, retraining, and Nickel’s corporate scholarship
for employment, decent jobs and students and internships with Norilsk skills improvement programmes
entrepreneurship Nickel Group's companies3
311 students
covered by Norilsk Nickel’s corporate
scholarship programmes
25 projects
supported under the World of New
Opportunities programme
¹ Part of the Public Health domain (Russia’s National Projects).

² Part of the Environment domain (Russia’s National Projects).
Part of the Education domain (Russia’s National Projects).
3
Strategic corporate
priority governance
framework
6.3 By 2030, improve water quality Environmental Policy 1. Implementation of investment 2. Water conservation projects
by reducing pollution, eliminating projects aimed to improve (activities) required by the
dumping and minimising release water management (water cycle Environmental Action Plan (EAP,
of hazardous chemicals and optimisation, wastewater treatment section II)1
materials, halving the proportion etc.) and water supply1
of untreated wastewater and
substantially increasing recycling
and safe reuse globally
7.1 By 2030, ensure universal Strategy 1. Rollout of the Automatic System for 3. Delivery of investment projects ASCAPC design documents and cost ASCAPC rollout at Copper Plant,
access to affordable, reliable and Commercial Accounting of Power aimed to develop power and heat estimates for the PD units developed Nadezhda Metallurgical Plant,
modern energy services Consumption (ASCAPC) across Polar generation, power grids and heat and approved Komsomolsky and Skalisty mines
Mission and values Division (PD)1 networks2 and Common Storage Facilities
7.3 By 2030, double the global
rate of improvement in energy
Renewable Energy
2. Implementation of energy efficiency 3,098 TJ
efficiency
Sources Policy
and energy saving projects (initiatives)
required by the Energy Saving and
fuel and energy savings resulting
from energy consumption
13 MW
increase in installed generation
Energy Efficiency Programme and/ reduction and energy efficiency and transformer capacities
or the Programme for Improving improvement initiatives
Performance and Reducing Per Unit
Costs1
10 MW
increase in installed generation
and transformer capacities
8.2 Achieve higher levels of

economic productivity through
Human Rights Policy 1. Ensuring decent compensation for
labour3
5. Implementation of health and
safety activities required by the RUB 111,600 28 social facilities
diversification, technological Working Conditions Comprehensive Plan for Labour average monthly salary to be commissioned after
upgrading and innovation, Policy 2. Securing employees’ involvement in Conditions Improvement, Labour renovation
including through a focus on high- Occupational Health
social partnerships3 Protection, Health and Recreation 81%
value added and labour-intensive and Safety Policy 3. Programmes to improve the social Activities, and Occupational Safety employees covered by collective
sectors and living conditions for employees agreements
Freedom of 6. Ensuring employees’ involvement
of Norilsk Nickel Group
8.4 Improve progressively,
through 2030, global resource
Association Policy
4. Implementation of current
in improvement of the health and
safety system3 25 social facilities
efficiency in consumption and Policy Regarding commissioned after renovation
occupational safety measures 7. Delivery of the Operating Unit’s
production and endeavour to Support for Small (providing employees with individual
decouple economic growth from and Medium investment projects (concentration
and collective protective equipment, and downstream)
environmental degradation, in Enterprises special food and milk, maintenance
accordance with the 10-Year Environmental Policy of health centres, first-aid posts,
Framework of Programmes on medical units, mandatory checkups,
Sustainable Consumption and Environmental health and safety training and skills
Production, with developed Impact Assessment improvement, etc.)
countries taking the lead Policy
¹ Part of the Environment domain (Russia’s National Projects).

2
Part of the Housing & Urban Environment domain (Russia’s National Projects).
Part of the Labour Productivity and Employment Support domain (Russia’s National Projects).
3
Strategic corporate
priority governance
framework
8.5 By 2030, achieve full and

productive employment and
decent work for all women and
men, including for young people
and persons with disabilities, and
equal pay for work of equal value
8.8 Protect labour rights and
promote safe and secure working
environments for all workers,
including migrants, in particular
women, and those in precarious
employment
9.1 Develop quality, reliable,

sustainable and resilient
Strategy 1. Upgrading and retooling Talnakh
Concentrator to increase its total
4. Research and development (R&D)
and feasibility studies aimed to 1,081 m Norilsk Airport’s infrastructure to
be upgraded
infrastructure, including regional Mission and values ore capacity to 18 mtpa update Norilsk Nickel Group’s of Norilsk Airport’s runway
and trans-border infrastructure, to Development Strategy, expand renovated
Local Community
support economic development Relations Policy
2. Projects aiming to develop local
communities’ infrastructure
production and protect the 13 MW
and human well-being, with a environment2 On 21 September 2018, Norilsk increase in installed generation
focus on affordable and equitable Policy Regarding (including transport accessibility Airport received a certificate of and transformer capacities
access for all Support for Small and improvement): 5. Investments in the development compliance from the Federal Air
Medium Enterprises of transportation and logistics
9.4 By 2030, upgrade • projects implemented under public-
private partnerships (PPP)¹
assets
Transport Agency
38
infrastructure and retrofit industries On 29 October 2018, the airport R&D and feasibility studies to be
to make them sustainable, with 6. Construction and reliability received a certificate of compliance completed
• projects implemented under improvement of the fibre optic
increased resource-use efficiency agreements with local with the Federal Aviation
and greater adoption of clean communication line (FOCL) Requirements from the Federal Air
administrations¹ in Norilsk1
and environmentally sound Transport Agency
technologies and industrial 3. Delivery of investment projects
processes, with all countries taking aimed to develop power and heat
action in accordance with their generation, electrical grids and heat 10 MW
respective capabilities networks increase in installed generation and
transformer capacities
9.5 Enhance scientific research,
upgrade the technological
capabilities of industrial sectors 69
in all countries, in particular R&D and feasibility studies
developing countries, including completed
encouraging innovation and
substantially increasing the 318 hours/year
number of research and FOCL downtime
development workers per 1 million
people and public and private
research and development
spending by 2030
Part of the Housing & Urban Environment domain (Russia’s National Projects).
1
Part of the Environment, Science, and Digital Economy domains (Russia’s National Projects).
2
Strategic corporate
priority governance
framework
10.7 Facilitate orderly, safe, regular

and responsible migration and
Equal Opportunities
Programme
1. Implementation of the complementary
corporate pension plan for former
3. Implementation of the Cooperation
Agreement between the Russian 545 former Complementary corporate
pensions to be paid to
mobility of people, including employees moving from the Norilsk Ministry of Regional Development, employees 667 former
were paid complementary corporate
through the implementation
of planned and well-managed
Industrial District Krasnoyarsk Territory, Norilsk
Municipality and MMC Norilsk Nickel pensions employees
2. Relocation assistance to new
migration policies
employees1
to relocate people living in
Norilsk and Dudinka (Krasnoyarsk 533 apartments 450 apartments
Territory) to Russian regions with acquired to relocate people to be purchased to relocate
better climate and socioeconomic to regions with better climate people to regions with better
conditions and socioeconomic conditions climate and socioeconomic
conditions
4. Implementation of the Our Home
and My Home social programmes 316 people
(purchase of apartments covered by the new employee
for employees in various Russian relocation assistance programme
regions)
11.6 By 2030, reduce the adverse Environmental Policy 1. Comprehensive environmental 3. Waste management projects
per capita environmental impact programme for the Norilsk Industrial (activities) required by the
of cities, including by paying District (the Sulphur Project) Environmental Action Plan (EAP,
special attention to air quality integrated into the Roadmap to section III)2
and municipal and other waste Reduce Air Pollutant Emissions in 4. Other environmental protection
management Norilsk (approved by Deputy Prime activities required by the
Minister of the Russian Federation Environmental Action Plan
on 28 December 2018) and the Fresh (EAP, section IV)2
Air national project2
2. Air protection projects (activities)
required by the Environmental Action
Plan (EAP, section I) other than the
Sulphur Project2
12.2 By 2030, achieve the Information Policy 1. Comprehensive environmental 3. Waste management projects
sustainable management and Regulation programme for the Norilsk Industrial (activities) required by the
efficient use of natural resources District (the Sulphur Project) Environmental Action Plan (EAP,
Biodiversity integrated into the Roadmap to section III)2
12.4 By 2020, achieve the Conservation Policy Reduce Air Pollutant Emissions in
environmentally sound 4. Other environmental protection
Environmental Policy Norilsk (approved by Deputy Prime activities required by the
management of chemicals and Minister of the Russian Federation on
all wastes throughout their Environmental Action Plan (EAP,
28 December 2018) and the Fresh section IV)2
life cycle, in accordance with Air national project2
agreed international frameworks,
and significantly reduce their 2. Air protection projects (activities)
release to air, water and soil in required by the Environmental Action
order to minimise their adverse Plan (EAP, section I) other than the
impacts on human health and the Sulphur Project2
environment
12.5 By 2030, substantially
reduce waste generation through
prevention, reduction, recycling
and reuse
Part of the Labour Productivity and Employment Support domain (Russia’s National Projects).
1
2
Part of the Environment domain (Russia’s National Projects).
Strategic corporate
priority governance
framework
12.6 Encourage companies,

especially large and transnational
ones, to adopt sustainable
practices and integrate
sustainability information into their
reporting cycle
15.1 By 2020, ensure the Environmental Policy 1. Cooperation with nature reserves
conservation, restoration and (support for research and educational
sustainable use of terrestrial and Environmental Impact projects at the Pasvik, Lapland,
inland freshwater ecosystems Assessment Policy and Relict Oaks nature reserves,
and their services, in particular Biodiversity Joint Directorate of Taimyr Nature
forests, wetlands, mountains and Conservation Policy Reserves, etc.)1
drylands, in line with obligations
under international agreements
15.5 Take urgent and significant
action to reduce the degradation
of natural habitats, halt the
loss of biodiversity and protect
and prevent the extinction of
threatened species by 2020
16.5 Substantially reduce

corruption and bribery in all their
Anti-Corruption Policy 1. Implementation of anti-corruption
measures in operating Russian
2. Raising awareness of its anti-
corruption practices among of Norilsk 100% of operating 100% of operating
forms subsidiaries of the Group Nickel Group’s employees business units business units
are implementing will be implementing anti-
anti-corruption activities corruption activities
100% employees 100% employees

of Norilsk Nickel Group’s employees of Norilsk Nickel Group’s
are made aware of its anti-corruption employees will be aware of
practices its anti-corruption practices
17.16 Enhance the Global

Partnership for Sustainable
Environmental Policy 1. Cooperation with federal legislative
and executive authorities, civil
3. Reporting on the Company’s
contribution towards the achievement 21 Reporting on the progress
resulting from accession to the
Development, complemented by Environmental Impact society institutions, and the of the UN SDGs in line with the working bodies (committees, expert UNGC
multi-stakeholder partnerships that Assessment Policy business community UNCTAD guidance and working groups, etc.) established
mobilise and share knowledge, by civil society organisations and
expertise, technology and 2. Support for volunteering: activities 4. UN Global Compact (UNGC) public authorities where Norilsk
financial resources, to support the implemented under agreements membership and related reporting Nickel Group is represented
achievement of the Sustainable with local administrations
5. Support for corporate volunteering
Development Goals in all 3,700 volunteers
countries, in particular developing supported by Norilsk Nickel Group
countries Reporting on the progress resulting
from accession to the UNGC
Part of the Environment domain (Russia’s National Projects).

1
05
MANAGEMENT
LEADERSHIP IN INNOVATION
Nornickel is on Forbes’ Top 100 Most Innovative Companies list. The Company
is committed to digitisation of every production stage. Most of the Company’s
processes will be digitised and automated by 2020.
44 Sustainability management
• 44
Corporate governance
• Operational sustainability management
47
• 50 Remuneration
• Employee performance management system
51
• 52 Risk management framework
• Corporate security
53
• Information technologies
54
54 Economic efficiency
57 Stakeholder engagement
• 57 Stakeholders and interaction mechanisms

• 60 Dialogue with shareholders and investors
• 60 Dialogue with employees
• 62 Dialogue with authorities and non-profit
organisations
• 64 Environmental dialogue
• 65 Dialogue in public non-financial reporting
65 Supply chain management
• 66 Supply
• 68 Product quality and supply reliability
• 71 Dialogue with business partners
72 Innovations
73 Transparency
Management
STATEMENT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS’ AUDIT
AND SUSTAINABLE DEVELOPMENT COMMITTEE 102–20 102–21
Sustainability management
Corporate governance At Nornickel, sustainability is at the core of our business.

Our commitment to this cause means that we pursue
102–26 • sound, bona fide and efficient management of the our business goals in a socially responsible manner,
Nornickel’s corporate governance Company’s day-to-day operations by executive making sure our footprint leaves a positive impact on the
framework is designed to take bodies accountable to the Board of Directors and community.
into account and balance the the General Meeting of Shareholders;
interests of shareholders, the
Nornickel’s sustainability goals are advanced through
• compliance with the Russian laws and the
Board of Directors, managers a range of initiatives and programmes designed to
national laws of the countries of operation;
and employees, as well as other enhance corporate governance practices, further
stakeholders. • corporate social responsibility; upgrade production, mitigate environmental impact and
• strong business ethics; drive social development. In our efforts, we focus on
The Company’s approach to
• zero tolerance to corruption and effective anti- projects that will benefit the well-being of communities
corporate governance, its
key principles and the by- corruption measures; across our operations.
laws serving as a basis for an • full, transparent, reliable and timely disclosure; The Company’s sustainability agenda is steered by the
effective governance framework
• robust internal controls, internal and external Board of Directors and the Audit and Sustainable Development Committee (the Committee).
draw on the applicable Russian
laws, including the Corporate audits; The Committee is responsible for overseeing environment, social and governance (ESG)
Governance Code recommended • active collaboration with investors, creditors,
matters, risk management and internal control systems, and annual reporting. It also
by the Bank of Russia. and other stakeholders in order to increase reviews the Group’s quarterly risk reports, along with those of the Corporate Trust Service
Company’s assets and market capitalisation. on human rights and other violations reported by the employees.
102–25
Nornickel’s governance 102–27 102–28 Nornickel has a set of internal regulations in place that address such areas as human rights,
framework relies on the following These principles are reflected in Nornickel’s official environment protection, industrial safety, stakeholder and local community engagement,
principles: documents, including the Charter, Regulations and corruption prevention. Our activities are aligned with the best global practices and
• equitable and fair treatment of on the Board of Directors, Information Policy standards, including ISO 14001, ISO 9001, ISO 26000 and OHSAS 18001.
every shareholder; Regulations, Anti-Corruption Policy, and other
by-laws. All these documents are available on We regularly inform our stakeholders and the general public about all aspects of our
• support for the shareholders the Company’s website.1 operations. We have been reporting on our sustainability performance since 2004, with
to let them exercise their rights
both recent and historical data available on our website.
and lawful interests in the most Pursuant to MMC Norilsk Nickel’s Charter,
reasonable and convenient its governing bodies are: Nornickel’s Long-Term Development Strategy until 2023 drives our ambition to grow further
manner; as an advanced, efficient and environmentally responsible company. With these goals
• the General Meeting of Shareholders, the
• professionalism and leadership Company’s supreme governing body; being the key deliverables for the Company and the Committee going forward, we will
of the Board of Directors, and
• the Board of Directors, a collegial governing also ensure a continued focus on transparency of our business, keeping our stakeholders
involvement of independent duly informed of all sustainability-related aspects of our operations. At the same time, we
body in charge of strategic management of the
directors in governance;
Company and oversight of its executive bodies’ will keep reinforcing our sustainability governance by embedding more efficient practices
• strategic management by activities; and tools.
the Board of Directors, its • the Management Board and the President that
efficient control over executive represent the collegial and sole executive bodies
bodies, and oversight of the Roger Munnings
of the Company, respectively, and manage its Chairman of the Board of Directors’ Audit
risk management and internal daily operations.
control framework; and Sustainable Development Committee
https://www.nornickel.com/investors/disclosure/corporate-documents/.
1
GOVERNANCE STRUCTURE 102–18 102–20

The Board of Directors has four committees: Audit of Directors met on a quarterly basis to review the
and Sustainable Development Committee, Strategy Company’s financial results, strategy implementation
Committee, Budget Committee, and the Corporate progress, the management’s HSE reports, and
Governance, Nomination and Remuneration Committee. operational performance reports. In 2018, the Board
of Directors of MMC Norilsk Nickel considered
election election
102–19 102–29 102–31 102–33 102–34 175 matters, including 79 transaction approvals,
In overseeing the Company’s management, financial 70 corporate governance matters, 11 economic and
AUDIT GENERAL MEETING INDEPENDENT and business affairs, the Board of Directors may instruct financial matters, 2 social and environmental matters,
COMMISSION OF SHAREHOLDERS AUDITOR the executives on individual matters and monitor and 13 other matters.
implementation of resolutions and tasks. Authorised
executives are vested with powers and responsibilities The President and the Management Board are the
election
reporting reporting to address economic, environmental and social issues Company’s executive bodies. In the reporting period,
and may delegate their powers to other employees the position of the Company’s President was held
based on their competences and functions. by Vladimir Potanin who concurrently chaired the
Company’s Management Board. As at end of 2018,
The Board of Directors meets as and when required, Vladimir Potanin held the position of the President
INTERNAL
but at least once every six weeks. In 2018, the Board (CEO before 2015) for 6 years and 13 days.
CONTROL AND RISK
election MANAGEMENT UNIT
MANAGEMENT
election
BOARD reporting
Committees Directors Chairman Share of directors
reporting
of the Board of Directors
Independent Non- Independent Non-
executive executive
election
Audit and Sustainable
PRESIDENT,
reporting Development 5 + + 60% 40%
CHAIRMAN OF THE Committee
reporting MANAGEMENT BOARD Budget Committee 5 + 60% 40%
Strategy Committee 5 + 60% 40%
reporting
Corporate Governance,
Nomination
5 + + 60% 40%
and Remuneration
Committee
election election
BOARD OF DIRECTORS
Operational sustainability All executive efforts are coordinated by the

CORPORATE GOVERNANCE, management Management Board, the President and the following
NOMINATION AND REMUNERATION executive committees: the Budget Committee under
COMMITTEE The governing and executive bodies of the Management Board; the Charity Committee,
MMC Norilsk Nickel and its subsidiaries are Health, Safety and Environment Committee,
STRATEGY
in charge of implementing the Company’s Investment Committee, and the Nomination and
COMMITTEE
sustainability goals and objectives within the Remuneration Committee.
BUDGET scope of their functions and in accordance with
COMMITTEE the legislation and internal regulations.1 Nornickel’s management systems are aligned with
best international practices and standards. For many
AUDIT AND SUSTAINABLE The Company has created an extensive regulatory years, the Company has been successfully running
DEVELOPMENT COMMITTEE
framework of over 20 internal documents to help the Corporate Integrated Quality and Environmental
integrate sustainability aspects into the Company’s Management System (CIMS). In 2017, Nornickel
management practices and day-to-day operations kicked off an efficiency improvement programme
reporting
reporting
reporting
of its functional units. seeking, among other things, to introduce

innovative management approaches.
CORPORATE INTERNAL AUDIT

SECRETARY DEPARTMENT
Please see the corporate website at https://www.nornickel.com/investors/disclosure/corporate-documents/.

1
OPERATIONAL MANAGEMENT 102–18 102–20
SENIOR EXECUTIVES UNITS SUSTAINABILITY BY-LAWS
SAFETY
• Operating Unit • Health and Safety Strategy

MANAGEMENT FIRST VICE • Strategy and Business • Occupational Health and Safety Policy
BOARD PRESIDENTS Development Unit • Social and Working Conditions Standard for employees of MMC Norilsk
Nickel and the entirety of its Russian operations forming the Norilsk Nickel Group
• Investor Relations • Corporate health and safety standards
Department
• Corporate Governance,
Asset Management and
Legal Affairs Unit
• Unit of Economics and
Finance ENVIRONMENT
• HR, Social Policy and Public

PRESIDENT, Relations Unit • Environmental Policy
CHAIRMAN OF THE SENIOR VICE • Biodiversity Conservation Policy
MANAGEMENT PRESIDENTS • Government Relations Unit • Environmental Impact Assessment Policy
BOARD • Non-industrial Assets and • Renewable Energy Sources Policy
Energy Unit
• Corporate Security Unit
• Internal Control and Risk
Management Unit
SOCIETY
• Executive Office
• Sales, Procurement and
Innovation Unit • Business Ethics Code
• Human Rights Policy
• State Secret Protection,
• Freedom of Association Policy
Mobilisation and Special
VICE PRESIDENTS • Indigenous Rights Policy
Communications Department
• Local Community Relations Policy
• Equal Opportunities Programme
• Working Conditions Policy
• Anti-Corruption Policy
• Quality Assurance Policy
• Information Policy Regulation
• Charity Regulation
Internal Audit Department • Policy Regarding Support for Small and Medium Enterprises
Company Compliance of the External audits Certification Certification area According to the Company’s Charter, decisions indicators of the Company/divisions/subsidiaries
management system in 2018 body on remuneration and reimbursement payable and link an employee’s performance to their
with international to the Company’s President and members of pay level.
standards
the Management Board are reserved to the
PJSC MMC ISO 9001:2015, Surveillance audit Bureau Veritas Production, project Board of Directors. The total remuneration of The reporting year saw the Company continue
Norilsk Nickel ISO 14001:2015 Certification management, storage, the President1 and members of the Management implementing the performance assessment
(BVC) delivery, including by sea, and
sales (nickel, copper, cobalt,
Board2 consists of the base salary and bonuses subsystem of the automated enterprise
precious materials, sulphur, (a variable part). Bonuses are linked to the management system. By the year-end, the system
selenium, tellurium) Company’s performance, including both financial ran at 19 Nornickel’s divisions and subsidiaries.
Kola MMC ISO 9001:2015, Surveillance audit Bureau Veritas Mining and processing of ore, (EBITDA, free cash flow) and non-financial In 2019, the Company expects to roll it out across
ISO 14001:2015, Certification production of nickel, copper, indicators (workplace injury rates, labour its energy assets and transport divisions.
OHSAS 18001:2007 (BVC) cobalt, their compounds,
precious metal concentrates, productivity).
sulphuric acid Competency management
Gipronickel ISO 9001:2015 Recertification audit Societe R&D, design, engineering Employee performance management
Institute Generale de surveys, engineering and system In 2018, the corporate competencies model was
Surveillance environmental activities, used to assess candidates at the recruitment stage,
(SGS) project management in
mining, concentration and Performance management evaluate employee performance and potential, and
smelting, and relevant 103–3 404–3 add them to talent pool. The outcome of evaluating
inspection methods; the managerial and leadership potential served as
development of standards for
non-ferrous metal industry The Company put in place the performance a key criterion for selecting managers with strong
products and their inspection management system five years ago, with career growth prospects.
methods; development of assessment relying on a variety of key
reference standards for the
composition of non-ferrous performance indicators (KPIs), including 103–3
metal industry products occupational safety, operating efficiency and In 2018, the Company continued to train the
Norilsk Nickel ISO 9001:2015, Recertification audit DQS GmbH Manufacturing of nickel and capital management. In 2018, the KPI-based Head Office’s executives and high-potential
Harjavalta ISO 14001:2015, (DQS&UL) cobalt products assessment covered 9,800 employees. managers from its facilities based on their
OHSAS 18001:2007 individual development plans, with 50 of the latter
The system helps streamline evaluation criteria, completing the operating efficiency training at
Murmansk ISO 27001:2013 Certification audit British Standards Freight transport by sea
Transport Division Institution (BSI) enables the management and employees to align Moscow’s Skolkovo School of Management. WEB
of MMC Norilsk the current year’s priorities with performance
Nickel
Remuneration
Remuneration of members of the supreme

governing body
• additional remuneration of USD 50,000 for COMPETENCY ASSESSMENT IN 2018
membership in a committee of the Board of
Directors; Competencies Participants Outcome
102–35 102–36 102–37
Principles and mechanics of remunerations due to • additional remuneration of USD 150,000 for Assessment of potential, current Managers from a number of the Group’s 455 managers listed as those with a
executives are set out in the Charter, Regulations on chairing a committee of the Board of Directors; performance and development key organisations high career growth potential
prospects of middle and top
the Management Board, and other by-laws of the
• reimbursement of expenses incurred by managers
Company.1 The system of remunerations applicable
directors in discharge of their duties. A 360-degree competency review 270 unit heads of the Head Office Development activities, tools
in the Company is continuously and directly
using an updated model and methods selected for the
monitored by the Board of Directors. participants
The Annual General Meeting of Shareholders
The Board of Directors’ annual remuneration is for 2018 established remuneration for the Assessment of professional 722 managers Areas for personal and professional
competencies for line managers development identified
set out in the Remuneration Policy for Members of Chairman of the Board of Directors, an employed at mining operations
the Board of Directors1 approved by the General independent director, in the amount of
Meeting of Shareholders. The annual remuneration USD 1,000,000 per year, paid on a quarterly basis
for non-executive directors includes: in equal instalments in roubles at the exchange
• base remuneration of USD 120,000 for the Board rate of the Bank of Russia on the last business day
membership; of the reporting quarter.2
Total annual remuneration of the highest-paid officer (President) is not disclosed due to the confidential nature of information.
1
https://www.nornickel.com/investors/disclosure/corporate-documents/.
1 3
For the remuneration amount, please see the 2018 Annual Report.
2
This amount is after taxes withheld in accordance with the applicable Russian laws.
In 2019, the Company will proceed with the Its approach to risk management is outlined in its Nornickel was one of the first metals companies • The Company helped stage the Regional Transport
diagnostics and management of professional Corporate Risk Management Policy, Corporate in Russia to start using the business continuity Security Forum attended by the representatives of the
skill development across its facilities, building Risk Management Framework Regulations, Risk management system and develop relevant plans. The Krasnoyarsk Territory Government and Krasnoyarsk
a professional competency model for a number Management Regulations, and other by-laws. Group companies drafted more than 20 continuity Transport Prosecutor's Office.
of functional and production divisions, defining The Company holds training sessions on risk plans for catastrophic production risks to describe
• In 2018, the Company held four drills and 123 training
knowledge and skills requirements for each management for its employees and managers at interaction procedures for business units, measures
exercises together with the Federal Security Service,
position, and developing a set of test questions various levels. to support or resume production, rehabilitate or
EMERCOM and the Russian Ministry of Defence.
to assess professional competencies of employees. reconstruct the affected assets in case of adverse
102–30 events with an extremely low probability. • The Company implemented a comprehensive
Risk management framework Nornickel continuously manages its risks security framework at the all-weather Bobrovy Log
in all business areas and at all governance When it comes to risk management development in Fun Park (Krasnoyarsk), the main venue of the Winter
102–30 102–15 levels. Strategic risks are the responsibility 2019, the Company plans to expand the continuity Universiade 2019.
The Company continuously manages risks that of the Company’s Board of Directors and management scope to cover non-production risks, • Ongoing is the project to set up a system of analytical
affect its strategic and operational goals. These senior executives who are also in charge of such as IT, security and staffing risks, and improve risk situation centres to be further integrated with regional
efforts include identification and assessment of key operational risks, while other significant management components in strategic and operational Secure City systems.
external and internal risks in terms of their impact on operational risks are managed by heads of planning, as well as in other areas. WEB
key financial and non-financial metrics, along with business units and subunits. The corporate risk The reporting year’s milestones include the creation
the development and implementation of response management framework (CRMF) implementation Corporate security of the National Association of International Information
and minimisation measures. and improvement initiatives are spearheaded Security actively backed by Nornickel.
by the Company’s Vice President and Head of Nornickel is a global metals and mining leader and a
The Company’s risk management framework relies Internal Controls and Risk Management and its strategically important company in most regions where In April 2018, Nornickel presented its in-house developed
on the principles and requirements of Russian Risk Management Service. The latter submits it operates. This makes corporate security a priority area Information Security Charter for Critical Industrial
and international laws and professional standards, its quarterly reports to the Board of Directors’ for the Company that seeks to ensure safe and smooth Facilities at the information security forum in Germany
including the Corporate Governance Code Audit and Sustainable Development Committee operation of its facilities. and the OSCE’s cyber security conference in Rome. The
recommended by the Bank of Russia, ISO 31000 for review. document was approved by 13 countries.
(Risk Management) and COSO ERM (Enterprise Risk Development and implementation of group-wide security
Management – Integrated Framework). measures fall under the remit of the Corporate Security Going forward, Nornickel plans to set up and finance
Unit, acting in line with the Russian laws, applicable research grants in international information security.
international regulations, internal standards and
guidelines. The reporting year saw the Company adopt a number of
key regulations on the information security of Nornickel's
KEY RISKS OF NORNICKEL 102–15 The corporate security system is structured and assets and operations:
managed based on a number of targeted programmes • Freedom of Association Policy;
to maintain economic, corporate, information, facility
and transportation security along with transparency in • Regulation on the Personal Data Protection
STRATEGIC RISKS
procurement and contractor selection. The Company Commission;
pays special attention to supporting socially significant • Regulation on the Commission for Critical Information
• Price risk • FX risk
investment and environmental projects. Infrastructure Categorisation. WEB
• Market risk • Investment risk
• Risk of toughened environmental requirements
205–3
A landmark achievement in 2018 was no confirmed

incidents of corruption, which was attained through a
comprehensive approach to corporate security and a
OPERATIONAL RISKS
zero tolerance policy towards corruption.
• Workplace injury risk • Social risk Nornickel is actively engaged in public-private

• Information security risk • Risks related to changes in legislation and law partnerships to maintain high security levels and
• Technical and production risk enforcement practices
enhance social stability at its facilities in the regions of
• Compliance risk • Climate risks operation.
• Risk of power blackouts at production and - risk of insufficient water resources
social facilities in the Norilsk Industrial District • Also, the Company is enhancing cooperation with law
- soil thawing risk
(NID) enforcement and supervisory authorities. Nornickel
representatives participate in public and advisory
boards of the Ministry of Internal Affairs, Investigative
Committee, Transport Prosecutor's Office and the
Federal Security Service, and in interagency working
groups.
Information technologies Nornickel won the 16th National The Company honoured its commitments, providing As at the year-end, the Company had credit ratings from
IT Leader Award 2018 in the Non-Ferrous timely and full payments to the budgets of all levels. the three leading international rating agencies and the
Nornickel leverages information technologies (IT) to Metallurgy category for introducing Tax and non-tax payments1 to budgets of various levels Russian RAEX:
continuously improve its production and business totalled RUB 115.6 bn, increasing by RUB 15.3 bn y-o-y. • Fitch Ratings: BBB–/Stable;
personnel and machinery positioning and
processes. While constructing new capacities and
expanding the existing ones, the Company introduces radiocommunications systems at Zapolyarny The Company's stable financial position is confirmed by • Standard & Poor's: BBB–/Stable;
advanced automatic systems to boost process efficiency, Mine. investment grade ratings from Moody’s, and S&P Global • Moody's: Baa3/Positive;
safety and manageability, optimise costs and increase and Fitch.
productivity. Overall, the reporting year saw the The automation system installed at the mine • Expert RA: ruААА/Stable.
Company implement over 40 IT projects, including: scans individual tags of employees and self- In January 2018, Moody's upgraded Nornickel's credit
• the Technology Breakthrough operating excellence propelled machinery and allows for wireless rating to Ваа3 (investment grade) and raised its outlook In February 2019, Moody's upgraded Nornickel's credit
initiative; communication with each employee via their from stable to positive following an increase in Russia's rating to Ваа2, outlook stable, following an increase in
personal phones. It also features an anti- country ceilings for foreign currency debt to the same Russia's country ceilings for foreign currency debt to the
• Mining Control projects to allow for the online control Baa3 level and a change in the outlook on Russia’s same Baa2 level and an upgrade in Russia’s sovereign
of mining operations; collision technology informing the driver
rating from stable to positive. credit rating to Baa3 (investment grade), outlook stable.
of getting close to the deployed staff or
• the Economics and Finance Unit’s strategic IT
initiatives. equipment. Also, Nornickel received the highest creditworthiness
rating according to the Russian national scale (ruAAA,
In 2018, the Company launched the SAP operations control The staff or equipment location data is outlook stable) from the RAEX (Expert RA) rating
centre to support the systems running at the Company's continuously transmitted to the control room agency.
facilities. WEB ensuring real-time coordination of actions in
case of emergencies.
The Company's cutting-edge IT platform facilitates
the introduction of advanced technologies and opens
up new digitalisation opportunities. Nornickel runs FINANCIAL HIGHLIGHTS
pilot projects to implement potentially effective digital character recognition, big data and internet of things. In
tools and solutions. 2018 saw the launch of Nornickel 2019, the lab will expand its scope of work to add new
Digital Lab, a platform that helped test more than projects to the pipeline and pilot launch the designed Indicator 2014 2015 2016 2017 2018
10 technologies, including simulation modelling, optical solutions.
Revenue, RUB bn 456.0 506.1 548.6 536.8 728.9
Gross profit, RUB bn 238.0 277.0 270.8 268.6 406.3

Economic efficiency of investment projects, this helped reduce our CAPEX
EBITDA, RUB bn 218.2 247.3 257.3 236.4 389.2
by 22% to USD 1.6 bn. In 2019, the Company will make
103–2 investment decisions on a number of promising growth EBITDA margin, % 48 50 47 44 53
Economic efficiency is essential projects. We also expect to see further positive effects
for the Company to meet its from our programme to increase labour productivity. Net profit, RUB bn 93.4 104.0 167.4 127.4 187.8
strategic goals and deliver on its We estimate our CAPEX for 2019 at USD 2.2–2.3 bn.
Dividends paid,2 RUB bn 159.9 154.2 86.7 176.2 218.9
commitments to shareholders,
employees, local communities and Thanks to higher output and metal prices, the Assets, RUB bn 739.8 974.5 998.3 958.3 1,059.5
other stakeholders. Company's consolidated revenue went up by 28% to
USD 11.7 bn, while EBITDA rose by 56% to USD 6.2 bn Total CAPEX,3 RUB bn 49.9 103.3 113.6 116.7 99.2
In 2018, the Company embarked on driven by stronger revenues, the launch of Bystrinsky
the second stage of its ambitious GOK and a decrease in operating costs as a result of
environmental programme, our ongoing efforts to improve operating efficiency.
launching initiatives to upgrade EBITDA margin stood at 53%, which is one of the best
infrastructure, accelerate results among global diversified metals and mining
digitalisation, etc. A year before, we companies.
had completed the construction of
Bystrinsky GOK and reconfigured
production capacities. Coupled
with shifting deadlines for a number
Includes all taxes paid, net of VAT and dividend income tax, as well as insurance payments and customs duties.
1
2
Dividends paid during the periods, excluding payouts on quasi-treasury stock.
³ Includes costs paid in Russia for new construction projects, expansion, retrofit or upgrade of existing facilities, acquisition of
machinery and equipment, R&D and other expenses, as well as housing and amenity construction.
DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED1 201-1

Stakeholder engagement government authorities, local communities, Russian and
international non-profit organisations. The Company
Indicator, RUB bn 2014 2015 2016 2017 2018 Stakeholders and interaction identifies stakeholders based on the extent to which
mechanisms they interact, share interests and communicate with
1. Direct economic value generated 470.8 521.2 554.9 541.0 734.6 Nornickel.
102-42 102-43 102-40 102-21
2. Economic value distributed, including: 464.9 554.2 512.7 519.0 684.6
MMC Norilsk Nickel bases its Stakeholder engagement principles and procedures are
Operating expenses 162.0 175.7 194.6 194.1 228.5 interaction with stakeholders set out in MMC Norilsk Nickel's Business Ethics Code.3
Community investments and charity2 2.7 7.0 7.4 17.7 12.9
around making an ongoing
dialogue with various groups a The Transparency Policy of MMC Norilsk Nickel aims
Payroll and other employee remuneration part of the Company's day-to- to provide stakeholders with complete and accurate
87.4 104.5 114.2 120.4 128.8
and benefits, including payroll taxes
day operations, all in accordance information about the Company's activities and ensure
Payments to providers of capital (interest, with the AA1000AP,1 AA1000SES2 proper feedback.
165.2 222.0 133.4 128.6 243.1
dividends) and GRI standards. Nornickel's
Gross tax payments, excluding payroll taxes 47.6 45.0 63.1 58.3 71.3 key stakeholders are employees,
shareholders, investors, business
3. Economic value retained (1–2) 5.9 – 32.9 42.2 22.0 50.0 partners, national and local
307-1 419-1 103-2 When calculating dividends, MMC Norilsk Nickel STAKEHOLDER MAP⁴
In 2018, budgets of various levels saw the Group accounts for the cyclical nature of the metals market and
companies pay RUB 39.6 mln in fines under 334 imposed for the need to maintain a high level of creditworthiness.
Company
sanctions, including 29 for environmental impact, 22 for As a result, the amount of dividends may change employees
breach of labour laws, and 283 imposed on other depending on the Company’s operating profit and Russian and international sports
organisations 3.0 Shareholders and investors
grounds. WEB leverage.
Non-profit organisation 2.5 Investment banks (brokers)
2.0
Dividend policy Analytical and rating agencies
DIVIDENDS PAID, RUB BN Industry unions
1.5
MMC Norilsk Nickel’s Dividend Policy aims to balance
the interests of the Company and its shareholders, 218.9 Business associations 1.0 Suppliers and contractors
2018
enhance the Company's investment case and market 0.5
capitalisation, and ensure respect of shareholder 176.2 Local communities and civil society 0.0
rights. 2017 organisations across the Company's Customers
geographies
86.7
The Company put in place the Regulations on the 2016 State-run educational institutions
Dividend Policy approved by its Board of Directors to Russian Federation Council
in the Company's regions of operation
ensure transparency on how dividends are calculated 154.2
and paid out. 2015
Territorial offices of federal government
Russian State Duma
agencies
159.9
2014
Local authorities Russian Government
Regional government authorities Federal ministries, agencies

and services
Russian Trilateral
Effect of the stakeholder
Commission on the on Nornickel Group
Regulation of Social and
Labour Relations
Effect of Nornickel
Group’s operations on the
stakeholder
AA1000 AccountAbility Principles Standard.

1
Calculated on an accrual basis under the IFRS. The Company used an in-house calculation methodology developed in line
1
2
AA1000 AccountAbility Stakeholder Engagement Standard.
with the GRI Standards. 3
Please see the corporate website at https://www.nornickel.com/investors/disclosure/corporate-documents/.
² Excluding CAPEX. 4
The map was put together based on surveying 78 of the Company's managers and employees, as well as external stakeholders.
Stakeholders Key interests of Interaction mechanisms Key interaction events Stakeholders Key interests of Interaction mechanisms Key interaction events
stakeholders in 2018 stakeholders in 2018
Personnel Federal authorities
• Company employees • Social benefits and • Joint commissions, • Signing a new Collective • Russian Federation • Regulatory improvement • Working and expert groups, • Signing an agreement
guarantees committees and working Agreement with the Council in different areas commissions and committees with the Federal Agency
• Favourable working groups Company’s employees for • Russian State Duma • Environmental impact • Public events for Ethnic Affairs (FAEA)
conditions • Discussions with trade unions 2018–2021 regulation on cooperation aimed at
• Russian Government • Permits and licenses
and labour councils • The Leadership and providing support to the
• Decent salaries • Federal ministries, • Support for domestic • Intergovernmental
Management of Team indigenous peoples of the
• The Company's stability • Offices for operating, social agencies and services producers commissions
Motivation corporate North
as an employer and labour matters • Stability in taxes
workshop • Russian Trilateral • Creation of the National
• Opinion polls Commission on the • Social stability support
• Participating in the Youth Association of International
• Corporate media, booklets, Regulation of Social across the Company's Information Security with
Economic Summit during
information screens and and Labour Relations geographies Nornickel's backing
the Krasnoyarsk Economic
boards • Strengthening
Forum
• Corporate intranet portals enterprises’ economic
security
Shareholders and investors
Regional government authorities and local communities
• Shareholders and • Capitalisation growth • Meetings (including one-on- • Strategy Day on
investors • Dividend payments one meetings) and conference 19 November 2018 in • Regional government • Stability in taxes • Working and expert groups, • Government support for the
• Investment banks calls London authorities • Environmental protection commissions, committees and Kola MMC upgrade
• Transparency of
(brokers) • Phone calls • Conference calls and a • Local authorities councils • Signing of the agreement
information and timely • Social stability support
• Analytical and rating disclosure of key facts • Emails road show following the • Territorial offices of across the Company's • Cooperation agreements to support SMEs between
agencies disclosure of IFRS financial federal government geographies • Development plans for MMC Norilsk Nickel and the
• The Company's
statements agencies the Company's regions of Government of the Trans-
sustainable development • Support for domestic
• An analytical review of the operation Baikal Territory
• State-run educational producers
nickel and PGM markets institutions in the • Corporate and partnership • The agreements to support
prepared in alliance with Company's regions of programmes and projects the volunteer movement
ICBC Standard Bank operation were signed in 2018 with
• Forums, conferences, fairs,
the administrations of
Business partners • Local communities and round table discussions
Norilsk, Monchegorsk, and
and civil society • Joint inspections, drills and Chita
• Suppliers and • Streamlining of • Meetings, conferences, • Staging a conference for organisations in the training exercise
contractors procurement procedures exhibitions, hosting Norilsk Nickel Group’s Company's regions of • Launch of the Social Portrait
negotiations suppliers and contractors operation of a City Resident analytical
• Accessibility of
survey in the Krasnoyarsk
procurement procedures • Automation of procurement • Building a single database
Territory and Murmansk
using SAP of contractors from all
Region
• Procurement announcements regions of the Company’s
operation Russian and international non-profit organisations
• Corporate Trust Service
• Joint workshops • Business associations • Information exchange • Joint projects • Development of the
• Industry unions • Removal of • Events (meetings, round table Information Security
• The Company’s • Product quality • Organising meetings • Participation in the
administrative barriers discussions, conferences and Charter for Critical Industrial
customers • Packaging and labelling throughout the year SFCHINA 2018 industry • Non-profit organisation
competitions) Facilities
• Annual customer surveys exhibition • Russian and • Support for domestic
• Delivery terms • Participation in the
• Production audits at international sports producers • Membership in governing
• Information support of • Working with customers on development of the draft
Kola MMC’s sites to organisations • Stability in taxes bodies and committees
transactions matters of product quality UN resolution for combating
confirm compliance with • Environmental protection • Opinions, proposals, requests
• Processing customer illegal production and
• Sustainable growth of sustainability policies as per
complaints and grievances and industrial ecology trafficking of precious
sales markets customer requests
• Improvement of safety metals
• Meetings, conferences, fairs,
exhibitions and reliability of precious • Extension of the term
metals supply chains in office as chair of the
• Working with customers
International Nickel Institute
in connection with the
for Nornickel's Head of
consumption and market
Marketing
growth prospects analysis
Dialogue with shareholders and investors In 2018, the Investor Relations Department kept In regulating labour relations, employee interests are In order to develop interregional social partnership,
diversifying the shareholder base and attracting new represented by social and labour councils and trade Interregional Cross-Industry Association of
102-5 102-10 shareholders, organising over 350 meetings with union organisations. The Company has collective Employers “Union of Entities of the Copper and
The authorised capital of MMC Norilsk Nickel is made institutional investors and an Investor Day in London decision-making bodies representing the employer, Nickel and Supporting Industries” involving six of the
up of 158,245,476 ordinary shares with an aggregate followed by a road show in Europe and the USA. employees and trade unions, including collective Group’s Russian companies was established in 2018.
market value of USD 29.7 bn as at 31 December 2018. bargaining commissions, labour dispute commissions, In November 2018, the Association of Employers and
The Company's ordinary shares are traded mostly on Responsible investment social benefits commissions/committees, social the Trade Union of MMC Norilsk Nickel Employees
the Moscow Exchange, while ADRs are traded in the insurance commissions, health and safety commissions/ interregional public organisation initiated collective
electronic trading system of OTC markets of the London In recent years, the sustainable development agenda committees, social and labour relations committees, etc. negotiations to develop and sign an interregional
Stock Exchange. has been gaining ground, with an increasing number of cross-industry agreement for the key players of the
investors and asset managers focusing on responsible Trade Union of MMC Norilsk Nickel Employees, an copper and nickel and supporting industries for 2019–
The reporting year saw minor changes in the investment. In 2018, the Company held around interregional public organisation that includes territorial 2022. The signing is slated to take place in 2019.
shareholding structure. Olderfrey Holdings Ltd, the 20 target meetings with investors whose investments trade unions and trade unions of the Group companies,
Company's major shareholder, increased its holding were primarily driven by environmental, social and represents the Group's employee interests on an Employee engagement survey
by 4.2% to 34.6% as at the year-end. The shares of the governance (ESG) factors. In order to improve relations interregional level. The trade unions of transport and
other major shareholders – UC Rusal Plс and Crispian with responsible investors and agencies that evaluate logistics divisions are members of the Yenisey Basin In 2018, for a second consecutive year, Norilsk
Investments Ltd – remained unchanged at 27.8% and companies using ESG criteria, the Company created Trade Union of Water Transport Workers (Krasnoyarsk, Nickel Group organised a series of activities to
4.2%, respectively. The shares and ADRs in free float a separate section on the corporate website with all Russia). manage employee engagement. The core initiative
accounted for 33.4%, owned by institutional and private pertinent information: https://www.nornickel.com/ is a survey called “Let Everyone Be Heard. What Do
investors from Europe, Asia, the USA, Russia and investors/esg/. All the Group’s major facilities located in the Norilsk You Think?” that includes questionnaires and focus
elsewhere. Industrial District and Murmansk Region have put in groups, covering around 75,000 employees and
place social and labour councils that represent the 32 businesses of Nornickel. Its results are subject
employees who are not trade union members. Chairs to review, action planning and implementation at all
of the local councils make up the Social and Labour governance levels, from facilities to the Group as a
ESG ASSESSMENT: THE LARGEST RATINGS AND INITIATIVES Council of MMC Norilsk Nickel and the Social and whole.
Labour Council of Kola MMC.
Based on the completed survey, the Company
102-41 compiled a series of initiatives to increase employee
The Group companies have signed 21 collective engagement and motivate staff to boost their
bargaining agreements covering 81% of Nornickel's performance. These initiatives are grouped as follows:
average headcount. As at the end of 2018, 10.8% of top management, the employer's brand value, success
Nornickel's total headcount were members of trade factors, performance management, and career
unions, while 78% joined social and labour councils. opportunities.
The absence of strikes and lockouts involving the

Company's employees highlights the effectiveness of
interactions and Nornickel's social policy, in general.
INITIATIVES TO INCREASE EMPLOYEE ENGAGEMENT
Top management The employer's brand Success factors Performance Career

value management opportunities
Our key ESG achievements in 2018: Dialogue with employees
Initiatives to increase engagement
• in December 2018, the Company’s score in
Social partnership framework Corporate dialogues Positive Life Experience Nornickel’s Leaders 360-degree review New compre-
Sustainalytics' ESG rating went up to 69 against 58 project programme hensive training
103-2 103-3 Communication training Training sessions for
in 2017; sessions Corporate volunteer IamHR programme managers on providing system for
Nornickel’s companies run a social partnership employees in the
Direct line with the Com- programme New collective bargain- feedback
• in December 2018, ISS affirmed Nornickel's framework aimed at reconciling interests of employees talent pool
pany’s vice presidents Guidebook for New Em- ing agreement Keeping employees
Environmental and Corporate Governance ratings and employers on matters pertaining to the regulation ployees aware of the Com- Training course
Interactions on personal Interregional cross- for mentors
at 4, and Social – at 3 (1 and 10 standing for low and of social and labour relations. The Company performs matters Onboarding programme industry agreement pany’s priorities
high risk, respectively); its obligations in compliance with the Labour Code Engagement workshops National conferences Social and working con-
of the Russian Federation, collective bargaining at unit forums ditions at the facilities
• in June 2018, the FTSE index score was confirmed at
agreements, and joint resolutions. It has in place the
3.1 out of 5.
Freedom of Association Policy approved by the Board
of Directors.
Offices for operating, social and labour relations supporting socially important projects. Representatives Partners Goals of the agreement
of the Company take part in parliamentary sessions and
In addition to the Corporate Trust Service, the round table discussions organised by the Federation Federal Agency for Ethnic Affairs Interaction and cooperation aimed at preserving the traditions and lifestyle of the indigenous
Company launched offices for operating, social and Council and State Duma of the Federal Assembly of peoples of the North, Siberia and Far East of Russia living in the regions of the Company’s
operations
labour relations back in 2003. They are primarily the Russian Federation, Government of the Russian
tasked with response to employee queries, control Federation, Russian Union of Industrialists and Rosatom State Atomiс Energy Interaction and cooperation to implement strategic projects in the Russian region of the Arctic
of their processing, and prompt resolving of conflicts. Entrepreneurs, Chamber of Commerce and Industry Corporation
The offices regularly monitor the staff’s social status, of the Russian Federation, Association of Managers Government of the Trans-Baikal Support for small and medium-sized enterprises, development of partnerships with industrial
enabling us to solve reported issues in a timely manner. interregional public organisation, etc. Territory organisations
In 2018, the Group's units in the Norilsk Industrial
Chita Administration Cooperation as part of the Year of Volunteer
District ran 24 offices that received over 52,000 queries Nornickel is an active participant of conferences,
and requests mostly from employees (78%), former forums and business events involving policymakers and Krasnoyarsk Administration Interaction and cooperation on projects to improve Krasnoyarsk city landmarks;
employees (21%) and local communities (1%). government officials, and drafts hands-on proposals to cooperation as part of the Year of Volunteer
optimise and develop the legal framework.
Norilsk Administration Cooperation as part of the Year of Volunteer
Starting 2017, the Company’s top management attends Monchegorsk Administration Cooperation as part of the Year of Volunteer
QUERIES BY TOPIC IN 2018, %
regional authorities’ public meetings to report on
0.5 the results and plans of Nornickel. In January 2018,
the Company presented its results and plans on
implementing investment projects to the Economic Relocation programme Committee, Transport Prosecutor's Office and the
26.0 1.0 Social and Council headed by the Murmansk Region's Governor. Federal Security Service, and in interagency working
working issues
Since 2011, the Company has been contributing to groups.
Legal issues Over the past year, the Company backed large a long-term targeted federal programme to relocate
Production international and domestic conferences and forums: people living in Norilsk and Dudinka to other Russian In 2018, the Company systematically collaborated with:
72.5 issues
regions with favourable climate conditions.
• International Forum “The Arctic: Territory of Dialogue” • the Federal Security Service of the Russian
Personal
(Arkhangelsk, official partner); Federation on anti-terrorism and anti-sabotage
issues
The programme envisages relocation, in the span security of the Company's critical infrastructures (fuel
• Krasnoyarsk Economic Forum (Krasnoyarsk, general of 10 years, of over 11,000 families. The Company and energy utilities, transport infrastructure, etc.);
partner); participates in the programme as a benefactor, with
its donation totalling RUB 8.3 bn. Since the launch of • the Ministry of Internal Affairs of the Russian
• Nevsky International Ecological Congress
the programme, the Company has contributed a total Federation to prevent stealing of products and
(St Petersburg, partner);
of RUB 6,991 bn to the Krasnoyarsk Territory budget, materials containing precious and non-ferrous
Dialogue with authorities and non-profit • St Petersburg International Economic Forum including RUB 0.830 bn in 2018. metals, maintain security at public events and take
organisations (St Petersburg, partner); addiction prevention measures;
• Eastern Economic Forum (Vladivostok, business During 2011–2018, 7,107 families purchased apartments • the Federal Customs Service of Russia to prevent
103-2
programme partner); on the “mainland” and moved there, including cross-border smuggling of metal-bearing materials;
Norilsk Nickel Group's guiding principles in 5,847 families from Norilsk and 1,260 families from
• ECOTECH International Exhibition and Forum • the Ministry of the Russian Federation for
cooperating with government bodies, local authorities Dudinka.1
(Moscow, official partner); Civil Defence, Emergencies and Elimination of
and non-profit organisations are strict compliance with
Russian laws, regional and municipal regulations and Public-private cooperation on corporate security Consequences of Natural Disasters (EMERCOM) to
• Murmansk International Business Week (Murmansk,
the social responsibility principle, collaboration, and drill emergency response plans and disaster relief
partner).
mutual respect of interests. As part of its responsibilities, the Company’s Corporate operations;
Cooperation agreements Security Unit actively liaises with government • the Federal Security Service and the Ministry of
Following the information transparency principle, agencies. One of the key forms of interaction is the Defence of the Russian Federation to organise
Nornickel maintains an open dialogue with the In 2018, Nornickel signed a number of agreements with Unit’s participation in industry conferences, forums, multi-service tactical training sessions on the Taimyr
authorities to build constructive and effective regional and local authorities as well as major Russian and business meetings with direct involvement of the Peninsula;
cooperation. The Company is represented in companies. The agreements covered a wide range of legislative and executive authorities.
• the Ministry of Foreign Affairs of the Russian
21 committees, commissions, expert and working social and economic issues, including infrastructure
Federation to foster international information
groups established by government bodies in projects. Also, the Company is enhancing cooperation with law
security.
association with the business community, thus enforcement and supervisory authorities. Nornickel
representatives participate in public and advisory
boards of the Ministry of Internal Affairs, Investigative
¹ As of January 2019.
Environmental dialogue • the Environmental Aspects of Industrial Development Dialogue in public non-financial NUMBER OF DIALOGUE PARTICIPANTS, PPL¹
international conference devoted to law enforcement reporting 102-43 102-46
10 20 30 40 50 60 70 80 90 100
Measures for reducing MMC Norilsk Nickel’s in regard to approved informational and technical
2018
environmental footprint are constantly on the agenda reference books on the best available technologies; Each year starting from 2003, the Company has
of the Company and its stakeholders. In the course been engaging in dialogues with stakeholders while
• the Environmental Legislation: Problems and
of the year, both internal and public events feature drafting sustainability reports. Since 2014, these 2017
Implementation Practices workshop.
environmental discussions. dialogues have been staged as part of the We Are
Over the years, Nornickel has successfully used the City! social technologies forum. 2016
In 2018, the following items were on the agenda of volunteer movements to promote dialogue on
various forums and platforms: environmental protection with its employees and The dialogues held during the preparation of the
local communities. Russia declared 2018 the Year of 2018 Sustainability Report included discussion points 2015
• sustainable development of regions;
Volunteer, and the Company launched its third Let’s related to identifying the goals and targets within the
• preservation of ecosystems across the footprint of Do It environmental marathon. It spanned Norilsk, UN’s 2030 Sustainable Development agenda that 2014
production sites; Monchegorsk, the Pechengsky District, and Moscow, were most relevant for the Company’s operations
• improvement of environmental laws and regulations; as well as the Trans-Baikal Territory that hosted the and non-financial reporting. External stakeholders Internal stakeholders
marathon for the first time.
• promotion of best practices in environmental These dialogues took place in Norilsk and
protection; Monchegorsk and were attended by Nornickel DIALOGUE PARTICIPANTS BY TERRITORY, %
• the Company’s environmental programmes and employees, local authorities and members of the
initiatives;
Nornickel’s awards and achievements: general public. The forum helped identify the UN
• Certificate of Honour from the Federation 55
Sustainable Development Goals and targets most
• industrial ecology problems.
Council for the Company’s environmental relevant for the Company and the regions where it Murmansk
achievements; operates. Region
At Nornickel’s milestone event for the year — Norilsk Industrial
Investor Day 2018 in London on 19 November — the • first place in the Business Leaders: District
Company presented its long-term development Environmental Expenses category of a
programme, which sets out environmental protection as RAEX rating agency ranking;
one of the strategic priorities. 45
• top 10 position in an ESG ranking by RAEX.
Ecology was also at the top of the agenda at multiple
international and domestic forums backed by Nornickel
and attended by government representatives, captains
of industry, investors, experts, and analysts: In June 2018, Nornickel held an environmental Supply chain management KEY ELEMENTS OF NORNICKEL'S SUPPLY
• Environment Protection and Sustainable campaign to mark the World Environment Day as a CHAIN
Development in the North VII environmental forum; way to reduce the plants’ environmental footprint. 102-9
The smelting capacities of Nadezhda Metallurgical Supply chain is a set of interrelated

• VIII International Forum Arctic: Today and the Future; Plant were suspended for 60 minutes, and Kola MMC resources and processes leveraged
• Arctic Days in Moscow federal forum. idled its smelting and conversion department of the by Nornickel to create value all the SUPPLY • PROCUREMENT
Metallurgical Shop at the Monchegorsk site for the way from obtaining goods, materials
• PLANNING
same amount of time. In the town of Nickel, one-hour and services to delivering end
MMC Norilsk Nickel maintains active dialogue with shut downs were arranged on three ore-thermal products to the consumers. Supply
various levels of the government and the professional furnaces and two converters of Kola MMC’s smelting chain management at Nornickel PRODUCTION
LOGISTICS
community on matters of application and improvement shop. seeks to ensure continuous
of the regulatory framework governing environmental operation of the Group companies,
PRODUCT
protection. In 2018, the most significant venues for this In late 2018, Nornickel’s two main production sites high product quality and reliability of
QUALITY
dialogue were: Polar Division and Kola MMC joined the Zero Negative shipments to customers. MANAGEMENT
• parliamentary sessions of the State Duma Committee Environmental Impact campaign, with Kola MMC idling
on Ecology and Environmental Protection devoted the operation of the smelting and conversion section The Company continuously
to Improvement of the Government Policy on Air and three ore-thermal furnaces on 29 November. improves the efficiency of its supply SALES
Protection; Polar Division joined the environmental campaign on chain by adopting best practices
1 December. Nadezhda Metallurgical Plant's smelting and standards and through business
• meetings of the joint working group made up of shop idled its second processing line for three days, process automation.
the Federal Service for the Oversight of Consumer and the operation of slag cleaning furnace No. 3 was CUSTOMER
Protection and Welfare (Rospotrebnadzor) and the suspended for seven days.
Russian Union of Industrialists and Entrepreneurs
(RSPP) representatives to discuss draft regulations
on establishing and changing sanitary protection ¹ External stakeholders are representatives of regional and local authorities, communities, and non-profit organisations, while internal stakeholders refer
zones; to managers of various levels from the Head Office, Polar Division, and Kola MMC.
Supply In 2018, based on an independent survey Nornickel strives to create an environment of shared Our procurement team together with experts from other
by the RAEX rating agency and the culture, visions and values in its relationships with departments are looking into alternative technologies
Given the diverse businesses and geography of Association of Procurement Directors, the suppliers. An ESG clause is incorporated into the (alternative fuel and energy sources) that can reduce
operations of Norilsk Nickel Group, the supply standard agreement with suppliers and contractors. The the Company's environmental footprint and cut costs.
Head of MMC Norilsk Nickel's Procurement
management function is designed to fully cater to the Company adheres to a number of codes of conduct The results of this can already be used in procurement.
Company's resource needs in a timely and efficient
Department was included in the list of the applied by its business partners and devised by foreign The current tender procedure, in particular, includes a
manner securing seamless operation of all production most prominent heads of procurement manufacturers. There is also ongoing work to develop criterion of the supplier’s readiness to participate in the
units and negotiating the best available procurement according to the professional community. Nornickel's Charter for Suppliers that is expected to be Company’s alternative energy initiatives. WEB
terms. signed by the Company's suppliers and contractors.
does not only give suppliers an opportunity to

The importance of supply management at Nornickel is
ensure seamless operation of their enterprises, but
dictated by the impact it has on: CONTROL OF NON-FINANCIAL FACTORS IN SUPPLIER RELATIONS 103-2
also provides incentives for further growth.
• achievement of the Company's strategic goals. The
supply function plays a crucial role in the programme PROCUREMENT INITIATION
to enhance efficiency and cut costs; Nornickel pays close attention to developing relations
with manufacturers of equipment and materials, as
• occupational health and safety. The quality of • Scope of supply/work: legal and regulatory requirements of the Company, mandatory
they ensure the Company’s ability to meet its strategic and recommended specifications of products and services, covering health, safety and environment,
sourced products and timely supplies have a material targets. Nornickel is committed to working with more etc.
impact on occupational health and are directly linked local suppliers. To this end, it developed a centralised • Procurement documents: provisions for no signs of bankruptcy, overdue taxes and charges, and no
to the workplace safety; pilot testing procedure enabling it to phase out criminal records in the biographies of top managers
• 103-2 imported equipment with that manufactured locally. • Procurement policies for certain product categories may specify quality assurance procedures for
environment. An environmental impact is exerted As at the end of 2018, Nornickel had 57 ongoing and supplies
throughout the life cycle of sourced products 15 completed pilot tests. The Company established
(production, transportation, storage, use and cross-functional commissions to determine promising
PROCUREMENT PROCEDURE
disposal) and is directly linked to demand planning, directions for scheduled pilot tests aimed at achieving
inventory management and logistics; import substitution.
• Qualification of suppliers: default risk assessment and compliance with the Company's initial
• financial performance of Nornickel across the requirements (scope of supply/work, specifications, etc.)
As at the end of 2018, the Company had 457 domestic • Corporate Security's checks into business reputation, reliability and solvency of potential
footprint. As Nornickel is the only or key customer for and 35 foreign suppliers. counterparties
many local businesses, partnership with the Group
• Analysis and evaluation of bids submitted, including track record of similar projects and qualifications
of key employees
CONTRACTING PROCEDURE
SUPPLY MANAGEMENT
• Inclusion of an anti-corruption clause in the contract
• Inclusion of product and service specifications in the scope of supply/work
REQUIREMENTS
PLANNING FEEDBACK
PROCUREMENT LOGISTICS
AND SUPPLY CHANNELS
MANAGEMENT CONTRACT PERFORMANCE BY SUPPLIERS
• Material and technical • Formalised procedures • Higher • See the Suppliers • Corporate Procedure for Organising and Conducting High-Hazard Operations: control over
procurement plan and policies efficiency in section on contractors’ compliance with health and safety requirements
• Inventory management • The Company's transportation www.nornickel.com • Control over compliance with the Company’s initial requirements (scope of supply/work,
model that rules out procurement process is • 2018: supplier specifications, etc.) and environmental regulations during work and upon acceptance
shortages certified for compliance conference
with ISO 9001 and
ISO 14001
• Procurement automation Key non-financial factors
• Equal competitive
Quality of products, works and services Occupational health and safety
opportunities Environmental protection Legal compliance
• Combating corruption and
other abuses
Product quality and supply reliability CORPORATE INTEGRATED MANAGEMENT SYSTEM (CIMS)
FACTORS ENSURING RELIABILITY AND CONTINUITY OF NORNICKEL'S PRODUCT SHIPMENTS • Continuous enhancement of operational excellence
• Competitive products and services
OBJECTIVES OF CIMS
• Guaranteed occupational safety, quality and reliability of supplies
• Alignment with consumer needs and expectations
Efficient self-developed product delivery Close coordination between marketing, production

planning and monitoring system and delivery units
• Quality Assurance Policy

• Environmental Policy
KEY REGULATIONS
• Occupational Health and Safety Policy
• Nornickel Group's internal standards
Feedback loop with customers that enables
Corporate cargo fleet prompt response to their proposals, inquiries,
and complaints
• GOST R
• ISO 9001:2015, ISO 14001:2015, OHSAS 18001:2007
KEY RUSSIAN AND
• Rules and regulations of the European Union, World Trade
INTERNATIONAL STANDARDS
Organisation, London Metal Exchange, and Shanghai Futures
ISO-certified management system
Highly qualified staff Exchange
in Norilsk Nickel Group
102-2
Norilsk Nickel Group has achieved utmost efficiency In 2018, Nornickel's management systems successfully Saleable products offered by MMC Norilsk Nickel’s Polar By 2020, around 300,000 electric vehicles
in its production operations to provide the volumes, passed a surveillance audit, while the systems of Division include copper cathodes, technical selenium
per year will be using batteries with
quality, and product range1 that meet the needs of Gipronickel Institute and Norilsk Nickel Harjavalta (powder), platinum group metal concentrates (powder),
society while also fully complying with all applicable were subjected to recertification audits. As part of the crude silver (powder), commercial lump sulphur, tellurium
components manufactured as part of the
laws and HSE requirements. second surveillance audit, Kola MMC migrated to the for thermoelectrical materials (bars) and copper- strategic partnership between Nornickel
new ISO 9001:2015 and ISO 14001:2015 standards. nickel converter matte (bars). M00k copper cathodes and BASF.
Environmental and quality-related goals and objectives A total of 104 employees (14 in the Head Office and 90 (GOST 859-2014 and GOST 546-2001) are certified in
are in line with the Company's strategic goals and in the Group companies) underwent training in quality the GOST R certification system for compliance with the
formulated in the management's resolutions based management. applicable product regulations and are registered on the
on annual Corporate Integrated Management London Metal Exchange under the NORILSK brand.
System performance reviews. To achieve the goals The Company has in place the Corporate Integrated Commercial products offered by Norilsk Nickel
and objectives, the Company develops plans and Quality and Environmental Management System (CIMS). Kola MMC’s commercial products (electrolytic Harjavalta Oy include nickel cathodes, nickel
programmes and then implements them, monitors the nickel, carbonyl nickel powder, carbonyl nickel briquettes, nickel powder, nickel salts, cobalt salts,
status of target parameters, and assesses performance. pellets, electrolytic copper, electrolytic cobalt, cobalt and ammonium sulphate. Nickel brands of NORILSK
concentrate, precious metal concentrates, and sulphuric NICKEL HARJAVALTA CATHODES and NORILSK NICKEL
acid) do not require mandatory certification and are HARJAVALTA BRIQUETTES are registered on the London
not certified against Russian regulatory standards. Metal Exchange.
Products are labelled in accordance with the GOST
and TU requirements. At the same time, Kola MMC’s In terms of sustainable development, the prospective
cathode nickel brands of SEVERONICKEL COMBINE application areas for Nornickel metals include lithium-ion
H-1Y and SEVERONICKEL COMBINE H-1 are registered batteries, electric engines for vehicles, autocatalysts,
on the London Metal Exchange and Shanghai Futures electronics industry, hydrogen fuel cells and healthcare.
Exchange. In the reporting year, nickel cathodes were
registered on the London Metal Exchange under the In 2018, the Company faced no fines for failure to comply
¹ The Company’s products, when used as intended, fall in the category of those that change their properties almost completely: nickel is used in NORNICKEL brand. with product supply rules and requirements. WEB
alloys; copper is mostly used in construction and manufacturing of electric and electronic devices; cobalt is used in electrical engineering and
chemical industries as well as alloy production; platinum and palladium as chemical compounds are mainly used in autocatalysts; selenium is used in
metallurgy, chemical, electrical engineering and glass industries; tellurium is used in solar batteries and photovoltaics and thermoelectrical materials;
nickel and cobalt salts are used in a variety of industries.
Sales policy Customer satisfaction has improved by 6% REVENUE FROM KEY METAL SALES IN 2018 BY REGION, %
compared to 2017.
102-4 102-6
In sales, the Company focuses on building long-term NICKEL COPPER

strategic relationships with key market players. The buyers of sulphuric acid are asked to complete relevant
Company’s customer base includes 434 companies, questionnaires once every three years. Compliance with 0.94
mostly industrial consumers. Nornickel sells its contractual obligations is audited and analysed on an Europe Europe
products on all key markets, with its footprint spanning ongoing basis. 8.33 Asia 7.09 Asia
34 countries as at the end of 2018. 11.50 North and South 13.18 North and South
The main criterion for customer satisfaction is America America
When it comes to nickel products, the sales strategy focuses maintaining or exceeding the target satisfaction level 36.30 Russian 78.79 Russian
on achieving a balance between supplies to stainless steel at 2.5 points (out of 3 points). Key customer satisfaction Federation and Federation and
manufacturers and to other industry stakeholders. surveys must cover at least 50% of the Company’s the CIS the CIS
total product sales. According to the 2018 survey, the
As the world’s largest producer of palladium, the customer satisfaction level stood at 2.73 points.
43.86
Company continues to implement the strategy of
entering into direct long-term contracts with end In 2018, the Company received 38 complaints and
consumers to ensure sustainable and strong demand for grievances about its product or service quality and
platinum group metals.1 achieved out of court settlement for 36 of them by
meeting the demands of consumers (18 complaints PALLADIUM PLATINUM
Customer satisfaction monitoring were deemed unfounded). As at 31 December 2018,
0.94 1.06
two grievances were being processed, with remedial
Consumers of the Company's key products are surveyed action plans developed to address all 18 well-grounded Europe Europe
to assess their satisfaction on an annual basis, while and 10 rejected grievances. WEB 30.62 Asia 6.18 Asia
North and South
7.04 North and South
America 85.72 America
Russian Russian
Federation and Federation and
the CIS the CIS
35.86 32.58
MARKETS AND PRODUCTION VOLUMES2
2018 2019
Market description Price evolution Company’s Market outlook

production volume
Dialogue with business partners
Dedicated to meeting the growing demand for
Nickel market growing deficit growth 218.8 kt neutral reducing deficit
Nornickel has always paid close attention to building battery materials used in electric vehicles, the
effective cooperation with business partners both in strategic partnership between BASF and Nornickel
the course of joint projects and at various economic became a landmark event for achieving SDGs
Palladium market deficit growth 2,729 koz positive deficit and industry forums. and supporting green economy. As part of the
long-term agreement, the Company will supply
The Company's expertise and solid track record nickel and cobalt feedstock for battery production
Platinum market surplus decline 653 koz cautiously positive surplus in creating powerhouse industrial businesses that in Europe.
leverage cutting-edge technologies have laid the
groundwork for successful implementation of projects Nornickel forms a key link in creating a global
Copper market slight deficit volatility 473.7 kt neutral continued slight with partners in both traditional and emerging mechanism to ensure reliability of precious metals
deficit
industries. supplies. In this area, the Company successfully
collaborates with the International Platinum Group
In 2018, Nornickel and Russian Platinum signed a Metals Association (IPA), where it chairs the Security
framework agreement on strategic partnership to set Committee, and with the United Nations Interregional
up a joint venture (JV) for developing disseminated ore Crime and Justice Research Institute (UNICRI).
deposits in the Norilsk Industrial District. The JV aims In particular, the Company’s cooperation with UNICRI
to establish one of the world's largest PGM producers and IPA yielded a draft UN resolution on combating
with the output of 70–100 t of PGMs per year. illegal production and trafficking of precious metals.
¹ For more details on the Company's sales policy, see the 2018 Annual Report.
For more details on the Company's key metal markets, see the 2018 Annual Report.
2
Developed by the Company’s Office for Chemical promotion of responsible consumption in the segment Transparency conference calls, and meetings with stakeholders.
Forensic Analysis, the procedure for identifying the of precious metals and metal-bearing products. In 2018, Nornickel takes care with its media relations, making
origin of precious metals in any product crossing the as part of the International Nickel Institute’s programme, Enhanced transparency and information availability sure to provide the Company’s position on events
border gained international recognition. In the future, Nornickel and other producers jointed efforts to are the key guiding principles of MMC Norilsk Nickel (including emergencies) that call for comments from
these unique identification methods can become systematically update the data on the nickel and nickel- in all of its pursuits. The Company has put in place the Company’s representatives, press conferences,
an international best practice (following appropriate containing products life cycles. the Information Policy Regulations and Procedure for briefings, or press releases.
validation by the European Network of Forensic Science the Interaction between MMC Norilsk Nickel’s Officers
Institutes). As a member of the International Information Security and Russian and International Mass Media (updated Over the past year, the number of media publications
Research Consortium, Nornickel can participate in in 2018), which govern its material disclosures to about Nornickel increased by over 27% compared to
In terms of both infrastructure and methodology, crafting of the global information security agenda. stakeholders and serve as a testament to Nornickel’s 2017. In total, Russian outlets mentioned the Company
Nornickel makes a significant contribution to the commitment to go beyond the mandatory disclosure 95,820 times. This rise in coverage was spread out
requirements of the Russian law and regularly inform across all of the Group's geographies, with the outlets
the public about its strategy and mission, policies, key focusing mainly on the social and production activities
events and performance, as well as make clear the of the Company, its environmental and sporting
Company’s position on certain topics. initiatives, as well as charitable projects and support for
local communities.
Innovations Gipronickel Institute comprises four divisions in In its application of the information policy, the
St Petersburg, Norilsk, Monchegorsk and Chita. In terms Company is guided by the principles of regularity, Media coverage peaked in February, April and
R&D plays a key role in of facilities and equipment, the Institute is on a par with timeliness, accessibility, reliability, completeness, September of 2018. Throughout the year, Russian
implementing Nornickel’s strategic the most technologically advanced international peers. balance, and impartiality, all the while taking outlets reported on the Company’s investing activities,
priorities such as reducing the In 2018, updated design documents drafted by the appropriate measures to ensure protection of its agreements with the Murmansk Region and Trans-
environmental impact, improving Institute for Bystrinsky GOK were approved by Russia’s information resources. The key annual disclosure Baikal Territory, support of Universiade-2019, and the
production efficiency and setting State Expert Review Board (Glavgosexpertiza). The draft events aimed at the target audiences are publication launch of the Sulphur Project, as well as social and
stage for the Company’s sustainable provides for the plant to be constructed in 49 steps. of the sustainability and annual reports and charitable programmes and initiatives of Nornickel.
development in medium and long presentation of Nornickel’s updated strategy and its
run. In its everyday activities, Gipronickel Institute implementation progress at Investor Day. An important focus area of 2018 was the continued
concentrates on the development of standard operating enhancement of the Company's social media presence
Today, Nornickel operates two procedures for key shop areas, such as ore mining, The key channels used to relay information to the in light of the step-up in coverage of Nornickel’s social
business units responsible for concentration, pyrometallurgy and hydrometallurgy. public, investment and expert communities are and charitable projects and especially the 2019 Winter
the production development and publications on the Company’s official website Universiade in Krasnoyarsk, where the Company acted
upgrade. These are Gipronickel Nornickel Digital Lab set up in 2018 has already www.nornickel.com, press conferences, briefings, as the general partner.
Institute, one of Russia's largest delivered a number of projects and created prototypes
research and engineering centres for digital systems. These include a copper electrolysis
for mining, metallurgy, concentration short circuit detection system, a digital twin of Copper
and processing of minerals, and Plant's main aisle to streamline in-shop logistics, and
Nornickel Digital Lab established others. Currently, there are about one hundred initiatives
in 2018 to focus on research in in the lab’s pipeline.
information technologies. The
Company also hires Russian and On 16 October 2018, Nornickel and Skolkovo Foundation
foreign R&D and engineering signed a partnership agreement providing for Nornickel
companies and Russian universities Digital Lab to be housed in the Skolkovo Innovation
to carry out its projects. Centre. The lab will track new technologies and business
models, collect, classify and analyse digital initiatives,
To improve the quality of decisions and prototype solutions based on digital technologies.
related to research and technology, According to the agreement, the Company will invest
the Company established an R&D RUB 350 mln in the laboratory over 2019–2021.
Panel back in 2013.

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2018 SUSTAINABILITY REPORT

NORNICKEL 2018 SUSTAINABILITY REPORT

Each year, the Company’s Report undergoes external

GRI Content Index

05 Scope of data collection

Statement of the President and

Environment Development of local communities

32.5 3,098 457,000 115.6 30.9 410

Labour The Company’s position in the industry2

48% 22% RUB 7,500 2,220 mt of ore Nornickel supplies its

2018 0.23 2018 10,563 2018 111.6

No. 1 No. 1 No. 4 No. 4 No. 8 No. 11

About Norilsk Nickel Group

Overview 102–1 102–2 Assets 102–4

See also the 2018 IFRS financial results, page 47 at https://www.nornickel.com/investors/disclosure/financials/.

Core companies and business units

PRODUCTION EXPLORATION TRANSPORT AND LOGISTICS SUPPORT FUNCTIONS

POLAR DIVISION NORILSKGEOLOGIYA POLAR TRANSPORT DIVISION PECHENGASTROY

KOLA MMC VOSTOKGEOLOGIYA ARKHANGELSK TRANSPORT DIVISION KOLABYT

GRK BYSTRINSKOE INTERGEOPROEKT MURMANSK TRANSPORT DIVISION NORILSK SUPPORT COMPLEX

MEDVEZHY RUCHEY KRASNOYARSK TRANSPORT DIVISION NORILSKNICKELREMONT

BYSTRINSKY TRANSPORT DIVISION POLAR CONSTRUCTION COMPANY

DISTRIBUTION AND SALES FOREIGN ASSETS MMC NORILSK NICKEL’S

NORMETIMPEX NORILSK NICKEL HARJAVALTA MMC NORILSK NICKEL’S

NORILSK NICKEL ASIA LTD.

NORILSK NICKEL USA, INC.

NORILSK NICKEL METALS

Taimyrgaz was reorganised and merged with Norilskgazprom on 1 March 2019.

PRODUCTION OF COPPER-NICKEL SULPHIDE CONCENTRATION PRODUCTION SALES

Deposit Mine Concentrator Concentrate, Smelting Refinement Refinement (of

• OKTYABRSKY MINE*** * Precious metals are

• COPPER metals under a tolling

• BYSTRINSKOYE • BYSTRINSKY • BYSTRINSKY • MAGNETITE, COPPER,

Key social and environmental projects

SOCIAL PORTRAIT ZERO NEGATIVE

Cooperation with nature reserves Tver Region

CURLING ARCTIC CUP

ROSA KHUTOR SKI RESORT

Krasnoyarsk AGREEMENT TO SUPPORT

ANNUAL RELEASE OF VALUABLE

SCIENCE FESTIVAL IN KRASNOYARSK

29TH INTERNATIONAL WINTER

Area Population Industry

2,366,800 2,876,360 • Non-ferrous metallurgy

Iron ore Coal Crude Gold

KEY AREAS OF COOPERATION WITH THE KRASNOYARSK TERRITORY

Economic Social Environmental

• Cooperation on major investment • Improvement of the existing sports • Implementation of cutting-edge

NORNICKEL’S PERFORMANCE IN THE KRASNOYARSK TERRITORY

55.9 54,286 104,241 2,480,681.7

Area Population Economy

144,900 757,600 • Mining industry

Iron ore Copper Nickel Cobalt

KEY AREAS OF COOPERATION WITH THE MURMANSK REGION

Economic Social Environmental

• Implementation of investment • Implementation of the World of • Cooperation on environmental

NORNICKEL’S PERFORMANCE IN THE MURMANSK REGION

10.6 12,579 82,443 377,799.5

Photo: Lapland State Nature Biosphere Reserve, Murmansk Region

Area Population Industry

Uranium Copper Tungsten Cobalt

KEY AREAS OF COOPERATION WITH THE TRANS-BAIKAL TERRITORY

Economic Social Environmental

See also the 2018 IFRS financial results, page 47 at https://www.nornickel.com/investors/disclosure/financials/.

Taimyrgaz was reorganised and merged with Norilskgazprom on 1 March 2019.

¹ Part of the Public Health domain (Russia’s National Projects).

¹ Part of the Environment domain (Russia’s National Projects).

Part of the Environment domain (Russia’s National Projects).

• 57 Stakeholders and interaction mechanisms

Please see the corporate website at https://www.nornickel.com/investors/disclosure/corporate-documents/.

AA1000 AccountAbility Principles Standard.