Either way, Nornickel can still rely on some of the world’s lowest costs, making it one of the most profitable miners in existence.
Its uncommon deposits within the Arctic Circle’s frozen tundra have a history of development dating back to the Second World War and Soviet leader Joseph Stalin’s archipelago of gulag work camps. Other operations are on the Kola Peninsula near Norway.
The margin on earnings before interest, taxes, depreciation and amortization is forecast at more than 48 percent this year, according to a survey of analyst estimates compiled by Bloomberg. That also hands shareholders one of the industry’s richest dividends, with a yield close to 10 percent, or about double that of mining giant BHP Billiton Ltd.
“Nornickel has unique deposits that are rich in everything,” said Kirill Chuyko, head of equity research at BCS Global Markets in Moscow. “Plus the cost of mining is relatively low and it’s hard to find a similar peer. The expected electric-vehicle boom is only making its position stronger.”
This article was provided by Bloomberg News.