Vladimir Potanin makes an unlikely environmentalist.

The Russian tycoon, worth $17 billion at last count, derives half his wealth from a mine operator that’s the biggest polluter in the nation’s dirtiest city.

The smelting of nickel and other metals from the mines pumped about 2 million metric tons of waste into Norilsk’s air as recently as 2013, eight times the level of Russia’s next most-polluted metropolis.

Yet if Potanin makes good on plans to spend billions of dollars on the largest modernization of  MMC Norilsk Nickel PJSC since the Soviet era, he’ll have cut annual sulphur-dioxide emissions equal to the entire output of the toxic gas from Europe’s five biggest economies.

“When all are pointing fingers at you for doing something wrong, it’s unpleasant,” the billionaire said, sitting in one of the restaurants of the Luzhki Club resort he owns near Moscow. “On top of that, it’s important for me what I think of myself.”

The task for Potanin, who’s been a shareholder for almost two decades but was appointed as chief executive officer only at the end of 2012, has meant picking through a patchwork of filthy mining and smelting industries. Some operations at Nornickel, as the company is known, dated back as far as the Second World War and Soviet leader Joseph Stalin’s archipelago of gulag work camps.

Prison Labor

Among the oldest were those built in the Arctic Circle’s frozen tundra with prison labor. The nickel plants released sulfur-dioxide as a byproduct of smelting sulfide ores that contain the metal. The Norilsk area, with average annual temperatures of minus 10 degrees Centigrade (14 degrees Fahrenheit), is only reachable by plane or boat even now. Its almost 180,000 residents refer to the rest of Russia as “the mainland.”

"In 1942, when the war front needed the nickel, it was given,” Potanin said. In Soviet times, "human life wasn’t considered of great value,” he said. “The main thing was to produce a certain level of metal, no matter how."

It’s not as though the billionaire, made rich during controversial state privatizations in the 1990s, had to put his heart before his head for business before deciding on the cleanup.

Nornickel’s modernization program, begun in 2013, was always aimed at reducing costs as well as emissions, partly by transferring output to new, efficient plants. Unit costs for producing nickel fell about 39 percent by 2015, according to the company. It’s share price has more than doubled over the past three years in Moscow trading.

Stalin Era

Potanin’s assets in and around Norilsk and on the Kola Peninsula near Norway, needed to boost efficiency to catch up with rivals. Vale SA, the Brazilian company that vies with Nornickel as the world’s biggest nickel producer, has been modernizing since the 1970s, reducing sulphur-dioxide emissions from about 2 million tons a year to less than 100,000 tons.

The billionaire Russian began his own company’s transformation by closing an agglomeration plant for processing nickel ore on Kola. In August, Nornickel also shut Stalin-era nickel capacity in Norilsk, shifting to a modern plant and cutting 370,000 tons of sulphur emissions a year.

The next step is to capture sulphur dioxide at the Nadezhda site in the city, a project that the company estimates will cost about $1.7 billion. Green Patrol, an environmental-monitoring group says that could cut a further 900,000 tons of emissions.

“The efforts may help lure back investors concerned about the environment, helping Nornickel’s shares,” said Kirill Chuyko, chief strategist at BCS Global Markets in Moscow.
Largest Fund

Norway’s sovereign wealth fund, the world’s largest, was barred by the government in 2009 from investing in Nornickel. For decades, Scandinavian countries have complained about pollution and acid rain from Russia drifting over their borders.

Even the Russian government has bowed to evolving public opinion and demanded efforts to clean up the environment, with President Vladimir Putin declaring 2017 the Year of Ecology.

Some remain critical. One is Ekaterina Basalyga, the 23-year-old Norilsk resident whose pictures of an iron-oxide spill by Nornickel that turned a local river a lurid red went viral after she posted them to Instagram. The company said the discharge wasn’t dangerous.

“There is a lot of gas in the city as it always has been,” Basalyga said in an interview. “I do not see any changes.”

Others such as Oslo-based environmental group Bellona are keeping an open mind, noting that Nornickel’s plans mark a “significant step forward” as long as the company follows through.

Potanin insists in time he’ll win over more of the skeptics.

“We can’t afford to do nothing about sulphur emissions anymore,” said the billionaire, who’s felt the effects of breathing pollution while visiting Norilsk. “The results of our work will be visible only after five to seven years. But it’s important for me for this work to be finished.”