Norilsk Nickel has forecast a nickel output of at least 295,000 tonnes for 2012. Palladium output is also hoped to be above 2.6 million ounces. The Russian company is the largest producer of nickel and palladium in the world.
Norilsk Nickel hopes to produce between 235,000 to 240,000 tonnes of nickel in its Russian divisions and about 60,000 to 65,000 tonnes of nickel from its other international mining operations. The nickel production forecast for 2012 is 0.8% lower than its last year’s forecast.
The Russian metal mining giant has seen significant contribution to its production output from its mining operations in Australia, Finland, Botswana and South Africa. While the company, which takes its name from a small mining town in the Arctic Circle, does not publish its production costs, its Australian operations are said to be its most high cost ones.
The prices of nickel may feel the heat if the demand from the Chinese steel mills declines and the economy in Europe does not recover. Nearly 70% of nickel is used to produce stainless steel for the construction sector as of now.
In view of the risky economic environment Vladimir Strzalkovsky, the Chief Executive Officer of Norilsk Nickel has already hinted at slight production cuts this year. However analysts feel that high cost Chinese nickel pig iron smelters are more likely to bear the brunt of any cuts.