KOLA PENINSULA

Norilsk Nickel has brought ore production at Severny-Gluboky mine up to the rated capacity of 500 ktpm or 6 Mtpa. Located in the city of Zapolyarny (Murmansk Region), Severny-Gluboky mine is operated by Norilsk’s subsidiary OJSC Kola MMC. Total ore output at the mining operations of Kola MMC amounted to 7.9 Mt in 2009. Severny-Gluboky mine is the largest industrial project in the post-Soviet history of Murmansk Region. Its total cost was estimated at RUB 14.89 B, and planned 2010 investments amount to RUB 1.3 B.

The Polar and Kola Divisions in Russia produced 58 thousand metric tonnes of saleable nickel from July to September 2008 in line with production plans.

The State Reserves Committee Rosnedra approved this July the provisional exploration standards and reserves estimations of the Vuruchuaivench mineral deposit belonging to OJSC MMC Norilsk Nickel (hereinafter – MMC Norilsk Nickel or the Company). The deposit lies in the Murmansk Area not far from the city of Monchegorsk and close to Severonickel integrated works. The sulphide ore of this deposit contains such metals as platinum, copper and nickel. Platinum group elements in the Vuruchuaivench ore are associated with sulphide mineralization. At 1 g/t cutoff grade for PGE+Au, the reserves Ń1+Ń2 measured to the depth of 200 m are as follows: ore 17.5Mt, PGE+Au 70.38t, Ni 40Kt, Cu 51Kt. Ore body thickness is 4m, average metal contents for PGE+Au 4g/t, Ni 0.23%, Co 0.29%. Ore will be alternatively mined by open and underground methods and sent for primary processing to a modular concentrator with rated ore throughput of 520Ktpa. The existing ore reserves are sufficient for 19 years of the processing plant’s operation at this capacity. Current plans envisage that further concentrate treatment and production of final metals will take place at Severonickel and Pechenganickel operations of MMC Norilsk Nickel, in the Murmansk Area. In 2007/08, Norilsk Nickel was surveying a number of large deposits in the Kola Peninsula and may take decisions to develop some of them depending on deemed viability. One such deposit- the Gremyakha Vyrmes titanium deposit is located 40 km from Murmansk. This territory has ideal infrastructure, including a motor road and a railway, and electric transmission lines. The ore is composed of ilmenite and titanomagnetite. In 2007, combined Polar and Kola Divisions full year production was 234,454 t Ni, 404,465 t Cu, 3,050,000 oz Pd, 728,000 oz Pt. In 2006, USD 46 million was allocated to the development of the ore mining facilities in the Kola Peninsula. USD 43 million was invested in the construction of the Severny-Gluboky underground mine, to replace the decommissioned facilities of the Tsentralny mine, and ensure an optimum load for the processing facilities in the Kola Peninsula. The project started in 2000, and will be reaching design capacity in 2012. USD 2 million was used to finance stripping and mining of ore reserves on –620 meters and –740 meters horizons of the Severny mine. The objective of the project, initiated in 2001, is to develop the remaining ore reserves of the Zapolyarnoye deposit. Approximately USD 1 million was invested in capital mining work at the Kaula-Kotselvaara mine. The project is scheduled to be completed in 2008. Kola Peninsula invested USD 4 million in the development of concentration operations in 2006: USD 3 million was spent on the completion of construction and installation work during the reconstruction of pulp pumping applications at the Kola Peninsula, with replacement of the existing slurry pumps.