Corporate Social Responsibility Report MMC Norilsk Nickel by linzhengnd


									Corporate Social
Responsibility Report
MMC Norilsk Nickel

Table of Contents
Message from the General Director of MMC Norilsk Nickel        4   5.5. Selection, Professional Training, and Development of Personnel                                        91
About Norilsk Nickel                                           6   5.6. Social Programs                                                                                       97
Reporting Boundary and Principles                             13
                                                                   6. Contribution to the Development of the Regions of Operations                                          104
1. Social Responsibility and Stakeholders                     15
1.1. Social Mission and Responsibility                        15   6.1. Tax Payments                                                                                        104
1.2. Sustainability Governance and Management System          16   6.2. Employment in the Regions of Operations                                                             105
1.3. Information Policy                                       25   6.3. Voluntary Contribution to the Regional and Local Development                                        106
1.4. Stakeholder Engagement                                   27   6.4. Charity Programs                                                                                    108

                                                                   Objectives аchieved in 2010 and New Objectives for 2011                                                   113
2. Development Strategy – Economic Growth                     34   Conclusion of the RUIE Non-Financial Reporting Council on the Findings
2.1. Economic Policy and Economic Performance                 34   of the Review of the Corporate Social Responsibility Report of MMC Norilsk Nickel 2010
2.2. Investment Development and Modernization of Facilities   38   for the Purpose of Public Verification                                                                    117
2.3. Sales Policy                                             41
2.4. Transport Independence                                   43
                                                                   Annex 1. GRI and RUIE Basic Performance Indicators Content Index                                         121
2.5. Energy Conservation and Renewable Energy Sources         46
                                                                   Annex 2. Main Performance Indicators                                                                     126
2.6. Product Responsibility                                   48
                                                                   Annex 3. GRI Environmental and Material Use Indicators                                                   131
                                                                   Annex 4. Group’s Key Entities for which Consolidated Information on Sustainability
3. Environmental Protection – Priority Areas                  52   Aspects is Presented in this Report                                                                      136

3.1. Development of the Environmental Management System       52   Glossary                                                                                                 138
3.2. Environmental Performance Indicators                     56   List of Abbreviations                                                                                    140
3.3. Conservation and Restoration of Biodiversity             65   Contact Information                                                                                      142
                                                                   Feedback Form                                                                                            143
4. Occupational Health and Safety                             67
4.1. Occupational Health and Safety Policy                    67
4.2. Prevention Strategies in the Field of OHS                71
4.3. OHS Performance Indicators                               73

5. Human Resource Policy – Building Long-Term Partnership     76
5.1. Main Principles and Approaches of the Social Policy      76
5.2. Personnel Characteristics                                79
5.3. Social Partnership in the Labor Sphere                   83
5.4. Remuneration and Motivation                              86

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Message from the General Director                                                                                                         wastewater discharges to water bodies, as well as the
                                                                                                                                          arrangement of appropriate waste disposal sites. As a result
                                                                                                                                                                                                               MMC Norilsk Nickel has continued its efforts on the prevention
                                                                                                                                                                                                               of occupational injuries. In 2010, the Company’s existing
of MMC Norilsk Nickel                                                                                                                     of these activities, the Polar Division was able to reduce its
                                                                                                                                          sulphur dioxide emissions by 36.6 thousand tonnes compared
                                                                                                                                                                                                               occupational health and safety system was complemented
                                                                                                                                                                                                               by a system of OHS compliance oversight. As a result of
                                                                                                                                          to the previous year’s level, and reduce aggregate pollutant         the measures taken by the Company, in 2010 the number of
                                                                                                                                          discharges with wastewater by 2 thousand tonnes. We are              occupational injuries on the Group’s Russian subsidiaries
                                                                                                                                          going to continue these efforts. In particular, the Company          decreased by 8% compared to the previous year, the injury rate –
                                                                                                                                          announced an international tender to select a contractor for         by 9%, the number of days lost due to injuries – by 5.7%.
                                                                                                                                          the introduction of state-of-the-art sulphur dioxide capture
                                                                                                                                          technologies at the Polar Division’s operations.                     In the reporting year, the Company continued implementing
                                                                                                                                                                                                               the programs aimed at the attraction and retention of staff,
                                                                                                                                          Every company seeks to reduce its transportation costs. MMC          including young specialists and skilled workers, enhancement
                                                                                                                                          Norilsk Nickel created its own fleet of ice-class cargo vessels      of employee motivation, and improvement of their working
                                                                                                                                          in order to ensure its transport independence from external          and recreation conditions. The creation of NordStar Airlines
                                                                                                                                          companies. Today we can say that this was a sound decision. In       on the basis of Taimyr airline carrier has helped significantly
                                                                                                                                          2010, the Company for the first time shipped its metal products      reduce airfares and introduce new routes, making vacations in
                                                                                                                                          to China directly through the Northern Sea Route, and this           favorable climatic conditions more accessible to the employees
                                                                                                                                          proved much more efficient than the traditional route through        and their family members.
                                                                                                                                          Suez Canal. We will further advance this approach, which not
                                                                                                                                          only benefits the Company, but is in line with strategic interests   The Company made a new step in the development of
                                                                                                                                          of Russia, helping it maintain its presence in the Arctic.           its relations with basic, secondary and higher education
                                                                                                                                                                                                               institutions. In August 2010, a framework Strategic Partnership
                                                                                                                                          MMC Norilsk Nickel recognizes the high potential of the EU           Agreement with the Siberian Federal University, one of the
                                                                                                                                          market for its sales. The Company was among the first Russian        leading universities of Krasnoyarsk Region, was signed.
                                                                                                                                          metals companies to begin the implementation of the REACH
                                                                                                                                          Regulation requirements. Norilsk Nickel ensured timely pre-          The Company has started the implementation of “Our House”,
                                                                                                                                          registration of products and completed the registration of           a new corporate social program. The program is ultimately
                                                                                                                                          its large-volume products within the required time frame.            aimed at building a stable core of professionals with long-term
Dear readers!                                                          regional, and municipal budgets a total of some RUB 75 billion –   However, there is still much to do in this regard: introduce a       commitment to the Company. The social component of the
Dear colleagues!                                                       almost three times more than in 2009.                              new product labeling system, ensure subsequent stages of the         program involves providing housing in the “mainland” on a co-
                                                                                                                                          registration process, and work within consortia of producers         funding basis. The overall investments of MMC Norilsk Nickel
I am pleased to present the Corporate Social Responsibility            The future of the Company depends on investments and the           updating substance safety data based on the results of               in the project in 2010 exceeded RUB 4 billion.
Report of MMC Norilsk Nickel 2010.                                     modernization of its operations. In 2010, our key investment       international research.
                                                                       priority was the improvement of cost effectiveness of our                                                                               During the visit of Vladimir Putin, Prime Minister of the Russian
The year 2010 was a special year to us: we celebrated the 75th         operations, in particular, through the introduction of state-      We realize that human capital is our most important asset. The       Federation, to Norilsk in August 2010, two quadripartite
anniversary of the Norilsk Mining and Metallurgical Combine,           of-the-art technologies. But these efforts are not limited to a    well-being of the Company is impossible without the well-being       agreements between the Russian Ministry of Regional
the 75th anniversary of scientific research activities in Norilsk,     single year. In 2010, we developed the Production Development      of its employees. Therefore we continue implementing corporate       Development, Krasnoyarsk Region, municipal authorities of
the 50th anniversary of the discovery of rich ore fields of Talnakh,   Strategy of MMC Norilsk Nickel for the period until 2025. The      social programs, and after the final approval of the Production      Norilsk, and the Company were signed. The overall cost of the
and the 50th anniversary of Harjavalta nickel refinery (Finland).      key provisions of the document were approved by the Board          Development Strategy we intend to start working on the corporate     two major programs – the program for the resettlement of
And we are proud that the Company has reached this milestone           of Directors in December 2010. The Strategy will help Norilsk      Human Resource Strategy. Given the current demographic               residents of Norisk and Dudinka to Russian regions with more
in its life being a leader in corporate governance, openness           Nickel significantly expand its output, geography of operations    situation in Russia and, in particular, the general ageing of its    favorable conditions and the program for the modernization of
and transparency, implementing the principles of corporate             and product line. We would like our employees, shareholders        population, we should have a clear understanding of who will         infrastructure and housing in Norilsk – exceeds RUB 27 billion.
social responsibility, as well as technology modernization and         and investors, both actual and potential, to understand our        work for us in the future, and what we should do about it today.     The Company’s contribution will amount to RUB 9.6 billion.
environmental safety programs.                                         long-term development plans.
                                                                                                                                          In order to improve the level of social security of our employees,   Our key guiding principles include good business conduct,
The reporting year was a successful one for MMC Norilsk                The issues of environmental protection, energy saving and          and in accordance with the agreement signed during the               efficiency of our business, compliance with the legislation
Nickel. The year’s results show that the management has                energy efficiency of our operations have also been in the center   visit of the Russian Prime Minister Vladimir Putin to Norilsk,       and international standards, contribution to the sustainable
chosen the right strategy based on the efficiency improvement,         of the management’s attention.                                     since December 1, 2010, the fixed component of employee              development of the society, respect for human rights, and
which helped us minimize potential effects of the crisis on                                                                               remuneration has been increased, reaching 70% of the total           consideration of the interests of the future generations.
our performance. Over the year 2010 the Company’s market               Implementing the main principles of the corporate Environ-         remuneration. The average salary for employees of the Group’s
capitalization grew by almost 90% – the best result among              mental Policy, Norilsk Nickel undertakes modernization             Russian subsidiaries increased by 14.7% in the reporting year.
all mining and metallurgical companies in the world. The               projects at its facilities, introduces state-of-the-art            The Company increased its spending on corporate social               Vladimir Strzhalkovsky
Company’s revenue reached over USD 12 billion, net profit –            technologies, and implements programs aimed at a phased            programs. Its investments in employee health improvement             General Director and Chairman
over USD 3 billion. In 2010, the Company paid to federal,              reduction of pollutant emissions into the air and polluted         alone amounted to over RUB 1.5 billion.                              of the Management Board

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About Norilsk Nickel                                                                                                                                              Africa specializing in nickel mining. By-products of Nkomati
                                                                                                                                                                  operations include copper, platinum group metals, and
                                                                                                                                                                                                                                                            In 2010, the average staff size of the Norilsk Nickel Group was
                                                                                                                                                                                                                                                            82.7 thousand, including 2.3 thousand employees of foreign
                                                                                                                                                                                                                                                            operations. The majority of those employed by the Russian
                                                                                                                                                                                                                                                            operations of the Group (66%) work in the city of Norilsk and
                                                                                                                                                                  The Group also includes: LLC Gipronickel Institute, a research                            Taimyr Municipal District (see Table 1).
                                                                                                                                                                  and development institute based in Saint-Petersburg, with
                                                                                                                                                                  divisions in Norilsk and Monchegorsk.1                                                    In determining its development and operations strategy, MMC
                                                                                                                                                                                                                                                            Norilsk Nickel is guided by the assumption that strict adherence
                                                                                                                                                                  MMC Norilsk Nickel operates its own global network of                                     to social and environmental responsibility principles is an
                                                                                                                                                                  representative and marketing offices in Russia, the United                                essential condition of sustainable and effective development
                                                                                                                                                                  Kingdom, China, the USA and Switzerland.                                                  of its business.

                                                                                                                                                                  Table 1. Staff size of the Norilsk Nickel Group, 2008-2010

                                                                                                                                                                                                                                                                           2010                  2009                     2008
                                                                                                                                                                  Russian Federation                                                                                      80,417                80,082                  84,040
                                                                                                                                                                  USA                                                                                                          9                 1,323                   1,373
                                                                                                                                                                  Europe                                                                                                     315                   302                      312
MMC Norilsk Nickel is the world’s largest producer of nickel and    In Australia, Norilsk Nickel’s operations include: Norilsk Nickel                             Asia                                                                                                        17                    15                        –
palladium, and one of the leading global producers of platinum      Cawse, a laterite nickel ore mining and leaching production;                                  Australia                                                                                                   24                   268                      652
and copper. In addition, Norilsk Nickel produces a variety of       the Black Swan, Waterloo1, and Lake Johnston2 nickel ore                                      South Africa                                                                                               842                   817                      409
by-products, such as cobalt, chromium, rhodium, silver, gold,       mining and beneficiation plants.                                                              Botswana                                                                                                 1,094                 1,114                    1,183
iridium, ruthenium, selenium, tellurium and sulphur.                                                                                                              Burundi                                                                                                      6                     –                        –
                                                                    MMC Norilsk Nickel holds an 85% interest in Tati Nickel Mining                                Total                                                                                                  82,724                83,921                   87,969
The Group’s core activities include prospecting, exploration,       Company, a sulphide nickel production operation in Botswana.
extraction, concentration and processing of mineral resources,      Production facilities of Tati Nickel include the Phoenix open-
as well as production, marketing and sale of base and precious      pit nickel mine, the Selkirk underground nickel mine currently
metals.                                                             being prepared for open-pit mining, and a concentrator with
                                                                    a total capacity of up to 12 million tonnes of ore per annum,
The Group’s industrial operations are located on four continents    using both traditional flotation separation and dense media
and in six countries, including Russia, Australia, Botswana,        separation (DMS).
Finland, the USA and South Africa.
                                                                    Norilsk Nickel Harjavalta Oy, a part of the Group, is the only
The Group’s key operations in the Russian Federation                nickel refining plant in Finland. The plant processes materials
(hereinafter – RF) include two vertically integrated companies:     supplied by Australian and African operations of the Group, as
   • the Polar Division of OJSC MMC Norilsk Nickel (hereinafter –   well as nickel-containing intermediate products from external
     the Polar Division);                                           suppliers.3
   • OJSC Kola Mining and Metallurgical Company (hereinafter –
     Kola MMC).                                                     Norilsk Nickel holds a 50% interest in the Nkomati nickel
                                                                    mine in South Africa4, a joint venture with African Rainbow
The Polar Division is located above the Arctic Circle, on the       Minerals (ARM). Nkomati is the only metal producer in South
Taimyr Peninsula in the Krasnoyarsk Region of the Russian
Federation. The area is accessible by the Yenisei River and         1   In late 2008 – early 2009, the Company halted the production at these mines as a result
                                                                        of deteriorated economic environment and decreased demand in the nickel market.
the Northern Sea Route, as well as by air. Kola MMC, located
                                                                    2   In 2009, the Company halted the production at Lake Johnston as a result of deteriorated
on the Kola Peninsula, is the leading industrial operation              economic environment and decreased demand in the nickel market. Currently repair
of the Murmansk Region, fully integrated into the transport             works are carried out both at the mine and at the concentrator. The Group intends to
                                                                        resume the production of nickel concentrate at Lake Johnston in 2011.
infrastructure of the Northwest Federal District of the RF.
                                                                    3   Concentrates are first processed at Boliden Harjavalta smelter, which shares a site at
                                                                        Suurteollisuuspuisto industrial park (Finland) with Norilsk Nickel Harjavalta. Mattes
                                                                        and other intermediate products with high nickel content are sent directly to Norilsk
                                                                        Nickel Harjavalta.

                                                                    4   Norilsk Nickel Africa (NNAf) is also placed in South African Republic. In 2010 the
                                                                        number of NNAf employees was reduced from 31 to 15 due to the end of the phase            1   Norilsk Process Technology Pty Ltd, a research and development company based
                                                                        of intensive expansion of Nkomati and establishment of a representative office of the         in Australia, was closed down in early 2010. A part of its laboratory equipment was
                                                                        Company in Botswana.                                                                          acquired by LLC Gipronickel Institute.

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Figure 1. Geography of major Company’s operations
       Production of Ni/Cu/PGM
            Polar Division
                                                                                                                                                                                                                                                                                                                                                          75th anniversary of the Norilsk Combine


                                                                                                                                       Hong Kong

                                                                                                                                                                            the Company halted the production
       Production of Ni/Cu/PGM

                                                                                                                                                                                  Cawse, Black Swan
                                                                                                                                                                                   and Lake Johnston
             Kola MMC

                                                                                                                                                   Chita project
                                                                                   Corporate center

                                                                                                                                                                                                                                                                                                                                                          In 2010, the 75th anniversary of the Norilsk Mining and               Peninsula – was also created in the 1940’s. The combine was
                                                                                                                                                                                                                                                                                                                                                          Metallurgical Combine was celebrated. The Norilsk Combine             built in 1940 by Inco, a Finnish company, in the area that was
                                                                                                                                                                                                                                                                                                                                                          played a central role in the history of Norilsk, one of the world’s   ceded to the Soviet Union after the Great Patriotic War.
                                                                                                                                                                                                                                                                                                                                                          northernmost cities, and the Norilsk Industrial District, one of

                                                                                                                                                                                                                                                                         Ni concentrate and chrome ore

                                                                                                                                                                                                                                                                                                                                                          the world’s northernmost metallurgical sites.                         Soon after the war, as a result of the rapid development of the

                                                                                                                                                                                                                                                                              Nkomati Nickel (50%)
Scientific Research

                                                                                                                                                                                                                                                                                                                                                                                                                                Norilsk Combine, it became the leader of the national non-


                                                                                                                                                                                                                                                                                                                                                          On June 23, 1935 the USSR Government passed the decree “On            ferrous metal industry. In 1953, the Combine accounted for
                                                                                                                                                                                                                                                                                                                                                          the Construction of the Norilsk Combine”, placing the project         35% of the total nickel production in the Soviet Union, 12% of
                                                                                                                                                                                                                                                                                                                                                          under the authority of NKVD (the People’s Commissariat for            the copper production, 30% of the cobalt production, and for

                                                                                                                                                                                                                                                                                                                                                          Internal Affairs, the national police organization). Pursuant         90% of the total platinum group metals production.
                                                                                                                                                                                                                                                                                                                                                          to the decree, the construction of the largest mining and
                                                                                                                                                                                                                                                                                                                                                          metallurgical complex in the country started in the Taimyr            In 1966, the Oktyabrskoye copper and nickel ore deposit was

                                                                                                                                                                                                                                                                                                                                                          Pedninsula, almost 2000 km to the north from Krasnoyarsk.             discovered, and Talnakh town was established close nearby.
Ni/Zn Bio acid alkalization

                                                                                                                                                        Tati Nickel (85%)

                                                                                                                                                                                                                                                                                                                                                          The combine was built using forced labor of prisoners of              Over the next decade several mines and an ore concentrator
                                                                                                                                                         Ni concentrate
    Talvivaara (5.5%)

                                                                                                                                                                                                                                                                                                                                                          Norillag (a part of Gulag), transferred to the area from camps        were built in the vicinity of Talnakh. In 1981, the Nadezhda

                                                              Ni refining factory

                                                                                                                                                                                                                                                                                                                                                          on the Solovetsky Islands. Most of those were victims of              Metallurgical Plant, the largest metal plant of Norilsk Nickel
                                                                NN Harjavalta

                                                                                                                                                                                                                                                                                                                                                          political repressions – representatives of the intelligentsia,        and the Norilsk Industrial District, started operation. After
                                                                                                                                                                                                                                                                                                                                                          scientists, engineers and religious figures.                          decades of development, despite all economic and political
                                                                                                                                                                                                                                                                                                                                                                                                                                difficulties faced by the country at that time, in 1998 the
                                                                                                                                                                                                                                                                                                                                                          On March 10, 1939 the first copper-nickel matte was produced          combine held a ceremony of the shipping of the ten millionth
                                                                                                                                                                                                                                                                                                                                                          in Norilsk. The first high-grade (NiS) matte was produced three       tonne of copper produced by the copper plant.
In December, 2010 Norilsk Nickel sold a share in capital of
  Largest PGM producer outside of Russia & South Africa

   Stillwater Mining Company, a subsidiary of the Group.

                                                                                                                                                                                                                                                                                                                                                          months later, on June 16. Thirteen elements of the Mendeleev’s
                                                                                                                                                                                                                                                                                                                                                          table – copper, nickel, cobalt, gold, silver, palladium, platinum,    In 2001, Norilsk Nickel became one of the top ten Russian
            Stillwater Mining Company (53.18%)

                                                                                                                                                                                                                                                                                                                                                          iridium, selenium, rhodium, ruthenium, sulphur, and palladium –       companies, increasing the output of cobalt by 13.1%, copper –
                                                                                                                                                                                                                                                                                                                                                           are produced from Norilsk ore.                                       by 7.6%, nickel – by 2.9%, platinum group metals – by 0.2%.
                                                                                                                                                                                                                                                                                                                                                                                                                                By the year 2008, the annual output of nickel reached 300
                                                                                                                                                                                                                                                                                                                                                          During the Great Patriotic War the Norilsk Combine not only           thousand tonnes, copper – 419 tonnes, palladium – 2,821
                                                                                                                                                                                                                                                                                                                            Global distribution network
                                                                                                                                                                                                                                             Main development projects
                                                                                                                                                                                                                Scientific research centers

                                                                                                                                                                                                                                                                                                                                                          continued building new facilities, but also made a major              thousand ounces, platinum – 659 thousand ounces.
                                                                                                                                                                                                                                                                                                                                                          contribution to the nation’s war efforts. The nickel produced
                                                                                                                                                                                                                                                                             Production assets

                                                                                                                                                                                                                                                                                                         Corporate center

                                                                                                                                                                                                                                                                                                                                                          in Norilsk was used in making both heavy armor for fighting           Nowadays MMC Norilsk Nickel is one of the world’s largest
                                                                                                                                                                                                                                                                                                                                                          vehicles and ultralight parts for military aircrafts.                 producers of precious metals. It accounts for 20.2% of the
                                                                                                                                                                                                                                                                                                                                                                                                                                global output of nickel, 44.8% – of palladium, 2.5% – of copper,
                                                                                                                                                                                                                                                                                                                                                          The second major site of today’s Norisk Nickel – the                  10.7% – of platinum. In Russia, MMC Norilsk Nickel produces
                                                                                                                                                                                                                                                                                                                                                          Severonickel Combine (currently the Severonickel Combine              89.4% of the total national output of nickel, 45.3% – of copper,
                                                                                                                                                                                                                                                                                                                                                          of Kola MMC) based in the northwestern part of the Kola               82.1% – of platinum, 100% – of palladium.

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     CORPORATE SOCIAL                                                                                                                                                                                                                                                                                                                                                                                                                                                     CORPORATE SOCIAL
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                  2010                                                                                                                                                                                                                                                                                                                                                                                                                                                    2010
Company products are used in a broad range of sectors,
including mechanical engineering, construction industry,
                                                                   the Norilsk Land”, which was started on September 1, 2009,
                                                                   invited every city resident to nominate seven wonders of the
                                                                                                                                      Congratulations on the 75th anniversary of the Norilsk
electrical engineering, electronics, energy equipment              area.                                                              Combine
manufacturing, chemical industry etc.
                                                                   The Polar Division of Norilsk Nickel implemented a number
Celebrating its 75th anniversary, the Company looks                of joint projects with the city museum and the Education
forward with confidence, increasing its output, undertaking        department. Schools participated in the contests of museum
modernization projects, and introducing state-of-the-art           exhibitions, school outreach teams were preparing programs
technologies.                                                      on the theme “Strong People of the Great Country”. The
                                                                   excursion project “Norilsk – the Land of Courage” and many
                                                                   other projects were launched. As a result of coordinated
Celebrating the                                                    actions of the city authorities and the Company, a special warm
                                                                   and festive environment, supportive of creativity, friendship
75th anniversary of                                                and cooperation, was formed across the region.

Norilsk Nickel                                                     In May 2010, MMC Norilsk Nickel handed over items and
                                                                   materials to Lenin nuclear-powered icebreaker, currently a
One of the most prominent events of the year 2010, which           museum ship. A handing-over ceremony was held aboard the
attracted a lot of attention from the federal, regional, and       decommissioned icebreaker in Murmansk, and presentation of
international media, was the celebration of the 75th anniversary   a photography exhibition dedicated to the history of the Norilsk
of the Norilsk Mining and Metallurgical Combine. This was a        Combine was organized. The project, associated with the 75th       Dmitry Medvedev,                                                   Sergey Mironov,
joint festival of the Company and the city made possible by        anniversary of the Norilsk Combine and the 50th anniversary        President of the Russian Federation                                Chairman of the Federation Council
coordinated efforts of numerous organizations and bodies,          of the icebreaker, was intended to emphasize the inextricable                                                                         of the Federal Assembly of the Russian Federation
including production operations of Norilsk Nickel, cultural,       historical connection between the first Russian nuclear-           Dear friends!
educational, and health care institutions, other municipal         powered ship and the leader of the national non-ferrous            I congratulate you on the 75th anniversary of the founding of      Over the past years the Norilsk Nickel team made significant
bodies, law enforcement agencies, divisions of the Ministry        metal industry – the Polar Division of MMC Norilsk Nickel. The     the Norilsk Mining and Metallurgical Combine.                      achievements towards modernization of production facilities,
of Emergencies, and many others. In fact, the entire city          icebreaker for more than three decades escorted cargo and                                                                             improvement of labor productivity, introduction of innovative
of Norilsk was involved in the common cause. Within the            passenger ships on the Northern Sea Route, with many of them       Built in the harsh conditions of the Far North, it is one of the   technologies and attracting additional investments in high
framework of the “Celebrating City” program, the theme of the      carrying metal products of the Norilsk Combine or equipment        world’s largest producers of base and precious metals. Its         technology projects.
75th anniversary of the Norilsk Combine was promoted across        and spare part necessary for the construction, development,        products enjoy a stable demand both in Russia and abroad.
the entire Norilsk Industrial District. The action “Wonders of     and stable operation of the combine.                               It is important that today your company actively implements        Today Norilsk Nickel is the world’s largest producer of
                                                                                                                                      programs in the field of technology modernization,                 nickel and palladium, also being a global leader in platinum
                                                                                                                                      environmental safety, and corporate social responsibility.         and copper production. I am glad to note that the Company
                                                                                                                                      I wish you success in the implementation of your plans, well-      implements large-scale programs to enhance occupational
                                                                                                                                      being, and all the best.                                           and environmental safety, as well as a range of social projects
                                                                                                                                                                                                         aimed at improving the quality of people’s lives. Due to self-
                                                                                                                                                                                                         sacrificing work of its entire team, Norilsk Nickel has become
                                                                                                                                      Vladimir Putin,                                                    a valuable national asset of Russia.
                                                                                                                                      Prime Minister of the Russian Federation

                                                                                                                                      Nowadays Norilsk Nickel is the recognized leader of its            Viktor Khristenko,
                                                                                                                                      sector. It actively expands its operations in various areas        Minister of Industry and Commerce
                                                                                                                                      of activities, including exploration, mining, concentration,       of the Russian Federation
                                                                                                                                      and processing of mineral resources. Norilsk Nickel strives
                                                                                                                                      to strengthen its position in the national and international       Over its decades-long history, your Company made an invaluable
                                                                                                                                      markets by means of introducing state-of-the-art technology,       contribution to the development of the largest mineral deposits,
                                                                                                                                      efficient development of the mineral resource base, and            the development and introduction of advanced technologies in
                                                                                                                                      adherence to high environmental standards.                         the non-ferrous metal industry, and the development of areas in
                                                                                                                                                                                                         the Far North. MMC Norilsk Nickel has come a long way since
                                                                                                                                      It is important that Norilsk Nickel makes a major contribution     producing its first metal, becoming a major holding company
                                                                                                                                      to the development of infrastructure, implements the               with operations encompassing four continents.
                                                                                                                                      principles of social responsibility of business, and cares for
                                                                                                                                      its employees.

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    CORPORATE SOCIAL                                                                                                                                                                                                                               CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                              RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                              2010
Boris Gryzlov,                                                       Public recognition of Norilsk Nickel’s                               Norilsk Nickel was ranked second in the “Best corporate            Tati Nickel was ranked second at the national World SHE
Chairman of the State Duma of the Federal Assembly                   sustainability performance in 2010                                   responsibility report” category at the 13th Annual Report          Day event held under the theme “Emerging risks and new
of the Russian Federation                                                                                                                 Contest organized by RTS Stock Exchange.                           approaches toward prevention in a changing world of work”.
                                                                     In 2010, the Company’s sustainability performance received
Today MMC Norilsk Nickel is a leading Russian company and            high recognition from Russian and international governmental
one of the world’s largest producers of nickel, palladium,           and independent organizations.                                       Awards received by subsidiaries
                                                                                                                                          and dependent companies
                                                                                                                                                                                                             Reporting Boundary
platinum, and copper. The Company has expanded its
operations far beyond Russia. The Company management                                                                                                                                                         and Principles
continuously works on the improvement of the quality of              Awards received by the Company                                       OJSC Kola MMC, a subsidiary of OJSC MMC Norilsk Nickel, in
products and services, and the introduction of highly effective                                                                           2010 was recognized a winner of the “Best Russian Exporter         Report boundary
management approaches.                                               MMC Norilsk Nickel was awarded an Honorary Diploma                   of the Year 2009” awards sponsored by the Russian Ministry
                                                                     of the Government of the Russian Federation “For a major             of Industry and Commerce. Kola MMC won the awards in the           Mining and Metallurgical Company Norilsk Nickel (hereinafter –
The management of Norilsk Nickel declared its commitment             contribution to the development of the national industry and         category “Best exporter in the non-ferrous metal industry”.        MMC Norilsk Nickel, Norilsk Nickel Group, Group, Norilsk
to social partnership between employers and employees.               outstanding work achievements”.                                      The awards are granted annually in each of the 16 key              Nickel, or the Company)1 continues the publication of annual
The Company’s priorities include the implementation of a                                                                                  economic sectors in the following categories: “Best exporter in    corporate social responsibility reports intended to inform
broad range of social programs from the training of highly-          MMC Norilsk Nickel became a winner of the regional stage of          the sector”, “Best exporter to the CIS countries in the sector”,   the broad public of the principles, objectives, outcomes, and
skilled specialists to actions aimed at the improvement of           Customs Olympus 2010 awards in the Best Importer category.           and “Most dynamic exporter in the sector”.                         prospects of the corporate social policy and other activities of
environmental safety.                                                                                                                                                                                        the Company that are relevant to its sustainability.
                                                                     MMC Norilsk Nickel was recognized as a winner of the
                                                                     6th National Awards “Best Russian HR Department 2010”.               Awards received by top managers                                    This Corporate Social Responsibility Report (hereinafter – the
Lev Kuznetsov,                                                       Company’s HR Department won the awards in the category “For          of the Company                                                     CSR Report) is the Company’s seventh social report2, based on
Governor of Krasnoyarsk Region, and                                  successful development and implementation of an effective HR                                                                            the international reporting standards.3
Alexander Uss,                                                       policy in the context of the new government programs for the         Vladimir Strzhalkovsky, General Director – Chairman of the
Chairman of the Legislative Assembly                                 innovation-based development of the Russian economy”.                Management Board of OJSC MMC Norilsk Nickel received the           In preparing this CSR Report for 2010, the Company was guided
of Krasnoyarsk Region                                                                                                                     Person of the Year 2010 international award established by RBC     by Russian and international best practices, also relying on its
                                                                     MMC Norilsk Nickel became a winner of IR magazine Russia             media holding in the special category “For the Implementation      own experience in the collection, consolidation, and analysis
We can say without exaggeration that Norilsk Nickel has always       & CIS Awards 2010 in the “Best investor relations website/           of an Effective Anti-Crisis Program”.                              of sustainability information on the basis of the Russian legal
been one of the key industrial companies of Krasnoyarsk              webcasting” category. These annual awards are aimed at the                                                                              requirements and corporate standards. The Company sought
Region, a true stronghold of the regional economy.                   identification and recognition of best IR specialists and services   Vladimir Strzhalkovsky was also awarded an Honorary Diploma        to enhance transparency of the social responsibility reporting
                                                                     with a view to facilitate the introduction of best IR practices in   for a major contribution to the socio-economic development         compared to the previous year.
For decades Norilsk Nickel has been the engine of the                day-to-day activities of companies.                                  of Krasnoyarsk Region from the Governor of the Region Lev
regional development. Its activities facilitated the creation and                                                                         Kuznetsov.                                                         For this CSR Report, Norilsk Nickel used the third version (G3)
development of industries in the south of the region, agricultural   MMC Norilsk Nickel was recognized as a winner of the Open                                                                               of the Sustainability Reporting Guidelines (hereinafter – the
enterprises in the Minusinsk area, the river shipping company,       Annual Report Contest carried out within the framework of the        In the annual ranking “TOP 1000 Russian Mangers 2010” for          Guidelines) of the Global Reporting Initiative (GRI), Application
and the entire transportation infrastructure connecting various      International Investment Forum “Sochi 2010”. The annual report       the metal industry Vladimir Strzhalkovsky, General Director        level of A. Recommendations on the Use of Basic Performance
parts of our vast region.                                            of MMC Norilsk Nickel won the contest in the “Industry” category.    of OJSC MMC Norilsk Nickel was ranked first in the “Best top       Indicators in Non-Financial Reporting prepared by the RUIE
                                                                                                                                          manager” category; Dmitry Kostoev, Deputy General Director –       (Russian Union of Industrialists and Entrepreneurs) and
Over the recent years the region has received major resources                                                                             Chief Financial Officer was ranked second in the “Best financial
for the development of its social sphere due to the work of all      High credit ratings                                                  director” category; Vyacheslav Poltavtsev, Deputy General          1   If the terms «Company» or «Group» are used without additional qualifications,
members of the Company team from a metal worker to a senior                                                                               Director for GR, Social and Corporate Policy was ranked second         the information or data apply to the Norilsk Nickel Group. The Norilsk Nickel
                                                                                                                                                                                                                 Group comprises the Company, its subsidiaries and dependent companies, and all
executive. The efforts of management and the whole team              The Company has investment-grade credit ratings: Ваа2 from           in the “Best GR director” category; Viktor Sprogis, Deputy             organizations vertically linked through the participation in the authorized capital
have made the Company one of the most stable enterprises             Moody’s Investors Service and ВВВ- from Standard&Poor’s              General Director for Sales and Distribution, was ranked third          or through agreements between them, with each of these organizations being a
                                                                                                                                                                                                                 subsidiary or dependent company relative to a respective higher-level entity. As a legal
in the country.                                                      and Fitch Ratings.                                                   in the “Best marketing director” category; Gennady Bauman,             entity, OJSC MMC Norilsk Nickel comprises the Polar Division, Polar Transport Branch,
                                                                                                                                          Director of the IT Department of OJSC MMC Norilsk Nickel was           Murmansk Transport Branch, Archangelsk Branch, Krasnoyarsk Branch, Krasnoyarsk
                                                                                                                                                                                                                 Representative Office, and the Head Office. Quantitative indicators in specific
                                                                                                                                          ranked second in “Best IT director” category.                          sustainability areas apply to the range of the Group’s entities specified by Annex 4.
                                                                     Social responsibility leadership                                                                                                            The data for the Group do not include information on Stillwater Mining Company, a
                                                                                                                                                                                                                 subsidiary of the Group until December, 2010.

                                                                     MMC Norilsk Nickel was ranked fourth in the Annual Rating            Awards received by foreign entities of the                         2   Social Reports of OJSC MMC Norilsk Nickel for 2003-2004, 2005, 2006, and 2007, as
                                                                                                                                                                                                                 well as CSR Reports for 2008 and 2009 (Russian and English versions) are available at
                                                                     of Social Responsibility of Russian Companies 2010 prepared          Group                                                                  the corporate website
                                                                     by Trud newspaper, the Agency for Political and Economic                                                                                3   The Company’s Corporate Social Responsibility Reports for 2008 and 2009 have
                                                                     Communications, and the Russian Anti-Crisis Forum.                   Tati Nickel was ranked first at the showcasing event of the            been included in the National Corporate Non-Financial Report Registry. The National
                                                                                                                                                                                                                 Corporate Non-Financial Report Registry, created in 2006 by a decision of the Board
                                                                                                                                          national World Environment Day commemoration ceremony                  of RUIE, is a publicly accessible national resource collecting and disseminating
                                                                                                                                          held under the theme “Biodiversity – a Source of Life”.                information about corporate non-financial reports (social, environmental, or
                                                                                                                                                                                                                 sustainability ones). The register is updated on a regular basis as information about
                                                                                                                                                                                                                 new reports becomes available.

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    CORPORATE SOCIAL                                                                                                                                                                                                                                                    CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                   RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                   2010
provisions of AA1000SES international standard were also
taken into account in preparing the CSR Report.
                                                                                 Operational and financial performance data contained in this
                                                                                 CSR Report are presented according to International Financial                     1. Social Responsibility and Stakeholders
                                                                                 Reporting Standards (IFRS) and, unless otherwise indicated,
Information and data on all sustainability aspects covered
by this CSR Report are collected both through the regular
                                                                                 refer to the Group as a whole. The indicators and information on
                                                                                 environmental performance, as well as on occupational health
                                                                                                                                                                   1.1. Social Mission                                                       • promoting comprehensive professional and cultural
                                                                                                                                                                                                                                               development of the employees.
corporate reporting system and by means of special                               and safety, product responsibility, personnel selection and                       and Responsibility
questionnaires based on the GRI Guidelines and filled by the                     training, and implementation of social programs cover all the
Company’s divisions once a year. Primary data from various                       key entities of the Group, including foreign ones, thus making it                 1.1.1. Social mission                                                 1.1.2. Corporate social responsibility policy
entities are then verified and consolidated.                                     possible, in most cases, to consider sustainability performance
                                                                                 information in connection with the IFRS statements.                               The social mission of Norilsk Nickel is producing output              The sustainability strategy of MMC Norilsk Nickel is based
Today, MMC Norilsk Nickel with its subsidiaries and dependent                                                                                                      demanded by the society – base and precious metals – in the           upon the long-term vision of the main areas of the Company’s
companies (hereinafter the Group) is a diversified industrial                    In 2010, the Company management decided to submit the 2009                        most efficient and safe way possible on a sustainable long-term       activities as defined by the following fundamental corporate
complex comprising companies operating in various regions                        CSR Report to the RUIE Non-Financial Reporting Council for                        basis thereby contributing to social progress and prosperity of the   strategies and policies:
of the Russian Federation and abroad. The Company’s sales                        the public verification procedure. In 2011, this CSR Report 2010                  society, sustainable development of the regions of operations,
network extends across Russia, Europe, Asia, and the USA.                        also underwent a similar public verification procedure.                           the well-being of their population, and the improvement of living     The Production Development Strategy for the period until
                                                                                                                                                                   standards of the Company’s employees.                                 2025 outlines the key production development priorities for the
The CSR Report of MMC Norilsk Nickel 2010 covers the period                      Publishing this CSR Report, OJSC MMC Norilsk Nickel expects                                                                                             long-term perspective and is aimed at the following objectives:
from January 1, 2010 to December 31, 2010. In this CSR Report                    to continue and further expand the constructive public dialogue                   Corporate social responsibility principles of MMC Norilsk                • retaining global leadership in the production of nickel and
2010 the scope was expanded compared to the previous years                       regarding social responsibility of business and will welcome                      Nickel with regard to the society as a whole include:                      platinum group metals through expanding the capacity
by providing information on all sustainability aspects of foreign                any stakeholders’ suggestions on the improvement of the                              • manufacturing of competitive products needed by the                   of the existing mining and processing operations and
assets of the Company.                                                           Company’s sustainability performance.                                                  society and conforming to the safety requirements, with               commissioning new facilities in Russia and abroad;
                                                                                                                                                                        the amount, quality, and product mix meeting modern                 • retaining sectoral leadership in operational efficiency
                                                                                                                                                                        market demands;                                                       through increasing the capacity of the process equipment,
Table 2. Sustainability reporting principles                                                                                                                          • carrying out operations in the most efficient way,                    decommissioning obsolete and worn-out production
                                                                                                                                                                        considering the interests of both the business and the                facilities, introducing the most advanced technologies of
 Principle                  Use in the preparation of the CSR Report                                                                                                    society, and using resource efficient technologies;                   ore concentration and metal refining, and increasing the
 Reliability and            Reliability of the information presented in the CSR Report is ensured by the Company’s reporting management systems covering              • unconditional compliance with the legislation of the                  share of metal by-products in the Company’s sales;
 transparency               collection, consolidation, and quality control of information. Together they provide an effective framework for a comprehensive             countries of operation, including tax legislation;                  • ensuring environmental safety of operations;
                            performance analysis, which serves as a basis for corrective managerial decisions.
                            Transparency of the information in the CSR Report is ensured by using a clear structure based on consistent methodological                • compliance with international agreements, including                 • further diversification of the geography of operations;
                            principles, and by presenting appropriate indicators in an informative, clear and sufficiently detailed form.                               internationally recognized standards of business conduct.           • global optimization of product flows within the Group by
 Timeliness, completeness   Timeliness of the information presented in the CSR Report is achieved by choosing a one-year reporting period, as close as                                                                                        using raw materials produced by Group’s entities as an
 and materiality            possible to the date of publication.                                                                                                   Corporate social responsibility principles with regard to local            input for its own processing facilities to the maximum
                            The CSR Report presents the most significant outcomes of the Company’s operations during the reporting period.
                            Completeness and materiality of the CSR Report is achieved by covering, to the maximum extent possible, all the significant            communities include:                                                       extent possible.
                            entities of the Group and aspects of the Group’s CSR performance.                                                                         • provision of jobs to the residents of the areas of operations;
 Feedback and stakeholder   Views of all stakeholders regarding the Company’s reporting and sustainability performance are important to Norilsk Nickel.               • contribution to local and regional budgets by the payment        The Quality Policy1 is aimed at the continuous improvement
 inclusiveness              Therefore the CSR Report contains a user feedback form.                                                                                     of taxes;                                                        of products and processes, enhancement of the efficiency
                            Stakeholders’ comments and suggestions will be used in the improvement of the Company’s reporting management systems,
                            and in the compilation of future CSR reports.                                                                                             • socially responsible restructuring of operations in a            of operations, and cost reduction in accordance with the
 Objectivity and            Objectivity and comparability of the CSR Report are ensured by reliance, in its preparation, on the international generally accepted        manner acceptable to local communities;                          requirements of ISO 9001 international standard.
 comparability              standards, principles and approaches, which allows comparison of the Company’s performance with information provided in                   • ensuring environmental and industrial safety of operations,
                            other organizations’ reports.                                                                                                               and participation in regional environmental projects;            The Environmental Policy2 defines the priority areas of
 Sustainability context     This CSR Report presents information on the Company’s contribution to various aspects of sustainability both at the national level        • implementation of projects contributing to the socio-            Company’s environmental activities:
                            and in the key regions of operations of its entities.
                                                                                                                                                                        economic development of the areas of operations;                   • phased reduction of pollutant emissions into the air, with
                                                                                                                                                                      • support to socially vulnerable groups.                               priority attention given to sulphur dioxide and particulate
                                                                                                                                                                   Corporate social responsibility principles with regard to the           • continuous reduction of polluted wastewater discharges
                                                                                                                                                                   Company personnel include:                                                into water bodies;
                                                                                                                                                                      • provision of jobs with competitive remuneration and                • arrangement of waste disposal sites in order to reduce
                                                                                                                                                                        social benefits;                                                     the environmental footprint of Company’s operations.
                                                                                                                                                                      • unconditional compliance with the standards of social and
                                                                                                                                                                        labor relations defined by the legislation and collective
                                                                                                                                                                        bargaining agreements;
                                                                                                                                                                      • ensuring occupational health and safety standards and            1    The Quality Policy is available at the corporate website
                                                                                                                                                                        high-quality amenities in the workplace, with protection         2    The Company’s Environmental Policy is available at the corporate website
                                                                                                                                                                        of employees’ health and safety being the top priority;     

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                 2010                                                                                                                                                                                                                                                                               2010
The Occupational Health and Safety Policy1 – defines the
Company’s goals, objectives and commitments in the field of
                                                                                            1.2. Sustainability                                                               the most conservative criteria in determining the independence
                                                                                                                                                                              of its directors.
                                                                                                                                                                                                                                                                           The Corporate Governance, Nomination and Remuneration
                                                                                                                                                                                                                                                                           Committee of the Board of Directors4 was created in February
industrial safety and occupational health.                                                  Governance and                                                                                                                                                                 2009. According to the Board’s decision, the Committee

The HR Strategy of MMC Norilsk Nickel for the period until                                  Management System                                                                 The annual General Shareholders’ Meeting elected three
                                                                                                                                                                              independent directors, including Bradford Mills, Vasily Titov,
                                                                                                                                                                                                                                                                           inherited the functions of the former Governance Committee.

2020 defines the Company’s priorities in the field of human                                                                                                                   and Gerard Holden.                                                                           The responsibilities of the Corporate Governance, Nomination
resource management and development of the respective                                       MMC Norilsk Nickel continually improves its governance and                                                                                                                     and Remuneration Committee of the Board of Directors
management tools for the mid-term and long-term perspective:                                management systems relying on Russian and international                           In 2010, 51 meetings of the Board of Directors were held,                                    include providing advice to the members of the Board of
   • providing the Company and its entities with human                                      best practices in sustainability management, and seeking                          including 11 meetings held in person and 40 – by absentee                                    Directors on the matters of corporate governance; drafting
     resources, whose number and professional skills meet                                   compliance with generally accepted international standards.                       voting.                                                                                      the Company’s policy with regard to the nomination of top
     the demands of the Company’s operations as defined by                                                                                                                                                                                                                 managers, their remuneration and performance evaluation;
     the Production Development Strategy;                                                   The Company has developed and implemented a corporate                             In 2010, the following committees of the Board of Directors                                  review and approval of the Company’s HR policy, in particular,
   • ensuring motivation of the staff to accomplish strategic                               Integrated Quality and Environmental Management System2.                          continued their work: the Audit Committee, the Strategy                                      with regard to personnel remuneration. In 2010, one meeting
     and operational objectives;                                                            Entities of the Norilsk Nickel Group have a number of local                       Committee, the Budget Committee, and the Corporate                                           of the Corporate Governance, Nomination and Remuneration
   • ensuring social stability in the labor collectives of the                              certified and accredited quality, environmental, and OHS                          Governance, Nomination and Remuneration Committee.                                           Committee was held.
     Group’s entities and its regions of operations.                                        management systems, which make important contribution to
                                                                                            the accomplishment of the Company’s strategic objectives3.                        The main objective of the Audit Committee1 is to assist the                                  The collective executive body of the Company – the Management
                                                                                                                                                                              Board of Directors in supervising Company’s financial and                                    Board – comprises 7 members. In 2010, 56 meetings of the
                                                                                                                                                                              economic activities by means of preliminary consideration                                    Management Board were held, including 5 meetings held in
                                                                                            1.2.1. Corporate social responsibility                                            and preparation of recommendations on such matters                                           person.
                                                                                            governance system                                                                 as: Company’s interactions with auditors; review of the
                                                                                                                                                                              Company’s financial statements; evaluating and improving                                     Vladimir Strzhalkovsky has been serving as the sole executive
                                                                                            General guidance of MMC Norilsk Nickel sustainability                             the effectiveness of the Company’s internal controls; and                                    body of the Company – General Director and Chairman of the
                                                                                            activities is provided by the Company’s governance bodies.                        interaction between external audits and internal controls of the                             Management Board – since August 9, 2008.
                                                                                                                                                                              Company. In 2010, 3 meetings of the Board’s Audit Committee
                                                                                            According to the Charter of OJSC MMC Norilsk Nickel, the                          were held.
                                                                                            Company’s governance bodies include:
                                                                                               • the General Shareholders’ Meeting – the supreme                              The Strategy Committee of the Board of Directors was created
                                                                                                 governance body of the Company;                                              in July 2008. The responsibilities of the Committee2 include
                                                                                               • the Board of Directors, which is responsible for general                     providing advice to the Board of Directors on the following
                                                                                                 guidance of the Company’s operations, with the exception                     matters: changes to the existing priorities of the Company’s
                                                                                                 of the matters reserved by the Federal Law “On Joint                         business, strategic goals and objectives; long-term and
                                                                                                 Stock Companies” and the Company’s Charter for the                           medium-term Company strategy; proposals on the Company’s
                                                                                                 General Shareholders’ Meeting;                                               sales strategy; oversight of the implementation of approved
                                                                                               • the Management Board and the General Director – the                          investment projects and programs; the improvement of the
                                                                                                 collective and the sole executive bodies of the Company                      investor relations policy. Five meetings of the Board’s Strategy
                                                                                                 respectively, responsible for the management of the                          Committee were held in 2010.
                                                                                                 Company’s day-to-day operations.
                                                                                                                                                                              The Budget Committee of the Board of Directors was created
                                                                                            On June 28, 2010, the annual General Shareholders’ Meeting                        in August 2008. The main objectives of the Budget Committee3
                                                                                            elected a new Board of Directors comprising 13 members.                           include preliminary review and providing advice to the Board of
                                                                                            Vasily Titov, First Deputy President and Chairman of the                          Directors on such matters as budgeting and business planning,
                                                                                            Management Board of OJSC VTB Bank, was elected the                                dividend policy, use of the Company’s reserves, changes to the
                                                                                            Chairman of the Board of Directors.                                               structure of the Company’s asset management, and oversight
                                                                                                                                                                              of the execution of budgets and business plans approved
                                                                                            In accordance with the international corporate governance                         by the Board of Directors. In 2010, 3 meetings of the Budget
                                                                                            practices and the recommendations of the Federal Financial                        Committee were held.
                                                                                            Market Service, independent directors are elected to the Board
                                                                                            of Directors of OJSC MMC Norilsk Nickel. The Company uses
                                                                                                                                                                              1   The current version of the Regulation on the Audit Committee of the Board of Directors   3   The current version of the Regulation on the Budget Committee of the Board of
                                                                                                                                                                                  of OJSC MMC Norilsk Nickel has been approved by the Board’s decision on September            Directors of OJSC MMC Norilsk Nickel has been approved by the Board’s decision on
                                                                                                                                                                                  8, 2009.                                                                                     August 3, 2010.
1       The Company’s Occupational Health and Safety Policy is available at the corporate   2   For more details see Section 2.6. Product Responsibility.
        website                                                                                                                                         2   The current version of the Regulation on the Strategy Committee of the Board of          4   The Regulation on the Corporate Governance, Nomination and Remuneration
                                                                                            3   Detailed information on the existing management systems is available at the       Directors of OJSC MMC Norilsk Nickel has been approved by the Board’s decision on            Committee of the Board of Directors of OJSC MMC Norilsk Nickel has been approved by
                                                                                                Company’s website:                      February 26, 2009.                                                                           the Board’s decision on February 26, 2009, and amended on August 10, 2009.

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        CORPORATE SOCIAL                                                                                                                                                                                                                                                                                                           CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                                          RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                                                                          2010
1.2.2. Corporate social responsibility                                                      Responsibility Reports is the responsibility of the Labor                                     in Russia, and other activities aimed at the improvement of                               management objectives and targets and monitoring their
management system                                                                           Management and Motivation Department.                                                         corporate governance and CSR management.                                                  achievement.

The management of day-to-day corporate social responsibility                                In 2010, in order to improve the corporate structure, the                                     The key Company’s units responsible for day-to-day                                        Tati Nickel
activities at the Company level is carried out by a number of                               position of the President of MMC Norilsk Nickel was                                           management of various CSR aspects and contributing to                                     The supreme governance body of Tati Nickel is annual
functional divisions (Figure 1.1), responsible for preparation,                             introduced. There are four corporate departments reporting                                    CSR reporting include: the Federal and Regional Government                                Shareholders’ Meeting, which is responsible for the consideration
approval, and implementation of the respective managerial                                   to the President, namely the Legal Department, the Investor                                   Relations Department , the Human Resource Department, the                                 and approval of financial statements, audit reports, and the
decisions.                                                                                  Relations Department, the Property Department, and the                                        Environment, Health, and Safety Department, the Investment                                annual reports, the appointment of directors, and the review of
                                                                                            SDC Department. Responsibilities of the President include:                                    Policy Department, the Foreign Assets Department, the Investor                            management performance of the previous year.
It is the Deputy General Director for GR and Social Policy, who                             the development of the Company’s strategy, formulation                                        Relations Department, the Internal Control Department,
is responsible for the general coordination of the Company’s                                and implementation of the Company’s policy based on the                                       the Department of Social Programs and Corporate Events,                                   The Board of Directors is responsible for general guidance of
CSR activities (Figure 1.1). Preparation of the Corporate Social                            corporate strategy, oversight of Company’s entities based                                     the International Financial Reporting Department, the PR                                  the company’s activities. The Board meets on a quarterly basis;
                                                                                                                                                                                          Department, and the Department of Scientific and Technology                               in order to improve the effectiveness of its work, some function
                                                                                                                                                                                          Development (Fig. 1.1).1                                                                  are delegated to respective committees reporting to the Board.
Figure 1.1. Corporate sustainability governance and management system                                                                                                                                                                                                               Presently, there are four standing Board committees at Tati
                                                                                                                                                                                          All functions of the Company are involved in sustainability                               Nickel, including the Production and Production Strategy
                                                                                                                                Committees of the Board of Directors                      management in their particular areas of responsibility.                                   Committee, the Key Personnel Relations Committee, the
                                                         General Shareholders’                                              Audit Committee                                               Specific areas of activities are coordinated by respective                                Remunerations Committee, and the Audit Committee (see
                                                         Meeting                                                            Strategy Committee
                                                                                                                            Budget Committee                                              corporate commissions and committees, including the Budget                                Figure 1.3).
                                                                                                                            Corporate Governance, Nomination,
                                                                                                                            and Remuneration Committee
                                                                                                                                                                                          Committee, the Expert Committee, and the Charity Committee2,
                                                            Board of Directors                                                                                                            Occupational Injury Prevention Committee.                                                 The Board of Directors appoints the Managing Director
                                                                                                                                        Coordination Bodies
                                                                                                                                                                                                                                                                                    responsible for day-to-day management of the company, who
                                                            Management Board                                                                                                                                                                                                        is assisted by the Operations Director and other members of
                                                                                                                            Budget Committee
                                                                                                                            Expert Committee                                              1.2.3. Corporate governance at the foreign                                                the Executive Committee. The Managing Director immediately
                                                            General Director                                                                                                              entities of the Company                                                                   reports to the Board of Directors.
                                                            and Chairman of the                                             Charity Committee
                                                            Management Board                                                Occupational Injury Prevention Committee
                                                                                                                                                                                          It is the Foreign Assets Department that is responsible for the                           Nkomati
                                                                                                                                                                                          management of foreign entities of the Group and oversight of                              The top governance body of Nkomati is the Executive Committee
                                                                                                                                                                                          their operations and financial activities. The only exception                             responsible for the overall (strategic) direction of the company.
                                                                                                                                                                                          is Norilsk Nickel Harjavalta Oy managed by the Operations                                 The Committee is comprised of 8 members, with each of the
                                                                                                                                                                                          Management Department in cooperation with the Foreign                                     two partners appointing 4 members.
                                                                                                                                                                                          Transactions Department of the Head Office of MMC Norilsk
            First Deputy                       First Deputy                            Deputy General Director                      Deputy General Director for GR                        Nickel.                                                                                   There are standing Audit Committee and Steering Committee
          General Director                   General Director                         for Economy and Finance                             and Social Policy
                                                                                                                                                                                                                                                                                    (Fig. 1.4). They are responsible for the oversight of operations
                                                                                                                                                                                          Various aspects of corporate social responsibility of the                                 with particular focus on compliance with the approved budget
                    Environment, Health,               Deputy General Director for                   Federal and Regional Government                                 Investor Relations   Company’s foreign assets are managed by their respective                                  policy.
                   and Safety Department               Transportation and Logistics                       Relations Department                                          Department
                                                                                                                                                                                          functions through preparing, making and implementing
                                                                                                                                                                                          managerial decisions in their areas of responsibility.                                    The key entities responsible for the development of the
                  Operations Management
                                                       Deputy General Director for
                                                         Sales and Distribution
                                                                                                     Labor Management and Motivation
                                                                                                                                                                     Legal Department                                                                                               social policy and the implementation of the social programs
                                                                                                                                                                                          Norilsk Nickel Australia                                                                  are the Human Resource Department and the Safety, Health,
                     Strategic Projects                            Economic                            Department of Social programs
                                                                                                                                                                                          The Board of Directors of NN Australia (see Figure 1.2)                                   Risk, Environment, and Quality (SHREQ) Department. Social
                                                                                                                                                                 Property Department
                        Department                                Department                              and Corporate Events                                                            comprises 5 members, two of whom (including the Managing                                  programs are approved by the Steering Committee and
                                                                                                                                                                                          Director) reside in Perth, Western Australia, where production                            Executive Committee.
                       Foreign Assets
                                                           Foreign Transactions
                                                                                                             Human Resource
                                                                                                                                                                     SDC Department       assets and facilities of NN Australia are based. Three directors
                                                                                                                                                                                          reside in Moscow, Russian Federation.
                  Department of Scientifiic                International Financial
                and Technology Development                Reporting Department                                                                                                            The Board of Directors of NN Australia is responsible for
                                                                                                                                                                                          strategic direction of all operations of Norilsk Nickel Australia
                  Informational Technology                      Public Relations                                 Internal Control                                Investment Policy        Group. Its responsibilities include defining operations
                        Department                                Department                                       Department                                       Department

                                                                                                                                                                                          1   For details on the responsibilities of these departments see CSR Report of OJSC MMC
                                                                                                                                                                                              Norilsk Nickel for 2009.

                                                                                                                                                                                          2   For more details see Social/CSR Reports of OJSC MMC Norilsk Nickel for 2005, 2006,
                                                                                                                                                                                              2007, 2008, and 2009.

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    CORPORATE SOCIAL                                                                                                                                                                                                                                                                                                          CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                                         RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                                                                         2010
Figure 1.2. Corporate structure of Norilsk Nickel Australia                                                                                                                   Norilsk Nickel Harjavalta Oy                                                      1.2.4. Risk management system
                                                                                                                                                                              The Board of Directors of NNH provides guidance to the                            MMC Norilsk Nickel’s operations entail a number of risks,
                                                                                                                                                                              corporate management team, which is responsible for day-                          which, under some circumstances, may potentially have a
                                                                          Board of Directors
                                                                                                                                                                              to-day management of the operations and the effectiveness                         significant effect on its financial and economic performance
                                                                                                                                                                              of the NNH management system. Each manager is personally                          and, as a result, on the Company’s contribution to the socio-
                                                                                                                                                                              responsible for the respective areas, so the management                           economic development of its regions of operation.
                                                                                 Managing                                                                                     system is understood by everyone involved and the established
                                                                                                                                                                              procedures are fully complied with. Each employee is                              In order to mitigate adverse impacts of potential hazards and
                                                                                                                                                                              responsible for the quality of his or her work and has access to                  to ensure the continuity of operational and financial activities,
                                                                                                                                                                              opportunities for improving his or her professional skills and                    the Company has in place a risk management system and
                                                                                                                                                                              the working environment.                                                          continually improves it, increasingly bringing the system
                                   Business Development                           Executive                              Legal
                              APAC/HMW/AD/ Feasibility Studies                     Director                            Department                                                                                                                               into compliance with international best practices and risk
                                                                                                                                                                              The company manages its quality, environmental, and OHS                           management standards.
                                                                                                                                                                              aspects within the framework of its overall management
                                                                                                                                                                              system. The management system has been certified compliant
                                                                                                                                                                              with SFS-EN ISO 9001 and SFS-EN ISO 14001 standards,
                        Finance                           Human Recources                              Commercial                            Production
                       Department                           Department                                 Department                             Division                        and OHSAS 18001 specification. The company also took the
                                                                                                                                                                              commitment to comply with the agreement on industrial
                                                                                                                                                                              energy efficiency.

                                                                          Exploration & Geotechnical              Department of Scientific
                                                                                 Department                     and Technology Development                                    Figure 1.4. Corporate structure of Nkomati

                                                                                                                                                                                                                                                 Board of Directors

Figure 1.3. Corporate structure of Tati Nickel

                                                                          Board of Directors
                                                                                                                                                                                                                             Audit Committee                            Steering Committee

                                                                                                                                                                                                                                                    Managing Director
                                                                                 Remuneration                                                               Managing
    Production Committee                   HR Committee                                                              Audit Committee
                                                                                  Committee                                                                 Director

                                                                                                                                                                                                                     Mineral Resource Management                             Projects
                                                                                                                                                                                                                              Department                                    Department

       Finance                              Operational                           Security                          Human Resources                   Corporate Development
      Department                             Director                            Department                           Department                           Department
                                                                                                                                                                                                                   Mine Planning & Mining Engineering                   Engineering Services
                                                                                                                                                                                                                              Department                                    Department

                                                                                                                                                                                                                                Mining                                   Financial Services
      Materials                       Mining                     Metallurgical                   Engineering                   Commercial                       SHERQ                                                         Department                                    Department
     Management                     Department                   Department                      Department                    Department                     Department

                                                                                                                                                                                                                        Concentrate Production                           Human Resources
                                                                                                                                                                                                                             Department                                    Department

                                                                                                                                                                                                                                                   SHREQ Department

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    CORPORATE SOCIAL                                                                                                                                                                                                                                                                                      CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                     RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                                                     2010
Figure 1.5. Corporate structure of Norilsk Nickel Harjavalta Oy                                                                                                   Key elements of the Company’s risk management                                         Company takes all necessary measures to control these risks,
                                                                                                                                                                  system1:                                                                              in particular, using state-of-the-art equipment and technology.

                                                                                                                                                                  Risk identification                                                                   Seeking to reduce the probability of adverse events at industrial

                         Research and
                                                                                                                                                                  This involves collection and analysis of information on internal                      facilities and associated effects, Norilsk Nickel regularly
                                                                                                                                                                  and external factors that may adversely affect accomplishment                         evaluates the risk of unplanned disruptions of its processes.
                                                                                                                                                                  of the corporate objectives.                                                          The Company on an annual basis identifies and implements
                                                                                                                                                                                                                                                        managerial and engineering measures to prevent potential
                                                                                                                                                                  Risk assessment                                                                       consequences of accidents and incidents, and develops
                                                                                                                                                                  Possible effects of identified adverse events on the Company’s                        business continuity plans.
                                                                                                                                                                  financial and operational performance and strategic objectives

                                                                                                                                                                  are evaluated using state-of-the-art risk assessment                                  A comprehensive program of insurance against the Company’s

                                                                                                         KAMPA System,
                                                                                                          product safety
                                                            Training and Media


                                                                                                                                                  Research and
                                                                                                                                                                  approaches and methods (qualitative, quantitative, mathematical                       operational risks is in place.



                                                                                                                                                                                                                                                        Environmental risks
                                                                                                                                                                  Risk prioritization                                                                   Recognizing the magnitude and complexity of environmental
                                                                                                                                                                  Acceptable risk levels are defined, and risks are classified into                     issues faced by Norilsk Nickel, the Company’s management
                            Finance and IT

                                                                                                                                                                  significance categories.                                                              views environmental activities as an integral part of its
                                                                                                                                                                                                                                                        business, seeking to ensure environmental compliance and
                                                                                                                                                                  Risk handling                                                                         resource efficiency of its operations. In order to minimize
                                                                                                                                                                  Based on risk significance, actions to handle the risks are                           potential financial losses associated with environmental
                                                                                                                                                                  defined, and the process of their implementation is monitored.                        pollution, the Company practices insurance against such risks.
                         of raw materials

                                                                                                                                                                  The corporate risk management system encompasses a broad                              Currently the Company carries out environmental monitoring


                                                            IT Unit

                                                                                                                                                                  range of non-financial risks2:                                                        programs and implements measures to reduce the
                                                                                                                                                                     • natural and industrial (engineering/operational) risks;                          environmental footprint of its operations. In order meet its
                                                                                                                                                                     • environmental risks;                                                             environmental commitments, in 2005 the Company developed

                                                                                                                                                                     • regulatory risks;                                                                and implemented a corporate environmental management
                                                                                                                                                                     • risks related to the availability of human resources;                            system. The system’s compliance with ISO 14001:2004
                                                                                                                                                                     • social risks;                                                                    international standard is confirmed on a regular basis by an
                                                                                                                                                                     • risks associated with foreign assets.                                            independent certification body conducting annual surveillance

                                                                                                                                                                                                                                                        audits. The most recent surveillance audit was carried out in
                                                                                                                                                                  Natural and industrial (engineering/operational) risks                                November 2010 by Bureau Veritas Certification, an international
                                                                                                                                                                  Industrial operations are the foundation of Norilsk Nickel’s                          certification body, which confirmed compliance with the
                                                                                                           and Logistics

                                              and Repair


                                                                                                                                                                  sustainability and successful development; it is their stability                      standard. The key divisions and SDCs of the Company hold all
                                                                                                                                                                  and effectiveness that determines the Company’s ability to                            the environmental permits necessary for their operations, or
                                                                                                                                                                  meet its key business goals.                                                          took all available steps to obtain such permits.

                                                                                                                                                                  The main industrial sites of the Company are located in the                           Regulatory risks
                                                                                                                                                                  Far North of Russia. As a result of the weather and other                             The activities of MMC Norilsk Nickel are regulated by numerous
                                                                                                                                                                  natural conditions in the region, such activities as conducting                       laws, regulations, standards, and guidelines in such areas as
                                                                                                                                                                  geological exploration, mining and processing of ore, supplying                       mineral resource processing and product manufacturing,
                                                                                                                                                                  production facilities and urban infrastructure with energy,                           environmental protection, international trade, taxes, labor

                                                                                                                                                                  and transporting products to customers all require resolving                          relations, etc.
                                                                                                                                                                  complex engineering issues.
                                                                                 and Cutting Workshop
                                                                                 Electrolysis Workshop
                                                            Leaching Workshop

                                                                                                                                                                                                                                                        International expansion of the Company’s operations makes
                                                                                                           Powder Reduction

                                                                                                                                 Chemical Plant

                                                                                                                                                                  Severe environmental conditions in the key regions of activity                        it necessary to ensure compliance with all applicable laws,
                                                                                                                                                    Supply Unit

                                                                                                                                                                  (e.g. extremely low temperatures, “black snowstorms”,                                 regulations, and standards of the respective countries.
                                                                                                                                                                  navigability of the Yenisei River) under certain circumstances
                                                                                                                                                                  can have a major impact on Norilsk Nickel’s operations. The                           In order to prevent potential adverse effects associated with

                                                                                                                                                                                                                                                        changes in the existing laws and regulations or the adoption
                                                                                                                                                                  1   For more details on the corporate risk management system, see Annual Review of
                                                                                                                                                                      MMC Norilsk Nickel for 2010.
                                                                                                                                                                                                                                                        of new ones, and ensure meeting its commitments to
                                                                                                                                                                                                                                                        stakeholders, the Company carries out continuous monitoring
                                                                                                                                                                  2   For more details on financial and non-financial risks, see Annual Review of MMC
                                                                                                                                                                      Norilsk Nickel for 2010.                                                          of legal and other applicable requirements in all the fields of

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    CORPORATE SOCIAL                                                                                                                                                                                                                                                                              CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                             RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                                             2010
its activities. This helps timely respond to all relevant changes,      Risks associated with foreign assets1                                                        requirements may lead to adverse consequences, including             The government program for increasing the participation
adjusting operational and other practices as appropriate.                                                                                                            risks of failure to obtain new exploration and mining permits.       of historically disadvantaged persons in companies leads
                                                                        Financial and price risks                                                                                                                                         to additional limitations for the attraction of highly-skilled
Risks related to the availability of human resources                    Most of the Company’s sales, as well as other payments and                                   In Botswana, relevant risks are associated with potential failure    specialists.
The geography of the Company’s key operations located above             transactions, are in US dollars. Fluctuations of exchange rates                              to get work permits for foreign specialists and increased quotas
the Arctic Circe results in a range of risks associated with the        and, in particular, depreciation of the dollar relative to local                             for local residents to be employed as workers and managers.          Given the high prevalence of HIV/AIDS in the region, there is a
need for attraction and retention of high-quality workforce             currencies may negatively affect financial performance of the                                                                                                     risk of a loss of both skilled and unskilled workforce as a result
possessing necessary skills. The lack of qualified human                Company. Price risks may also have effects on its performance.                               Local labor market risks and social risks                            of this disease.
resources required by mining, metal production, energy, and                                                                                                          In Africa, the lack of requisite skills for dealing with high-
transport operations may potentially have a significant impact          Norilsk Nickel Harjavalta Oy manages risks associated with                                   tech equipment among the local workforce and high demand             A high demand for highly skilled workforce in the mining
on the quality, timing, and cost of the implementation of               potentially unfavorable timing of market sales by means of                                   for skilled mining engineers in regional labor markets lead          sector of Western Australia in the post-crisis period gives
corporate production programs.                                          internal price arrangements with the sales company Metal                                     to additional risks of a loss of highly-skilled workforce            rise to additional risks associated with the potential lack
                                                                        Trade Overseas AG. The company procures raw materials and                                    and, consequently, unstable operation of mining assists in           of necessary human resources and resulting instability of
The Company has in place a system of measures to address                sells nickel products at the international prices, and purchases                             Botswana and South Africa.                                           mining operations.
staffing and social issues and to attract and retain qualified          other necessary goods and services from a range of internal
employees. It also continuously monitors local labor markets,           and external providers. The company manages its risks in this
as well as the social and demographic situation and migration           area by concluding long-term contracts with reliable suppliers                               1.3. Information Policy
processes in the relevant regions.                                      and monitoring their activities on a regular basis.

In order to maintain social stability within its entities and prevent   Regulatory risks
deterioration of the personnel quality, in 2010 the Company             Risks faced by the Group’s assets in Australia are associated
continued implementing a broad range of programs including:             with potential changes in pollutant emission limits and license
corporate workforce attraction and training programs, partner           fees.
programs with specialized educational institutions to train
future workers and specialists in specialties demanded by the           In Africa, the Company’s assets face a range of risks associated
Company, and programs for attracting highly-skilled workers             with potential regulatory restrictions, price controls, export
and specialists, difficult to recruit in the local labor markets,       controls, changes in income tax rates, property expropriation,
from other regions of Russia.                                           and changes in the relevant environmental and safety
                                                                        legislation. These factors may lead to changes in the costs
The Company also was taking measures to protect jobs and                of resource extraction, product manufacturing, geological
increase wages, and to improve recreation opportunities                 exploration, and mining operations.
available to its staff. The implementation of the existing social
programs was continued.                                                 The legislation of South Africa establishes a currency
                                                                        regulation regime and imposes limitations on the export of
Social risks                                                            capital from the common currency zone, which includes South                                  The information policy of the Company is based on the corporate      General Director and Chairman of the Management Board, and his
Norilsk Nickel’s success depends greatly on the input of                Africa. The mining industry in South Africa is heavily regulated                             Regulation on the Information Policy of OJSC MMC Norilsk             deputies responsible for various functions within the Company.
employees involved in the Company’s operations.                         by the legislation and regulations issued by state authorities,                              Nickel, approved by the Board of Directors of OJSC MMC Norilsk       The Company maintains working relations with Intrerfax, RBC,
                                                                        including directives with regard to occupational health                                      Nickel in 2009. The key provisions of the document are intended      and RIA Novosti news agencies, Vedomosti, Kommersant, and
The Company manages social and labor relations with its staff           and safety, geological exploration, mining operations, and                                   to help stakeholders fully exercise their rights to access to        RBC Daily newspapers, Russia 24, RBC TV, and Russia Today
on the basis of unconditional compliance with the respective            managing environmental impacts of mining activities. Mining                                  the information, which is significant to their investment and        television channels, Business FN and Vesti FM radio stations, as
legislation, including any amendments to it, collective                 operations in the country require various permits and licenses.                              managerial decisions. The main principles of the corporate           well as such foreign media as the Financial Times and several
bargaining, and adoption of relevant corporate regulations.                                                                                                          information policy include: regularity, timeliness, accessibility,   news agencies, including Reuters, Bloomberg, and Dow Jones.
The Company implements a system of social programs                      Labor unions are strong and active in South Africa. The                                      reliability, completeness, balance and objectivity, ensuring
going beyond legal requirements in such areas as personnel              Mining Charter2 stipulates that the share of HDSA (historically                              equal rights, and protection of sensitive information resources.     In the reporting year, the Company’s senior executives participated
training, occupational health and safety, health improvement,           disadvantaged South Africans) ownership of each mining                                                                                                            in Russian economic and investment forums and conferences, and
and corporate pensions. This reflects social responsibility             company in South Africa should reach at least 15% within                                     In addition to compulsory disclosure in accordance with the          gave presentations at international forums. Press conferences
of the Company and the attention paid to the interests of its           five years after the adoption of the Charter (May 1, 2004), and                              federal legislation and regulations of RF, the Company discloses     with top management of OJSC MMC Norilsk Nickel for federal and
employees in order to prevent social tensions.                          26% within ten years. The Group’s failure to comply with the                                 all the information required by various stock exchanges where        international media were held on a regular basis.
                                                                                                                                                                     its shares are listed. It also provides a broad range of other
                                                                        1   For more details on operational and other risks, see Annual Review of MMC Norilsk
                                                                                                                                                                     information on a voluntary basis.                                    Russian and foreign media, as well as business community
                                                                            Nickel for 2010.                                                                                                                                              and analysts widely discussed the working trip of Vladimir
                                                                        2   The Broad-Based Socio-Economic Empowerment Charter for the South African Mining          In 2010, the Company’s transparency was exemplified by               Strzhalkovsky to France as a member of the official delegation
                                                                            Industry (the Mining Chapter) entered into force on May 1, 2004. The Mining Charter is   numerous interviews given to federal media by Andrey Klishas,        accompanying Russian President Dmitry Medvedev during his
                                                                            aimed, in particular, at transforming the structure of ownership in the South African
                                                                            mining industry.                                                                         President of MMC Norilsk Nickel, Vladimir Strzhalkovsky,             visit to that country in March 2010.

                 24                                                                                                                                                                                                                                                                  25
    CORPORATE SOCIAL                                                                                                                                                                                                                                                                 CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                                2010
The visit of Vladimir Putin, Prime Minister of Russia, to Norilsk         radio, TV, websites) in order to ensure comprehensive
in August 2010, during which a number of important documents              coverage of its activities. Detailed information on the                                         1.4. Stakeholder Engagement
were signed, was a particularly significant event, which received         company’s activities and its involvement in socially significant
wide coverage in Russian and international media.                         projects, including social and environmental initiatives, is
                                                                          available at the corporate website (
In order to better inform stakeholders about various aspects              Information on Kola MMC’s activities is also accessible in other
of the Norilsk Nickel’s strategy and activities, the Company              districts of the Murmansk Region, where Murmansk TV-21
continuously updated the Regional News section of the                     channel, a company’s broadcasting partner, can be received.
corporate website. The section covers, in particular, the
progress of the modernization of production facilities operated           In November 2010, Kola MMC actively supported the 3rd “Northern
by the Polar Division and Kola MMC.                                       Character” International TV Program and Film Festival (the first
                                                                          festival was held in 2008). The festival is organized by CJSC
The Company continuously updated its corporate blog, posting              Northwestern Broadcasting, a media asset of the Company. The
information on social and cultural activities of Norilsk Nickel           objective of the Festival has been to improve target audiences’
(various contests, sporting events, presentation materials on the         awareness of human life in the Far North, activities of industrial
history of Norilsk, on activities of the Company’s arctic fleet, etc.).   companies developing northern regions, and environmental
                                                                          situation in the North of Europe. The 3rd “Northern Character”
The Company has been publishing Norilsk Nickel corporate                  festival demonstrated the growing significance of the project. In
magazine, popular both among its employees and among                      2010, traditional participants of the festival – Norway, Sweden,
external stakeholders, for eight years. In 2010, several higher           Finland and Russia – were joined by the Netherlands and                                         The key stakeholders of MMC Norilsk Nickel include the             In order to learn about views of its stakeholders and get their
education institutions specializing in mining and metallurgy              Canada. Overall, the festival has established itself as a unique                                Company’s employees, shareholders and investors, business          feedback, the Company conducts regular surveys among its
demonstrated their interest towards the periodical. In particular,        cultural event of the Murmansk Region.                                                          partners, regional governments and municipal authorities in        stakeholders and reviews comments posted to the corporate
the magazine was considered relevant for the inclusion in the                                                                                                             the Company’s regions of operations, NGOs active in these          blog, as well as written communications sent to the Company.
electronic library of the Moscow Mining University. The magazine          The Polar Division of OJSC MMC Norilsk Nickel also uses a                                       regions, as well as stakeholders at the federal level and          Maintaining close contacts with its stakeholders helps the
was also included in the library of specialist periodicals                variety of information channels to reach external stakeholders.                                 international organizations.                                       Company learn about stakeholders’ expectations and address
maintained by the developers of the NormaCS information                   It particular, it publishes Zapolyarny Vestnik newspaper,                                                                                                          their requests on a timely basis.
and reference system. NormaCS provides information support                which appears in Norilsk five times a week. The periodical                                      The Company bases its stakeholder engagement activities on
in a broad range of sectors and areas, including construction,            covers the division’s activities and development trends, its                                    the following fundamental principles:                              Mutual alignment of interests of the Company and its
energy, environmental protection, mechanical engineering,                 achievements and social initiatives. The most interesting news                                     • respect for and consideration of stakeholders’ interests,     stakeholders is achieved through a direct dialogue with
metal processing, communications, ship building, railroad                 are discussed on daily programs of Severny Gorod TV channel,                                          views, and preferences, including respect for the history,   stakeholder representatives maintained by way of negotiations,
equipment, oil and gas production and processing, chemical                which is broadcast across the Norilsk Industrial District, and                                        culture, customs, lifestyle and heritage of residents of     establishing and running joint working groups and standing
and petrochemical industry, electronics, agriculture, and many            on programs of Radio GOROD and Radio Severy Gorod. The                                                the regions where the Company operates;                      commissions, holding conferences and forums, as well as
others. An example of magazine presentation in the information            division’s news are also available at the website of Taimyrsky                                     • openness and transparency                                     various meetings and consultations.
system can be seen on the website of NormaCS: www.normacs.                Telegraph news agency (                                                          • trust and sincerity;
ru (                                                                                                                                 • unconditional compliance with the law;
                                                                          The reporting year marked the beginning of a new social and                                        • consideration of Russian and international standards;         1.4.1. Social dialogue with the employees
MMC Norilsk Nickel practices information transparency not                 cultural initiative in Norilsk, which evolved into a distinct area                                 • responsible fulfillment of commitments assumed by the
only at the federal level, but also in its regions of operations.         of activities of LLC “Severny Gorod” Media Company, a media                                           Company.                                                     MMC Norilsk Nickel views employees of its divisions and SDCs
                                                                          asset of OJSC MMC Norilsk Nickel. The project titled NORTH.                                                                                                        as one of the key stakeholder groups, and gives priority attention
Kola MMC has been publishing Kolsky Nickel corporate weekly               doc became a new cultural brand in Norilsk, a venue for media                                   MMC Norilsk Nickel adheres to the policy of information            to maintaining and developing relations with this group.
since 2002 in order to keep the Company’s employees in                    and cultural experiments centered around the premise that the                                   openness aimed at providing all stakeholders with reliable and
Murmansk Region (the towns of Monchegorsk, Zapolyarny, and                North is an area where one can live a full and meaningful life.                                 complete information on its key activities. In its stakeholder     MMC Norilsk Nickel is committed to observance of human
Nickel) and all interested stakeholders informed of its activities,       In 2010, six major events were organized within the framework                                   engagement activities, the Company uses various forms and          rights in accordance with the Constitution of the Russian
plans and objectives. The periodical covers corporate news and            of the project, attracting much attention of the residents of                                   methods of disclosing information and obtaining feedback, and      Federation, the Russian legislation, and universally recognized
publishes materials on management decisions, development                  Norilsk. The NORTH.doc project became a runner-up in the                                        employs the most effective means of communication.                 principles and requirements of the international law, as
plans, modern technologies introduced by the company, sports              “Best PR project” category of the prestigious “Silver Archer”                                                                                                      stipulated by relevant declarations and conventions, as well
activities, and social projects. Guided by its policy of maximum          National PR Awards. Members of the expert panel and the                                         Information on the most important events in the Company’s          as guidelines of the International Labor Organization and other
transparency, in 2010 Kola MMC initiated the creation of                  jury highly appreciated the project representing the cultural                                   life and its performance is communicated to stakeholders via       international organizations.
a new TV program about its activities, which is broadcast                 brand of an area and ambitiously positioning itself as the new                                  the corporate media, which include the corporate website,
across Pechenga District of Murmansk Region, where major                  “northern idea”.1                                                                               corporate blog, Norilsk Nickel corporate magazine, other print     The Company recognizes the right of its employees to associate
operations of Kola MMC are based. The company uses a range                                                                                                                publications, as well as annual and social reports, prepared       and establish organizations according to their choice as an
of information channels and communication methods to reach                                                                                                                in Russian and English and made available at the corporate         inalienable element of freedom of association and collective
                                                                          1   The “Silver Archer” awards are granted to author of the most interesting projects,
external stakeholders. Kola MMC for many years has been                       professionals who made a significant contribution to the development of public relations,
                                                                                                                                                                          website (for more details see Section 1.3. Information Policy).    bargaining.
working with the media of the Murmansk Region (newspapers,                    and persons using PR approaches in their political, social, and professional activities.

                 26                                                                                                                                                                                                                                                                     27
     CORPORATE SOCIAL                                                                                                                                                                                                                                                                   CORPORATE SOCIAL
 RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                  RESPONSIBILITY REPORT
                  2010                                                                                                                                                                                                                                                                  2010
Figure 1.6. Stakeholders                                                                                                                                                   In addition to general staff satisfaction surveys, the Company       The dividend policy of MMC Norilsk Nickel approved by the
                                                                                                                                                                           practices regular thematic employee surveys to provide               Company’s Board of Directors in 2002 provides for using 20–
                                                                                                                                                                           information basis for managerial decisions in various areas          25% of IFRS net income for dividend payments. In 2010, the
        Internal stakeholders                                       MMC Norilsk Nickel                                                            Federal stakeholders
                                                                                                                                                                           (adaptation of young employees, effectiveness of corporate           Company paid high dividends for 2009 in both absolute (USD
                                                                                                                                                                           health improvement and recreation programs, including those          1.325 billion) and relative (50% of IFRS net income) terms. This
                                                                                                                                                                           aimed at employees’ children, provision of protective clothing,      was a result of the Company’s strong performance in 2009.
                     Business partners                                                                                                       Mass media                    workplace amenities etc.).
                                                                                                                                                                                                                                                The management of MMC Norilsk Nickel holds regular meetings
                                                                                                                                                                                                                                                with shareholders and investors to discuss current operations
                                                                                                                                                                           1.4.3. Shareholders and investors                                    of the Company and its development plans and to learn about
                                       International stakeholders       Shareholders and investors                   Regional stakeholders
                                                                                                                                                                                                                                                the opinions of minority shareholders. The views voiced during
                                                                                                                                                                           MMC Norilsk Nickel bases its shareholder and investor                such meetings are then considered in further decision making.
                                                                                                                                                                           relations on the principles of direct constructive dialogue in
     1. Senior and middle management                                1. Suppliers (selected on a competitive basis)           1. Governments of the regions of operations
        and employees of the Company                                2. Customers                                             2. Institutions of basic, secondary           accordance with the existing legislation and generally accepted      In 2010, the Company’s activities aimed at the improvement
     1. Russian Tripartite Commission
                                                                    3. Contractors                                              and higher vocational/professional         international practices. The Company works to ensure the             of its transparency and meeting information needs of the
                                                                                                                                education in the areas of operations
     2. Employer associations
        (RUIE, Association of Managers etc.)
                                                                    1. Shareholders                                          3. NGOs active in the areas of operations     maximum possible transparency of its operations, providing           investment community included, in particular:
                                                                    2. Investors
     1. Federal media                                               1. International NGOs including
                                                                                                                                                                           its shareholders and investors with timely and equal access to          • more than 130 meetings with shareholders, investors,
     2. Regional and local media                                       sectoral associations                                                                               information on its performance.                                            and investment bank analysts at the Company’s Head
     3. Other web-based media and news agencies                     2. International Labor Organization
     4. Regional and local TV channels                                                                                                                                                                                                                Office, and 230 meetings held abroad;
                                                                                                                                                                           It is the Company’s Investor Relations Department that is in            • public presentations on the Company and its activities
The Company adheres to the principle of prohibiting any form of                          their entities, potential of personnel turnover, and social well-                 charge of shareholder and investor relations. The key priority             delivered by senior managers at nine Russian and
discrimination or forced labor, making sure that every worker                            being of various employee groups.                                                 of Norilsk Nickel’s shareholder and investor relations activities          international investment conferences;
has equal opportunities to realize their labor rights regardless                                                                                                           is the disclosure of relevant information on its activities and         • Investor Day in London, where top managers of MMC
of sex, race, nationality, origin, financial and social status, job                      The 2010 employee satisfaction survey                                             performance.                                                               Norilsk Nickel made public presentations on the long-
position, age, place of residence, religious orientation, political                      In the fourth quarter of 2010, a survey among employees of the                                                                                               term development prospects of the Group’s operations;
convictions, or any other circumstances unrelated to their                               Company’s divisions and SDCs based in Norilsk was carried out.                    In accordance with the legal requirements concerning rights             • three site visits to the Company’s production facilities
professional skills.                                                                     The survey demonstrated that the general level of employee                        and legitimate interests of shareholders and investors, the                in the Norilsk Industrial District for shareholders and
                                                                                         satisfaction and loyalty to their divisions of companies remained                 Company prepares, publishes and submits to the Federal                     investors;
The Company strives to make sure that all employees have                                 high. In particular, it was found that 77% of employees were                      Service for Financial Markets and Russian stock exchanges               • over 540 written responses to shareholders’ and
equal opportunities to realize their potential in the course of                          completely or generally satisfied with their jobs.                                (MICEX and RTS) annual reports, securities issuer’s quarterly              investors’ enquiries.
their work activities, receive impartial and fair evaluation                                                                                                               reports, statements of material facts, and statements of facts
of their performance, and are selected and advanced solely                               Compared to the 2009 survey, employees more positively                            which may have considerable influence on the value of the
on the basis of their professional abilities, knowledge and                              evaluated the financial status of their households, safety                        issuer’s securities.                                                 1.4.4. Relations with business partners
skills.                                                                                  and sanitary conditions at the workplace, and approaches to
                                                                                         work organization. The survey showed an increased level of                        The Company supports the trading of its shares on the main           The Company seeks to deal with its business partners – suppliers
The Company strictly adheres to legal requirements prohibiting                           employee satisfaction with employments guarantees, technical                      Russian trading floors MICEX and RTS – by means of regular           and customers – based on the principles of transparency,
workers under the age of 18 to work in harmful and/or                                    competencies of immediate supervisors and competencies                            disclosures in accordance with the listing requirements of the       fairness, impartiality, and ethical business conduct.
hazardous work conditions, and observes norms prohibiting                                related to the management of labor collectives. The level of                      stock exchanges. In April 2010, ordinary shares of MMC Norilsk
the use of women’s labor in jobs with arduous and hazardous                              management’s care for employee well-being, as perceived by                        Nickel were transferred from the MICEX’s B Quotation List to the     The Company practices a responsible approach to selecting
working conditions in mining industry.                                                   the latter, also improved. The satisfaction level with regard to                  A1 Quotation List. This helped significantly expand the range of     its suppliers and customers and identifies potential partners
                                                                                         professional development and career growth opportunities                          potential investors in the Company’s stock, including state and      through analysis of the market, also taking into account
                                                                                         remained generally unchanged, as did satisfaction indicators                      non-state investment funds and insurance companies viewing           companies’ public reputation and their approach toward
1.4.2. Employee satisfaction surveys                                                     with regard to disclosure of information and the handling of                      the inclusion in the A1 Quotation List of a major trading floor as   corporate governance and social responsibility.
                                                                                         employees’ suggestions and complaints. Against the backdrop                       a necessary requirement for a stock to invest in. The inclusion
The Company conducts regular surveys of employee                                         of growing workloads and intensity of production programs in                      of Norilsk Nickel shares in the A1 Quotation List confirms full      The Company prequalifies potential providers of goods and
satisfaction with the key conditions of their employment,                                most Company’s production entities, line managers and foremen                     compliance of the Company with the requirements of MICEX             services, paying particular attention to their business conduct.
including organizational and technical aspects of working                                are getting more demanding with regard to technology support                      stock exchange with regard to financial performance, stock
conditions, health and safety at the workplace, remuneration                             and human resource support of operations, remuneration, and                       liquidity, corporate governance, and disclosure procedures.          The Company purchases its major inputs on a competitive basis,
level, opportunities for professional development and                                    organization of work. Some units and subsidiaries demonstrated                    RTS stock exchange lists Norilsk Nickel stock in the B               ensuring transparency of the tendering process by means of:
career growth, disclosure on significant issues, handling                                a major improvement in terms of most employee satisfaction                        Quotation List. In addition, the Company ensures circulation            • disclosing, at the tender announcement stage, how the
of employees’ suggestions and complaints, and general                                    indicators, while other entities showed no significant changes                    of its Level 1 American Depositary Receipts on a number of                Company intends to secure its obligations to winning bidders;
communication climate at the workplace. The surveys also                                 compared to the previous years. Survey results are reviewed                       foreign trading floors, including IOB, London Stock Exchange –          • opening bids in the presence of bidders or their authorized
cover staff satisfaction with the performance of various levels                          by management of the Company and its SDCs and are used in                         UK; OTC Market – New York, USA; Freiverkehr, Berlin-Bremen                representatives;
of management, employees’ attitudes to their jobs, loyalty to                            decision-making on social and labor issues.                                       Stock Exchange – Berlin, Germany.                                       • splitting the lot for provision of goods or services among

                    28                                                                                                                                                                                                                                                                     29
    CORPORATE SOCIAL                                                                                                                                                                                                                                                                       CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                      RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                                      2010
         several bidders into equal shares where proposal terms are                        involvement of the business community. The Company also                    of mineral resources in the southeast of Zabaikalsky Region,                                respective sectoral ministry – the Ministry of Minerals, Energy
         identical, if it is possible and feasible.                                        uses its participation as an opportunity to promote socially               and in the construction of Bugdainsky and Bystrinsky ore                                    and Water Resources, to which it submits monthly reports on
                                                                                           significant projects. The Company’s representatives participate            mining and processing plants.                                                               its operations.
The Company chooses its customers based on selection                                       in parliamentary hearings and roundtable meetings organized
criteria that take into account their reliability ratings and global                       by the Council of Federation and the State Duma of the Federal             The Company actively participates in various public events                                  Tati Nickel actively engages with the Ministry of Education and
reputation.                                                                                Assembly of the Russian Federation.                                        organized by government authorities at different levels. In                                 Skills Development, contributing to a joint educational project
                                                                                                                                                                      2010, the Company’s senior managers took part in a number of                                launched three years ago.
The Company develops its customer relations on the basis                                   In 2010, Company became a member of the Russian Union                      major events, including the Paris Forum of Russian and French
of corporate sales standards. It seeks to deliver products                                 of Industrialists and Entrepreneurs (RUIE) and the Chamber                 Business Leaders, the 3rd Nevsky International Environmental                                Tati Nickel also has good working relations with a number
conforming to established standards, at the same time meeting                              of Commerce and Industry of the Russian Federation, which                  Congress, the 14th Saint Petersburg International Economic                                  of other government bodies, including the Local Enterprise
specific demands of individual customers to the maximum                                    helped the Company to raise its dialogue with the society and              Forum 2010, “Russia–Africa: Horizons of Cooperation”                                        Authority, the Botswana Training Authority, the Botswana
extent possible.                                                                           the government to a new level.                                             International Business Forum1, “Innoprom 2010” International                                Export Development and Investment Authority.
                                                                                                                                                                      Exhibition and Forum, the 9th International Investment Forum
The Company gives priority to securing long-term contracts                                 The General Director and Chairman of the Management Board                  «Sochi-2010».                                                                               The company also maintains close contacts with the City of
with customers of metal products, particularly with the end                                of OJSC MMC Norilsk Nickel was elected to the RUIE Board, the                                                                                                          Francistown Council and the North East District Council. Both
users who use nickel to manufacture steel, alloys, and other                               collective governing body or the Union.                                    In 2010, the Company’s representatives also took part in                                    councils are based in the immediate vicinity of the Tati Nickel’s
products. The prices are determined in accordance with the                                                                                                            the following specialized conferences and forums: the 10th                                  premises, and their representatives often participate in various
respective international practice. The Company practices                                   Participation of Norilsk Nickel managers as experts in relevant            International Yalta Financial Forum, the Financial Forum of                                 public, social, or economic events organized by the company.
a flexible approach to sales, allowing customers to seek                                   committees and commissions helps the Company expand it in-                 Russia, the International Conference “Intellectual Transport
payment extensions and improved delivery conditions.                                       volvement in legislative activities, in particular, via drafting propos-   2010”, and the 2nd International Conference “GR Congress 2010:                              Norilsk Nickel Harjavalta Oy
                                                                                           als on the improvement of the legislation in the areas of signifi-         Effective Dialogue between Business and the Government”.                                    NNH management maintains relations with a number of
The Company carries out annual surveys among all of its                                    cance to the business community, with special emphasis on social                                                                                                       Finnish government authorities. In particular, NNH actively
domestic and foreign customers to learn about their perception                             and labor relations, industrial safety and environmental safety.                                                                                                       engages with several relevant ministries, including the
of delivery conditions, product quality and packaging. The                                                                                                            1.4.6. Engagement of foreign entities of the                                                Ministry of Trade and Industry, the Ministry of Social Affairs
Company evaluates the degree of customer satisfaction with                                 When engaging with government authorities, the Company                     Company with government authorities                                                         and Health, the Ministry of the Environment etc. The company
the quality of products and delivery services.1                                            considers it a priority to achieve a balance of interests of the                                                                                                       management also maintains contacts with local authorities,
                                                                                           business, employees, communities in the areas of operations,               Norilsk Nickel Australia                                                                    including, among other, the Harjavalta municipal government.
The Company has created and maintains electronic databases                                 and the society as a whole.                                                NN Australia maintains constructive working relations with                                  NNH collaborates with a number of relevant working groups
of customer complaints regarding all types of the Company’s                                                                                                           relevant government bodies and officials, both at the federal                               established by EU bodies and contributes to their activities.
products and non-compliance with delivery conditions.                                      In 2010, the Company, as a RUIE member, was able to secure                 level and at the level of Western Australia, the state where it
Customer complaints are reviewed and addressed in                                          the participation of its representatives as experts in several             is based. During the visit of Vladimir Strzhalkovsky, General
accordance with the established corporate procedures.                                      working groups of the Russian Government Tripartite                        Director of OJSC MMC Norilsk Nickel, to Western Australia, he                               1.4.7. International cooperation
                                                                                           Commission for the Regulation of Social and Labor Relations                had a meeting with Martin Ferguson, Minister for Resources
To secure the interests of its European customers, the Company                             in order to facilitate decisions, which take into account the              and Energy of Australia.                                                                    Being one of the world’s largest mining and metallurgical
was among the first Russian companies to register its products                             interests of those working in the northern regions of Russia                                                                                                           corporations, the Company sells most of its products in
in accordance with EU’s REACH and CLP regulations, thus                                    and employers running operations there.                                    Nkomati                                                                                     foreign markets. Therefore it pays particular attention to
ensuring the continuity of supply to the European market.                                                                                                             Nkomati Nickel continuously engages with the South African                                  cooperation with international sectoral associations and non-
                                                                                           In implementing socially significant programs and projects,                Department of Health, the Department of Education, the                                      profit organizations, aimed at mutually beneficial sharing of
The Company’s representatives have been participating in                                   the Company is guided by the principles of public-private                  Department of Labor, the National Development Agency, the                                   best practices in production, environmental, social and other
annual events for metals producers and consumers – London                                  partnership.                                                               Small Enterprise Development Agency, and the National Youth                                 spheres.
Metal Exchange Week (since 1998) and London Platinum Week                                                                                                             Development Agency. This helps create a conducive environment
(since 2003) – and in various international conferences on the                             In August 2010, during his working visit to Norilsk, Vladimir Putin,       for the further development of Nkomati Mine.                                                Membership in international organizations opens new
development of metal markets.                                                              Prime Minister of the Russian Federation, visited the Company’s                                                                                                        opportunities for expanding the Company’s business in terms
                                                                                           industrial sites and held a meeting with its employees. As a result        Tati Nickel                                                                                 of both attracting foreign investments and improving access of
                                                                                           of Prime Minister’s meeting with representatives of the city               Tati Nickel builds and maintains long-term constructive                                     Russian companies to international markets.
1.4.5. Engagement with the federal                                                         government and Company’s management, decisions on further                  relations with various ministries of Botswana, government
stakeholders                                                                               actions on the socio-economic development of the city and the              departments, and enterprises with state participation. In                                   Managers of OJSC MMC Norilsk Nickel participate in the
                                                                                           Company’s operations – the backbone of the local economy –                 particular, the company has partnership relations with the                                  activities of a number of international non-profit institutions,
The Company works with federal legislative and executive                                   were made (for more details see Chapter 6. Contribution to the                                                                                                         including the Nickel Institute, United States – Russia Business
authorities in order to ensure representation and communication                            Socio-Economic Development of Region of Operations).                       1   “Russia–Africa: Horizons of Cooperation” International Business Forum was held for      Council (USRBC), the International Platinum Group Metals
                                                                                                                                                                          the first time in Moscow on June 15-16, 2010 within the framework of an international
of its interests in the committees, commissions, expert panels                                                                                                            parliamentary conference. The forum was organised by the Council of the State
                                                                                                                                                                                                                                                                  Association (IPA), and the International Metallurgists Union.
and task forces created by government authorities with the                                 Within the framework of a public-private partnership, the                      Duma of the Russian Federation assisted by the Russian Ministry of Foreign Affairs,
                                                                                                                                                                          other federal bodies, and the Russian Chamber of Commerce and Industry in order to
                                                                                           Company has been participating in an investment project on the                 facilitate the development of multilateral relations between Russia and the African
                                                                                                                                                                                                                                                                  Since 2002, the Company in cooperation with other IPA
1       For more details see Monitoring of Customer Satisfaction in Section 2.5. Product
        Responsibility                                                                     creation of transport infrastructure to support the development                countries                                                                               members – the world’s leading mining and metals companies –

                      30                                                                                                                                                                                                                                                                                    31
        CORPORATE SOCIAL                                                                                                                                                                                                                                                                                    CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                   RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                                                   2010
has been implementing a sectoral program to combat the theft        In November 2010, a trilateral agreement was signed between         One of the key areas of cooperation between MMC Norilsk            and supervisory agencies, and environmental NGOs. The
and illicit trafficking of materials bearing precious metals of     the Federal Institution “Russian Energy Agency” and two             Nickel and the regional and municipal governments is the           participants shared their experience of tackling pressing
Russian and foreign origin.                                         companies – OJSC Norilsk-Taimyr Energy Company (NTEC) and           implementation of environmental projects in the Company’s          environmental issues, discussed sensitive environmental
                                                                    LLC Norilsk Housing Maintenance Company. The agreement              regions of operations.                                             aspects of operations of major industries in the North, and
Specialists of NNH closely collaborate with the European            defines a plan of joint actions of the three organizations for                                                                         came up with recommendations on mitigation or elimination of
Chemicals Agency and contribute to environmental projects of        the development and implementation of a concept of energy           In particular, modernization projects at the Polar Division and    adverse environmental consequences of operations.
the European Union.                                                 efficiency improvement in the Norilsk Industrial District.          Kola MMC within the framework of corporate environmental
                                                                    According to the agreement, a dedicated Project Office will be      programs are implemented in close cooperation with and             The Polar Division continued to finance the “Soil Remediation”
Long-term experience of productive cooperation with                 established by the Agency to coordinate the development of          under the oversight of the respective regional and local           project implemented by the Institute of Agriculture in the
international organizations ensures successful implementation       both Polar Division’s five-year energy efficiency improvement       authorities. The programs contribute to the reduction of           Extreme North. For nine years of the project implementation, a
of corporate projects differing in terms of scale and complexity.   plan and a municipal energy efficiency improvement program.         adverse environmental impacts, thus helping protect the            total of 120 ha of land – a significant area given the conditions
The Company works with the Asia-Pacific Economic                    Moreover, in order to provide information and methodological        living environment of the Company’s employees and local            of the Far North – was reclaimed at the Pelyatkinskoe field. For
Cooperation (APEC) implementing certain projects on behalf of       support to energy efficiency programs and to promote energy         communities, and, in particular, the environment and traditional   these achievements, specialists of the Institute were awarded
the Russian Federation, in particular, participating in the APEC    efficient behavior patterns among Norilsk residents, the            lifestyle of minority indigenous peoples of the North.             a diploma of the “Agrorus 2010” International Exhibition. In
Mining Task Force (MTF). Norilsk Nickel’s participation in the      Polar Division and the Russian Energy Agency will establish a                                                                          2010, Norilsk researches started a soil remediation project at
MTF meetings provides additional opportunities for pursuing         training and demonstration center for energy efficiency based       In October 2010, an environmental conference was organized         the Lebyazhye tailings pond. Kola MMC jointly with the Kola
Company’s interests in the Asia-Pacific Region through              at the Norilsk Nickel Corporate University, a non-commercial        in Norilsk by the Polar Division. The event was attended by over   Forestry Administration has been implementing a similar
participation in the projects designed by the MTF.                  educational institution.                                            130 persons representing research institutions and universities    project for the reclamation of “technogenic wastelands” since
                                                                                                                                        based in Krasnoyarsk, Moscow and St. Petersburg, legislative       2003 (for more details see Section 3.3. Conservation and
The Company engages with the International Labor                    Collaboration between MMC Norilsk Nickel and regional               and executive authorities of Krasnoyarsk Region, regulatory        Restoration of Biodiversity).
Organization, in particular, participating in sharing experience    governments goes beyond purely economic projects. The
in the field of CSR.                                                Polar Division of Norilsk Nickel jointly with the Government of
                                                                    Krasnoyarsk Region has developed a program for attracting
                                                                    highly-skilled professionals to the Company’s entities, and a
1.4.8. Engagement with regional                                     number of long-term cooperation projects with the Siberian
governments and non-governmental                                    Federal University (SFU) aimed at training future employees
organizations                                                       for Norilsk Nickel. On August 30, 2010, MMC Norilsk Nickel and
                                                                    the SFU signed a framework Strategic Partnership Agreement
Relations between MMC Norilsk Nickel and regional                   defining approaches toward cooperation in the fields of
governments, municipal authorities and non-governmental             education, research, technology, and innovation. In addition to
organizations are based on the principles of equal cooperation,     the training of specialists for Norilsk Nickel in relevant areas,
mutual interests and social responsibility in addressing the        the agreement provides for organizing internships for students
objectives of the economic and social development of the            at the entities of MMC Norilsk Nickel, cooperation in the field
Company’s regions of operations.                                    of re-training and skills upgrading programs targeted at the
                                                                    Company staff, and attracting talented youth to the SFU with a
Mutual interests and key areas of cooperation between               view to subsequent recruitment by the Company.
the parties are usually set forth by framework cooperation
agreements, which provide a foundation for specific                 In October 2010, roundtable meetings on cooperation in
cooperation programs and projects.                                  the field of vocational guidance and education were held in
                                                                    Zapolyarny and Monchegorsk. Participants of the meetings
Contributing to the implementation of the program for the           included representatives of the HR, Labor, and Remuneration
economic development and diversification of so-called               Department of Kola MMC, local departments of educations,
“monotowns” (towns whose economies are dominated by a               as well as principals of local general schools and institutions
single industry or company) initiated at the highest levels of      of additional education. The discussion was centered on
the Russian government, the Company jointly with regional           cooperation in the field of the training of future workers and
and local governments has designed a number of large-               specialists demanded by the Company’s operations. As a
scale projects. For example, in Murmansk Region Kola MMC            result of the events, the participants signed memoranda of
in cooperation with the regional government implements the          cooperation defining key principles and areas of cooperation.
project for the creation of Monchegorsk Industrial Park and         The latter included: specialized vocational guidance activities
contributes to the development of the Integrated Innovation         targeted at senior school students and preliminary vocational
Development Plan for the Monotown of Monchegorsk. Another           guidance activities aimed at 8th and 9th-graders, communication
example of a similar partnership is the contribution of the Polar   support of vocational guidance projects implemented by Kola
Division to the development of the Modernization Plan for the       MMC, and educational events organized jointly by Kola MMC
Monotown of Norilsk.                                                and local educators.

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    CORPORATE SOCIAL                                                                                                                                                                                                                                 CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                2010
2. Development Strategy – Economic Growth

2.1. Economic Policy and                                                                       The objectives of the economic management at the level of
                                                                                               sectoral complexes within the Group include:
                                                                                                                                                                                                 Dmitry Kostoev,
                                                                                                                                                                                                 Deputy General Director, Chief Financial Officer
Economic Performance                                                                              • identification of parameters of product output (product
                                                                                                                                                                                               The end of the year 2010 was marked by an important event from the perspective of the
                                                                                                    mix, volume, costs, prices) ensuring the accomplishment
                                                                                                    of economic objectives of the respective sectoral                                          future development of the Company: the Board of Directors of OJSC MMC Norilsk Nickel
2.1.1. Economic Policy of the Company                                                               complex;                                                                                   approved the main parameters of the long-term Production Development Strategy. The
                                                                                                  • development of programs for the optimization and                                           Strategy provides for a large-scale and truly unprecedented investment program for the
The goal of the economic management of the Group is to                                              reduction of costs of sectoral complexes.                                                  next 15 years. The main goal of the investment program is the retaining and strengthening
ensure the accomplishment of economic, financial, and social                                                                                                                                   of the competitive advantages of Norilsk Nickel, and the realization of its unique potential
objectives defined by the corporate strategy documents,                                        The objectives of the economic management at the operational                                    for the benefit of shareholders, employees, communities in the regions of operations, and
while maintaining unconditional compliance with the existing                                   level include:                                                                                  the country as a whole. I am convinced that Company management was able to come up
legislation. The Group defines economic management                                                • development of corporate programs for optimizing the                                       with numerous interesting investment ideas, implementation of which will contribute to ac-
objectives at the corporate level, the level of sectoral                                             consumption of all types of resources in core production                                  complishment of this goal.
complexes within the Group, and the operational level.                                               operations, and development of proposals for the reduction
                                                                                                     of resource costs;
The objectives of the economic management at the corporate                                        • operational accounting and control of production costs;       The implementation of the Strategy will help us expand the
level include:                                                                                    • establishment of environmental limits with regard to          output instead of reducing it. By 2025 we will have the same
   • development and implementation of models and                                                    pollutant emissions and discharges, waste disposal, other    resource base as today. At the same time management
      mechanisms of economic regulation in order to achieve                                          adverse environmental impacts, and removal of natural        of Norilsk Nickel believes that the implementation of the
      the best possible economic performance at the Group                                            resources from the environment.                              capitalization improvement program together with the long-
      level1;                                                                                                                                                     term Production Development Strategy will help the Company
   • management of the liquidity of the Group and centralized                                  Integrated approach to these objectives combined with a            significantly increase its capitalization and accomplish the
      risk management at the Group level;                                                      flexible approach to resource allocation and resource mobility     objective of returning capital to shareholders in the medium-
   • identification of the most efficient approaches to                                        helped the Group overcome the effects of the global crisis in      and long term perspective. Within the framework of the
      cooperation between sectoral complexes and labor                                         2008-2009 with minimum economic losses and restore the             capitalization improvement program, the Company intends
      division within the Group, depending on changes in the                                   pre-crisis performance level in 2010.                              to implement a program of returning capital to shareholders
      external environment and economic conditions;                                                                                                               using a range of mechanisms; undertake a systemic
   • contribution to the stable development of the Group’s                                                                                                        analysis of non-core assets and identify approaches toward
      regions of operations;                                                                                                                                      selling them; implement a capital management program
   • elaboration of common approaches toward social                                                                                                               using, among others, innovative financial instruments. The
      services and benefits available to employees across the                                                                                                     program implementation process will be integrated with the
      Group.                                                                                                                                                      implementation of the long-term production development
                                                                                                                                                                                                        Yuri Filippov,
1       Also taking into account the need to ensure appropriate economic performance of each                                                                                                            Acting First Deputy General Director
        Group’s company.

                       34                                                                                                                                                                                                                                               35
        CORPORATE SOCIAL                                                                                                                                                                                                                                                CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                               RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                               2010
2.1.2. Economic performance indicators                                                             tonnes) compared to the previous year, while the output of                                       Figure 2.1. World’s largest producers of base and precious metals, 2010 (percentage of world production)*
                                                                                                   copper decreased by 3% (from 402.2 thousand tonnes to 388.9
Operational performance                                                                            thousand tonnes).                                                                                 Nickel                                                                              Palladium
Being the largest mining and metallurgical company in Russia,
MMC Norilsk Nickel is a major contributor to the national                                          In the reporting year, the output of palladium increased nearly                                  %                                                                                   %
economy.                                                                                           by 2% compared to the previous year’s level – 2,861 thousand                                     25                                                                                  50
                                                                                                   ounces, and the output of platinum was 694 thousand ounces                                                                                                                                   45%

In 2010, the Group accounted for 1% of the Russian gross                                           (5% more than in 2009).345                                                                                20.2%
                                                                                                                                                                                                    20                                                                                  40
domestic product (GDP), 2% of the overall industrial output in
Russia, 3% of the Russian exports, and 7.4% of the output of the                                   MMC Norilsk Nickel is the world’s largest producer of nickel
                                                                                                                                                                                                    15                                                                                  30
Russian non-ferrous metal industry.                                                                and palladium, being also one of the leading producers of
                                                                                                   copper and platinum (see Figure 2.1).                                                                                    10.3%       9.3%
                                                                                                                                                                                                    10                                                                                  20                  17%
Collectively, the Group entities run a full production cycle
from geological exploration, ore mining, concentration and                                         Financial performance                                                                                                                              6.3%                                                             10%
metallurgy to sales of base and precious metals. 1 2                                               In 2010, the revenue from metal sales amounted to USD 12,126                                      5                                                            4.1%          3.9%    10                                          7%
                                                                                                   million, profit/(loss)5 – to USD 3,089 million, assets – to USD
In 2010, the Group’s output (see Table 2.1) of saleable nickel                                     23,909 million (see Table 2.2).                                                                   0                                                                                   0
                                                                                                                                                                                                           Norilsk      Vale          Jinchuan    Xstrata       SMM         Eramet           Norilsk    Anglo       Impala      Stillwater    Lonmin
increased by 5% (from 282.9 thousand tonnes to 297.3 thousand                                                                                                                                              Nickel                                                                            Nickel     Platinum    Platinum    Mining

Table 2.1. Production of saleable metals by the Group1, 2010 (tonnes or as indicated)                                                                                                                Copper                                                                              Platinum
                                                                              Nickel                   Copper Palladium, thousand ounces                    Platinum, thousand ounces                %                                                                                  %
Russia                                                                      235,518                    365,698                                  2,722                                      663                                                                                                 33%
                                                                                                                                                                                                    12                                                                                  35
Australia                                                                          –                          –                                     –                                        –
Botswana2                                                                     11,163                     11,050                                    84                                       14      10                                                                                  30
Finland                                                                      49,1593                     11,279                                    48                                       15                                                                                          25
USA                                                                                –                          –                                     –                                        –       8                         6.9%
                                                                                                                                                                                                                                                                                        20                 19%
Total Group, excluding South Africa                                         295,840                    388,027                                  2,854                                      692
                                                                                                                                                                                                     6                                5.4%
South Africa4                                                                  1,489                        845                                     7                                        2
                                                                                                                                                                                                                                               4.3%                                     15
Total Group                                                                 297,329                    388,872                                  2,861                                      694                                                         4.0%                                                           11%         11%
                                                                                                                                                                                                                                                                2.9%                    10
                                                                                                                                                                                                                                                                         2.6%    2.5%
                                                                                                                                                                                                     2                                                                                                                                          4%
Table 2.2. Revenue from sales, 2009–2010 (USD million)
                                                                                                                                                                                                     0                                                                                   0
                                                                                                                                                                                                           Codelco Free- BHP- Xstrata Rio              Ang lo   Sou- KGHM Norilsk            Anglo      Impala     Lonmin      Norilsk       Aquarius
                                                                                                                          2010                           2009                    Change (%)                        port  Billiton     Tinto            Ame-     thern     Nickel             Platinum   Platinum               Nickel        Platinum
Revenue from other sales                                                                                                12,126                          8,075                               50                                                         rican    Copper
including:                                                                                                                                                                                          * Source: OJSC MMC Norilsk Nickel, Brook Hunt, GFMS, 2011.
– nickel                                                                                                                6,459                           4,206                               54
– copper                                                                                                                2,941                            2,190                              34
– palladium                                                                                                             1,479                              751                              97
– platinum                                                                                                              1,086                              794                              37
Revenue from other sales                                                                                                  649                              467                              39
Total revenue                                                                                                          12,775                           8,542                               50

1       All information is presented on 100% ownership for subsidiaries. The above stated          3     Norilsk Nickel Harjavalta production volumes of own refined nickel.
        production volumes do not include the production results of Stillwater Mining Company
        (SWC), which used to be a subsidiary of the Company till December 2010, also including     4     Excluding 3,546 tonnes of nickel in concentrate, 1,957 tonnes of copper in concentrate,
        a 50% interest in Nkomati joint venture, which is treated as an associate.                       14 thousand troy ounces of palladium in concentrate and 4 thousand troy ounces of
                                                                                                         platinum in concentrate, shipped for further processing to the Norilsk Nickel Harjavalta
2       Excluding 3,014 tonnes of nickel in concentrate, 3,053 tonnes of copper in concentrate,          refinery in 2010.
        23 thousand troy ounces of palladium in concentrate and 4 thousand troy ounces of
        platinum in concentrate, shipped for further processing to the Norilsk Nickel Harjavalta   5     Profit from continuing operations.
        refinery in 2010.

                        36                                                                                                                                                                                                                                                                                                       37
        CORPORATE SOCIAL                                                                                                                                                                                                                                                                                                         CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                                        RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                                                                        2010
2.2. Investment Development and Modernization                                                                                                                  Continued construction and expansion of mining facilities at
                                                                                                                                                               the Polar Division and Kola MMC with a view to developing
                                                                                                                                                                                                                                  2.2.2. Social facilities
of Facilities                                                                                                                                                  and mining new ore deposits, increasing ore output, replacing      In 2010, the Company resumed the implementation of
                                                                                                                                                               decommissioned capacity and introducing state-of-the-art           investment projects for the construction or modernization of
                                                                                                                                                               mining processes:                                                  social facilities, postponed in 2009, and started several new
                                                                                                                                                                     – at the Oktyabrsky mine – further expansion of cuprous      investment programs. In 2010, the overall cost of the key
                                                                                                                                                                       ore production and replacement of decommissioned           investment projects in the social sphere amounted to over RUB
                                                                                                                                                                       rich ore mining capacity;                                  5,320 million, including:
                                                                                                                                                                     – at the Taimyrsky mine – expansion of rich ore mining          • RUB 1,138.9 million – the reconstruction of “Zapolyarye”
                                                                                                                                                                       and replacement of decommissioned capacity;                     corporate health resort in Sochi with the purpose of
                                                                                                                                                                     – at the Komsomolsky mine – projects for the                      improving the quality of accommodation, catering, health,
                                                                                                                                                                       development and mining of flank deposits of rich and            fitness, recreation, and entertainment services provided
                                                                                                                                                                       cuprous ore, and for beginning the development of a             to Company’s employees to the level of international
                                                                                                                                                                       priority locus of disseminated ores;                            standards;
                                                                                                                                                                     – at the Skalisty mine – the development and preparation        • RUB 4,125.0 million – “Our House” corporate program to
                                                                                                                                                                       for exploitation of rich ore deposits at the Talnakhskoe        help highly-skilled, active, and responsible employees of
                                                                                                                                                                       ore field;                                                      the Company acquire housing in the “mainland” on a co-
                                                                                                                                                                     – at the Severny-Gluboky mine – the development and               financing basis;
                                                                                                                                                                       mining of disseminated ores at the Zhdanovskoe ore            • RUB 31.2 million – the construction of Arena Norilsk
                                                                                                                                                                       field.                                                          sports and entertainment complex providing sports,
2.2.1. Key investment priorities                                                   The Group’s plan of capital investments in Russian production                  • Continued implementation of an investment project for              fitness, and entertainment services, and hosting a
of the Company in 2010                                                             facilities for 2010 included the following priority measures:                    the development of polymetallic deposits in Zabaikalsky            number of retail outlets;
                                                                                                                                                                    Region (Bystrinskoye copper, gold, silver, and iron              • RUB 14.9 million – the reconstruction of the corporate
In 2010, the priorities of MMC Norilsk Nickel’s investment                                                                                                          deposit, and Bugdainskoye molybdenum deposit).                     health and recreation center in Monchegorsk with the
activities included maintaining the existing level of production                                                                                                  • Modernization and technical upgrade of ore concentration           purpose of creating a state-of-the-art medical and health
in Russia, while further strengthening its energy and                                                                                                               and metallurgical processing facilities of the Polar               improvement complex providing medical and prevention
transportation security, and financing prospective capital                                                                                                          Division and Kola MMC:                                             services to employees of Kola MMC and local community
intensive development projects.                                                                                                                                      – continued implementation of the project to expand the           members;
                                                                                                                                                                       capacity of pyrometallurgical processing facilities of        • RUB 9.5 million – program for the improvement of
                                                                                                                                                                       the Nadezdinsky Metallurgical Plant;                            amenities and convenience services available to
Table 2.3. Capital investments of the Group entities, 2008–2010 (USD million)                                                                                        – continuation of the modernization of the nickel                 employees of OJSC MMC Norilsk Nickel at work.
                                                                                                                                                                       electrolysis plant of Kola MMC with the purpose
    Group’s capital investments1                                                                      2010                     2009                     2008           of increasing the output of cathode nickel to 120
    Russia2                                                                                            932                      909                    1,476           thousand tonnes per annum, while reducing operating        Vladimir Strzhalkovsky,
    Australia3                                                                                          10                        4                      105           costs, the amount of material in process, and metal        General Director of MMC Norilsk Nickel
    Botswana4                                                                                           16                       29                      330           losses.
    Finland                                                                                              6                       59                       60      • Environmental activities including, in particular,            We understand very well that without investment in new
    USA5                                                                                                 –                       39                       82        implementation of state-of-the-art emission reduction         technology and new equipment we would soon lose our
    GROUP TOTAL, excluding South Africa                                                                964                    1,040                    2,053        technologies and approaches toward environmental              competitiveness in the global market. Our investment
    South Africa                                                                                        79                       84                       74        improvement.                                                  program is large enough. In particular, it involves
    GROUP TOTAL                                                                                      1,043                    1,124                    2,127      • Continued implementation of projects on the development       the replacement of mining equipment, innovations in
                                                                                                                                                                    of the Pelyatkinskoe gas condensate field and the             metallurgical processing, and we will also definitely
Notes:                                                                                                                                                              construction of new gas and condensate pipelines              focus our efforts on tackling environmental issues.
  Assets in Australia, Botswana, Finland, and a 50% interest in Nkomati mine (South Africa) were purchased by the Group in 2007.
  The data are based on management accounts and do not include capital investments of OGK-3.                                                                        between the field and Dudinka town.
  The IFRS data were adjusted for the amount of future expenses on dismantling of the equipment and reclamation of sites upon the termination of operations.
  The IFRS data were adjusted for the amount of an operating lease classified as a financial lease under the IFRS, and for the amount of future expenses
  on dismantling of the equipment and reclamation of sites upon the termination of operations.
  The data are presented according to US GAAP. In December 2010 the Group sold its interest in Stillwater Mining Company.

                    38                                                                                                                                                                                                                                                    39
        CORPORATE SOCIAL                                                                                                                                                                                                                                                  CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                 RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                 2010
                                                                                                                              2.2.3. Investment development of foreign
                                                                                                                                                                                                   2.3. Sales Policy
                                                                                                                              Norilsk Nickel Australia                                             The Company views sales as a part of its core business
                                                                                                                              In 2010, the largest portion of the Group’s capital expenditures     activities. The Company’s goal in this area is increasing the
                                                                                                                              in Australia was associated with the acquisition of Cawse            average profits and capitalization over its entire lifespan
                                                                                                                              power plant and resuming the operations of Lake Johnston             through the development of the global demand for its strategic
                                                                                                                              site. Norilsk Nickel Australia intends to use the plant for power    metal products and the maximization of profits from sales of
                                                                                                                              supply to Cawse nickel operation owned by the Group.                 all products.

                                                                                                                              Tati Nickel                                                          Therefore the Company is interested in maximizing its
                                                                                                                              In 2010, the priority investment projects of the company             revenues over the entire period of its life, rather than its limited
                                                                                                                              included: changing the transportation route of tailings of the       period. This can only be achieved on the basis of a stable
                                                                                                                              DMS Plant, stripping operations at the Phoenix open-pit mine,        long-term demand for its products in the global markets.
                                                                                                                              and construction of auxiliary facilities. In addition, the company   According to Viktor Sprogis, Deputy General Director for Sales
                                                                                                                              implemented investment projects on the development of                and Distribution, “both we and our customers are interested
                                                                                                                              corporate information systems and occupational safety                in sustainable development and transparency of the market;
                                                                                                                              systems.                                                             in this regard, our interests fully coincide with those of the
                               Roman Mashkarin,                                                                                                                                                    customers”.1
                               Director of the Investment Policy Department
                                                                                                                              The key investment projects in 2010 included:                        In order to support long-term demand for its outputs, the
                             The Company has studied investment practices of international and domestic metallurgi-              • completion of the construction of the MMZ (Main                 Company ensures a stable supply of its products, markets
                             cal companies. It was found that foreign metals companies reinvest almost one third of                Mineralized Zone) nickel ore concentration plant;               them directly to end customers, minimizes the risks of creating
                             their revenues back in their business, while the respective share for the Russian compa-
                                                                                                                                 • expanding the capacity of the PCMZ (Chromititic Peridotite      artificial shortage of material on the market, and provides
                             nies does not exceed 10-15%.
                             The Company’s Production Development Strategy reviewed by the Board of Directors in the               Mineralised Zone) ore concentration plant;                      continuous technical support to consumers of its products. This
                             late 2010 seeks to strike a “golden mean” between these two approaches. Over the next five          • stripping operations at the MMZ open-pit mine;                  means that Norilsk Nickel acts as a responsible participant of
                             years, the Company’s investments in production will amount to one fourth of its revenues. As a      • general infrastructure development and replacement of           the global market, whose mission is to ensure the sustainable
                             result of the investment program implementation, the Company’s operations will increase their         worn-out equipment.                                             development of the markets, in which the Company is a leading
                             production of nickel, copper, platinum, and palladium.                                                                                                                supplier.
                             The investment program also provides for the implementation of large-scale environmental         Norilsk Nickel Harjavalta Oy
                             projects. By 2015, Norilsk Nickel intends to implement a sulphur capture program, which will     In 2010, the main investment projects included:                      The main condition for achievement of targets of Company’s
                             result in a five-fold reduction of sulphur dioxide emissions.                                        • acquisition of new metallurgical equipment;                    sales activity is possession of a highly efficient sales system
                                                                                                                                  • replacement of worn-out equipment;                             which is comprised of advanced management practices,
                                                                                                                                  • projects aimed at expanding the production capacities;         qualified and motivated employees, as well as long-term
Currently the efforts of Kola MMC are focused on the                                                                              • environmental activities;                                      strategic relations with the main market players.
modernization of its operations, further improvement of                                                                           • introduction of a new corporate management information
the processes, and optimization of material and operat-                                                                             system.                                                        For more than a decade, the Company has been developing
ing costs with a view to reducing overall production costs                                                                                                                                         its own sales system, based on a well-developed system of
while maintaining the invariably high quality of products.                                                                    In 2010, the R&D Department of Norilsk Nickel Harjavalta             direct sustainable connections with customers. Their total
The company addresses all these objectives based on                                                                           Oy implemented several innovation projects aimed at the              amount just for the core product is about 500 with industrial
the principles of efficient natural resource use and care
for the environment. In the years to come we need to                                                                          improvement of the company’s processes. In particular, the           customers being the bulk of them. This was one of the main
make serious efforts to this end. And if our plans come                                                                       Department tested new technologies of magnesium extraction,          factors that enabled the Company to successfully achieve
true, by 2015-2017 the company will undergo a dramatic                                                                        removal of sulphur from the process, and the cleaning of cobalt      its sales objectives in 2008-2009, the period of the global
transformation. New processes will be introduced; new                                                                         sulphate solution. A pilot project on the improvement of the         economic crisis. “Our approach based on direct sales to end-
equipment will be installed at the main process stages.                                                                       electrolysis process was carried out on a larger scale.              users has already proved its advantages: during the crisis we
Collectively the system of investment projects encom-                                                                                                                                              did not lose a single customer, and this helped us sell 100% of
passes virtually every division and process stage within                                                                                                                                           outputs efficiently”.2
our company.
                                                                                                                                                                                                   Norilsk Nickel has a well-developed corporate sales network,
                                                                                                                                                                                                   which comprises sales outlets in all the key markets, including

                                                                                                                                                                                                   1    Interview of Viktor Sprogis to RBC-TV channel, March 18, 2011 (“Markets: a Global
                                      Sergey Selyandin,                                                                                                                                                 Look” programme).
                                      General Director of Kola MMC                                                                                                                                 2    Interview of Viktor Sprogis to “Metals Supply and Sales” magazine (#2, 2011).

               40                                                                                                                                                                                                                                             41
    CORPORATE SOCIAL                                                                                                                                                                                                                                          CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                         RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                         2010
Europe, Asia, and America. The Company continuously
advances its sales management technologies, which helps
                                                                                        Vladimir Strzhalkovsky,
                                                                                        General Director of OJSC MMC Norilsk Nickel
                                                                                                                                                           2.4. Transport Independence
it achieve its sales objectives under the conditions of fierce
competition with world’s leading producers and trading                                  Indeed, during the crisis we learned that we needed
companies.                                                                              to further diversify our sales markets. Now we have
                                                                                        a more balanced market, and it is less dependent
Norilsk Nickel also makes efforts to develop and protect global                         on individual countries or group of countries, which
markets of its strategic outputs – nickel and palladium. To this                        can be hit by crisis or face economic difficulties. This
end, the Company participates in activities of international                            contributes to sustainability of our operations.
sectoral associations, including the Nickel Institute and the
International Platinum Group Metals Association.
                                                                                        Nkomati mine, in which OJSC MMC Norilsk Nickel has a
In 2010, despite continued uncertainty of our customers about                           50% interest, supplies nickel concentrate to other entities of
their production plans, particularly with regard to nickel, our                         Norilsk Nickel Group on the basis of a long-term contract. The
main product, the Company managed to effectively accomplish                             concentrate is processed into various products, which then are
its sales objectives. The whole production output was sold at                           marketed through the Company’s sales network.
the prices higher than the global market prices. Most of the
output was sold to industrial consumers.                                                Tati Nickel, in which OJSC MMC Norilsk Nickel has an 85%
                                                                                        interest, produces nickel concentrate and sells it in the market   2.4.1. Transport infrastructure of the                                  2.4.2. Transportation and Logistics
OJSC MMC Norilsk Nickel on a regular basis conducts studies                             on the basis of long-term contracts.                               Company                                                                 Business Unit
of its sales markets. The information received direct from
the players of these markets enables increasing efficiency in                           The products of Norilsk Nickel Harjavalta Oy are marketed          Norilsk Nickel Group’s main industrial sites in Russia are based        The Transportation and Logistics Business Unit is responsible
making decisions, including decisions on geographical and                               through companies of corporate sales network, like the             in the Norilsk Industrial District and in the Kola Peninsula.           for transporting the Company’s cargo by sea, river, rail,
industrial diversification of the sales.                                                products of Russian entities of the Group. Nickel concentrate      Under these geographic conditions, maintaining year-round               road and air. The main objective of the unit is ensuring the
                                                                                        used by Norilsk Nickel Harjavalta Oy as an input is partially      transportation services becomes of utmost importance to the             transportation of the required amounts of the Company’s cargo
The geography of the Company’s sales encompasses more than                              supplied by other entities of the Group and partially purchased    Company’s operations and the living conditions of the residents         within agreed upon timeframes and in the most cost-effective
thirty countries. In the recent years Norilsk Nickel increased its                      in the market. The companies of the Norilsk Nickel’s sales         of the Norilsk Industrial District.                                     manner.
sales in the Asian market; in 2010, the Company retained its                            network provide concentrate procurement and supply services
position as the leading supplier of imported refined nickel to                          to Norilsk Nickel Harjavalta Oy, and also help it minimize price
the rapidly developing markets of China and India.                                      risks associated with the difference in the market prices at
                                                                                        the moment of purchasing the concentrate and the moment of
OJSC MMC Norilsk Nickel attaches great importance to                                    selling products manufactured of it.                                                                                                       This voyage is the Company’s additional contribution to
maintaining its reputation among customers as the most                                                                                                                                                                             the implementation of the Russian Maritime Doctrine
                                                                                                                                                                                                                                   with regard to shipping in the Arctic. It proves the ef-
reliable supplier of the most quality products. This is a
                                                                                                                                                                                                                                   fectiveness of approaches taken by the Russian Maritime
necessary pre-requisite of successfully meeting our sales                                                                                                                                                                          Collegium and the Ministry of Transport, which are
objectives in the long run. According to Viktor Sprogis,                                                                                                                                                                           aimed at the development of the Northern Sea Route
“Over the entire history of our company, we never failed to                                                                                                                                                                        as a short and safe transit route between Europe and
meet our contractual obligations, even due force majeure                                                                                                                                                                           Southeast Asia.

According to the results of a direct customer survey, in the
reporting year the Company retained a high level of customer
satisfaction with the quality of its products and services. The
share of customers who took part in the survey increased,
exceeding 90% (weighted by sales volume).

The Company is also the sector leader in terms of transparency
of its sales system to the market participants. The respective
information is disclosed via corporate reports and a dedicated
                                                                                                                                                                                             Sergey Buzov,
section of the corporate website.                                                                                                                                                            Deputy General Director,
                                                                                                                                                                                             Head of the Transport and Logistics Business Unit

1       Interview of Viktor Sprogis to “Metals Supply and Sales” magazine (#2, 2011).

                        42                                                                                                                                                                                                                                                 43
        CORPORATE SOCIAL                                                                                                                                                                                                                                                   CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                  RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                  2010
The Transportation and Logistics Business Unit includes the         According to the plan, the overall cost of the first stage           In the reporting year, the Company started to use a new             Anatoly Kvashnin,
following entities: Polar and Murmansk Transport Branches,          amounts to RUB 1,102 million.                                        container type, ISO 1CX, with the gross weight of 30.48             President’s Representative
Archangelsk and Krasnoyarsk Branches, OJSC Arkhangelsk                                                                                   tonnes. These containers were specially designed for the            to the Siberian Federal District
Commercial Sea Port, OJSC Yenisei River Shipping Company,           The business plan provides for a range of construction and           Company’s ice-class vessels with characteristics of its main
OJSC Krasnoyarsk River Port, OJSC Lesosibirsk Port, OJSC            installation works at an overall cost of RUB 983 million, intended   products taken into account. The use of the new containers          This is a momentous event, the beginning of a new
Taimyr Airlines, LLC Norilsk Airport, and Norilsk Nickel            to build the infrastructure of the Company’s transshipment           will help the Company reduce its transportations costs by           stage of practical work toward the improvement of
Logistics B.V., a Europe-based logistics office.                    terminal, and the acquisition of various port equipment at           ensuring the most efficient utilization of the cargo-carrying       the accessibility of transportation services to the
                                                                    a total cost of RUB 119 million. The design capacity of the          capacity and space of its freight vessels.                          population of Siberia, 30% of whose area is occupied
Corporate divisions and SDCs of MMC Norilsk Nickel operate          planned terminal after the completion of the first stage of the                                                                          by Krasnoyarsk Region. The creation of such an airline
corporate fleets, handle cargo at transhipment sea and river        project amounts to 750 thousand tonnes of freight per year.                                                                              means not only passenger and cargo airline services.
ports, operate airports and provide domestic passenger and                                                                               2.4.6. Taimyr Airline                                               This opens the way for the further development of
cargo airline services.                                             In 2010, the Company initiated a number of investment projects                                                                           forest aviation, medical aviation, air-based geological
                                                                    aimed at upgrading the port fleet of the Polar Transport Branch.     In the late 2008, the General Director of OJSC MMC Norilsk          exploration, and air transportation of rotation crews,
In the reporting period, the total cargo turnover across the unit   In particular, it prepared and approved business plans for the       Nickel made a decision to create the Company’s own                  which is particularly important to the development of
amounted to some 2.5 million tonnes, including over 1 million       building of a fuel bunkering tanker (project cost – RUB 300          passenger airline service on the basis of OJSC Taimyr Airline,      East Siberia and the Lower Angara Area.
tonnes along the Northern Sea Route and some 1.5 million            million), a maritime harbour tug (RUB 216 million), and a river      a Norilsk Nickel subsidiary, which started operating regular
tonnes – along the Yenisei River.                                   tug (RUB 140 million). All these vessels were commissioned           flights under the NordStar brand. The main purpose of the new
                                                                    from Russian shipbuilding companies.                                 airline was to offer affordable airline services to the Company’s   All components of the Company’s transportation infrastructure
                                                                                                                                         employees and residents of the Norilsk Industrial District using    will be integrated into a single information system and
2.4.3. Development of the Arctic fleet                                                                                                   Taimyr Airline’s own flights and flights of partner airlines. The   interconnected through it. As a result, an interactive company-
                                                                    2.4.5. Development of container shipping                             company operates regular direct flights between Norilsk and         wide transportation management information network will be
MMC Norilsk Nickel has a unique Arctic cargo fleet comprising                                                                            Moscow, St. Petersburg, Sochi, and Krasnoyarsk.                     created, which would allow real-time monitoring of shipments.
five reinforced ice-class vessels (ARC 7 according to the PMPC      The construction of Norilsk Nickel’s own vessels, replacement                                                                            It is expected that the deployment of the system will result in
classification) of the Norilsk Nickel class. The vessels are able   of old gantry cranes with modern mobile cranes, and the                                                                                  a reduction of transportation costs by at least 2.5% per year.
to operate in Arctic ice up 1.5 meters thick without icebreaker     upgrading of the forklift fleet at the Company’s ports led to        Vladimir Strzhalkovsky,
support. The vessels have a cargo-carrying capacity over            the objective of upgrading the container fleet of the Company        General Director of MMC Norilsk Nickel
15,000 tonnes and a container capacity of 571 TEU.                  and transition to container shipping as the main approach to
                                                                    product transportation. Such a transition ensures safety and         Norilsk Nickel is not only the largest taxpayer in
The Company’s fleet provides year-round regular cargo service       security of products at all stages of transportation, as well as     Krasnoyarsk Region – it also assumes major social
between such seaports as Dudinka, Murmansk, Archangelsk,            a reduction of shipping time and costs.                              commitments and contributes to significant regional
Rotterdam, and Hamburg. In the reporting year, the Company’s                                                                             projects through its charity and patronage programmes.
own vessels made 54 voyages carrying 1,090 thousand tonnes                                                                               In particular, by creating NordStar Airline MMC Norilsk
of cargo. In particular, the fleet made 12 direct voyages to        Lev Kuznetsov,                                                       Nickel has provided reliable and affordable airline
European ports and one voyage to Southeast Asia carrying 194        Governor of Krasnoyarsk Region                                       services to residents of Norilsk and Krasnoyarsk.
thousand tonnes of export metal products.
                                                                    It is very important that the interests of the region and
In September 2010, Mocnhegorsk, an Arctic-class container           Norilsk Nickel meet. On the one hand, the Company
ship, became the Company’s first vessel to make a direct            is a major customer of services, while on the other                  2.4.7. Modernization of the transportation
voyage Murmansk – Dudinka – Busang (South Korea) –                  hand Norilsk Nickel has always been a model of social                management system
Shanghai (China), including the eastern part of the Northern        responsibility in the regions. As a result of the Company’s
Sea Route, without icebreaker escort, shipping export metal         efforts, now we have in place all the necessary pre-                 In 2010, a decision was made to undertake modernization
products to customers in Southeast Asia. This is the shortest       requisites for ensuring the mobility of residents of the             of the corporate transportation management system using
route connecting Norilsk Nickel production sites to customers       region and accessibility of transportation services to               Oracle transportation and logistics management software
in Southeast Asia, and it takes about 20 days to reach Shanghai     them.                                                                by Oracle Corporation. The introduction of state-of-the-
from Dudinka, while the traditional route through the Suez                                                                               art information systems will help improve the quality of the
Canal and a transhipment port in Europe takes some 65 days.                                                                              planning, organization, management, and monitoring of
                                                                    In 2010, the Company started to ship its export metal products       Company’s shipments.
                                                                    in large-tonnage containers of international shipping lines
2.4.4. Modernization of the Company’s                               immediately from the storage facilities of production divisions
transportation infrastructure                                       to supply bases in Shanghai and Baltimore. It is Norilsk Nickel
                                                                    Logistics B.V., the Company’s European logistics office, that is
At the end of 2009, MMC Norilsk Nickel management approved          responsible for coordination with international shipping lines
a business plan for the first stage of the construction of          and monitoring of shipments.
the Company’s own transshipment terminal in Murmansk.

                44                                                                                                                                                                                                                                    45
    CORPORATE SOCIAL                                                                                                                                                                                                                                  CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                 RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                 2010
2.5. Energy Conservation                                          and 0.4% respectively. The structure of indirect energy use2
                                                                  did not undergo substantial changes from the previous year
                                                                                                                                                                   • using mobile compressor units instead of stationary ones
                                                                                                                                                                     for compressed air supply of remote facilities at mines;
                                                                                                                                                                                                                                     The results of proactive measures on energy conservation
                                                                                                                                                                                                                                     and efficiency improvement can be expressed as a percentage
and Renewable Energy                                              (see Annex 3, Figure 2.3). A considerable share of secondary                                     • installing a new skip hoist equipped with a frequency           of the overall energy consumption. In 2010, energy savings

Sources                                                           energy products consumed by the Group is produced by its own
                                                                                                                                                                     converter at the Komsomolsky mine.                              across the Group amounted to 1.5% of the total consumption.

                                                                                                                                                                In addition, the following organizational measures were              The largest contribution to energy conservation and efficiency
Seeking to ensure the stable and efficient development of the     Figure 2.3. Indirect energy consumption by energy                                             introduced in the entities of the Group:                             improvement across the Group was made by the most energy-
existing production base, reduce spending on fuel and energy      type, 2010                                                                                        • adjusting heating units depending on the outdoor               intense entities, including the Polar Division (1,951,856 GJ),
resources, and improve the reliability and efficiency of energy                                                                                                       air temperature in order to avoid excessive energy             OJSC Norilsk-Taimyr Energy Company (1,382,148 GJ), OJSC
equipment, MMC Norilsk Nickel devotes considerable attention                                                                                                          consumption;                                                   Kola MMC (163,354 GJ). Collectively, they account for 3,497,358
to initiatives aimed at the introduction of energy efficient or                 11%                                                                                 • optimizing hydraulic and thermal regimes of the heat and       GJ, or 96% of the overall Group’s savings.1
renewable energy-based equipment and services. Savings                                                                           Electricity                          water supply systems of the entities of the Polar Division.
resulting from reduced energy consumption and improved                                                                           Heating and cooling                                                                                 Figure 2.5. Energy savings by energy type, 2010
efficiency make a considerable contribution to the reduction of                                                                  Steam                          Figure 2.4. Energy savings by measure type, 2010
the Company’s costs.
In 2010, the overall energy consumption of the Russian entities                                                                                                                    12%                                                                                                          Heat
of the Norilsk Nickel Group1 increased by 3,213 TJ or by 1.37%                                                                                                                                            Readjustment or                                                                       Fuel
                                                                                                                                                                                                          replacement of equipment       43%
compared to the 2009 level.                                                                                                                                                                                                                                                                     Electricity
                                                                                                                                                                                                          Behavioral changes
The relative shares of primary energy sources in direct energy    The renewable energy consumption3 increased by 1.9%
                                                                                                                                                                                                          Modernization                                             39%
consumption remained virtually unchanged compared to the          compared to the previous year as a result of increased                                                                  41%
                                                                                                                                                                                                          of production processes
previous year (see Annex 3, Figure 2.2).                          electricity demand of Norilsk Nickel operations, external
                                                                  customers, and residents of the Norilsk Industrial District.
Figure 2.2. Direct energy consumption by source, 2010             Renewable sources accounted for 33% of the Group’s overall
                                                                  indirect energy use associated with electricity consumption.

                                                                  In 2010, energy savings of the Russian Group’s entities resulting
                8%                                                from energy conservation and efficiency improvement
                                            Natural gas
                                                                  measures amounted to 3,629,348 GJ (1.5% of the total energy
                                            Diesel fuel           consumption or 4.3% of the indirect energy consumption), or by
                                            Coal                  238,548 GJ (6.2%) less than in 2009. The Group saved less fuel
                                                                  (-27%), but more heat (+21.2%) and electricity (+13.7%).

                                                                  Savings resulting from modernization of production processes
                               89%                                increased four times compared to 2009, savings from changes
                                                                  in the personnel behavior increased by 17.1%, while savings
                                                                  from readjustment and replacement of equipment decreased
The overall direct energy consumption by the Group increased      by 36.3%.
by 1.5% (2,296,746 GJ) compared to 2009. The consumption of
both natural gas and diesel fuel increased by 1.6%, while the     Most of the savings resulting from modernization of production
coal consumption decreased by 0.2%. A significant portion of      processes were achieved at the Polar Division due to the
the consumed natural gas is produced by Groups’ entities.         following measures:
                                                                      • using efficient lamps for the lighting of production
In 2010, the overall indirect energy use increased by 1.1%              facilities;
(915,396 GJ) compared to the 2009 level. The consumption of           • replacing pumps with more efficient ones and the use of
electricity purchased from external entities increased by 2.6%,         variable frequency drives (VFDs) in pumping systems of
while the consumption of heat and steam decreased by 1.5%               concentrator plants;

1       Entities listed in Annex 4.                               2    The data on indirect energy consumption, including the Group total, were produced by
                                                                       summing the data for individual entities without adjustment for energy flows between
                                                                       different Group’s entities. Therefore, strictly speaking, the resulting data cannot be
                                                                       considered a “Group balance”.
                                                                                                                                                                                                                                     1    See Annex 3 for more details on the Company’s energy conservation and efficiency
                                                                  3    Expressed in the intermediate energy units.                                                                                                                        improvement initiatives in 2010 and their results.

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    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                   RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                                   2010
2.6. Product Responsibility                                                                                                                                           Entities of the Norilsk Nickel Group have a number of local certified
                                                                                                                                                                      and accredited quality, environmental, and OHS management
                                                                                                                                                                                                                                                         The requirements regarding the safety of processes, including
                                                                                                                                                                                                                                                         manufacturing, transportation and sale of products, and
                                                                                                                                                                      systems. These systems make important contribution to the                          providing services, are formally defined by the Company in
                                                                                                                                                                      accomplishment of the Company’s strategic objectives1.                             the relevant technical documentation, ranging from terms of
                                                                                                                                                                         • Kola MMC has in place an ISO 9001:2008 certified quality                      reference for process design to operational procedures and
                                                                                                                                                                             management system in the area “Production of nickel,                        parameters charts for specific processes and operations,
                                                                                                                                                                             copper, cobalt and their compounds, concentrates of                         including, in particular, various forms of permits (licenses,
                                                                                                                                                                             precious metals and sulphuric acid”, an ISO 14001:2004                      safety data sheets, expert conclusions, etc.).
                                                                                                                                                                             certified environmental management system, and an
                                                                                                                                                                             OHSAS 18001:2007 certified occupational health and safety                   Information on the requisite product quality and properties,
                                                                                                                                                                             management system in the area “Ore mining, production                       including safety requirements, is contained in technical
                                                                                                                                                                             of matte, nickel, copper, cobalt and their compounds,                       standards and specifications, and contractual documentation for
                                                                                                                                                                             concentrates of precious metals and sulphuric acid”.                        specific product types. Product compliance with the established
                                                                                                                                                                         • LLC Gipronickel Institute has in place a quality                              requirements is assured by means of quality control; based on
                                                                                                                                                                             management system “with regard to research, design,                         the results, necessary documents are produced.
                                                                                                                                                                             engineering, survey and environmental activities and
                                                                                                                                                                             project management in the field of mining, concentration,                   The Company’s finished metal products have been certified in
                                                                                                                                                                             metallurgy, and other industrial sectors”. The system                       the GOST R Certification System as conforming to the national
MMC Norilsk Nickel produces output demanded by the society                                        other stakeholders (customers, shareholders, governments,                  has been certified as ISO 9001:2008 compliant by SGS                        standards and technical specifications. Certifications are
in the most efficient way possible with the amount, quality, and                                  the society and employees). Ultimately, the Company’s quality              Switzerland and VNIIS Russian certification body (as                        validated by means of product inspections. As of December 31,
mix of products1 meeting marked demand, while complying with                                      management activities are aimed at the strengthening of its                compliant with GOST R ISO 9001). The company works                          2010, the Company had over ten conformance certificates for
the legal requirements of its countries of operation and ensuring                                 market position and stable growth of its shareholder value and             on the implementation of an ISO 14001:2004 compliant                        its products.
environmental safety, as well as occupational health and safety.                                  financial performance.                                                     environmental management system.
                                                                                                                                                                         • Norilsk Nickel Harjavalta Oy (Finland) has in place an ISO                    Nickel of N1, N1Y grades and cobalt of K1Ay, K1A have been
                                                                                                  The main objective of implementing and maintaining quality                 9001:2008 certified quality management system, an ISO                       registered with the London Metal Exchange.
2.6.1. Quality Policy of the Company                                                              and environmental management systems on the basis of                       14001:2004 certified environmental management system,
                                                                                                  international standards is ensuring evidence and the required              and an OHSAS 18001:2007 certified OHS management                            The Company manufactures its products in accordance
Norilsk Nickel’s quality policy is a part of the overall policy                                   level of guarantees of operational safety, as well as maintaining          system.                                                                     with the established operational safety requirements for
of the Company and as such is aimed at meeting current and                                        customers’ confidence in the quality of products and reliability       • Tati Nickel Mining Company (Botswana) has in place an                         the respective processes (see Table 2.4). Compliance of the
future demands of base and precious metals customers to the                                       of supply. The quality policy and the environmental policy                 ISO 9001:2008 certified quality management system, an                       Company’s operations with the applicable safety requirements
fullest extent possible. The Company considers customers’                                         of Norilsk Nickel are aligned with the Company’s strategic                 ISO 14001:2004 certified environmental management                           is confirmed by the state licenses held by the Company.
views and expectations in implementing its quality policy, and                                    objectives and provide the basis for setting environmental and             system, and an OHSAS 18001:2007 certified OHS
guarantees delivery of products conforming to established                                         quality objectives, and for review and improvement of IQEMS.               management system.                                                          Information on potential health impacts of products and
standards and specific customers’ demands.                                                                                                                               • Nkomati Joint Venture (South Africa) has in place an ISO                      applicable requirements concerning product labeling to inform
                                                                                                  The Company has implemented and maintains the requirements                 9001:2008 certified quality management system, an ISO                       the customer on potential hazards are contained in regulatory
In the implementation of its quality policy, the Company is                                       of ISO 9001 and ISO 14001 international standards on the basis             14001:2004 certified environmental management system,                       documents for specific product types (national standards,
guided by the following principles:                                                               of its Integrated Quality and Environmental Management                     and an OHSAS 18001:2007 certified OHS management                            technical specifications).
   • customer focus;                                                                              System (IQEMS), which encompasses the processes and                        system.
   • management leadership and personnel involvement;                                             activities of the Company’s Head Office (Moscow), the Polar            • Polar Transport Branch works on the implementation of                         Assessments of product safety and disclosure of the respective
   • process and systems approaches to management;                                                Division (Norilsk), and the Polar Transport Branch (Dudinka).              quality and environmental management systems (based                         information in accordance with the established requirements
   • continuous improvement of the Company’s operations;                                                                                                                     on ISO 9001:2008 and ISO 14001:2004).                                       are carried out by production units of the Polar Division and Kola
   • effective fact-based decision-making;                                                        The Company’s IQEMS has been certified in the area “Production,                                                                                        MMC for all significant types of the Company’s products (see
   • mutually beneficial relationships with suppliers.                                            project management, sales, and product delivery”. The system                                                                                           Table 2.5). The assessment results are reflected in respective
                                                                                                  was first certified as compliant with the respective standards      2.6.2. Ensuring compliance with mandatory                                          types of documents, including information charts of hazardous
The Company manages quality and safety of its products on                                         in 2005. The certification status is confirmed on an annual basis   product/service safety requirements                                                chemical and biological substances, safety data sheets for
the basis of the international quality management standards;                                      by Bureau Veritas Certification, an independent certification                                                                                          products, shipment documents etc. The product shipments
European Union directives; guidelines and requirements of                                         body accredited by several international accreditation bodies,      In order to ensure the level of health and environmental                           are accompanied by Material Safety Data Sheets (MSDS),
the EU, World Trade Organization (WTO), and the London Metal                                      including United Kingdom Accreditation Service (UKAS, UK),          protection required by both Russian and international legislation,                 mandatory in the EU, USA and other countries, which describe
Exchange (LME); requirements of the global metal markets and                                      Deutschen Akkreditierungs Rat (DAR, Germany), and American          and to define mandatory product/service safety requirements,                       safety measures in handling the product. The objective of
                                                                                                  National Accreditation Board (ANAB, USA).                           all stages of the product/service lifecycle are assessed for risks                 MSDS is to communicate product safety information, including
1       The Company’s products are characterized by virtually complete transformation and
        change of properties in the process of intended use/consumption: nickel is used in
                                                                                                                                                                      and potential negative impacts associated with them.                               potential hazards2.
        alloys, copper is used mainly in construction and production of electronic and electric   The Polar Division and Polar Transport Branch work on bringing
        devices, platinum and palladium (in the form of compounds) are used primarily in
        production of autocatalysts. Salts of nickel are used in various industrial sectors.
                                                                                                  their existing OHS management systems into compliance with          1    Detailed information on the existing management systems is available at the   2   Hazard is defined as a potential harm or potential exposure to chemicals that may
                                                                                                                                                                           Company’s website:                      occur in handling or applying the product, as well as other risks, including potential
        Company’s assets based in South Africa produce metal concentrates.                        the requirements of the OHSAS 18001:2007 specification.                                                                                                    accidental contact, fire, or leakage to the environment.

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    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                          RESPONSIBILITY REPORT
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Table 2.4. Product lifecycle stages, at which mandatory product/service safety requirements are established and                          Monitoring of conformance to customer requirements related       an annual basis conducts questionnaire surveys among its
the potential impact on customer health is assessed for the purpose of subsequent improvement                                            to packaging, delivery term, availability of accompanying        domestic and foreign customers in order to identify their
                                                                                                                                         documentation etc. is performed at various stages of product     preferences and solicit their suggestions regarding the quality
Lifecycle stage                                                                                                         Yes        No    movement from the producer to the customer. Customers’           of the Company’s products and services. Customers evaluate
Development of the product/service concept                                                                                +              complaints and comments are analyzed and addressed in            products based on a number of criteria such as chemical
Research and development                                                                                                  +              accordance with the corporate policies regulating customer       composition (including contaminants), geometric parameters,
Certification                                                                                                             +              relations and defining procedures of corrective and preventive   surface condition, packaging and labeling, shipping timing
Production                                                                                                                +              actions within the framework of the Company’s IQEMS and          and information support. In 2010, the Company received
Marketing and promotion                                                                                                   +              local quality management systems of individual business units    three customer’s claims regarding the quality of its finished
Storage, distribution, and shipping                                                                                       +              and SDCs.                                                        products, all of which were resolved.
Use/consumption and servicing*                                                                                                      +
Disposal, re-use, or recycling *                                                                                                    +    One of the Company’s approaches toward maintaining the           The Company’s foreign assets also monitor customer
* The Company does not use, service or dispose of its own products.                                                                      customer focus of its activities involves soliciting feedback    satisfaction and analyze their suggestions, guided by the
                                                                                                                                         from the customers and monitoring their satisfaction with        customer focus principle and using a broad range of methods.
                                                                                                                                         the Company’s products. The Company’s sales function on
Table 2.5. Types of product safety information
Information type                                                                                                        Yes       No
Sources of product components                                                                                             +
Product composition                                                                                                       +
Safe handling of products                                                                                                 +
Disposal* of products and related environmental/social impacts                                                                      +

* The Company does not carry out disposal of its own products.

Requirements with regard to labeling of the Company’s products        Recognizing the potential of the EU market for its products,
are defined by respective regulatory documents (national              Norilsk Nickel was among the first Russian metal companies
standards, technical specification). These requirements can de        to begin appropriate preparations and then the implementation
further detailed or extended at the customer’s request in the         of the REACH requirements. It ensured timely pre-registration
process of negotiating a sales contract.                              and completed the registration of its large-volume products
                                                                      within the required time frame.
In 2010, the Company successfully completed the registration
of its products in accordance with the requirements of the            Another instrument of promoting compliance with product
REACH Regulation, which was adopted by the European                   quality and safety requirements is the corporate training system
Union in December 2006 and came into force on July 1, 2007.           in the field of quality, environment, and safety, operating on a
The Regulation introduces a new system for the control of             continuous basis. In 2010, over 3 thousand employees received
the production, import and use of chemicals in the European           specialized training in these areas.
Union. The document provides for the registration of chemicals
marketed in Europe, assessment of their safety, and restrictions
on the use of certain hazardous chemicals. The requirements           2.6.3. Monitoring of customer satisfaction
of the REACH Regulation apply to the products of MMC Norilsk
Nickel marked in the EU. It is expected that the full transitions     The Company’s quality policy is aimed at meeting customer
to the new registration system for the substances currently on        requirements and preferences to the maximum extent
the EU market will take 11 years (2007-2018).                         possible. According to the corporate policies, monitoring of
                                                                      customer preferences and satisfaction includes the following
In 2010, the Company has prepared Chemical Safety Reports             types of activities:
(CSRs) for each registered product as required by the                    • Preparatory work preceding the signing of a sales
Regulation. The structure and content of Safety Data Sheets                contract;
(SDSs) were checked for conformance to the new requirements.             • Annual customer questionnaire surveys;
Updated SDSs were sent to all end users of Company products              • Analysis of customer satisfaction;
among other documents accompanying shipment. CSRs and                    • Development, implementation and evaluation of measures
SDSs contain the most recent information on the physical and               aimed at the improvement of customer satisfaction.
chemical properties of products and guidance of their safe use.

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 RESPONSIBILITY REPORT                                                                                                                                                                                                                             RESPONSIBILITY REPORT
                  2010                                                                                                                                                                                                                             2010
3. Environmental Protection – Priority Areas

Environmental Policy                                                3.1. Development
Recognizing the magnitude and complexity of environmental           of the Environmental
issues faced by the Company, MMC Norilsk Nickel intends
to continuously reduce and, wherever possible, prevent              Management System
environmental impacts arising from its operations.
                                                                    The Company’s Environmental Management System (EMS) is
The management of MMC Norilsk Nickel views environmental            placed within the framework of the corporate Integrated Quality
activities as an integral part of the Company’s business. The       and Environmental Management System (IQEMS). Norilsk               and ISO 14001:2004 international standards. Based on the            Aspects Identification and Significance Assessment”. The
Company seeks to contribute to sustainable development              Nickel continuously develops and improves the system, as it        audit findings, the BVC specialists provided recommendations        identification of environmental aspects of the Polar Division
of Russia by way of compliance with the environmental               looks at environmental management as an important activity         on potential opportunities for the improvement and noticed          and the Head Office was carried out. Registries of operations for
legislation, efficient use of natural resources, and continuous     that results in a number of significant benefits to the Company,   general strengths of the Company’s management approaches.           the management and monitoring of significant environmental
improvement of its environmental activities.                        including:                                                                                                                             aspects were updated for several entities of the Polar Division.
                                                                       • priority implementation of measures aimed at the              The EMS of Kola MMC since November 2009 has been functioning
The Environmental Policy of OJSC MMC Norilsk Nickel                       reduction of adverse environmental impacts;                  as a part of the Integrated Management System of Kola MMC,          The Company monitors on a continuous basis the existing
approved in 2004 defines the priority areas of its environmental       • enhanced environmental awareness and training of the          which also encompasses a quality management system and an           environmental legislation and other applicable requirements,
activities, which include:                                                Company staff;                                               occupational health and safety management system. In 2010,          as well as proposed legal acts and regulations. The results
   • phased reduction of pollutant emissions into the air, with        • improved competitiveness of the Company in both               a certification audit of the IMS was conducted. The auditors        are made available to the interested departments of the Head
      priority attention given to sulphur dioxide and particulate         domestic and international markets;                          recommended to re-certify the system as compliant with              Office, divisions and SDCs through the electronic Register of
      matter;                                                          • ability to demonstrate the Company’s adherence to the         ISO 14001, ISO 9001, and OHSAS 18001 standards for the next         Legal and Other Applicable Requirements. The Register is
   • continuous reduction of polluted wastewater discharges               principles of international environmental standards to       period.                                                             updated as new information becomes available, but at least
      into water bodies;                                                  the customers and other stakeholders, which results in                                                                           once a month.
   • arrangement of waste disposal sites in order to reduce               an enhanced confidence of the customers who prefer to        The Company maintains an integrated environmental reporting
      the environmental footprint of the Company’s operations.            deal with suppliers having an EMS in place;                  system encompassing the Russian entities of Norilsk Nickel          Assessments of environmental compliance are carried out in the
                                                                       • additional opportunities for gaining recognition at the       Group1, and uses the system to monitor the accomplishment of        course of day-to-day operations of the Company’s entities, and
In order to fulfill the commitments defined by its Environmental          international level and in the international markets;        the Group’s environmental objectives.                               by way of internal environmental inspections of the Company’s
Policy, OJSC MMC Norilsk Nickel adheres to the principles and          • improved investment attractiveness of the Company.                                                                                divisions and SDCs. The internal environmental inspections are
requirements of ISO 14001:2004 international standard.                                                                                 As a part of the continuous improvement of the corporate            carried out on the basis of the corporate Regulation R GMC-NN
                                                                    In November 2010, the second surveillance audit of the IQEMS       IQEMS, in 2010 the Company continued updating the existing          120-001 2007 “Conducting Environmental Inspections at the
                                                                    was conducted by auditors of Bureau Veritas Certification (BVC),   EMS documents, including the Environmental Management               Facilities of OJSC MMC Norilsk Nickel”.
                                                                    an international certification body. The audit was conducted at    System Manual and a number of corporate standards, including
                                                                    the Company’s Head Office (Moscow), and at the industrial sites    “Reporting on Environmental Activities”, “Identification of Legal   The internal environmental inspections include a review of
                                                                    of the Polar Division (Norilsk) and the Polar Transport Branch     and Other Applicable Requirements”, and “Environmental              enquiries from external stakeholders and communications
                                                                    (Dudinka). The surveillance audit demonstrated compliance of                                                                           from state environmental authorities. Overall, the Company
                                                                    the Company’s IQEMS with the requirements of ISO 9001:2008         1   Entities listed in Annex 4, and OJSC Norilskgazprom.            operates in compliance with the requirements established

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                 2010                                                                                                                                                                                                                                2010
by or agreed upon with state environmental authorities on            workshops. In particular, 108 specialists of the Polar Division      is in line with the nature and objectives of its activities and in full   Nkomati manages its environmental aspects in the following
the basis of the existing environmental legislation. For each        and Polar Transport Branch received training under various           compliance with the requirements of the respective standards.             priority areas:
case of environmental non-conformance identified, goals,             programs, including: cleaner production – 30 persons;                                                                                             • Efficient use of water resources at the mine and reduction
objectives and measures to bring the activities into compliance      waste management – 58 persons; specialized environmental             In September 2010, a certification audit was carried out, and                   of potential impact on the surrounding water bodies
are identified.                                                      protection and management courses and workshops – 20                 the mine was re-certified as compliant with the requirements                    (construction of dams to ensure appropriate removal of
                                                                     persons.                                                             of ISO 14001:2004 international standard.                                       rainwater from the production site).
                                                                                                                                                                                                                       • Minimization of impacts associated with fugitive dust
3.1.1. Development of the internal audit                             In the reporting year, the Company’s specialists took part in the    The following environmental measures were implemented                           emissions (watering of unpaved roads at the mines, using
system                                                               following events:                                                    during the reporting period:                                                    special coating to stabilize roads).
                                                                         • Scientific and practical conference “Development of               • re-alignment of the mine’s environmental objectives with                • Identification of measures to reduce waste generation
In 2010, the Company conducted internal audits within the                  mechanisms for the interaction between industries,                  the requirements of the respective ISO standards;                          and expand waste re-use and recycling.
framework of the IQEMS based on the Program of Internal                    protected areas, and regions”;                                    • training staff on requirements of the ISO standards;                    • Identification of measures to improve energy conservation
IQEMS Audits for 2009–2010. In accordance with the                       • International scientific and practical conference                 • raising environmental awareness through the distribution                   and reduce carbon footprint of the operations.
requirements of ISO 9001:2008 and 14001:2004 standards                     “Professional education in the 21st century: modern                 of fact sheets and pamphlets;                                           • Rehabilitation of areas affected by mining activities and
and corporate regulations, the audits were conducted by                    approaches, the content and technology of training                • various initiatives to reduce water and power consumption.                 work towards a sustainable closure plan.
competent staff members, who received appropriate training.                specialists for the oil and gas sector of the northern areas                                                                                • Implementation of a biodiversity management program
A total of 38 internal audits were carried out at the Head Office,         of Krasnoyarsk Region”;                                        Nkomati                                                                         to conserve the existing fauna and flora (planning roads
Polar Division, and Polar Transport Branch over the year 2010.           • International conference METALLURGY-INTECHECO 2010;            Nkomati has implemented and maintains an environmental                          so as to minimize environmental impacts, re-planting
                                                                         • All-Russian Conference ATMOSPHERE 2010;                        management program, which has the following key elements:                       trees of rare species).
The Company has created and maintains a Register of Corporate            • International scientific and practical conference GAS            • Leadership and Responsibility: All managers, employees
and Internal Auditors.                                                     TREATMENT 2010.                                                    and contractors are to understand their responsibilities              Norilsk Nickel Harjavalta Oy
                                                                                                                                              associated with environmental aspects of the operations,              Norilsk Nickel Harjavalta Oy holds all the necessary
                                                                                                                                              and should demonstrate commitment towards fulfilling                  environmental permits and has an environmental management
3.1.2. Environmental training                                        3.1.3. Environmental management systems                                  these responsibilities.                                               system functioning as a part of a certified integrated
                                                                     and environmental activities of the foreign                            • Legal and Other Requirements: Effective systems should                management system compliant with ISO 9001, ISO 14001 and
Activities aimed at ensuring personnel competence and                assets of the Group                                                      be implemented to ensure that all relevant legal and other            OHSAS 18001 standards.
development in the field of environmental management in                                                                                       requirements are identified, understood and complied with.
general and with regard to internal IQEMS audits in particular       Norilsk Nickel Australia                                               • Risk Management: Effective systems should be
are carried out under the uniform policy of professional             In 2010, as a part of the preparations for resuming operations           implemented for the identification of environmental
development of Norilsk Nickel Group’s staff and improvement of       at the Lake Johnson site, the management of Norilsk Nickel               impacts and the development of corrective and preventive
their professional skills. A needs assessment for environmental      Australia introduced the position of Senior Environmental                measures for bringing impacts within acceptable levels.
training and skills upgrading is carried out annually. Based         Advisor responsible for the oversight of environmental                 • Planning, Objectives and Targets: Effective systems
on the assessment results, an environmental section for the          compliance. The company also appointed an Environmental                  should be implemented to ensure that due consideration
Group’s annual Integrated Action Plan for Staff Training is          Specialist responsible for environmental safety of operations            is given to environmental impacts of the activities,
prepared. In 2010, the Company used services of both external        at the Lake Jonson mine and concentrator, which are about                products and services; formal objectives and targets
and internal training providers for personnel development and        to resume their operations after several years of being placed           should be developed and monitored to pursue continuous
skills upgrading. As a part of continuous improvement of the         on care and maintenance mode. The Senior Environmental                   improvement.
IQEMS, training courses in various environment-related areas         Advisor works in close liaison with the Legal Department to            • Environmental Awareness: Employees, contractors and
are delivered to the Company’s specialists.                          ensure compliance of the Australian Group’s entities with the            visitors are made aware of environmental impacts and
                                                                     environmental legislation. In Western Australia, environmental           controls to minimize them.
In October 2010, the regional conference “Environmental              compliance is overseen by various government agencies,                 • Communication and Consultation: Internal and
protection and industrial operations in the North” was carried       but the most significant in this regard are the Environmental            external stakeholders should be identified and effective
out in Norilsk.                                                      Protection Authority and the Department of Mines and                     communication and consultation with them should be
                                                                     Petroleum.                                                               maintained in order to encourage their participation and
In November 2010, the Company held the annual corporate                                                                                       engagement in achieving environmental management
workshop “Environmental protection in the metals industry”.          Tati Nickel                                                              objectives and targets.
The event was attended by 40 managers and specialists of             Since 2007, the mine has had in place an environmental                 • Crisis and Emergency Management: Procedures and
environmental departments of the Company’s Head Office,              management system functioning as a part of the integrated                resources are in place to effectively respond to crisis and
its divisions and SDCs, as well as representatives of external       Safety, Health, Environment, and Quality (SHEQ) Management               emergency situations.
organizations, including state supervisory authorities,              System based on the respective international standards. The            • Monitoring, Audit and Review: Compliance with the
ministries and agencies, and research institutions.                  system is audited by DQS, an ISO certification body. Internally,         requirements and procedures of the environmental
                                                                     the system is audited on a quarterly basis by the mine’s                 management system should be monitored and
Over the course of the year, the Company’s specialists               own specialist against the requirements of the respective                reviewed to measure progress and support continuous
participated in a number of conferences and training                 international standards. The Integrated SHEQ Policy of the mine          improvement.

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                 2010                                                                                                                                                                                                                                        2010
3.2. Environmental                                                  of the Copper Plant helped reduce the emissions of selenium
                                                                    dioxide by 0.149 tonnes (20.1%).
                                                                                                                                       Figure 3.1. Pollutant emissions into the air, 2008-2010 (thousand tonnes)

Performance Indicators
                                                                    A significant reduction in the emissions of nickel sulphate from
Environmental safety of operations and protection of the            the surface of electrolysis cells – by 0.842 tonnes (45.1%) –                                                                                          2,115.6 2,113.4 2,088.1
environment are among the key priorities of Norilsk Nickel.         was achieved due to the use of a more effective surfactant                                 1,956.7 1,949.8 1,915.0
The Group works to minimize environmental impacts of its            (Chromine instead of Sulfanole). The reduction was confirmed
operations through a phased reduction of pollutant emissions        by the results of operational monitoring of emissions (see
and discharges, reducing waste generation, and increasing           Figure 3.1).                                                                  1,500

waste recovery. The Group seeks to comply with the
requirements of the environmental legislation and international     During adverse weather conditions, emission control plans are                 1,000
agreements, ISO 14001:2004 international standard, as well as       enacted at the Company’s operations. In 2010, such plans were
sectoral and corporate policies applicable to environmental         activated at the metallurgical plants of the Polar Division 142                                                                                                                                           2008
aspects and environmental protection activities of MMC              times. The Copper Plant accounted for 59.9% of the cases, the                                                             143.5 148.4 154.8                                                               2009
Norilsk Nickel.                                                     Nickel Plant – for 31.7%, the NMP – for 8.4%.                                    0                                                                                                                        2010
                                                                                                                                                               Polar Division                Kola MMC                       Norilsk Nickel Group
                                                                    In 2010, the Company continued to carry out and commission
3.2.1. Pollutant emissions into the air                             design and research works aimed at a phased achievement
                                                                    of compliance with the Maximum Permissible Emission (MPE)          the Zapolyarny site the emissions of nickel were reduced by            Support Company’s production facilities was started in 2010. In
In 2010, the overall pollutant emissions into the air across        limits established for the Polar Division.                         19.98 tonnes, of copper – by 5.44 tonnes, of cobalt – by 0.54          the reporting year, no cases of exceedance of the established
the Norilsk Nickel Group decreased by 25.3 thousand tonnes                                                                             tonnes; at the Nickel site the emissions nickel were reduced           emission limits took place at the Company’s SDCs.
(or 1.2%) compared to 2009. The entities which contributed          In particular, a technical and economic assessment for the         by 4.28 tonnes, of copper – by 1.68 tonnes. The reductions
the most to the reduction included the Polar Division of MMC        selection and justification of the best option for recovery of     were mainly a result of the process improvements at the                Sanitary protection zones
Norilsk Nickel, Taimyr Fuel Company, Yenisei River Shipping         sulphur containing off-gases of the Polar Division was carried     pelletization and roasting section within the framework of a           In 2010, justifications of the proposed sizes of sanitary
Company, Polar Transport Branch, Vostokgeologiya, Taimyr            out. A number of design and research organizations contributed     larger modernization project, and at the smelter workshop.             protection zones were prepared for the 18 key production
Airline, Archangelsk Commercial Seaport etc.                        to the assessment, including LLC Gipronickel Institute, OJSC                                                                              facilities of the Polar Division (NMP, Nickel Plant, Copper Plant,
                                                                    Ukrkhimproekt, VIRAKS, CJSC Mekhanobr Engineering,                 Kola MMC continued the reconstruction of the floatation                Norilsk Concentrator, Talnakh Concentrator, all Talnakh mines
The aggregate pollutant emissions of the Polar Division were        VNIISTROM-NIUIF, and the Tomsk Polytechnic University.             concentrate roasting workshop at the Zapolyarny industrial             etc.). The proposals were based on calculations and included
reduced by 34,730.15 tonnes (by 1.8%), mainly as a result of                                                                           site in order to ensure transition to a new process involving          assessments of public health risks. All justifications received
reduced sulphur dioxide emissions of the Copper Plant. This         The Polar Division implements a large-scale integrated project     the production of hardened briquettes. The company prepared            positive conclusions of expert bodies of Rospotrebnadzor (the
was achieved due to decreased sulphur content in the process        ultimately aimed at the relocation of all pyrometallurgical        design documentation, which was approved by the Federal                sanitary oversight agency). For two industrial sites of the
inputs, and increased sulphur recovery from off-gas with            operations farther from the city of Norilsk and the processing     State Expert Review Department, concluded contracts                    Central Motor Transport Unit, the final sizes of the sanitary
subsequent manufacturing of sulphur-containing products.            of all nickel-containing materials at the Nadezhda Metallurgical   with suppliers of core process equipment, and continues                protection zones were approved by the Decree of the Chief
In 2010, a total of 103.8 thousand tonnes of sulphur was            Plant using a more advanced technology. In 2010, within the        construction works on the site. It is expected that the transition     Sanitary Physician of Russia dated December 23, 2010 No. 166
recovered from off-gases, 8.2 thousand tonnes (8.6%) more           framework of the project, the development of the working           from concentrate roasting to briquette production will be              (registered by the Ministry of Justice on January 31, 2011, No.
than in the previous year.                                          design documentation for the modernization of the depletion        completed in 2011, and, as a result, the site will virtually cease     19635). For the remaining facilities, in 2011 it is planned to start
                                                                    electric furnace #4 with the replacement of gas cleaning           emissions of sulphur dioxide.                                          air quality studies at the boundaries of the proposed SPZs.
The emissions of carbon monoxide and nitrogen oxides were           equipment was completed.
reduced, respectively, by 87.1 tonnes (by 1.3%) and 73.5 tonnes                                                                        New MPE limits for Nickel and Zapolyarny sites were approved
(by 4.3%) due to the introduction of better gas combustion          In November 2010, a new flue gas stack was put into operation      in 2010. The preparation of justifications for proposed sanitary       3.2.2. Water resource use
regimes in concentrate spray dryers and rotary sand dryers at       at the roasting and reduction workshop of the Nickel Plant         protection zones (SPZs) of production entities of Kola MMC has
the smelter workshop #1 of the Nadezhda Metallurgical Plant         (4th gas cleaning unit). The high stack (180 m) ensures better     started.                                                               The Company has been implementing a system of
(NMP).                                                              dilution of pollutants and a reduction of impacts on the                                                                                  environmental measures aimed at ensuring the efficient use of
                                                                    residential areas of Norilsk.                                      In 2010, the subsidiary and dependent companies of MMC                 water resources and prevention of their pollution.
The reduction of metal emissions of the metallurgical plants,                                                                          Norilsk Nickel were taking steps to comply with the air
including the emissions of nickel oxide by 17.9 tonnes (by 5.3%),   In 2010, pollutant emissions of Kola MMC’s entities were in        quality legislation. For Noriskgeologiya, Norilsk Support              Entities of the Norilsk Nickel Group withdraw water from
copper oxide – by 43.1 tonnes (by 12.0%), and cobalt oxide – by     compliance with the established MPE and Temporary Agreed           Company, Polar Construction Company, Norilsknickelremont,              surface water bodies and underground aquifers for public
5.3 tonnes (by 20.3%), was a result of a reduced content of the     Emission (TAE) levels, with no exceedance incidents occurring.     Norilskpromtransport, Nortrans-Norilsk, maximum permissible            water supply, general purpose and process water supply of its
metals in process inputs and improved effectiveness of suction                                                                         emission limits were approved and necessary emission permits           facilities, and for the needs of the Company’s vessels.
systems.                                                            In 2010, the amount of sulphur recovered from off-gases of         were obtained. The calculations demonstrated that emissions of
                                                                    sulphuric acid production units at Kola MMC increased by 2.19      these SDCs would not have adverse effects on residential areas         The water is withdrawn from surface water bodies of the
The reduction of operating hours of roasting kiln #2 and the        thousand tonnes (3.4%) compared to the previous year. The          of Norilsk, and the development of additional emission control         Kara Sea basin1, and underground sources (Talnakhskoye,
modernization of the electrostatic precipitator of the 1st gas      overall emissions of non-ferrous metal particulates across         measures was not required. The preparation of justifications
                                                                                                                                                                                                              1    For more details see Corporate Social Responsibility Report of OJSC MMC Norilsk Nic-
cleaning unit (selenium unit) at the metallurgical workshop         Kola MMC were reduced compared to 2009. In particular, at          for the proposed sizes of sanitary protection zones of Norilsk              kel for 2009.

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                 2010                                                                                                                                                                                                                                                  2010
Ambarninskoye, and Ergalakhskoye groundwater deposits).                      Jarvi (at the Zapolyarny industrial site) as a result of     Kola MMC was able to reduce its general purpose water               NTEC increased the amount of water use by 0.6% (recycled
The water withdrawal is carried out in accordance with the                   increased process water recycling at the Severny mine        consumption by 35.6% through introducing metering systems           water) as a result of an increased power generation at its
established limits and does not have a significant effect on the             and associated decreases in fresh water consumption.         at its operations, reducing the use of utility/drinking water for   power plants.
water bodies.                                                                                                                             the process needs of certain operations (at the Zapolyarny
                                                                       In 2010, Kola MMC achieved a reduction in its general purpose      site), and a major reduction of general purpose hot water           Polar Construction Company increased its process water
Some entities of the Norilsk Nickel Group use water supplied by        water consumption from municipal water supply by 15.1%.            consumption (at the Nickel site) achieved by optimizing hot         consumption by 5.1% compared to 2009 due to an increased
other organizations (specifically by OJSC Norilsk-Taimyr Energy        This was a result of the introduction of metering systems at       water supply to amenity rooms of production facilities.             water use in the construction of mine workings.
Company, or NTEC), instead of directly withdrawing necessary           the Zapolyarny and Nickel sites, and the optimization of water
water resources from the environment.                                  supply schemes to reduce losses.                                   Archangelsk Branch of MMC Norilsk Nickel implemented a              In 2010, the overall process water consumption increased by
                                                                                                                                          range of proactive measures at designated water bodies to be        0.4% as a result of an increased output of entities of the Polar
In 2010, the overall amount of water withdrawn by the Norilsk          The water withdrawn by vessels of the Norilsk Nickel Group is      used for firefighting, which helped reduce water consumption        Division. Due to a number of organizational and engineering
Nickel Group’s entities decreased by 7.4 million m3 (2.2%)             used for process needs – for the cooling of engines, in on-board   by 29.6% compared to 2009.                                          measures aimed at water saving and transition to closed-
compared to 2009, reaching 339.37 million m3 (see Figure 3.2).         machinery and systems. The reduction in water withdrawal from                                                                          circuit water supply systems, the use of recycled water at the
The reduction of water consumption by the Russian entities of          surface water bodies by vessels of the Polar Division in 2010      LLC Norilsknickelremont decreased its overall water                 Polar Division increased by 0.4% in 2010.
the Group was a result of measures aimed at ensuring rational          was a result of a decrease in overall operating hours during the   consumption by 98.7% by reducing the use of water for once-
water resource management and improving the efficiency of              navigation period compared to the previous year.                   through cooling of compressors used for compressed air supply.      In 2010, the Company continued to work on the optimization
water use.                                                                                                                                                                                                    of its water consumption and the reduction of wastewater
                                                                       The main causes of the increase in the overall natural water       Furthermore, various entities of the Norilsk Group implemented      discharges to surface water bodies.
The largest reduction in water withdrawal from surface water           inflow across the Norilsk Nickel Group by 16.9% in 2010 include    projects for the installation of water meters, which helped
bodies compared to 2009 – by 10.2 million m3 (4.2%) – was              an increased volume of water removed from underground              improve their water consumption accounting systems.                 The Group’s entities based in Krasnoyarsk Region discharge
achieved by NTEC as a result of efficient re-distribution of           and open-pit mines of the Polar Division and Kola MMC, and a                                                                           their effluents into water bodies of the Kara Sea basin,
water withdrawn form Kharaelakh Resevoir and Norilskaya                higher spring flood level compared to 2009.                        In particular, Polar Construction Company installed water           including those of the Yenisei River basin and the Norilo-
River for the cooling of condensers at the CHPP-2 (a combined                                                                             meters for their sub-customers. LLC Norilskgeologiya                Pyasinskaya water system. Facilities of Kola MMC discharge
heat and power plant).                                                 The total amount of recycled water used across the Norilsk         used meters to track its water consumption, which led to a          their wastewaters to water bodies of the Barents Sea basin,
                                                                       Nickel Group increased by 11.0 million m3 compared to the          decrease in the consumption by 41.6% compared to 2009. LLC          Archangelsk Commercial Seaport – to the Northern Dvina
Kola MMC in 2010 reduced water withdrawal from surface                 previous year.                                                     Norilskpromtransport reduced its water consumption by 8.6%          River.
water bodies by 2.1% as a result of:                                                                                                      due to the installation of cold and hot water meters and the
   • reduction of water withdrawal from Lake Sopchjavr                 The overall general purpose water consumption of the Group         updating of technical reports, which were used as a basis for       Some entities of the Group1 do not discharge their effluents to
     (at the Monchegorsk site) due to process optimization             decreased by 2.1 million m3 or 6.6% compared to 2009.              determining water and heat consumption.                             water bodies directly, sending them to sewer systems operated
     measures, which led to a decrease in water consumption                                                                                                                                                   by other companies.
     of the refining workshop and nickel electrolysis                  In the reporting year, the entities of the Norilsk Nickel Group    A number of Russian entities of the Group reduced their water
     workshop;                                                         implemented a range of organizational and engineering              consumption as a result of reorganization: Archangelsk              In 2010, the overall wastewater discharge across the Norilsk
   • reduction of the consumption of makeup water for water            measures aimed at the reduction of their water consumption.        Commercial Seaport reduced its overall water consumption            Nickel Group was reduced by 4.1% (6.6 million m3) compared
     recycling systems achieved due to loss reduction, and                                                                                by 18.6%; Norilsk Airport – by 80.6%, Scrap Metal Processing        to the previous year. The amount of wastewater treated to the
     a decrease in water withdrawal from Lake Seliakka-                                                                                   Plant – by 89.4%.                                                   standard quality at the treatment facilities increased 2.8 times;
                                                                                                                                                                                                              the overall weight of pollutants discharged to water bodies
Figure 3.2. Overall water withdrawal, 2008-2010 (million m3)                                                                              In 2010, Norilsk Support Company reduced its water                  decreased by 23.0 thousand tonnes (14.0%).
                                                                                                                                          consumption by 14.5% compared to the previous year as a
                                                                                                                                          result of a decrease in the product output.                         In the reporting year, the total wastewater discharge of the
                                                                                     350.3                                                                                                                    entities of the Polar Division increased by 8.8% due to an
           350                                                                               346.7
                                                                                                                                          The water consumption by LLC Norilskgazprom decreased by            increased inflow of flood waters to the Zapolyarny mine. At the
           300                                                  276.0 275.9 263.9                                                         26.1% due to disconnecting unused facilities from the water         same time, the overall weight of pollutants discharged with
           250                                                                                                                            supply system at the site of the Gas Distribution Station #1        wastewaters by the Polar Division’s operations decreased by
           200                                                                                                                            (Norilsk Industrial District).                                      2.1 thousand tonnes (3.2%) as a result of achieving the design
                                                                                                                                                                                                              capacity and treatment quality at wastewater treatment
                                                                                                                                          The 53% decrease in general purpose and process water               facilities commissioned in 2009.
            100     74.6   75.8   79.7                                                                              2008                  consumption by OJSC Taimyrgaz compared to 2009 was a
            50                             41.1   37.1   37.9                                                       2009                  result of the suspension of some planned drilling operations        Kola MMC increased the discharge of polluted insufficiently
                                                                                                                                          for reasons associated with certain aspects of the production       treated wastewaters by 14.0% compared to 2009, while the
                   Polar Division and     Kola MMC              NTEC                Norilsk Nickel Group                                  technology used at the Pelyatkinskoye gas condensate field. LLC     weight of pollutants discharged with wastewaters increased by
                   Norilskenergo Branch                                                                                                   Pechengageologiya reduced its water consumption by 54%.             3.8 thousand tonnes. This was a result of a significant increase

                                                                                                                                          Some entities of the Norilsk Nickel Group increased their water     1   LLC Nortrans-Norilsk, LLC Scrap Metal Processing Plant, LLC Norilskgeologiya, LLC
                                                                                                                                                                                                                  Vostokgeologiya, LLC Pechengageologiya, Murmansk Transport Branch, Archangelsk
                                                                                                                                          consumption in the reporting year.                                      Branch, Krasnoyarsk Branch, LLC Gipronickel Institute etc.

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                 2010                                                                                                                                                                                                                                               2010
in wastewater removal from the Severny mine, which led to an        flood in order to reduce pollution of the Yenisei River. After     Furthermore, the Group’s entities on a continuous basis carry            mine, currently being constructed (Zapolyarny industrial site
increased discharge of mine waters from mine’s ponds to the         the flood, in order to prevent erosion processes, the company      out monitoring of water bodies and water protection zones                of Kola MMC). In addition, more concentration tailings and
Haukilampi-Joki River.                                              carried out cleanup works across the whole area of the port        in accordance with their monitoring plans approved by the                metallurgical slag was produced due to an increased product
                                                                    site falling within the water protection zone. The company         respective authorities.                                                  output compared to 2009. At the same time, the established
LLC Norilsknickelremont reduced its wastewater discharges           also monitored the state of the port aquatorium and berthing                                                                                waste disposal limits were complied with at all the Company’s
and weight of pollutants discharged to water bodies as a result     structures in order to prevent contamination and clogging of                                                                                disposal facilities. The reuse and recycling of waste within
of eliminating two wastewater outlets.                              water bodies, and continued works on the construction of local     3.2.3. Waste management                                                  the Norilsk Nickel Group increased by 414.9 thousand tonnes
                                                                    treatment facilities.                                                                                                                       (2.1%) compared to the previous year. One should note that
OJSC Norilskgazprom in 2010 decreased the amount of                                                                                    In order to ensure compliance with the environmental                     over 90% of the industrial waste generated by the Company’s
wastewater discharged after treatment; the amount of                Kola MMC carried out works on the cleanup of a process             legislation, in 2010 the Company’s entities worked on the                operations is classified into the fifth hazard grade (i.e. virtually
pollutants discharged to water bodies was reduced by 14.4%.         wastewater treatment pond, emergency basin of a tailing pond,      preparation of proposed waste generation and disposal limits             no environmental hazard).
Thus was a result of a reduced cooling water consumption by         mine water settling ponds, and a rainwater retention pond. The     to be approved by the authorities, and took necessary steps for
the power plant at the Messoyakhskoe gas condensate field,          company also worked to expand wastewater recycling and             obtaining waste disposal permits.                                        In 2010, the amount of waste sent to external organizations
the optimization of wastewater discharges associated with the       reuse (including mine waters), and continued the construction                                                                               for recycling or decontamination increased by 4.1 thousand
functioning of water supply and sewer systems, and a decreased      of a water pipeline between the main pumping station of the        A number of entities, including the Murmansk Transport Branch            tonnes. At the same time, some Russian entities of the Group
water consumption at the site of the Gas Distribution Station #1.   mine and surface settling ponds. Furthermore, the company          of OJSC MMC Norilsk Nickel, Krasnoyarsk Branch, Yenisei                  were able to reduce the amount of waste sent to specialist
                                                                    also completed design works for the treatment and disposal of      River Shipping Company, Norilsknickelremont, and Taimyr                  organizations for disposal by over 2.4 thousand tonnes. The
In 2010, OJSC NTEC reduced its wastewater discharge as              salty effluent of the nickel refining process.                     Fuel Company, completed the elaboration of proposed waste                amount of waste disposal at the Company’s own facilities
a result of both a high water level in Lake Samsonkino (no                                                                             generation limits and were allocated waste disposal limits by            increased by 4,647 thousand tonnes (21.3%).
discharges to the lake took place in 2010) and a reduced            Other entities of the Norilsk Nickel Group also implemented        supervisory authorities.
withdrawal from Kharaelakh reservoir for once-through water         various measures in the reporting year, seeking to reduce                                                                                   In order to reduce environmental impacts associated with
use. The increase in pollutant discharge with wastewaters           wastewater and pollutant discharges to water bodies.               Such entities as Polar Construction Company,                             waste disposal, the Polar Division in 2010 continued the
was a result of an increased discharge of drainage waters at                                                                           Norilsknickelremont, and Taimyr Fuel Company were granted                implementation of the following projects:
Kureyskaya Hydropower Plant.                                        As a result of organizational and engineering measures, Polar      licenses for hazardous waste collection, use, decontamination,              • “The expansion of the Lebyazhye tailings pond. The second
                                                                    Construction Company was able to eliminate a wastewater            transportation, and disposal.                                                 field for storage of tailings from the Talnakh and Norilsk
In 2010, Taimyr Fuel Company increased the discharge of             outlet in 2010. At other outlets, the company implements a                                                                                       concentrators”, intended to ensure environmentally safe
pollutants by 2.8 thousand tonnes as a result of the installation   system of measures aimed at achieving compliance with the          In 2010, overall waste generation across Norilsk Nickel Group                 disposal and storage of tailings from the Talnakh and
of new modular boiler units at the Dudinka petroleum depot.         established wastewater and pollutant discharge limits.             increased by 4,217.9 thousand tonnes (10.1%) compared to                      Norilsk concentrators in the amount of at least 11 million
                                                                                                                                       the previous year (see Figure 3.3) as a result of an increase                 tonnes per annum;
Norilsk Airport reduced its wastewater discharges by 12.8%          Yenisei River Shipping Company works to guarantee                  in overburden stripping at Kayerkansky mine (the Polar                      • “The use of tailings of the Talnakh Concentrator for the
as a result of reducing its overall wastewater consumption          environmental safety of its cargo shipping services between        Branch) due to an increased extraction of non-ore mineral                     backfilling of disused underground mine workings at
in 2010. The airport was also able to reduce the amount of          Krasnoyarsk and Dudinka (the Yenisei River). The company’s         resources (coal, flux sandstone), and at the Severny Gluboky                  Talnakh”.
pollutants discharged with wastewaters by 30.4% due to the          environmental fleet comprises 23 specialized vessels,
improvement of wastewater treatment quality.                        including “collectors”, integrated waste processing stations,
                                                                    and treatment stations. These vessels collect effluent, oily       Figure 3.3. Overall waste generation, 2008-2010 (million tonnes)
In 2010, Polar Construction Company reduced its overall             bilge water and waste from other ships, making it possible to
wastewater discharges by 11.8%; the weight of pollutants            operate the company’s fleet without discharging pollutants to
discharged with wastewater to water bodies – by 42.9%.              water bodies. A specialized oil cleaning complex is used for                  50                                                                      47.6             46.1
                                                                    the cleaning of vessels’ engine compartments and oil tankers.                 45                                                                              41.9
Archangelsk Commercial Seaport decreases its pollutant              Oil-polluted waters collected from vessels and the oil cleaning               40
discharges to water bodies by 14.7% compared to 2009.               complex are processed by two special treatment vessels.                                                   35.5
                                                                                                                                                  35         33.7    33.1
                                                                    Sanitary effluent from vessels is treated and decontaminated
In 2010, the Group’s operations continued designing and             by STOK units. In 2010, STOK-10 units were installed on 6 ships,
constructing wastewater treatment facilities and eliminating        while a more powerful STOK-70 unit was installed on one of
wastewater discharge outlets in accordance with their               the two integrated waste processing stations.
                                                                                                                                                  15                                     13.9
approved Action Plans for the reduction of pollutant discharges.                                                                                                                                         10.5
                                                                                                                                                                                                 8.7                                                            2008
                                                                    OJSC Norilskgazprom was taking actions on the restoration                     10
The Polar Division continued the construction of wastewater         of bunding at petroleum product and methanol tank farms                        5
treatment facilities for mine waters, reconstruction of cooling     (Tukhard settlement), cleanup of production and well sites                     0                                                                                                            2010
                                                                                                                                                             Polar Division              Kola MMC                         Norilsk Nickel Group
towers, the design and construction of local treatment facilities   from waste, as well as cleanup of pipeline end manifold sites at
for mechanical and biological wastewater treatment etc.             underwater river crossings and of adjacent river bank sections.
                                                                    This helped reduce soil contamination, also decreasing the risk
The Polar Transport Branch took the full range of actions to        of polluting water bodies with petroleum products, ferrous
prepare potentially flooded areas of the port for the spring        compounds, and other substances.

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    CORPORATE SOCIAL                                                                                                                                                                                                                                        CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                       RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                       2010
3.2.4. Environmental expenditures                                                                 environmental impact of their transport operations. Temporary         underwater pipelines at the B. Kheta and Yenisei River               LLC Nortrans-Norilsk uses vehicles compliant with EURO 4
(indicator EN30)1                                                                                 access roads to their field camps and wells are constructed in        crossings; cleanup of water protection zones.                        standards, which helps considerably reduce pollutant
                                                                                                  the minimum amount possible on low-quality lands outside                                                                                   emissions into the air.
In 2010, the overall operating environmental expenditures2 of                                     water protection zones, with the routes being agreed upon with        LLC Norilskgeologiya, in order to prevent geological
the Russian entities of the Group increased by 11.3% compared                                     forest authorities. In order to prevent pollution of surface water    complications, uses non-aggressive methods of well cleanout,
to the previous year and amounted to RUB 12.47 billion,                                           bodies with fuel, washing of vehicles at field sites is prohibited.   as well as special inhibited drilling mud with low content of        3.2.7. Environmental performance
including operating environmental expenditures of the Polar                                       The vehicles are fuelled at specially arranged sites using hand       solids. In order to strengthen borehole walls and prevent            indicators of foreign assets
Division – RUB 11.37 billion, Kola MMC – RUB 858.7 million,                                       pumps, which prevents spills of hazardous liquids to the soil.        them from collapsing, well casing is used. In order to protect
OJSC Yenisei River Shipping Company – RUB 80 million, OJSC                                                                                                              freshwater zones from drilling mud and cleanout agents,              Environmental impacts of the Group’s operations
NTEC – RUB 64.2 million etc.                                                                      The products of OJSC Taimyrgaz (gas and gas condensate)               borehole is isolated with casing and the annulus is cemented.        in Africa
                                                                                                  are transported by pipelines (a gas pipeline and a condensate         To prevent adverse impacts on the geological environment,            The key requirements with regard to environmental
The expenditures on environmental protection measures                                             pipeline) Pelyatkinskoye field – Dudinka – Norilsk, which helps       all wells are plugged after the use. In order to minimize            performance of the Group’s foreign entities are defined by
(capital environmental expenditures, Form 18-KS) include                                          reduce environmental impacts associated with the product              damage to soil and vegetation, optimized schemes of vehicle          the environmental legislation of the respective countries and
expenditures on the construction and installation of                                              transportation.                                                       movement are used, making the maximum possible use of                corporate standards of the Norilsk Nickel Group. Environmental
wastewater treatment facilities, closed-circuit water recycling                                                                                                         already existing routes. In addition, most transport operations      programs play an important role in day-to-day activities
systems, off-gas cleaning units, industrial waste recovery                                                                                                              are performed by caterpillar tractors and all-terrain vehicles       of the operations. All production operations of the foreign
and processing units, as well as on the construction and                                          3.2.6. Environmental impact reduction                                 during the seasons when the snow cover stabilizes and the            assets are certified as compliant with ISO 14001 standard and
improvement of waste disposal sites etc.                                                          initiatives                                                           active layer is completely frozen.                                   undergo surveillance audits on a regular basis. The companies
                                                                                                                                                                                                                                             continuously develop and implement their own actions plans
The total expenditures on environmental protection measures                                       Entities of the Norilsk Nickel Group have been taking actions         In order to identify possible adverse environmental impacts of       for the prevention or minimization of environmental impacts
across the Group amounted to RUB 3.17 billion, including the                                      to reduce the environmental impacts associated with their             geological exploration works at the Maslovskaya license area,        associated with their activities.
respective expenditures of the Polar Division – about RUB 2.0                                     activities.                                                           in 2010 the Company contracted Aerogeologiya Federal State
billion, and Kola MMC – RUB 1.14 billion.                                                                                                                               Institution to carry out environmental monitoring.                   The most significant environmental footprint of the Company’
                                                                                                  According to a contract, signed in 2009, oil-containing waste                                                                              foreign production assets is associated with landscape
Thus, in 2010 the overall environmental expenditures of                                           generated by Archangelsk Commercial Seaport was sent for              LLC Pechengageologiya also uses a number of practices                transformation and water consumption. The key aspect of
the Norilsk Nickel Group defined as the sum of operating                                          disposal to a specialist organization, holding an appropriate         to minimize the environmental impact of its operations. In           environmental activities associated with them is subsequent
environmental expenditures and expenditures on                                                    license for hazardous waste processing and disposal. As a             particular, field camps are arranged outside protection zones        (upon the termination of their operations) reclamation and
environmental protection measures (capital environmental                                          result of this practice, the port was able to reduce its pollutant    of water bodies at the existing forest clearings, former camping     rehabilitation of affected natural landscapes and water bodies.
expenditures) increased, reaching RUB 15.6 billion.                                               emissions into the air, since formerly this waste type was            sites, and areas with sparse forest vegetation. In constructing
                                                                                                  incinerated at the port’s own boiler shop.                            field camps, efforts are made to minimize the cutting of trees.      Norilsk Nickel Harjavalta Oy
                                                                                                                                                                        Fire safety rules are strictly observed in geological camps and      The main environmental aspects of the company’s operations
3.2.5. Environmental impacts of the                                                               In the course of the waste inventory and certification of waste       temporary encampments. Each field camp has a set of fire             include emissions of ammonia and nickel into the air and
transportation of products, goods,                                                                types at Archangelsk Commercial Seaport, it was decided that          extinguishing equipment.                                             discharges of nickel, sulphate (SO4), and ammonium nitrate
materials, and personnel                                                                          used vehicle air cleaners should be sent to a specialist waste                                                                             (NH4-N) to water bodies. In 2010, all actual emissions and
                                                                                                  disposal company (formerly this waste type was collected in a         Drilling works are planned so as to perform most movements of        discharges of Norilsk Nickel Harjavalta Oy were in compliance
In order to keep pollutant emissions within the established                                       municipal solid waste container together with non-hazardous           drilling rigs in the winter, thus minimize damage to the soil and    with the respective permits.
limits, the Group’s entities on a regular basis practice technical                                waste and sent to the Archangelsk municipal landfill). Since          forest vegetation. Drilling operations are carried out outside
inspections of vehicles and other machinery, as well as                                           2010, used cleaners are collected and temporarily stored in           protection zones of water bodies. Closed-circuit well cleanout       The overall environmental expenditures of Norilsk Nickel
quarterly measurements of pollutant content in exhaust gases.                                     a separate container and then sent to a specialist company            systems are used in order to prevent the leakage of cleanout         Harjavalta Oy in 2010 amounted to EUR 2.0 million. Capital
When necessary, adjustment works are carried out.                                                 on a quarterly basis. In 2010, M.V. Lyapunova, a 2nd class            fluid and contamination of water bodies. The hydrogeological         environmental expenditures, including investments in the
                                                                                                  environmental engineer of the seaport, received an official           regime is continuously monitored during drilling, and if the risk    construction of cooling columns and gas cleaning units,
Geological exploration entities of the Company (LLC                                               acknowledgement from the Minister of Industry, Transport,             of disrupting occurs, the well is cemented. After the completion     amounted to some EUR 0.1 million.
Pechengageologiya LLC Vostokgeologiya, and LLC                                                    and Communications of Archangelsk Region.                             of works, casing is removed to be reused later, and the well is
Norilskgeologiya) adjust their work practices to minimize the                                                                                                           plugged. The drilling site is cleaned up; industrial and municipal
                                                                                                  The main priority of LLC Norilsknickelremont in the field of          waste is removed.
1       The value of the indicator EN30 “Total environmental protection expenditures and
        investments by type” were obtained by the summation, for all operations of the Norilsk    environmental impact mitigation is the reduction of process
        Nickel Group, of quantitative indicators reported in the official statistical reporting   water consumption. This not only improves resource efficiency
        forms 4-OS (“Information on operating environmental expenditures and environmental
        payments”) and 18-KS (“Information on capital investments for the purpose of              of operations, but also helps reduce wastewater discharges to
        environmental protection and efficient use of natural resources”) approved by the         water bodies.
        Federal State Statistics Service and submitted to federal authorities.

2       The operating environmental expenditures (Form 4-OS) include expenditures on the
        operation, maintenance and repair of the fixed assets intended for environmental
                                                                                                  OJSC Norilskgazprom took a range of actions to prevent
        purposes, on the personnel involved in the operation and maintenance of these assets,     or mitigate environmental impacts, including reclamation
        on materials, fuel, and energy consumed by these assets, on the transportation and
        disposal of industrial waste, on industrial environmental monitoring, reclamation of
                                                                                                  of sites, repairs of pipelines, restoration of the bunding
        disturbed lands etc                                                                       of petroleum tank farms, inspection of the condition of

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    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                             RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                             2010
Table 3.1. Environmental impacts of the Group’s operations in Africa, 2008-2010                                         3.3. Conservation and Restoration of Biodiversity
                                                                                  2010           2009           2008
Tati Nickel
Total water consumption (million m3)                                              2.40            2.30           2.20
Waste generation (tonnes)                                                         443              513            515
Waste disposal (tonnes)                                                           443              513            515
Total water consumption (million m3)                                              0.95            0.80           0.50
Waste generation (tonnes)                                                          474            236          15,767
Waste disposal (tonnes)                                                            474            236          15,767

Table 3.2. Environmental impacts of Norilsk Nickel Harjavalta Oy, 2008-2010
Indicator                                                                         2010           2009           2008
Pollutant discharges into the air (tonnes)
 - nickel                                                                          2.6              1.9           1.8
 - ammonia                                                                        126              193           389
Total water consumption (million m3)                                              11.2            10.4           12.9   The Russian operations of the Norilsk Nickel Group, in addition    Reserve, the Division sponsored the acquisition of office
Industrial wastewater discharges (thousand m3)                                    692             375            650    to mitigating environmental impacts of their activities,           equipment and appliances, furniture, fuel and lubricants, as
Pollutants discharged with wastewaters (tonnes)                                                                         make significant contribution to the conservation of natural       well as the transportation of the acquired goods and materials
 - nickel                                                                          0.9             0.8            2.8   ecosystems and biodiversity in their regions of operations.        at a total cost of RUB 348.5 thousand.
 - sulphate                                                                       16.1             5.9           17.7
 - ammonium nitrate                                                                58               19            57    The Polar Division for several years has been providing            Furthermore, according to the order of Yevgeny Muravyov,
Waste generation (thousand tonnes)                                                31.5            15.4           16.3   financial aid to the Norilsk Fish Hatchery. The main goal of       Director of the Polar Division of MMC Norilsk Nickel, “On
Waste disposal (thousand tonnes)                                                  30.9            14.4           15.7   the hatchery is rearing viable juvenile fish of valuable species   Providing Sponsorship Support”, additional office equipment
                                                                                                                        (char, whitefish, grayling) and releasing them to water bodies     and furniture were acquired for Putoransky Reserve.
                                                                                                                        of the Norilo-Pyasinskaya water system, including the Pyasina      According to the same order, the Division covered the costs
Table 3.3. Environmental expenditures of the operations of the foreign assets of the Group, 2008-2010 (USD million)     River and Lake Pyasino with its tributaries. These water bodies    of the transportation of the members and equipment of the
                                                                                                                        designated for fishery use are among the main habitats of          environmental expedition “Birds of the Putorana Plateau – the
                                                                                  2010           2009           2008    northern fish fauna, including the Arctic species (Arctic char,    Strategy of Survival in the 21st Century”. The Division spent
Tati Nickel                                                                       0.16            0.11           0.15   whitefish, nelma, taimen etc.).                                    a total of RUB 927.7 thousand on supporting the expedition
Nkomati                                                                           0.67            0.50           1.40                                                                      organized by the non-profit organization “Geese and Swan
NN Australia                                                                      2.10               –              –   Under the agreement “On Artificial Reproduction of Aquatic         Study Group of Eastern Europe and North Asia” and focused on
NN Harjavalta Oy                                                                  2.70            5.60           3.10   Biological Resources for the Compensation of Environmental         the study of the lesser white-fronted goose.
                                                                                                                        Damage” signed in 2010, 70.88 thousand juvenile char were
                                                                                                                        released to the Keta-Irbe River of the Norilo-Pyasinskaya          Kola MMC has been involved in cooperation with state nature
                                                                                                                        water system as a compensation for the environmental               reserves of Murmansk Region. Pasvik State Nature Reserve1 is
                                                                                                                        damage associated with the sand extraction operations at the       located 30 km southwest from the Nickel industrial site, while
                                                                                                                        Chervinsky Oseredysh site.                                         Laplandsky State Nature Biosphere Reserve2 is located 10 km
                                                                                                                                                                                           from the Monchegorsk industrial site.
                                                                                                                        The Division intends to continue financing the hatching and
                                                                                                                        releasing of fingerling of valuable species as a form of
                                                                                                                        compensation for the damage to water bodies associated with        1   Pasvik State Nature Reserve (, created on July 16, 1992, has been
                                                                                                                        its activities.                                                        included into the Prospective List of Wetlands of International Importance (Ramsar
                                                                                                                                                                                               sites) under the name of “Fjarvann – Schaanning’s Field Base”. The total area of the
                                                                                                                                                                                               reserve is 14,727 ha. Fifteen species found in the reserve are listed in the Red Book
                                                                                                                        Taimyrsky State Nature Biosphere Reserve and Putoransky                of the Russian Federation, including 7 rare species, 3 – vulnerable, 4 – supported, 1 –
                                                                                                                                                                                               critically endangered. Nine species have been included in the IUCN Red List with 8 of
                                                                                                                        State Nature Reserve have been included into the Polar                 them classified as near threatened (NT), and one – as vulnerable (VU). (Source: Pasvik
                                                                                                                        Division’s program of sponsorship in the Taimyr Dolgano-               State Nature Reserve.).
                                                                                                                        Nenets Municipal District on a permanent basis.                    2   Laplandsky State Nature Biosphere Reserve (, created on
                                                                                                                                                                                               January 17, 1930, is a federal protected area included in the UNESCO’s World Network
                                                                                                                                                                                               of Biosphere Reserves in 1985. The overall area of the reserve is 278,435 ha. Sixteen
                                                                                                                        Within the framework of the Division’s sponsorship program,            species occurring in the reserve are listed in the Red Book of the Russian Federation,
                                                                                                                        in 2010 a range of equipment for Taimyrsky Reserve was                 including 11 species classified as rare, and 5 as vulnerable. Two species have been
                                                                                                                                                                                               included in the IUCN Red List, including one near threatened and one vulnerable
                                                                                                                        purchased at a total cost of RUB 160 thousand. For Putoransky          species. (Source: Laplandsky State Nature Biosphere Reserve).

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                2010
Since 2006, researchers of Pasvik Reserve contracted by
Kola MMC have conducted studies to assess the state of
the environment in the impact area of the Pechenganickel
                                                                    Laplandsky Nature Reserve since 2002 has been contracted by
                                                                    Kola MMC to develop methods for the restoration of disturbed
                                                                    natural complexes in the long-term impact area affected by
                                                                                                                                       4. Occupational Health and Safety
Combine, including the reserve itself. According to a contract      airborne emissions from the Severonickel Combine, and to
signed in 1998, researchers of the Laplandsky Reserve               carry out environmental monitoring in the areas surrounding
have been conducting monitoring of the state of the natural         the Monchegorsk site and within the Laplandsky Nature
environment of areas adjacent to Severonickel Combine,              Reserve itself. The results of the studies create a foundation
including Monchegorsk town with its surroundings and the            for subsequent work on the rehabilitation of disturbed lands
area of the Laplandsky Reserve itself.                              and effective management of forest areas (improvement of
                                                                    their sanitary condition and prevention of forest fires) carried
One of the strategic areas of activities aimed at reducing the      out by contracted organizations.
impact on biodiversity is the transition to the cold briquetting
process at the pelletization and roasting section of the smelter    Since 2005, the Kola Geological Information and Laboratory
workshop (Zapolyarny industrial site), which will result in a       Center has been contracted to conduct integrated
major reduction of sulphur dioxide emissions. The approved          environmental monitoring at the Monchegorsk site and in the
project budget is RUB 2,200 million, with RUB 2,007 million         surrounding area. Monitoring is carried out at five locations
already disbursed. It is expected that the full launch of the new   selected as a result of a field reconnaissance and representing
process will take place in late 2011.                               different local catchments. In involves sampling of different
                                                                    components of the environment, including soil, vegetation
Another measure, which will help reduce impacts on
biodiversity, is the construction of treatment plants for mine
                                                                    cover, ground and surface waters, and precipitation.               4.1. Occupational Health                                                                    in OHS inspections within the framework of the multi-level
                                                                                                                                                                                                                                   oversight system and during weekly Safety Days;
waters. After the treatment, the water can be re-used for           When conducting exploration works, LLC Vostokgeologiya             and Safety Policy                                                                         • participation of managers representing appropriate organi-
process needs. In 2010, a contract worth RUB 9.4 million was        uses the existing winter roads and former dirt roads for                                                                                                       zation levels in pre-work briefings involving the discussion
concluded with CJSC Ion-Exchange Technologies. The scope of         constructing access roads to the exploration sites to the          The production processes of the operations of MMC Norilsk                                   of safe working practices and OHS performance, and the
work implies testing a pilot treatment plant at the Severny mine    maximum extent possible. Measures to prevent littering of          Nickel are associated with the extraction, concentration, and                               informing of employees about causes of workplace injuries;
and, based on the testing results, improving the plant design       drilling sites and their contamination with fuel oil and other     processing of mineral resources, and involve potential hazards                            • introduction of a corporate OHS oversight system, which
originally developed by Gipronickel Institute. It is planned that   petroleum products are taken. Drilling rigs are fitted with        to employee life and health.                                                                involves the assignment of territorial and/or structural units
the testing will be conducted in March – May 2011.                  equipment preventing leakages of fuel and lubricants to land.                                                                                                  to specific managers or specialists of production divisions
                                                                    Only reagents approved by the Ministry of Health are used fior     In 2008, the Occupational Health and Safety Policy of MMC                                   or functions, and the oversight of unsafe acts of employees
In order to restore the natural environment in the areas            well cleanout.                                                     Norilsk Nickel was approved. The OHS Policy proclaims                                       and behavioral risks by responsible groups and managers.
affected by its operations, in 2010 Kola MMC rehabilitated 1 ha                                                                        the principle of the priority of employee life and health over
of land affected by industrial emissions at the Zapolyarny site,    In 2010, LLC Scrap Metal Processing Plant was providing scrap      operational performance and declares the interest of the                               In 2010, the Occupational Injuries Prevention Committee
planting it with trees. In addition, a research expedition from     metal processing services to MMC Norilsk Nickel. A total of        Company’s management in creating safe and healthy working                              on a regular basis reviewed the situation with regard to
the Moscow State University assessed the state of the areas         440.7 tonnes of scrap metal was collected.                         conditions for all employees, and in maintaining sustained                             occupational injuries within the Company, approaches to the
rehabilitated by the company and arranged control locations                                                                            employee motivation for safe workplace behavior (for more                              improvement of the corporate OHSMS, and the progress of
outside the immediate impact area of the site. Within the           In 2010, the overall area of land reclaimed (rehabilitated) by     details, see Sustainable Development / Occupational Health and                         the implementation of measures aimed at the prevention of
framework of this long-term project (the contract period is         LLC Pechengageologiya after exploration works amounted to          Safety section at the corporate website                            occupational injuries and the improvement of the effectiveness
from 2010 through 2013) the researchers will compare trends         30.42 ha.                                                                                                                                                 of OHSMS. The Committee held videoconferences and on-site
in the condition of the rehabilitated and control locations                                                                                                                                                                   meetings at industrial sites of the Company’s divisions and
and then provide recommendations on the improvement of                                                                                 4.1.1. Improvement of the Occupational                                                 SDCs to review local occupational health and safety issues.
rehabilitation practices.                                                                                                              Health and Safety management systems                                                   Among other agenda items, heads of the Group’s various
                                                                                                                                                                                                                              units reported on OHS activities, including injury prevention
                                                                                                                                       In the reporting year, seeking to improve the corporate OHS                            measures. Pursuant to the Committee’s decision, the
                                                                                                                                       management system (OHSMS), the Occupational Injuries Prevention                        Environment, Health, and Safety Department of the Company’s
                                                                                                                                       Committee of MMC Norilsk Nickel proposed a number of new                               Head Office (hereinafter – the EHS Department) monitors the
                                                                                                                                       measures aimed at the prevention of workplace injuries, which                          progress of the implementation of planned measures aimed at
                                                                                                                                       were implemented at the Company’s divisions1 and at the majority                       the improvement of the Company’s OHS Management System.
                                                                                                                                       of the Russian entities of the Group. These measures include:
                                                                                                                                           • mandatory personal participation of heads of structural                          In order to assess the effectiveness of the OHS management
                                                                                                                                             units and sub-units of the Company’s divisions and SDCs                          systems of individual divisions of the Norilsk Nickel Group, 14
                                                                                                                                                                                                                              scheduled audits of such systems were carried out in 2010.
                                                                                                                                       1   In this chapter the term "Company" means a legal entity, OJSC MMC Norilsk Nickel   Based on the audits findings, a total of over 200 measures on
                                                                                                                                           comprises the Polar Division, Polar Transport Branch, Murmansk Transport Branch,   the improvement of the effectiveness of the respective OHS
                                                                                                                                           Arkhangelsk Branch, Krasnoyarsk Branch, Krasnoyarsk Representantive Office, and
                                                                                                                                           the Head Office                                                                    management systems were proposed.

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                                    RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                    2010
In 2010, MMC Norilsk Nickel continued to update on a              In order to improve the safety of mining operations, a new            Kola MMC, Norilsknickelremont, Polar Construction Company             entities; 749 OHS representatives conducted 4.7 thousand
regular basis its electronic database “Documents of the OHS       automatic system for early detection of underground fires was         and other entities. As a result of these activities, 18.4 thousand    inspections at the Company.
Management System”, containing corporate OHS standards,           deployed at the mines of the Polar Division in 2010. The cost of      workplaces used by 34.4 thousand persons were certified with
information about occupational injuries, reports of OHS           the system amounted to RUB 180 million.                               regard to working conditions in 2010. In the reporting year, the
inspections, and materials of the Occupational Injuries                                                                                 costs of workplace certification activities at the Group’s entities   4.1.6. Personal protective equipment,
Prevention Committee.                                             At the Oktyabrsky mine of the Polar Division, a pilot testing of a    amounted to RUB 22.6 million, including RUB 9.2 million on the        medical and preventive activities
                                                                  new automated underground rail system was carried out. The            certification activities at the Company.
In 2010, MMC Norilsk Nickel continued to develop new              new system is expected to replace the existing systems based                                                                                All employees of the Company are provided, in a timely manner
corporate OHS regulations and standards and update the            on obsolete and worn-out interlocking equipment.                                                                                            and on the basis of their working conditions and sectoral
existing ones. In particular, the corporate standard “The                                                                               4.1.4. Improvement of the corporate OHS                               standards, with high-quality certified personal protective
Procedure of Technical Investigation of Causes of Accidents and   In 2010, the Polar Division replaced obsolete vehicles and            training system                                                       equipment (PPE), ensuring appropriate protection from
Incidents at the Facilities Overseen by the Federal Service for   machinery with more advanced ones in order to reduce dust                                                                                   occupational hazards. Workers exposed to contaminants are
Environmental, Nuclear, and Technological Supervision” STO        generation as well as noise and vibration levels. Thirty pieces       In 2010, 25.3 thousand employees of the Norilsk Nickel Group,         provided, free of charge, with rinsing and decontamination
KISM 120-203-2010 was developed and enacted. The standard         of modern self-propelled machinery at a total cost of RUB             including 8.4 thousand managers and specialists, received             agents.
“Procedure of Informing, Record-Keeping and Reporting in the      773.2 million were commissioned. Twenty four new vehicles at          OHS pre-attestation training and attestations, as well as other
Field of Occupational Health and Safety (Workplace Injuries,      a total cost of RUB 381 million were purchased for the Central        relevant OHS training. This includes 1.7 thousand employees           In order to provide employees with the most effective and
Accidents, Occupational Diseases)” STO KISM 120-202-2009          Motor Transport Unit.                                                 of the Company’s divisions. The overall expenditures on the           convenient PPE, the Company’s divisions and operations of
was amended.                                                                                                                            employee training in the field of OHS amounted to RUB 19.2            the Group practice pre-procurement testing of the equipment,
                                                                  At the metallurgical plants of the Polar Division new EOT (electric   million, including RUB 833 thousand spent on the training of          including the most recent products of the leading providers.
In 2010, MMC Norilsk Nickel continued to develop new              overhead traveling) cranes and elevators were installed and put       the Company employees.
corporate OHS regulations and standards and update the            into operation (four cranes and the Nickel and Copper Plants,                                                                               In 2010, the total expenditures of the Russian Group’s entities
existing ones. In particular, the corporate standard “The         four elevators at the Nickel and Nadezhda Metallurgical Plant).       In June and August 2010, the EHS Department of the Company            on personal protective equipment amounted to RUB 802.5
Procedure of Technical Investigation of Causes of Accidents       At the smelter workshop of the Copper Plant, a modernization          jointly with the Center for Study and Assessment of Legal and         million, or RUB 12.1 thousand per employee entitled to free
and Incidents at the Facilities Overseen by the Federal Service   of a vapor suction unit of the copper casting machine #2 was          Economic Aspects of the OHS System delivered corporate                PPE. The respective expenditures of the Company amounted to
for Environmental, Nuclear, and Technological Supervision”        carried out in order to improve pollutant removal from the            workshops on the theme “Main areas of the improvement of              RUB 364.4 million and RUB 17.0 thousand respectively.
STO KISM 120-203-2010 was developed and enacted. The              work area. At the Norilsk Concentrator, additional suction            the legal framework with regard to providing employees of
standard “Procedure of Informing, Record-Keeping and              systems were installed in the reagent section of the grinding         mining and metallurgical industries with personal protective          The employees exposed to special workplace conditions are
Reporting in the Field of Occupational Health and Safety          and flotation workshop and in the coarse crushing section of          equipment” for managers and specialists of OHS departments            provided with appropriate medical nutrition according to
(Workplace Injuries, Accidents, Occupational Diseases)” STO       the crushing workshop.                                                of the Company’s divisions and the Group’s entities based in the      the corporate standards going beyond the respective legal
KISM 120-202-2009 was amended.                                                                                                          Norilsk Industrial District and the Kola Peninsula.                   requirements1.
                                                                  At the Polar Transport Branch, three cabins of gantry cranes at
In the second quarter of 2010, the integrated management          the cargo handling complexes #1 and #2 were replaced, which           Managers and specialists of OHS departments of the                    The Company on a regular basis implements prevention
system of Kola MMC was certified as compliant with several        helped improve working conditions of crane operators.                 Company’s divisions and the Group’s entities took part in the         measures against occupational diseases as required by the
international standards, including OHSAS 18001 – Occupational                                                                           14th International Exhibition “Occupational Health and Safety”        Russian legislation and recommended by medical institutions.
Health and Safety Management System.                              At Kola MMC, a major overhaul of rail tracks at the +140m level       and BIOT 2010 International OHS Congress.                             Mandatory pre-employment and periodic medical examinations
                                                                  of the Kapitalnaya adit at the Kaula-Kotselvaara mine was                                                                                   are conducted at the Company’s expense. Conducting medical
                                                                  carried out. At the smelter workshop, windows of galleries                                                                                  examinations on a regular basis facilitates early identification of
4.1.2. Improvement of the occupational                            of conveyors #17 and #17A were repaired; a swinging gate in           4.1.5. Engagement of the staff in the OHS                             occupational diseases. If an occupational disease is suspected,
health and safety status and working                              the new part of the workshop was replaced; an additional fan          management                                                            the employee is transferred to a different job to avoid further
conditions                                                        to increase fresh air supply to cabins of overhead cranes was                                                                               exposure to occupational hazards and receives occupational
                                                                  installed. At the concentrator, a control room for operators          Each structural entity of the Polar Division has a joint              retraining. In 2010, the expenditures of the Group’s entities on
In 2010, over 1.3 thousand individual OHS measures were           controlling conveyors #3, #4, and #5 was arranged; wooden             occupational health and safety commission comprised of the            pre-employment and periodic medical examination amounted
implemented at the operations of the Norilsk Nickel Group,        planking over tubs in the reagent section was replaced. At the        employer’s and employees’ representatives on a parity basis.          to RUB 143.3 million, including RUB 51.3 million spent by the
including 88 measures implemented within the Company. The         transportation and maintenance center, a renovation of the            A similar commission has been established at the level of the         entities of the Company.
overall OHS expenditures of the Norilsk Nickel Group amounted     lunch room in the building ARM1 was carried out.                      Division as a whole. The Polar Transport Branch, Murmansk
to RUB 2.8 billion, or RUB 37.1 thousand per employee. In                                                                               Transport Branch and many other operations of Norilsk Nickel          Employees of the Group’s entities are provided with necessary
particular, the OHS expenditures within the Company amounted                                                                            Group also have similar joint OHS commissions (committees,            pharmaceuticals, vitamins, and first-aid kits free of charge.
to RUB 1.6 billion, or RUB 60.7 thousand per employee.            4.1.3. Workplace certification and risk                               councils) in place.                                                   The respective expenditures in the reporting year amounted
                                                                  assessment                                                                                                                                  to RUB 25.2 million, including RUB 8.2 million spent by the
In 2010, the operations of the Norilsk Nickel Group carried out                                                                         The Company’s divisions and many entities of the Group have           Company’s divisions.
a large amount of work on the maintenance of buildings and        In 2010, the operations of the Norilsk Nickel Group started or        OHS representatives elected by the respective labor collectives
structures, equipment, machinery, engineering systems, as         continued work on the certification of workplaces with regard         or labor union organizations and participating in OHS activities      1    At the Polar Division, staff categories provided with free medical nutrition include
                                                                                                                                                                                                                   those working in hazardous conditions but no longer eligible for this benefit since 2003,
well as ventilation and suction systems. In particular, costs     to working conditions. Workplace certification activities were        on their behalf. In 2010, 1.6 thousand OHS representatives                 when the Decree of the Labor Ministry of the RF #14 dated March 31, 2003 entered into
of assessment, testing, inspections, and maintenance of fixed     carried out at the Polar Division and Polar Transport Branch,         conducted a total of 18.4 thousand inspections at the Group’s              force.
assets at the Polar Division amounted to RUB 402.6 million.

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    CORPORATE SOCIAL                                                                                                                                                                                                                                                      CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                     RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                     2010
4.1.7. Occupational health and safety at the                         In 2010, corporate safety initiatives were focused on engaging       Nkomati also implements a range of initiatives to manage HIV/           • Peer educators and counselors have been trained
foreign entities                                                     all employees in the implementation of a mine-wide strategy          AIDS and its impacts.                                                     and participate in monthly meetings of the Health and
                                                                     aimed at maintaining zero fatality rate. The campaign, which            • Nkomati Mine has put in place an Employee Wellness                   Wellness Committee, which also comprises managers
Norilsk Nickel Australia                                             successfully achieved its goal, was conducted under the theme             Strategy which addresses, among others, such issues as               and union representatives.
Norilsk Nickel Australia is committed to ensure occupational         “SIMUNYE”, an idiom reminding employees that accident                     HIV/AIDS, employee assistance programs, nutrition and              • Health Awareness Campaigns are held in accordance
health, safety and wellness of its employees, contractors, and       prevention is a collaborative and a participatory process, and            governance.                                                          with Department of Health’s National Health Calendar.
any other persons affected by its operations.                        getting good results requires everyone’s contribution.                  • A policy statement has been developed in consultation                Pamphlets and leaflets are distributed on an ongoing
                                                                                                                                               with the union, peer educators and management and                    basis. The World AIDS Day is commemorated annually.
The OHS Policy of Norilsk Nickel Australia includes the              Nkomati                                                                   communicated to all employees. The policy ensures that             • HIV/AIDS prevalence studies and environmental scan
following elements:                                                  Occupational health and safety is a priority to Nkomati. The OHS          the affected employees are not discriminated against                 studies are conducted annually in order to manage the
    • Assessment of OHS risks and issues.                            Policy of the mine complies with all applicable legal requirements        with their information kept confidential. At the same                pandemic and its impact on the business and employees.
    • Using integrated risk management approaches for the            and international best practices, which is assured by OHSAS               time employees are encouraged to declare their status in           • Voluntary Testing and counseling is available to
      identification of OHS hazards, risk assessment and             18001:2007 certification of the OHS management system.                    order to mitigate stigmatization.                                    employees on a weekly basis through the on-site OHS
      controlling in order to reduce risks to employees across                                                                               • There is a compulsory requirement for all employees to               Care.
      all the aspects of operations based on the principle of        Norilsk Nickel Harjavalta Oy                                              participate in the medical aid scheme.                             • Condoms are distributed at different departments of
      “the minimum practically feasible level”.                      For many years Norilsk Nickel Harjavalta Oy has paid special            • Anti-retroviral treatment is provided through the medical            Nkomati Mine on a monthly basis, and ongoing monitoring
    • Introducing appropriate planning processes, resource           attention to OHS activities. Over the last 10 years the lost time         aid scheme and is freely available through clinics in the            is carried out. “Go-Ahead” cereal, an energy supplement,
      and management systems for the purpose of creating             injury rate (per one million working hours) decreased from 25             local communities.                                                   is provided to employees free of charge on a daily basis.
      and maintaining a safe workplace environment, using            to 2.4. The objective of the NNH management is to reduce this
      safe equipment and machinery, safe production systems,         indicator to zero level. In 2010, one lost time injury occurred.
      as well as timely employee training, awareness raising,
      orientation, and OHS compliance oversight;
                                                                     The OHS activities of NNH are focused on prevention measures.
                                                                     In the reporting year, NNH staff reported 827 near misses. Such
                                                                                                                                          4.2. Prevention Strategies in the Field of OHS
    • As a minimum requirement, ensuring compliance                  reporting is one of the approaches toward injury prevention.
      of working conditions with the requirements of the             The company works to ensure continuous improvement of
      respective OHS legislation;                                    working conditions and employee wellness.
    • Ensuring that OHS responsibilities and requirements are
      understood and complied with by all staff members.             NNH’s requirements include pre-employment physical
    • Ensuring effective communication and consultation              examination and drug testing. The employees undergo physical
      with the staff, contractors, and other stakeholders            examination, fitness for work testing, as well as nickel and
      in developing and implementing OHS objectives and              arsenic exposure testing once in three years. Workers of
      initiatives.                                                   the electrolysis workshop are required to undergo exposure
    • Establishing measurable OHS objectives and targets in          testing once a year.
      accordance with the respective standards of Australia
      and New Zealand (AS/NZS 4801:2001 Occupational Health          Combatting HIV/AIDS
      and Safety Management Systems) for the purpose of              Employees of the foreign operations of Norilsk Nickel Group
      preventing workplace injuries and occupational diseases.       based in Africa (Botswana, South Africa) have access to social
                                                                     counseling services with regard to physical and mental health
The OHS Policy is subject to periodic review and update to reflect   (HIV/AIDS and tuberculosis), psychological aid, counseling
changes in the legislation and the organizational structure of the   regarding injuries, retirement due to disability and other issues.   In order to evaluate the effectiveness of the existing OHS           workshop and plant levels and comprising representatives of
Australian Group of Companies.                                                                                                            management systems, in 2010 the EHS Department carried               both management and employees. In 2010, OHS commissions
                                                                     Tati Nickel implements a number of initiatives with regard           out inspections (audits) of the OHS performance at the Group’s       carried out 27.2 thousand inspections at the Group entities,
Tati Nickel                                                          to HIV/AIDS. Following the prevalence survey conducted in            entities, in some cases – jointly with managers and specialists      including 3.9 thousand inspections at the Company.
Tati Nickel Mining Company (TNMC) has developed and                  2008, the mine mobilized its resources to combat HIV/AIDS,           of OHS departments of production entities of the Group. Based
implemented a Safety, Health, Environmental, and Quality             the nationwide scourge. The corporate HIV/AIDS management            on the findings of such audits, managers of the respective           In order to promote personal responsibility of each employee for
(SHEQ) Policy aligned with the nature of its business and            program includes peer education, ARV monitoring, and                 operations received recommendations on specific measures to          compliance with the workplace safety requirements, a special
compliant with the following requirements:                           awareness raising. The program has demonstrated significant          improve the effectiveness of the management systems.                 Personal Book of OHS Compliance Liability with tear-off coupons
   • ISO 9001, ISO 14001 and OHSAS 18001 international               success with over 85% employees being aware of their HIV                                                                                  has been introduced at the Group’s major entities and the
     standards;                                                      status and at least 92% of those infected being compliant with       The Russian entities of the Norilsk Nickel Group have a multilevel   Company’s divisions. Such a book is carried by every employee,
   • Botswana Mines, Quarries, Works and Machinery Act               the treatment. The engagement of NGOs volunteering to assist         system in place to monitor and oversee OHS compliance.               and failure to comply with OHS standards or requirements
     (Cap. 44:02);                                                   the mine in the implementation of the national strategy against      At the lowest level, the monitoring is focused mainly on the         results in a removal of a coupon with a subsequent disciplinary
   • Botswana Mines and Minerals Act (Cap. 66:01).                   AIDS was another significant sustainability factor. One NGO,         condition of individual workplaces and is carried out by a line      penalty and impact on the bonuses due. In 2010, a total of 2.5
   • TNMC SHEQ Business Improvement Strategy.                        TRUE Man, played a particularly important role in this regard.       manager (foreman) with involvement of OHS representatives.           thousand coupons were removed from employees’ books across
                                                                                                                                          At the second and higher levels, monitoring and oversight are        the Group’s entities, including 1.1 thousand coupons removed at
                                                                                                                                          performed by special OHS commissions established at the              the Company.

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In order to provide incentives for labor collectives and
individual employees to improve their OHS performance,
                                                                    occupational disease rate, and enhance labor productivity,
                                                                    motivation, and the Company’s attractiveness as an employer.
                                                                                                                                              4.3. OHS Performance Indicators
a number of the Group’s entities (the Polar Division, Kola
MMC, Norilsknickelremont, Polar Construction Company,               In 2010, the program was implemented in three regions –
Norilsk Support Complex, Norilskgeologiya) carry out regular        the Norilsk Industrial District (NID), Murmansk Region, and
OHS status reviews and contests, which reward progress in           St. Petersburg – at a number of entities, including the Polar
reduction of injury and accident rate and improvement of            Division, the Polar Transport Branch, five SDCs in the NID, as
workplace conditions. Based on the results of the reviews,          well as Kola MMC and Gipronickel Institute. According to a
best labor collectives and employees who made a significant         consolidated registry created in 2010, the Company’s entities
contribution to the improvement of the OHS performance              based in those regions operated 1.1 thousand social and
receive financial rewards.                                          amenity facilities.

According to Collective Agreements of the Polar Division            In 2010, the cafeteria of the Kaula-Kotselvaara mine and the
and some companies of the Norilsk Nickel Group, the bonus           cafeteria #17 of the Nickel Electrolysis Workshop of Kola MMC
funds unpaid to staff members as a result of their failure to       were re-commissioned after a major overhaul, which involved
comply with OHS requirements can be used to reward active           complete replacement of the equipment; the reconstruction of
participants of injury and accident prevention activities.          a gym at Gipronickel Institute was completed.

In 2010, based on the results of the OHS status reviews and         In the Norilsk Industrial District, construction and assembly             Occupational injures                                                 The number of serious injuries at the Company remained at the
using bonus funds unpaid to those who failed to comply with         works for major overhaul of social and amenity facilities at a                                                                                 previous year’s level; at the Russian entities of the Group there
OHS requirements, 8.7 thousand employees of the Group’s             number of operations were started in 2010. These operations               The implementation of a system of measures to improve                was one more serious injury than in 2009.
entities received financial rewards totaling to RUB 23.9 million.   include the Nadezhda Metallurgical Plant, the Komsomoskaya                OHS performance helped reduce the number of occupational
This includes 3.4 thousand employees of the Company, who            and Mayak mines, the Talnakh Concentrator, the Motor Vehicle              injuries at the Russian entities of the Norilsk Nickel Group in      In 2010, there were 9 fatalities across the Norilsk Nickel Group,
received a total of RUB 15.1 million of rewards.                    Division #4 of the Polar Division’s Central Motor Transport Unit;         2010 by almost 8% compared to 2009 (from 116 to 107 injuries).       including 5 fatalities at the Company.
                                                                    Norilsktransavtomatika and Norilsktransremont units of LLC                The number of occupational injuries at MMC Norilsk Nickel
In the same year, disciplinary penalties for failure to comply      Norilsknickelremont, and the Mining Department #1 of Polar                decreased by 20% (from 50 to 40 injuries).                           The causes and circumstances of injuries, which took
with OHS standards and requirements at the Group’s entities         Construction Company. A major overhaul of the cafeteria #32                                                                                    place in 2010, were analyzed and measures for the further
were imposed on 5.9 thousand employees, while 11.0 thousand         located in the office building of the Taimyrsky mine of the Polar         In 2010, there were no group accidents involving injuries at         improvement of the effectiveness of the corporate OHS
had their bonuses reduced. This includes 2.0 thousand and 4.8       Department was also started.                                              the Russian entities of the Group; in 2009, there was one such       management systems were identified. These measures
thousand employees of the Company respectively.                                                                                               incident at the Polar Division (with 2 persons seriously injured).   were reviewed by the Occupational Injuries Prevention
                                                                    In 2010, the total cost of the program amounted to RUB                    In the reporting year, the occupational injury rate at the           Committee of MMC Nickel and discussed in February 2011 at
Improvement of workplace amenities and services                     126.3 million, including RUB 81.8 million spent in the Norilsk            Russian entities of the Group was by 9% lower than in 2009, at       the extended Committee meeting dedicated to the prevention
The Group’s entities maintain numerous facilities providing         Industrial District.                                                      the Company by 21% lower.                                            of serious injuries, which was attended by representatives of
amenity services to their employees. Since 2003, the Company                                                                                                                                                       the Russian industrial operations of the Group.
has been implementing a program on improvement of                   The total cost of the program since the beginning of its                  In 2010, the number of days lost due to injury decreased
workplace amenities and services available to the personnel         implementation amounted to RUB 1.4 billion (including RUB                 compared to the previous year both at the Russian entities of
of the Group. The program is aimed at improving the quality of      1.1 billion in the Norilsk Industrial District). In 2011, it is planned   the Group (by 5.7%), and at the Company (by 13.7%),
workplace amenities and bringing it to the level of international   to increase the overall spending on the Program by 12%.
standards, which would help protect employee health, reduce                                                                                   Figure 4.1. Occupational injuries (total) at the Russian entities of the Group, 2009-2010

                                                                                                                                                                120                                                                            116


                                                                                                                                                                 60          50
                                                                                                                                                                                   40                       39

                                                                                                                                                                 20                                                     12       11

                                                                                                                                                                          MMC Norilsk Nickel      Polar Division      Kola MMC               Norilsk Nickel Group
                                                                                                                                                                           2009            2010

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Figure 4.2. Occupational injury rate1 (total) at the Russian entities of the Group, 2009-2010                                                          Figure 4.5. Fatalities at the Russian entities of the Group, 2009-2010

                             2.5                                                                                                                                          9
                                                                     2.06                                                2.10                                             8
                                            1.94                                                                                        2.0     1.96
                             2.0                                                                                                                                          7
                                                                            1.69                        1.56                                                              6
                                                                                        1.39                   1.42                                                                          5                         5
                             1.5                                                                                                                                          5
                                                                                                                                                                                      4                        4
                             1.0                                                                                                                                          3
                                                                                                                                                                                                                                 1       1
                             0.5                                                                                                                                          1
                                                                                                                                                                                   MMC Norilsk              Polar Division    Kola MMC          Norilsk Nickel
                             0.0                                                                                                                                                   Nickel                                                       Group
                                           MMC Norilsk             Polar Division      Kola MMC         Norilsk Nickel   RF            Non-ferrous
                                           Nickel                                                       Group                          metallurgy                                  2009             2010
                                           2009               2010

Figure 4.3. Days lost due to injury at the Russian entities of the Group, 2009-2010                                                                    Occupational health and safety performance indicators of foreign assets of the Group

                                                                                                                                                       Table 4.1. OHS performance, 2010
                         12,000                                                                                                            11,370                                                                             Tati Nickel    Nkomati          NN Australia   NN Harjavalta Oy
                         10,000                                                                                                                        Number of injuries                                                             32         115                    4                  1
                                                                                                                                                       Fatalities                                                                      0           0                    0                  0
                           8,000                                                                                                                       Serious injuries                                                                4          12                    0                  0
                           6,000                                                                                                                       Occupational diseases                                                           0          30                    0                  0
                                            5,014                             4,829
                                                        4,328                          4,040                                                           Lost work days (man-days)                                                      73         464                    1                  5
                           2,000                                                                       1,697
                                                                                                                                                       Table 4.2. OHS expenditures, 2010
                                            MMC Norilsk Nickel                Polar Division           Kola MMC                   Norilsk Nickel
                                                                                                                                  Group                                                                                       Tati Nickel    Nkomati          NN Australia   NN Harjavalta Oy
                                                                                                                                                       OHS expenditures (USD million)                                                0.15       1.70                  0.09                 –
                                            2009                   2010
                                                                                                                                                       including per employee (USD thousand)                                            –        4.2                     –                 –
                                                                                                                                                       Expenditures on health resort treatment and recreation (USD million)             –          –                     –                 –
Figure 4.4. Serious injuries at the Russian entities of the Group, 2009-2010                                                                           including per employee (USD thousand)                                            –          –                     –                 –

                                                                                                                                           24          Table 4.3. OHS training for managers and specialists, 2010
                            20                                                                                                                                                                                                Tati Nickel    Nkomati          NN Australia   NN Harjavalta Oy
                                                                                                                                                       Number of employees who completed the training                                 29         787                    –                173
                                                                                                                                                       Including managers and specialists                                              5          14                    –                 97
                                             11       11
                                                                              10      10

                             5                                                                          4

                                          MMC Norilsk                       Polar Division            Kola MMC                  Norilsk Nickel
                                          Nickel                                                                                Group

                                          2009                  2010

1       Official data for 2010 for Russian Federation are not available.

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5. Human Resource Policy – Towards                                                                                                    Table 5.1. Labor legislation of the Group’s countries of operations

Long-Term Partnership                                                                                                                 Country
                                                                                                                                      Russian Federation
                                                                                                                                                                                Legal act
                                                                                                                                                                                The Constitution of the Russian Federation
                                                                                                                                                                                Labor Code of the Russian Federation
                                                                                                                                                                                Civil Code of the Russian Federation
                                                                                                                                                                                Civil Procedure Code of the Russian Federation
                                                                                                                                                                                Administrative Offences Code of the Russian Federation
                                                                                                                                                                                Merchant Shipping Code of the Russian Federation
                                                                                                                                      Australia                                 The Constitution of Australia
                                                                                                                                                                                Australian Human Rights Commission Act
                                                                                                                                                                                Common law1
                                                                                                                                                                                Sex Discrimination Act
                                                                                                                                                                                Fair Work Act
                                                                                                                                      Republic of Botswana                      Employment Act
                                                                                                                                                                                Trade Unions and Employers’ Organizations Act
                                                                                                                                                                                Trade Disputes Act
                                                                                                                                                                                Workers Compensations Act
                                                                                                                                                                                Employment of Non-Citizens Act
                                                                                                                                                                                Individual employment contracts and collective labor agreements (BMWU)
                                                                                                                                                                                The Constitution of the Republic of Botswana

5.1. Main Principles                                               The social policy of MMC Norilsk Nickel is developed and
                                                                   implemented on a systemic basis in accordance with corporate
                                                                                                                                                                                Common law
                                                                                                                                                                                Industrial Court rulings

and Approaches of the                                              strategies and regulations. To ensure the fulfillment of its       South Africa
                                                                                                                                                                                National Industrial Relations Code of Practice
                                                                                                                                                                                Labor Relations Act
Social Policy                                                      short-term and long-term development goals, the Company
                                                                   designs and implements specific HR management programs.
                                                                                                                                                                                Basic Conditions of Employment Act
                                                                                                                                                                                Employment Equity Act
                                                                                                                                                                                Skills Development Act
5.1.1. Social policy goals with regard to                                                                                                                                       Occupational Health and Safety Act
personnel                                                          5.1.2. Employee rights                                                                                       Mine Health and Safety Act
                                                                                                                                                                                Compensation for Occupational Injuries and Diseases Act
The strategic goals of the corporate social policy are defined     MMC Norilsk Nickel is committed to the observance of human         Finland                                   Constitution of the Republic of Finland
by the HR Management Strategy of MMC Norilsk until 2020            rights as stipulated by the Constitutions of the Russian                                                     Collective Agreements Act
and the Concept of the Socio-Economic Development of the           Federation, Australia, the Republic of Botswana, and the                                                     Working Hours Act
Company until 2015. The goals with regard to human resource        Republic of Finland, South Africa and the national legislation                                               Annual Vacations Act
management include:                                                of the Group’s countries of operations. The legal foundation                                                 Occupational Safety and Health Act
   • creation of a system for regulating labor relations and the   of the Company’s approach toward labor relations and other
     development of social partnership based on a balance of       associated relations is formed by universally recognized
     interests of employees and the Company;                       principles and norms of international law, standards of the        any forms of discrimination and forced labor, making sure that                                5.1.3. Observance of employee rights at the
   • improvement of personnel motivation systems and               International Labor Organization, and the national legislation     every employee has equal opportunities to realize his or her                                  Russian entities of the Group
     providing employees with a competitive compensation           of the countries of operations.                                    labor rights regardless of sex, race, nationality, origin, financial
     package linked to labor productivity growth, as well as                                                                          and social status, job position, age, place of residence, religious                           MMC Norilsk Nickel complies with the requirements of the
     collective and personal performance;                          The Company observes employees’ rights to associate in             orientation, political convictions, or any other circumstances                                Labor code of the Russian Federation, which prohibit workers
   • personnel development (selection, recruitment,                organizations of their own choice, which is an inseparable         unrelated to his or her professional skills.                                                  under the age of 18 to work in harmful and/ or hazardous work
     evaluation, training, retention, promotion) to ensure that    element of the right to freedom of association and collective                                                                                                    conditions, and observes norms prohibiting the use of women’s
     the Company is staffed by personnel with the necessary        bargaining (for more details see Section 5.3. Social Partnership   The Company strives to make sure that all employees have                                      labor in jobs with arduous and hazardous working conditions in
     professional skills and qualifications;                       in the Labor Sphere).                                              equal opportunities to realize their potential in the course of                               mining industry.
   • improvement of the OHS status, enhancement of                                                                                    their work activities, receive impartial and fair evaluation of
     workplace amenities and services, and providing               In accordance with the Agreement on the Regulation of Social and   their performance, and are selected and advanced solely on                                    Due to the nature of operations of the Russian entities of the
     employees and their family members with additional            Labor Relations at the Companies of the Norilsk Nickel Group in    the basis of their professional abilities, knowledge and skills.                              Group, women account for some 30% of the total Group’s
     opportunities for recuperation and recreation;                2006–2008 and similar agreements with the union organizations                                                                                                    workforce.1
   • development of the corporate culture and ensuring social      of the foreign operations. The Group companies have assumed        1    Common law – a legal system originating from medieval England, in which judicial
     stability and a healthy moral and psychological climate in    the obligation to voluntarily observe the following fundamental         precedent is recognized as a formal source of law. At present, common law is used        1   With 64% of them being workers, 25% – specialists, 9% – managers, and 2% – admin-
                                                                                                                                           in the United Kingdom (except for Scotland), the United States (except for Louisiana),       istrative staff.
     the labor collectives;                                        principles in drafting and adopting corporate regulations,              Canada (except for Quebec), Australia, New Zealand, and some other countries that
   • development of corporate social programs.                     collective agreements and employment contracts: to prohibit             once were British colonies.

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                                                                                          Norilsk Nickel is a socially responsible company, and its
                                                                                          production development objectives have always been                 5.2. Personnel Characteristics
                                                                                          linked to the HR policy. The quality of specialists is of criti-
                                                                                          cal importance to us, since the work is often complicated          In 2010, the average staff size of the Norilsk Nickel Group                                      The staff breakdown by major categories shows a higher share
                                                                                          and involves operating modern machinery and equipment.             amounted to 82,724 persons, including 2,307 employees of the                                     of workers among the employees of the operations based in
                                                                                          Therefore we expect our employees to meet high standards.          foreign entities.                                                                                Africa (over 80%) and Russia (73%) operations, compared to
                                                                                          Salary alone is not enough to attract the workforce we need.                                                                                                        the operations based in Australia and Finland (Figure 5.3.).
                                                                                          Today the quality of their life is no less important to people     The majority of the staff of the Group’s Russian entities (66%)
                                                                                          than their employment conditions. Therefore Norilsk Nickel         work in Norilsk and in Taimyr Municipal District. Seventeen                                      Men account for 70% of the total workforce of the Group’s
                                                                                          considers it critically important to create and maintain com-      percent of the Group’s Russian staff work in the Kola Peninsula                                  Russian entities (Figure 5.4). Their share is even higher at the
                                                                                          fortable conditions both at the workplace and in the commu-        and Nothern Russia (Figure 5.1).                                                                 foreign entities of the Group, especially at the operations based
                                                                                          nities where our employees reside. We strive to contribute                                                                                                          in Africa, where men account for over 80% (Figure 5.5). At the
                                                                                          to the creation of comfortable modern infrastructure, which        Figure 5.1. Breakdown of the staff of the Group’s                                                same time, women prevail among certain categories of staff. In
                                                                                          includes a range of social facilities: kindergartens, sports       Russian entities by region, 2010 (%)                                                             particular, they account for 58% and 96% of the specialists and
                                                                                          grounds, swimming pools etc.                                                                                                                                        administrative staff of the Russian Group’s entities respectively.

                                                                                                                                                                              6%        11%                                                                   Six hundred different professions are represented among the
                                                                                                                                                                   17%                                                           Taimyr Peninsula             staff of the Group’s Russian entities.
                                                  Vyacheslav Poltavtsev,
                                                                                                                                                                                                                                 Kola Peninsula and
                                                  Deputy General Director for GR and Social Policy                                                                                                                               Northwest Russia
                                                                                                                                                                                                                                 Krasnoyarsk Region

                                                                                                                                                                                                                                 Moscow and other
The most female employees of the Group’s Russian operations                               5.1.4. Code of Ethics of the Company                                                                66%                                Russian regions
are workers, the Company strictly complies with:
   • norms prohibiting the use of women’s labor in jobs with                              As the Company grew and developed, it had become necessary
     arduous and hazardous working conditions in mining                                   to develop and put in place a system of internal rules and
     industry, as defined by the list approved by the government                          principles, which would guarantee adherence of all employees       The average age of the staff of the Group’s Russian entities1
     (the Decree of the Government of the Russian Federation                              to common values and standards of business conduct. The            is 40 years, with almost one quarter of the staff being over 50
     dated February 25, 2000 No. 162);                                                    Company’s Code of Ethics was adopted in 2003. The Code of          years old (Figure 5.2). The staff of the foreign entities of the
   • standards of maximum permissible loads for women                                     Ethics is based on the principles of commitment to universal       Group is on average much younger, with the share of employees
     lifting and moving heavy objects by hands (the Decree of                             human values, mutual assistance and respect for human dignity,     over 50 years old varying from 6% (Africa) to 17% (Australia).
     the Council of Ministers of the Russian Federation dated                             and is aimed at creating the atmosphere of mutual respect
     February 6, 1993 No. 105);                                                           and trust in the Company’s labor collectives. The Company
   • Sanitary Rules and Norms (SanPiN) “Hygienic                             expects that actions and conduct of employer representatives
     Requirements regarding Women’s Working Conditions”.                                  and employees under any circumstances will adhere to high
                                                                                          professional standards and moral values. In addition to defining
The Collective Agreement of MMC Norilsk Nickel establishes a                              general principles, the Code establishes specific mechanisms
36hour work week1 for women working in the areas of the Far                               to support their implementation.
North and equivalent areas, while preserving the full salary
established for the regular 40 hour work week.

In its activities, the Company complies with the provisions
of international declarations, conventions of international
organizations, and the Constitution of the Russian Federation with
regard to the prohibition of forced labor.

The Company maintains a system for the prevention,
identification, and, if necessary, remediation of violations of                                                                                              1   The data for the entities listed in the Personnel column of Annex 4 and for OJSC
employees’ social and economic rights.                                                                                                                           Norilskgazprom were used in calculating characteristics of the staff of the Group’s
                                                                                                                                                                 Russian entities, with the data on the following entities being excluded: LLC Kolabyt, LLC
                                                                                                                                                                 InformKolaService, LLC Arctic-Energo, LLC Vostokgeologiya, LLC Pechengageologiya,
                                                                                                                                                                 LLC Geokomp, OJSC Taimyrenergo, LLC Taimyrinvest, OJSC Krasnoyarsk River Port,
                                                                                                                                                                 OJSC Lesosibirsk Port, OJSC Krasnoyarsk Ship Repair Plant, CJSC Normetimpex, CJSC
                                                                                                                                                                 Taimyr Fuel Company, LLC Scrap Metal Processing Plant, LLC Renons, OJSC Torginvest,
                                                                                                                                                                 Mediaplatform Group, CJSC SOK Exelent Fitness Center, LLC Norilsk Milk Factory, LLC
                                                                                                                                                                 Sports Complex, LLC SGM, LLC NN-INFOCOM, LLC Polar Trade Alliance, LLC Directorate
1       Unless the federal legislation establishes a shorter work week for women.                                                                                of the Project “Metals of Zabaikalye”.

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Figure 5.2. Breakdown of the staff by age, 2010 (%)                                                                Figure 5.3. Breakdown of the staff by category, 2010 (%)

(а) Russian entities of the Group                              (b) NN Australia                                    (а) Russian entities of the Group                                     (b) NN Australia1

  %                                                              %                                                                             1%                                          %
100                                                            100                                                                                                                       100
90                                                             90                 17%                                                                                                    90
                    23%                                                                                                              13%                                                 80
80                                                             80                                                                                                Workers
70                                                             70
                                                                                                                            13%                                  Managers                60
60                                                             60
                                                                                                                                                                                         50              92%
50                  56%                                        50                                                                                                                        40
40                                                             40                                                                                                Administrative          30
                                                                                                                                                                 staff                                                   Managers, specialists,
30                                                             30                                                                                        73%                             20
                                         50 y.o. and older                                   50 y.o. and older                                                                                                          and other categories
20                                                             20                                                                                                                         10                            (C4-E3 grades)
                                         30-49 y.o.                                          30-49 y.o.                                                                                                      8%         Workers (A-C3 grades)
 10                 21%                                         10                                                                                                                        0
                                         29 y.o. and younger                            4%   29 y.o. and younger
 0                                                              0

(c) Tati Nickel                                                (d) Nkomati                                         (c) Tati Nickel                                                       (d) Nkomati

  %                                                              %                                                   %                                                                    %
100                                                            100                                                 100                                                                   100
                          6%                                                            6%                                                        13%                                                        22%
90                                                             90                                                      90                                                                 90
                                                                                                                       80                                                                 80
80                                                             80
                                                                                                                       70                                                                 70
70                                                             70
                                                                                  53%                                  60                                                                 60
60                  68%                                        60
                                                                                                                       50                                                                 50
50                                                             50                                                      40                         87%                                     40
40                                                             40                                                      30                                                                 30
                                                                                                                                                                Managers, specialists,                                  Managers, specialists,
30                                       50 y.o. and older     30                            50 y.o. and older         20                                       and other categories      20                            and other categories
20                                                             20                 41%                                  10                                       (C4-E3 grades)            10                            (C4-E3 grades)
                    26%                  30-49 y.o.                                          30-49 y.o.                                                         Workers (A-C3 grades)                                   Workers (A-C3 grades)
 10                                                             10                                                      0                                                                  0
 0                                       29 y.o. and younger    0                            29 y.o. and younger

(e) Norilsk Nickel Harjavalta Oy                                                                                   (e) Norilsk Nickel Harjavalta Oy

  %                                                                                                                  %
100                                                                                                                100
90                  15%                                                                                            90
                                                                                                                   80                             43%
                    62%                                                                                                50
50                                                                                                                 40
40                                                                                                                 30                             57%          Managers, specialists,
30                                       50 y.o. and older                                                         20                                          and other categories
20                                                                                                                     10                                      (C4-E3 grades)
                                         30-49 y.o.                                                                                                            Workers (A-C3 grades)
 10                 23%                                                                                                 0
 0                                       29 y.o. and younger

                                                                                                                   1        Data for the Perth office.

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Figure 5.4. Breakdown of the staff of the Group’s Russian entities by category and sex, 2010 (%)                5.3. Social Partnership in the Labor Sphere
  %                                                                               4%
 80                                                            42%
 60         70%                   75%      74%
 30                                                            58%
 10                               25%      26%
         All employees         Workers   Managers           Specialists        Administrative
          Men            Women

Figure 5.5. Breakdown of the staff by sex, 2010 (%)
                                                                                                                Social and labor relations at the Company and its SDCs are          as occupational health and safety. For example, in order to
(а) NN Australia                                                     (b) Tati Nickel                            managed on the basis of the Russian legislation, while specific     prevent occupational diseases more effectively and improve
                                                                                                                conditions and commitments of the parties are defined by            employee health, the provisions of the Collective Agreement
 %                                                                     %                                        collective agreements. In 2010, the parties of social partnership   with regard to providing free medical nutrition, milk, kefir,
100                                                                   100                                       completely fulfilled their obligations defined by the respective    and juice to the employees exposed to hazardous working
                         17%                                                                13%
 90                                                                       90                                    collective bargaining agreements.                                   conditions were amended.
 80                                                                       80
 70                                                                       70                                    In order to ensure timely identification of approaches toward       The internal communications system is one of the key tools
 60                                                                       60                                    resolving issues in the labor sphere and the alignment of           used to promote the principles of social partnership within
 50                                                                       50                                    interests of the parties, OJSC MMC Norilsk Nickel and its SDCs      the Company. The purpose of the system is to ensure an
 40                      83%                                              40                87%                 have standing collective agreement commissions in place.            effective information exchange between the management and
 30                                                                       30                                    In 2010, the commissions actively participated in reviewing         employees and contribute to maintaining a positive climate in
 20                                                                       20                                    and updating mutual commitments of the parties of social            the labor relations sphere.
                                                    Women                                               Women
 10                                                                       10                                    partnership. For example, the Collective Agreement
  0                                                 Men                    0                            Men     Commission of OJSC MMC Norilsk Nickel made 16 decisions             In April 2010, a traditional Regional Corporate Forum of
                                                                                                                on social, labor, and corporate issues, and over 50 decisions       the Group’s entities based in Norilsk was held. The forum
                                                                                                                on complaints and suggestions of individual employees. The          participants took stock of the last year’s progress in the field
(c) Nkomati                                                          (d) Norilsk Nickel Harjavalta Oy           commission of Kola MMC made 11 decisions, which resulted in         of social and labor relations, and set the objectives for the
                                                                                                                over 40 changes and amendments to the respective agreement.         next year. Around the same time an annual conference of the
 %                                                                     %                                                                                                            labor collective of Kola MMC was held in Mocnchegorsk. The
100                                                                   100                                       In 2010, an important development with regard to labor              conference took stock of the implementation of the collective
 90                      19%                                              90                24%                 relations was the reform of the remuneration system, which          agreement of Kola MMC in 2009.
 80                                                                       80                                    involved an increase in the fixed (guaranteed) component of
 70                                                                       70                                    the remuneration. Beginning July 1, 2010, the remuneration          At the Polar Division of MMC Norilsk Nickel and at Kola MMC,
 60                                                                       60                                    structure was changed and its fixed component was increased,        employees are represented by councils of labor collectives,
 50                                                                       50                                    while the variable component was reduced accordingly. In            which are elected in every unit. Chairpersons of these councils
 40                      81%                                              40
                                                                                            76%                 order to improve the level of social protection of the staff,       comprise a single representative body at the corporate level –
 30                                                                       30                                    beginning December 1, 2010 the fixed component of employee          the Social and Labor Council, which represents the interests of
 20                                                                       20                                    remuneration has been further increased to reach 70% of the         all employees and is able to directly negotiate social and labor
                                                    Women                                               Women
 10                                                                       10                                    total salary. This was in line with the agreement signed on         issues with the Company’s management.
  0                                                 Men                    0                            Men     August 31, 2010 during the visit of the Russian Prime Minister
                                                                                                                Vladimir Putin to Norilsk. The Collective Agreement of MMC          In 2010, Social and Labor Councils participated in decision-
                                                                                                                Norilsk Nickel was updated to reflect those changes.                making on the most important social and labor issues with
                                                                                                                                                                                    regard to the development and implementation of social
                                                                                                                A lot of work has been done to improve corporate standards          programs (pension, housing, recuperation etc.), employee
                                                                                                                and requirements with regard to working conditions, as well         motivation, labor discipline and OHS compliance.

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RESPONSIBILITY REPORT                                                                                                                                                                                                         RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                         2010
The Company has always welcomed the cooperation with labor         of mutual interest, which may affect the well-being of Union           companies. NNH may contract individual specialists of external      In early 2010, NNH changed its status from a chemical industry
unions, particularly with regard to social and labor issues. The   members or endanger harmonious relations between the                   organizations instead of contacting organizations as a whole.       to a technology industry. This change was in line with the
Company and the unions has maintained a constructive and           Union and the Company.                                                                                                                     business strategy of NNH.
effective dialogue. In particular, managers of the Company were                                                                           NNH also cooperates with the Finnish Metal Workers Union,
invited by the Russian Trade Union of Metal Workers in Nickel,     Collective agreements                                                  the Union of Salaried Employees, and the Federation of Special      Collective agreements
Cobalt, and Platinoids Industries (RUMW) to participate in a       The main collective agreement between Tati Nickel and the              Service and Clerical Employees.                                     NNH manages its labor relations in accordance with the
congress of this organization, which was held in Monchegorsk       Union is the Memorandum of Agreement which regulates the                                                                                   Collective Agreement of Employees in the Technology
in December 2010. Both parties expressed their interest in         relations between the two parties.                                     The Federation of Finnish Technology Industries is a venue          Industries, Collective Agreement of Salaried Employees in the
the strengthening and development of the Company, and the                                                                                 providing opportunities for effective cooperation at the regional   Technology Industries, and the Collective Agreement of Senior
enhancement of employee well-being and social protection.          There are also a number of additional sub-agreements,                  and local levels. NNH has representatives in other industry         Employees in the Technology Industries.
Being one of the leading unions in the Russian non-ferrous         including the Retrenchment Agreement, the Job Evaluation               associations including, among others, the Nickel Institute,
metals industry, the RUMW is represented in Russian Tripartite     Agreement, the Disclosure of Information Agreement, and the            Eurometaux, and REACH consortia.
Commission on the Regulation of Social and Labor Relations.        Localization Agreement.
The Congress elected the RUMW president for the next five
years.                                                             Nkomati
                                                                   The National Union of Mineworkers (NUM) is the majority
The Company is prepared to continue its cooperation with the       union representing employees within the A, B and C bands1.
unions in the future. Despite a large number of different union    Relations with the Union are handled by Nkomati management,
organizations (at the Polar Division alone, there are 45 active    while significant decisions require an approval by the Executive
shop-floor union organizations), the employer maintains all        Committee. The management and the Union sign collective
the necessary conditions for the effective functioning of labor    agreements in various areas of labor relations on an annual
representation.                                                    basis. At present, the following collective agreements have
                                                                   been signed:
An integrated network of reception desks on production,               • Recognition Agreement, which regulates the relationship
social and labor issues has been effectively functioning at the          between Nkomati Mine and the NUM.
Company’s divisions and SDCs based in Norilsk. At present, the        • Memorandum of Understanding for Recruitment and
network includes the Central Reception Desk and 20 reception             Procurement, which grants the NUM an observer status
desks at various business units (for more details see Section            at job interviews and Procurement Committee meetings.
5.6: Social Programs).                                                • Full-Time Shop Steward Agreement, which defines terms
                                                                         and conditions regarding the appointment of a full-time
                                                                         shop steward.
Social partnership at foreign assets                                  • Agency Shop Agreement, which defines conditions
                                                                         regarding the establishment of an agency shop.
Norilsk Nickel Australia                                              • Wage Agreement, which is signed on an annual basis to
In 2010, all employees of NN Australia were contracted in                regulate wages and substantive issues.
accordance with the labor legislation of Australia. Norilsk           • Constitution for Transformation, Employment Equity and
Nickel Australia prefers to maintain direct relations with its           Skills Development Forum.
employees and therefore seeks to minimize the engagement of
any third parties (including unions) in its labor relations.
                                                                   Norilsk Nickel Harjavalta Oy
Tati Nickel                                                        Norilsk Nickel Harjavalta Oy is a member of the Federation of
Tati Nickel Mining Company recognizes the Botswana Mining          Finnish Technology Industries, which represents employers,
Workers Union (BMWU) as a representative and negotiating           conducts collective bargaining on their behalf, and signs collective
body for members in its employment within A–C3 bands. The          agreements in a number of sectors, including the electronics
Union bargains on behalf of this group on matters relating to      and electrotechnical industry, mechanical engineering industry,
conditions of employment. The relations between the parties        metals industry and information technology industry. The
are governed by the Trade Unions and Employers’ Organizations      Federation is a member of several international organizations.
Act and the Trade Disputes Act.
                                                                   According to the Collective Agreement Act, the terms and
The relationship between the two parties is facilitated by two     conditions stipulated by a collective agreement between the
committees, including the Joint Negotiations Committee (JNC)       Federation and a union are binding on the Federation member
and the Joint Consultative Committee (JCC). The JNC negotiates
substantive matters relating to basic terms and conditions of
employment, while the JCC handles consultations on issues          1    Job grades according to the Paterson Grading System.

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                 RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                 2010
5.4. Remuneration and Motivation                                                                                                        Figure 5.6. Structure of the compensation package
                                                                                                                                        at the Russian entities of the Group, 2010 (%)
                                                                                                                                                                                                            salaries paid to employees depending on the level of their
                                                                                                                                                                                                            skills, degree of responsibility and complexity of the work.

                                                                                                                                                                                                            The employees of entities based in the Far North and equivalent
                                                                                                                                                     8%                                                     areas receive, in addition to the salary based on regular rates
                                                                                                                                                                                      Base salary           and grades, additional payments based on regional multipliers
                                                                                                                                                                                      Performance bonus     and “northern allowances”.
                                                                                                                                                                                      Regular bonus
                                                                                                                                                                                                            The Company’s personnel remuneration policy (applicable,
                                                                                                                                              11%                                     Social package        among others, to the top management of the Group’s entities)
                                                                                                                                                                                                            links remuneration to collective and personal key performance
                                                                                                                                                                                                            indicators, including growth in output and labor productivity,
                                                                                                                                                                                                            reduction in planned production costs, resource efficiency, oc-
                                                                                                                                                                                                            cupational health and safety performance, the level of labor
                                                                                                                                        The salary (92% of the total compensation package) consists of      discipline, safekeeping of property, observance of corporate
                                                                                                                                        the following components:                                           culture norms, etc.
                                                                                                                                           • base salary, including additional payments and
                                                                                                                                              allowances for special working conditions, payments in        The key objectives of the Company with regard to HR
Ensuring that the Company has the required number of                        the employee and the respective business unit as a whole          accordance with the regional multipliers and “northern        management include:
employees, providing decent remuneration, and improving                     (fulfillment of production targets, plans and programs,           allowances” for long service in the Far North and                • providing the Company and its subsidiaries with human
attractiveness of the Company as an employer are the priority               while ensuring conformance to technical specifications            equivalent areas, payment for the time not worked etc.;            resources, whose number and skill sets meet the demands
areas in the field of human resource management and the                     and standards; ensuring the requisite quality of the work      • regular bonuses;                                                    of the Company’s operations;
key pre-requisites for successful achievement of strategic                  performed; increased labor productivity; cost reduction        • bonuses linked to collective and personal performance.            • optimizing human resource costs;
development objectives and long-term competitiveness.                       achieved by reasonable means; observance of the                                                                                    • improving the level of social protection of employees and
                                                                            corporate culture norms).                                   The social package (8% of the total compensation package)                the attractiveness of the Group’s operations as employers.
The main objective of the Company’s remuneration policy,                                                                                includes expenditures on benefits and compensations provided
which is ultimately aimed at motivating personnel for high             The Company’s remuneration system is aimed at providing          for by the Russian legislation and collective agreements, as        In 2010, the Company was able to achieve a growth in labor
performance, is achieving a competitive remuneration level,            incentives for employees to contribute to the achievement        well as additional monetary incentives provided to employees        productivity and remuneration paid to employees. As a
while making efficient use of payroll funds.                           of operational and strategic objectives of the Company and       under corporate social and pension programs.                        result, the Company has retained its leading position in terms
                                                                       improving labor productivity, while ensuring a competitive                                                                           of remuneration level among Russia’s major mining and
The Company remunerates the staff of the Group’s operations in         remuneration level.                                              The operations based in Norilsk and Taimyr Municipal District       metallurgical companies.
strict compliance with the existing labor legislation, collective                                                                       account for the largest part of the overall payroll fund of the
agreements, and corporate regulations.                                 Corporate funds spent on salaries, bonuses, various additional   Group’s Russian entities – about 70.0% (Figure 5.7).                In 2010, the average monthly salary of the Group’s employees
                                                                       payments to employees, compensations and monetary                                                                                    grew by 14.7% compared to the previous year, reaching RUB
The key principles of the Company’s approach to personnel              incentives all comprise the payroll fund.                        Figure 5.7. Breakdown of the payroll fund                           55.9 thousand (USD 1.8 thousand), which is almost 2.7 times1
remuneration include:                                                                                                                   of the Russian entities of the Group by region                      higher than the Russian average, and 2.3 times higher than the
   • prohibition of any discrimination in determining or               The payroll fund is divided into the salary fund and social      of operations, 2010 (%)                                             average for the Russian metallurgical industry. The average
     changing the salary level and other conditions of                 payments – the funds used to finance various benefits provided                                                                       salary at the Polar Division in the reporting year was RUB 63.3
     remuneration;                                                     to employees (medical treatment, recreation, travel costs,        %                                                                  thousand (USD 2.1 thousand), or 10% higher than in the previ-
   • dependence of employee remuneration on: his or her skill          relocation allowances etc.).                                     100                                                                 ous year (Figure 5.8).
                                                                                                                                         90               17.7%
     level; complexity of the work and responsibility associated                                                                                                    2.8%
     with performing it; good performance of work duties;              Beginning December 1, 2010 the variable salary component          70               11.7%
     compliance with the workplace discipline requirements;            will not exceed 30%.                                              60                                                                 5.4.2. Social package
     conditions, amount, quality, and productivity of work;                                                                              50                                            Moscow and other
     personal and collective performance;                              The compensation package provided by the Company to               40                                            Russian regions      The overall social package provided by the Company to its
   • growth of remuneration in real terms contingent on the            its employees includes the salary and the social package          30               67.8%                        Krasnoyarsk Region   employees is worth RUB 4.6 billion and includes the following
     productivity growth rate;                                         (Figure 5.6.).                                                    20                                            Kola Peninsula and   main benefits and payments:
                                                                                                                                         10                                            Northwest Russia
   • the main (fixed) part of the salary is paid on the basis of the                                                                                                                                           • subsidized vouchers for recuperation and recreation
                                                                                                                                          0                                            Taimyr Peninsula
     time worked and accomplishment of job tasks (for those                                                                                                                                                      provided to employees and their family members (RUB
     working under piece-work conditions – on the basis of                                                                                                                                                       1.2 billion);
     the amount of work done) regardless of the performance                                                                             5.4.1. Salary                                                          • coverage of travel and baggage expenses to and from
     of the respective business unit and the Group as a whole;                                                                                                                                                   vacation sites paid once in two years to employees of
   • the variable part of the salary depends on the achievement                                                                         Remuneration of the Group’s employees is based on a system
     of the performance targets established by the employer for                                                                         of salary grades designed so as to differentiate and balance        1   ://

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                           RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                           2010
Figure 5.8. Average salary at the Russian entities of the Group, 2006-2010 (RUB)                                                                                        government, sectoral and corporate awards, using this as an                                  Figure 5.10. Structure of the compensation package at
                                                                                                                                                                        effective means of providing moral incentives.                                               Tati Nickel, 2010 (%)
                            60,000                                                                                                      55,930                          In 2010, more than 5.5 thousand employees of the Group were
                            50,000                                                                   47,710            48,751                                           awarded for outstanding work achievements, and long and                                                      10%
                                                                                                                                                                        meritorious service. Thirty two of them received government                                                                                                 Basic salary
                                                                           41,425                                                                                                                                                                                         14%
                            40,000                                                                                                                                      awards; 454 – sectoral awards from various ministries                                                                                                       Additional payments

                                                31,560                                                                                                                  and agencies; 775 – awards from regional and municipal                                                                                                      Bonus payments
                            30,000                                                                                                                                      authorities; 120 – corporate awards at the Company level;                                                                       52%
                                                                                                                                                                                                                                                                                                                                    Social benefits and guarantees
                                                                                                                                                                        and more than 4 thousand – corporate awards of the Group’s                                                                                                  Contributions to the
                            20,000                                                                                                                                                                                                                                             16%
                                                                                                                                                                        entities.                                                                                                                                                   pension scheme


                                                                                                                                                                        5.4.4. Remuneration and motivation system
                                              2006                      2007                       2008              2009             2010                              at the foreign entities                                                                      The remuneration system at Tati Nickel, in addition to the
                                                                                                                                                                                                                                                                     basic salary, includes various bonuses and incentives
                                                                                                                                                                        Norilsk Nickel Australia                                                                     (including bonus calculated on a quarterly basis depending
        the operations located in the northern regions and their                                          taken into account, the average monthly employee income at    According to the most recent studies of the labor market, the                                on the fulfillment of performance targets and amounting to
        family members (RUB 1.4 billion)1;                                                                the Group amounted to RUB 63.1 thousand, or 18.3% more than   remuneration level in the mining industry of Western Australia                               up to 25-30% of the basic salary), November bonus (5% of
      • occupational pension plans and other forms of social                                              in the previous year.                                         exceed the country level by 10-11%. The competiveness of                                     the annual basic salary of each employee), contributions to
        benefits and guarantees stipulated by the existing                                                                                                              the remuneration offered to employees is evaluated annually                                  a pension scheme (for residents, monthly payments equal to
        collective agreements and corporate regulations (RUB                                              Figure 5.9. Average monthly employee income                   on the basis of labor market and remuneration surveys for                                    8.33% of the basic salary size are accrued and then can be
        2.0 billion).                                                                                     at the Russian entities of the Group, 2008-2010 (RUB)         Western Australia, and the remuneration size is revised as                                   paid to employee after 5 years of service with the company),
                                                                                                                                                                        appropriate.                                                                                 and others.
The first two types of benefits support the vital needs of those
living in the Far North for vacations in a milder climate and                                                                                                           In 2010, the average monthly income per employee of Norilsk                                  Nkomati
health resort treatment. The inclusion of these benefits in                                                                                                             Nickel Australia amounted to USD 12.5 thousand.                                              The company’s remuneration policy requires competent
the social package ensures effective use of social funds and                                                                                                                                                                                                         employees to be paid at the 50th percentile level of the relevant
encourages employees to use their vacations for improving                                                                                                               Tati Nickel                                                                                  employment market, while identified critical skill segments or
their health. Detailed information on the Company’s social and                                            60,000                                                        The basic remuneration size is determined by the job grade,                                  those with scarce skills (e.g. artisans) are paid at the 75th.
pension programs is provided in Section 5.6. Social Programs.                                                          52,996          53,302                           established within the respective bracket and revised annually
                                                                                                          50,000                                                        in accordance with the collective agreement between the                                      Nkomati Mine has a personnel retention program, which
In the reporting year, the average annual social package per                                                                                                            employer and the union representing the employees. The                                       includes personal development of employees, market-based
employee at the Group’s Russian entities amounted to RUB 57.0                                             40,000                                                        collective bargaining on behalf of the Tati Nickel employees                                 benefit packages, and retention incentives for the employees
thousand, or 19.5% more than in the previous year (in 2009 –                                                                                                            within A-C3 bands1 (lower grades) is conducted by the                                        with scarce skills.3
RUB 47.7 thousand, in 2008 – RUB 56.2 thousand).                                                                                                                        Botswana Mining Workers Union. The remuneration size for
                                                                                                                                                                        the employees within C4 band and above is determined by                                      Figure 5.11. Structure of the compensation package at
In 2010, the average monthly employee income, including the                                                                                                             top management. Tati Nickel revises individual remuneration                                  Nkomati, 2010 (%)
social package, amounted to RUB 62.3 thousand, or 16.9%                                                   10,000                                                        packages, benefits and other conditions of employment
more than the respective value in 2009.                                                                                                                                 effective from 1 April of each year.2
                                                                                                              0                                                                                                                                                                      8%
                                                                                                                        2008            2009            2010                                                                                                                   6%
In 2010, the Company started the implementation of a new                                                                                                                The company also provides to employees a social package                                                                                                     Basic salary

corporate social program titled “Our House”. The program                                                  5.4.3. Non-financial incentives                               depending on the job grade, which may include the following                                      9%                                                         Additional payments
is aimed at tackling the issue of a shortage of strategically                                                                                                           benefits: reimbursement of housing maintenance or rental                                                                                                    Bonus payments
significant key staff, and at creating a stable core of                                                   The Company attaches great importance to moral incentives,    costs, reimbursement of car maintenance costs (for grade D                                       13%                                                        Contributions to the
professionals at the Group’s operations. The planned cost of                                              believing that non-financial rewards for work achievements,   and above), health care services for employees and their family                                                                                             pension scheme

the program is RUB 4 billion. In 2010 году finished apartments                                            provided on a timely basis, give employees a sense of         members, payment of utility bills, payment for the education of                                                                                             Social benefits and guarantees
were provided to 170 employees at a total cost RUB 705                                                    involvement in the accomplishment of corporate goals,         employees and their family members.
million. These funds can be viewed as additional Company’s                                                also strengthening personal commitment to improving the
expenditures on the employee social package (on average, RUB                                              performance of their organizational units, entities and the
8.8 thousand per Group employee). With these expenditures                                                 Company as a whole.
                                                                                                                                                                        1   Job grades according to the Paterson Grading System.                                     3    At present, the retention program is under review to ensure that it conforms to the corporate
1       According to the Russian legislation, this benefit is considered a social payment. Other
        social payments include severance payments, financial assistance to employees in dif-
                                                                                                          In particular, the Company nominates work collectives and     2   Basic remuneration is structured to enable the payment of competitive salaries
                                                                                                                                                                                                                                                                          standards and meets specific needs of the mine.

        ficult life situations, payment for health services provided to employees, etc.                   individual employees showing outstanding performance for          corresponding to the 50 th through 75th percentile values in the general labor market.

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        CORPORATE SOCIAL                                                                                                                                                                                                                                                                                                            CORPORATE SOCIAL
    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                                           RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                                                                           2010
                                                                                                                                     5.5. Selection, Professional Training, and Development
                                                                                                                                     of Personnel

Nkomati has several incentive programs, including a short-      Norilsk Nickel Harjavalta Oy                                         To ensure that the Group’s entities1 are staffed with employees                                   5.5.1. Search, selection, and adaptation
term program involving bonuses calculated on a quarterly        The remuneration system of Norilsk Nickel Harjavalta Oy,             having necessary skill sets and professional expertise,
basis depending on the key performance indicators (e.g.         in addition to the basic salary, provides for the payment of         the Company uses modern methods of personnel search,                                              MMC Norilsk Nickel uses a wide range of advanced approaches
production plan or safety performance) and amounting to up to   bonuses depending on employee performance and for profit             selection and adaptation, maintains an internal candidate pool,                                   to personnel search in order to meet the workforce needs
36% of the basic salary; and the long-term incentive program    sharing. Incentives for the fulfillment of performance targets are   and ensures professional training and development of target                                       of the Group’s entities on a timely basis. In addition, the
aimed at the attraction and retention of D-E grade employees    provided as a part of the overall remuneration package (bonuses,     personnel groups.                                                                                 Company develops its own mechanisms for recruiting workers
and the improvement of their motivation.                        profit sharing). The period between payments under incentive                                                                                                           and specialists among prospective graduates of vocational
                                                                programs depend on employee grade (senior managers, middle
The company provides a social package to employees. It          managers, other employees). In the reporting year, payments
includes the following main benefits: reimbursement of          under the profit sharing scheme were made on a quarterly basis.      Figure 5.12. Personnel search methods used by the Group’s Russian entities
housing maintenance or rental costs, reimbursement of car       Bonus sizes are calculated according to the existing bonus and
maintenance costs, health care services for employees and       profit sharing schemes on the basis of employee performance.
their family members, and other social benefits. In 2010, the
average annual size of the social package at Nkomati per        In 2010, the average monthly income per employee of NN
employee amounted to USD 3.7 thousand.                          Harjavalta (consolidated) amounted o USD 5.4 thousand.

                                                                                                                                                                                     Mass media,                              Corporate                  Organized recruitment in the                 Young talent
                                                                                                                                          Recruitment agencies
                                                                                                                                                                                  including websites                         CV databases                     Russian regions                    recruitment programs

                                                                                                                                                                 Foreign labor                          Russian labor                  Labor market of the regions          Vocational and professional
                                                                                                                                                                    market                                 market                             of operations                   educational institutions


                                                                                                                                     1   The data on the Group’s Russian entities are provided in accordance with Annex 4.

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    CORPORATE SOCIAL                                                                                                                                                                                                                                                                           CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                          RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                                          2010
and professional educational institutions, using a range of                       signed a Strategic Partnership Agreement with the Siberian                               In the reporting year, over 1,960 persons, including students                               reduce the period of professional and social adaptation after the
corporate programs for this purpose.                                              Federal University.                                                                      and graduates of 13 specialized Russian universities, took part                             recruitment.
                                                                                                                                                                           in the permanent corporate programs1.
In the reporting year, in order to meet their workforce                           One area of the Company’s cooperation with universities is                                                                                                                           Originally the program was implemented by the Polar Division
demands, the Russian entities of the Group1 selected and                          commissioning targeted training programs for selected student                                                                                                                        and a number of entities based in Taimyr Municipal District,
recruited on a permanent basis 9.7 thousand persons,                              groups in specialties demanded by the Company. At present,                               Yevgeny G. Malinovsky,                                                                      but in 2010 the program was joined by Kola MMC. In the
including 4.9 thousand persons aged below 30.                                     such programs are delivered at the Plekhanov St. Petersburg                              Deputy Director for Academic Affairs of the                                                 reporting year 353 students took part in the “Professional
                                                                                  State Mining University and at the Moscow Institute of Steel                             Institute of Mining, Geology and Geotechnology                                              Start” program. The program participants are offered paid
                                                                                  and Alloys. In the reporting year, a similar group comprising 11                         at the Siberian Federal University:                                                         work placements with the Company; those arriving from other
Maria N.Nazarova,                                                                 graduates of Norilsk schools was formed for the training at the                                                                                                                      regions are reimbursed travel expenses and the costs of hostel
Director of the Career Center of the Siberian                                     Siberian Federal University. At present, a total of 41 students                          During the first year of our cooperation, 16 students left                                  accommodation.
Federal University:                                                               participate in the targeted university training programs.                                for Norilsk to receive work placements. The Company
                                                                                                                                                                           has been continuously increasing the quota for our                                          In order to facilitate professional and social accommodation
Students can come to Norilsk for a work placement,                                Basic vocational training institutions participate in programs                           students. In the pre-crisis year, 100 students received                                     and to identify and attract the most talented candidates, the
which involves not only a mere presence at the                                    for targeted training of young workers.2 In 2010, 135 students                           work placements in Norilsk Nickel, and we expect that                                       program participants are engaged in various events, which
workplace, but a real immersion in the very job for                               participated in such programs, and 103 of them were offered jobs                         this number will not decrease in the future.                                                allow them not only to learn about the history and traditions of
which the students are trained. In today’s context                                with the Company.                                                                                                                                                                    the Company and the city, but also to realize and demonstrate
it is important that Norilsk Nickel offers paid work                                                                                                                                                                                                                   their creative potential.
placements to students, also reimbursing travel and                               Seeking to further advance its cooperation with basic                                    In 2010, the Company revised the respective corporate
accommodation costs. In this regard, the Norilsk                                  and secondary vocational training institutions and higher                                regulations and introduced new corporate standards with                                     In the summer 2010, 260 students of the Russian universities
Nickel’s work placement program has one of the                                    educational institutions, in the reporting year Kola MMC                                 regard to three corporate programs, including “Intern”,                                     receiving work placements under the “Professional Start”
strongest social components.                                                      organized the roundtable meeting “Professional Start 2010”.                              “Worker Succession”, and “Professional Start”, based on                                     program participated in the “Norilsk Summer Academy”
                                                                                  The participants of the meeting included representatives of                              the requirements of ISO 9001:2008 and ISO 14001:2004                                        business game. For a month and a half the students together
                                                                                  training and educational institutions, employment services,                              international standards. In particular, the upper age limit for                             with activists of the “Leader” Young Professionals’ Movement
5.5.2. System of cooperation with                                                 the Department of Education, the regional government, and                                the participation was increased to 30 years.                                                were designing and implementing socially significant projects.
vocational and professional educational                                           the Ministry of Education and Science of Murmansk Region.                                                                                                                            Seventeen persons were recognized as winners of the business
institutions                                                                      The main theme of the meeting was the attraction of young                                The “Worker Succession” program is one of the main                                          game.
                                                                                  specialists to the operations of Kola MMC and employment                                 instruments of providing the Company’s operations with
In order to provide the Russian entities of the Group with young                  opportunities offered by the latter. A standing Coordination                             skilled young workers. The apprentices guided by experienced                                In the reporting year, the Corporate Event “Team 2030” was held
workers and specialists and to support the development of                         Council comprising representatives of the employer,                                      mentors receive on-the-job training in 90 specialties; the                                  in Anapa, at the Volleygrad recreation base. The participants
education and training in the field of mining and metallurgy                      educational and training institutions, and regional authorities                          program also facilitates social and professional adaptation of                              of the event included 120 students receiving work placements
in Russia, the Company on a permanent basis partners with                         was established at the meeting. The Council’s efforts will be                            the apprentices. In 2010, a total of 829 apprentices took part                              under the “Professional Start” program and members of the
relevant basic and secondary vocational training institutions                     focused on the improvement of the quality of education and                               in the program, with 446 of them recruited by the Company’s                                 “Leader” Movement employed by various entities of the Group.
and higher educational institutions.                                              providing employment opportunities for young specialists.                                operations later.                                                                           The participants took part in various trainings, business
                                                                                                                                                                                                                                                                       games, workshops, as well as educational, information and
The Company attaches particular importance to the cooperation                                                                                                              The “Intern” corporate program is aimed at the attraction and                               communication, creative, sports, and tourist contests and
with vocational training and educational institutions based in                    5.5.3. Corporate personnel attraction and                                                recruitment of highly skilled young professionals and managers                              competitions.
Norilsk and Taimyr Municipal District. The Company finances                       development programs                                                                     aged 30 and younger, who have successfully completed their
the acquisition of general purpose and specialized training                                                                                                                internships at the Company’s operations. The program provides                               In order to meet its demand for skilled workforce and to
equipment and the renovation of premises of vocational                            The Company has an effective system for meeting workforce                                for training interns for 29 job positions. A total of 209 persons                           attract best graduates of higher educational and vocational
training and educational institutions. The students of such                       demands of its operations. The Company considers the                                     participated in the program in 2010, with 60 of them then                                   training institutions, Kola MMC has been implementing the
institutions are offered unpaid work placements with the                          youth as one of the priority categories for the recruitment,                             recruited on a permanent basis by the Company’s operations.                                 “Kola MMC Scholarship Student” program. The groups eligible
Russian entities of the Group. In 2010, a total of 1,246 students                 and implements a number of corporate programs targeting                                                                                                                              for the program include students of universities, colleges and
used this opportunity.                                                            specifically this category. The programs provide for the                                 The “Professional Start” corporate program is aimed at on-                                  technical colleges starting from the third year of training,
                                                                                  selection, training and attraction of prospective employees                              the-job training and adaptation of undergraduate students                                   as well as students of vocational schools starting from the
In order to ensure the training and attraction of young specialists,              in line with the existing and expected workforce demands,                                of Russian universities. After a successful graduation, young                               second year of training. The stipend size depends on the type
the Group’s entities cooperate with over 30 universities of the                   specific requirements arising from the nature of the Company’s                           specialists, who already have practical experience of working                               of training and student’s performance.
Russian Federation providing training programs relevant to the                    operations, and trends in the labor market.                                              with the Company, are recruited by the Group’s operations.
mining and metallurgical industry. Among them, the Company                                                                                                                 The experience obtained during their work placements helps                                  In 2010, 32 students participated in the program. Fifteen
selected six key universities, with which long-term framework                                                                                                                                                                                                          participants received work placements with the units of
cooperation agreements were signed. In 2010, the Company                                                                                                                                                                                                               Kola MMC, 5 program participants were recruited as young
                                                                                                                                                                           1   In the reporting year, the number of participants of the “Professional Start” program
                                                                                                                                                                               was 353 persons (the Polar Division and Norilsk-based SDCs – 296 persons, Kola MMC –    specialists after graduation.
1       The data for the Group’s Russian entities with the staff size over 500.                                                                                                57 persons), “Intern” – 209 persons, “Worker Succession” – 829 persons, Relocation
                                                                                  2   Under the agreements of the Polar Division with the Vocational School #105 and the
                                                                                                                                                                               assistance to those newly employed by MMC Norilsk Nickel – 488 persons, Kola MMC
                                                                                      Vocational Lyceum #17.
                                                                                                                                                                               (a similar program) – 52 persons, “Scholarship Student” - 32 persons.

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OJSC MMC Norilsk Nickel has a relocation assistance program           contribution of the Company’s young professionals to the events     “Norilsk Nickel Women’s View”                                       The mine provides literacy and numeracy programs for
targeting specialists with skill sets or professional expertise       commemorating the 75th anniversary of the Norilsk Combine,          The creative group of the “Norilsk Nickel Women’s View”             illiterate employees. These programs are based on mainly
scarce in the local markets, who are newly recruited by the           the 50th anniversary of the discovery of Talnakh ore fields, the    project prepared and delivered the festive show “Warming the        Adult Basic Education and Training (ABET) courses, which are
Company’s entities based in Norilsk and Taimyr Municipal              45th anniversary of the town of Talnakh, and the 65th anniversary   Frost with the Heart” dedicated to the 75th anniversary of the      designed to enhance communication skills, life orientation
District from other regions of Russia. The Company reimburses         of the Great Victory. And, as a first step in the long series of    Norilsk Combine.                                                    skills, basic computer skills etc. Information about ABET
relocation and housing rental costs to such employees. In 2010,       commemorating events, a meeting with the “legends of Norilsk”                                                                           courses is communicated to employees accordingly. For this
the program supported the relocation of 488 specialists to the        was held as a part of the action “Wonders of Norilsk Land”. At                                                                          process to be effective, employees have to be the drivers of
Norilsk Industrial District.                                          the completion of the action, a book describing the wonders         5.5.6. Personnel development at the foreign                         their own learning, while the organization can only facilitate
                                                                      selected by action participants was published.                      entities                                                            the learning process.
Similar benefits are offered by Kola MMC. Specialists invited
by Kola MMC are offered a signing bonus and reimbursed                Activists of the “Leader” Young Professionals’ Movement             Tati Nickel                                                         Career progression planning
relocation and housing rental costs. The program targets              together with other representatives of the Company participated     Personnel development programs                                      Tati Nickel recognizes the need for employees to have clear
graduates of vocational training or higher educational                in the meeting with Vladimir Putin, Russian Prime Minister,         The main personnel development programs at Tati Nickel,             career paths. This helps employees identify their development
institutions, who received their training under the targeted          where the development of the area was discussed. Some               which are managed by the HR Department, involve skills              needs and align their careers with the company’s strategic
training programs or cooperation agreements with educational          questions raised by the young activists were answered at            development, career progression planning, learnership, as           plans. In 2010, the best 50 mine employees received Career
institutions, and scholarship students of Kola MMC (a total of        another meeting with Vladimir Putin, which was held in Moscow       well as providing internships and bursaries.                        Path Appreciation (CPA) interviews.
52 persons in 2010).                                                  later. Another action of the “Leader” Movement was the youth
                                                                      forum “The Territory of Positive Mood” held in September. The       TTati Nickel, like other mines and major employers in               The career path plan includes, among others, the following
                                                                      forum program included a number of professional and informal        Botswana, faces a shortage of skilled workforce. To overcome        components:
5.5.4. Personnel training and the candidate                           meetings of young professionals of the Group’s operations           this shortage in the short term, employers, having explored the
pool                                                                  based in Norilsk, the Kola Peninsula, and Sochi.                    local market in terms of necessary skills, are allowed to source    a. Generic skills
                                                                                                                                          such skills externally. However, the government policies aimed      Job descriptions are made available to all employees. They
In 2010, additional professional training was received by over        “Foreman University”                                                at promoting local employment require them to facilitate the        include the minimum requirements for each job. That enables
31.9 thousand employees of the Russian entities of the Group          As a part of the “Foreman University” corporate project, the        development of citizen employees who can eventually take            employees to identify their development needs.
(about 40% of the average headcount), including over 19.8             “Foreman of the Year” contest was held. The contest was aimed       over jobs currently held by expatriates.
thousand workers.                                                     at the promotion of proactivity at the operational management                                                                           b. Succession planning
                                                                      level, retention of highly skilled line managers engaged in the     To do that, employers are required to come up with a Training and   Potential successors are identified with the help of professional
In February 2010, the Kola Personnel Development Center,              implementation of the Production Development Strategy, and          Localization Plan outlining how prospective citizen employees       psychologists. Such tools as Initial Recruitment Interview
a corporate training facility, started providing training             the strengthening of professional values. In June 2010, best        will be identified and developed. The draft Plan is discussed       Schedule (IRIS) are also used to identify potential successors.
services. The center was established in order to improve the          foremen in ten categories representing all major sectors within     and agreed upon by internal stakeholders, i.e. management           Five mine employees were trained as IRIS Practitioners.
effectiveness of professional training and development of             the Company received awards at a special ceremony.                  and the union organization. Then the Plan is presented to the
the staff of operations based in Monchegorsk and Pechenga                                                                                 Labor Commissioner for approval. The employer is required to        c. Individual development plan
District. In the reporting year, some 2 thousand persons              “Mentor Academy”                                                    submit to the Labor Commissioner an annual brief describing         Such plans are prepared to support employee development.
received training at the center.                                      Mentoring has been practiced at the Company’s operations for        the progress of the Plan implementation.                            The employees are being assisted by their supervisors, who
                                                                      decades. In the recent years, this practice was further advanced                                                                        provide performance evaluation, monitoring and feedback.
In order to meet the Group’s needs for filling line management        due to the role of mentoring in such corporate programs as          Training priorities
vacancies, the Company continued to build and update its              “Worker Succession”, “Intern”, and “Professional Start”. In the     Tati Nickel is committed to training its employees in order         Nkomati
candidate pool. The candidate pool is maintained at three levels      reporting year, the main area of activities with regard to this     to help them acquire skills necessary for the operation             Nkomati also faces a shortage of middle and line managers
(starting level, middle level, and senior level management            target group was conducting professional mastery contests to        of the mine. The Mine Training Center at the mine site has          and workers, like all its major contractors do. As a result of
positions). In the reporting year, the candidate pool included over   identify the best workers in various specialties, and the best      been operational since May 2006. Training is provided by            the explosive growth of mining operations in the southern
430 employees.                                                        mentors of companies and units.                                     both internal trainers and contracted external facilities. The      countries of Africa, including South Africa, a severe shortage
                                                                                                                                          following training areas have been identified as crucial to         of skilled specialists is felt in the regional workforce market.
                                                                      Development of intellectual potential of the youth                  the organization: technical skills; management skills; safety,
5.5.5. Target groups for personnel                                    In the 2010 season, 27 teams representing different operations      health and environment training; business awareness skills;         The company delivers three-month training programs in basic
development                                                           of the Group competed in the games of the NIKoNN Intellectual       equipment operation skills; HIV/AIDS awareness training;            operating skills to its core production staff. Additional trainings
                                                                      Club. In addition, ten teams representing students receiving        leadership skills; supervisory skills etc.                          are carried out on an annual basis. Due to the particular
“Leader” Young Professionals’ Movement                                work placements as the Company under the “Professional                                                                                  focus of the South African Government on occupational injury
In 2010, the activities of the “Leader” Young Professionals’          Start” program took part in the summer game of the season.          The upper level employees (Level 1 and Level 2) are offered         prevention, the company pays significant attention to primary
Movement, a corporate project of Norilsk Nickel, started                                                                                  training courses in management and supervisory skills. The          OHS training of its staff and continuous additional training in
with the Forum of Young Professionals of Norilsk Nickel. The          Employees of Norilsk Nickel participate in the KVN movement,        courses encompass a range of aspects, such as employee              safe work practices.
program of activities of the “Leader” Movement was presented          centered around a team-based humorous contest, popular in the       development, financial planning, planning and organization,
at the Forum. The event was attended by over 200 young                Former Soviet Union. In particular, representatives of the teams    team process, and HIV/AIDS management. Employees are                Norilsk Nickel Harjavalta Oy
professionals, representing the Group’s operations based in the       of the KVNN Polar League took part in the 21st International        also trained in tool handling, occupational health and safety,      Staff selection and recruitment at NN Harjavalta takes place
Norilsk Indistrial District. The main theme of the Forum was the      Festival “KiViN 2010” held in Sochi.                                computer skills etc.                                                on a per need basis. Before recruiting new staff, internal re-

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training and reorganization opportunities are explored. Each
recruitment decision requires an approval of the Board of
                                                                                               development, management skills, and computer skills. In
                                                                                               2010, every employee received on average 5 days of training.
                                                                                                                                                                5.6. Social Programs
Directors of NN Harjavalta. According to the requirements
of NN Harjavalta, each production worker should have a                                         Career progression, personal preferences and plans are
professional degree/qualification in the chemical industry in                                  discussed with each employee annually. The HR Management
order to be employed on a permanent basis.                                                     Department collects information on employee preferences and
                                                                                               helps identify the optimal position for each employee based on
The company has a three-year training program, which allows                                    this information and his or her professional skills.
students to be employed as production workers, at the same
time being taught at a school. This program is based on the                                    In the summer, NN Harjavalta provides internships and work
Vocational Qualifications Act. The HR policy of NN Harjavalta                                  placements to fill temporary vacancies arising as a result
is aimed at continuous training and skills development of                                      of employee vacations, sickness leave, or parental leave.
its employees. The company reviews employee training                                           Certain units, which face a shortage of human resources,
and development needs on an annual basis. Annual training                                      provide internships throughout the year. This flexible
programs are delivered mainly in such areas as environmental                                   approach to HR management helps maintain the efficiency of
protection, occupational health and safety, production                                         operations.

Table 5.2. Personnel development programs at Tati Nickel, 2008-2010                                                                                             Following their corporate social responsibility strategy, MMC                                  5.6.1. Pension programs
                                                                                                                                                                Norilsk and its subsidiaries make focused efforts to address a
                                                                                                                      2010            2009              2008    range of socially significant objectives.                                                      The corporate funded pension system is an important
Number of training events                                                                                               69               32               16                                                                                                   component of the Company’s corporate social responsibility
Number of employees trained                                                                                            379              764            1,507    At present, the Company has an established system of                                           activities. In May 2010, the Company’s Management Board
Actual hours of training                                                                                            81,992            2,204              649    corporate social programs1, aimed at attraction and retention                                  made the decision on the improvement of the corporate
Training hours per employee                                                                                            216               2.9             0.4    of employees, and facilitating long-term performance of                                        pension schemes, while retaining the core principles of the
Personnel training costs (USD thousand)                                                                                189             12,8             46,1    the staff by offering a range of social benefits and targeted                                  existing occupational pension system – voluntary participation,
                                                                                                                                                                allowances (Figure 5.13).                                                                      accessibility, and co-financing of pension plans by employee
                                                                                                                                                                                                                                                               and employer. This was an important step in the development
Table 5.3. Personnel development programs at Nkomati, 2008-2010                                                                                                 In the reporting year, the Company revised and optimized specific                              of the Company’s corporate pension system.
                                                                                                                                                                implementation mechanisms of a number of corporate programs
                                                                                                                      2010            2009              2008    in order to improve the overall effectiveness of its social benefits.                          In the recent years, the Company’s management has paid special
Number of training events                                                                                                34             438              249    The Company also launched new social programs and projects,                                    attention to the development of occupational pension programs,
Number of employees trained                                                                                             787           1,598            1,450    optimizing the range of social benefits and payments offered                                   which have been popular among employees. This popularity
Actual hours of training                                                                                            42,720           50,249           31,747    as a part of the corporate social package in addition to what is                               reflects special expectations of those working in the Far North
Training hours per employee                                                                                           54.28           31.40           215.00    required by the legislation.                                                                   with regard to their post-retirement future. Contributions to
Personnel training costs (USD thousand)                                                                             1,089.4           420.7            596.7

                                                                                                                                                                Figure 5.13. Corporate social programs
Table 5.4. Personnel training and re-raining at Norilsk Nickel Harjavalta1, 2008-2010
                                                                                                                                                                              Objectives                                                                         Programs
                                                                                                                      2010            2009              2008         Personnel retention
                                                                                                                                                                                                                                                 • Corporate co-funded pension
                                                                                                                                                                                                                                                 • Option program
Number of training/re-training events                                                                                  384              368              280         and rotation                                                                • Supplementary corporate pension
Number of employees trained/re-trained                                                                                 267              267              267
                                                                                                                                                                                                                                                 • Solidarity corporate pension
Actual hours of training/re-training                                                                                10,547           11,887            9,913         Providing incentives and rewards                                            • Subsidized loans
Training hours per employee                                                                                           39.5             44.5             37.1         for the core staff                                                           • Additional corporate vacation travel allowance
                                                                                                                                                                                                                                                 • “Our House” program
Personnel training/re-training costs (USD thousand)                                                                  503.0            590.0            557.0
                                                                                                                                                                                                                                                 • Recuperation and recreation
                                                                                                                                                                     Maintaining working capacity                                                • Children’s recreation
                                                                                                                                                                     of personnel and promoting                                                  • International corporate tourism
                                                                                                                                                                     healthy lifestyle                                                           • Mass sports events

                                                                                                                                                                                                                                                 • Vocational guidance
                                                                                                                                                                     Attracting young people                                                     • Working with children

1       Personnel training and re-training indicators for 2008-2009 include data for Norilsk                                                                    1    The data are provided for the Group’s Russian entities in accordance with Annex 4,
        Nickel Finland (office).                                                                                                                                     except for social adaptation programs.

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                     2010                                                                                                                                                                                                                                                                               2010
a corporate pension plan are included in the standard social            term service with the Company. Under this scheme, in addition        employees after their retirement from the Company. In                 Under the program the Company acquires apartments in the
package offered by the Company to its employees.                        to matching the employee’s contributions on an ongoing basis,        particular, these programs provide for one-time retirement            Russian regions with favorable climate; then the housing is
                                                                        the Company contributes to employee’s plan with a “starting          bonus linked to employee’s work contribution over his or her          provided to key specialists on mutually beneficial conditions.
The key components of the Company’s corporate pension                   capital” that depends on the employee’s work contribution by         period of service. In 2010, the Company has increased the             Finished apartments, initially acquired by the Company, are
system are specific pension schemes, based on the principle             the moment of joining the scheme. In 2010, the Company’s             average size of payments to the employees retiring under the          provided to employees on a co-financing basis: ultimately the
of co-funding of the future pension by employee and employer.           expenditures on this scheme amounted to RUB 50.5 million.            Supplementary Corporate Pension program.                              Company covers up to a half of the cost, while the remaining
The personal pension plans of employees are managed by                                                                                                                                                             part is paid by the employee during a certain period of his or
Norilsk Nickel Non-State Pension Fund. In 2010, the Company             Since the launch of the scheme, it was joined by over 3.3 thousand   In the reporting year, the Company has also increased the             her work with the Company (between 5 and 10 years). The
continued to maintain two main pension schemes – the                    employees of the Polar Division and the Group’s operations based     size of the lifetime corporate pension paid to distinguished          Company’s contribution is made only after the completion of the
Corporate Co-Funded Pension and the Solidarity Corporate                in Norilsk and Taimyr Municipal District. At the end of 2010, the    employees who received government awards.                             period, and only then the participant takes legal possession of
Pension – aimed at increasing post-retirement income of                 total number of scheme participants was some 1.8 thousand                                                                                  the housing. However, the employee is able to use the housing
Company employees.                                                      persons. The average length of service of the scheme participants    The Company also offers additional vacation travel allowance          from the very moment it is provided, sub-leasing it to a tenant,
                                                                        with the Company is 26 years. At present, 902 persons receive        to the employees, who achieved high performance and                   staying in it during vacations, providing it for the use of his or
These schemes are aimed primarily at the employees of                   corporate pension under the scheme, including 249 persons who        professional mastery and were distinguished by sectoral               her children or relatives etc. The housing price remains fixed
the Group’s entities based in the main regions of Company’s             became corporate pensioners in 2010.                                 and corporate awards. In 2010, a total of some 1.6 thousand           over the whole period of the employee participation.
production operations – the Polar Division, Polar Transportation                                                                             employees used this benefit.
Branch, a number of entities based in Norilsk and Taimyr                Improvement of the corporate pension system                                                                                                The overall cost of the program in 2010 exceeded RUB 4 billion.
Municipal District, and the Group’s operations based in the Kola        The decisions regarding the improvement of the corporate             Program of state co-financing of the funded part of                   It is expected that at least 1,000 employees of the Norilsk Nickel
Peninsula.                                                              pension schemes, made by the Company’s Management Board              the retirement pension                                                Group will be able to take advantage of the program.
                                                                        in 2010, were aimed at strengthening motivation of highly-           The enactment of the Federal Law No. 56-FZ dated April 30,
Under the Corporate Co-Funded Pension scheme, which has                 skilled staff for long-term service with the Company. While          2008 “On Additional Contributions to the Accumulation Part            In 2010, finished apartments were provided under the “Our
been in place since 2007, personal occupational pension                 making terms and conditions of corporate pension schemes             of the Retirement Pension and State Co-Financing of Pension           House” program to 170 employees of the Polar Division and
plans are financed jointly by employee and the Company. The             more attractive, the Management Board retained the core              Savings” provided an opportunity for the Group’s employees            the Polar Transport Branch based in Norilsk and in the Taimyr
employee builds his or her future occupational pension by               principles of the existing occupational pension system –             to increase their future pensions using the mechanism of              Peninsula, and of Kola MMC, a subsidiary of the Company. All
making regular contributions to the personal pension plan               voluntary participation, accessibility, and co-financing of          state co-financing. The Program for State Co-Financing of the         apartments provided under the program in 2010 are located
from the salary, while the Company matches employee’s                   pension plans by employee and employer.                              Accumulation Part of the Retirement Pension was designed by           in towns of Moscow Region, including Noginsk, Ramenskoye,
contributions. The size of the Company’s contributions is equal                                                                              the Russian Government in order to promote pension savings            and Lyubertsy.
to the ones made by the employee, but cannot exceed 3% of                                                                                    and improve the level of pension support by increasing the size
his or her salary during the first ten years of the employee’s          Vyacheslav Poltavtsev,                                               of the funded part of the retirement pension.                         The “Our House” program also has a significant social
service with the Company.                                               Deputy General Director for GR                                                                                                             dimension. It helps key employees to meet, with the Company’s
                                                                        and Social Policy                                                    Recognizing the social significance of the government initiative,     support, one of the vital needs of those working in the Far
Flexible terms of participation allow employees to suspend                                                                                   the Company provides information support of the program,              North – to own housing in the “mainland”.
and resume their contributions to the plan, and to change their         In this year the “Our House” program was launched.                   helping its employees increase the size of their future pension.
size. At the end of 2010, over 25 thousand Group employees              We started with acquiring finished housing for our                   By the end of 2010, some 4.2 thousand employees of the Group
participated in the scheme; some 1.1 thousand persons                   employees, but we explore opportunities for the                      took part in the program.                                             5.6.3. Personnel recuperation programs
received corporate pensions with 723 of them becoming                   Company’s own housing construction projects in the
“corporate pensioners” in 2010.                                         south of the region, an area with favorable climate                                                                                        Personnel recuperation programs are among the priorities
                                                                        conditions. This housing will be provided to our                     5.6.2. “Our House” program                                            of the Company’s social policy. Living in the severe climate
The Company fulfills its obligations to the participants of corporate   employees, who gave much to the Company. Now it’s                                                                                          of the Far North and the nature of work at the Company’s
pension schemes and uses its contributions as an additional             our turn to take care of them.                                       In 2010, the Company started implementation of a new                  operations require special care for employee health. For many
incentive for high performance. Facing financial constraints during                                                                          corporate social program titled “Our Housing”. The program            years the Company and its subsidiaries have been running
the economic crisis, the Company continued to match employees’                                                                               is aimed at addressing the issue of shortage of strategically         special recuperation and health resort treatment programs
contributions to their pension plans. In 2010, some 1.8 thousand        Under the new programs, the Company will be able to                  significant key staff, including those with scarce skill sets and     for the employees and their family members. In 2010, total
best performing employees each received an extra pension bonus          make larger matching contributions to pension plans of all           professional expertise, and at the creation of a stable core of       expenditures on employee recuperation and recreation
worth RUB 75 thousand, which was contributed to their pension           categories of employees – up to 7% of their salary. Employees        professionals at the Company’s operations based in the Far            programs amounted to RUB 1.5 billion.
plans by the Company. This action was linked to the anniversary         will be offered new attractive occupational pension schemes,         North. The first stage of the program implementation showed
year’s Company Day. In 2010, total matching contributions made          including those involving matching contributions from the            a rather high demand for participation among employees.               The corporate ”Zapolyarye” Health Resort is one of the
by the Company under the Corporate Co-Funded Pension scheme             Company. This will help attract over 600 high-skilled young                                                                                Company’s largest facilities providing recuperation and
amounted to RUB 533.4 million.                                          specialists and workers, and strengthen employee motivation          The program is an innovative mechanism for strengthening              recreation services to the Group’s employees and their family
                                                                        for long-term service with the Company.                              the motivation of the most skilled, proactive, responsible, and       members. In the recent years, this resort has been particularly
Additional social package available to the “core” of highly-                                                                                 effective employees for long-term service with the Company.           popular among employees. In 2010, the resort received over 20
skilled employees includes the Solidarity Corporate Pension, an         The Company’s entities have programs aimed at maintaining            At the same time the program is a significant factor attracting       thousand guests, while the Company spent over RUB 1.1 billion
enhanced pension scheme, which has been implemented since               an optimal age structure of the personnel, facilitating staff        highly-skilled candidates to the Company and helping address          on subsidizing their recreation.
2002 to motivate the core staff for high performance and long-          rotation, and helping ensure social stability among former           the objective of providing its operations with skilled specialists.

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                         RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                         2010
In the reporting year, “Zapolyarye” Health Resort implemented      5.6.4. Development of corporate sports                               help increase the confidence in the Company among the local              organized in Students’ Labor Brigades, took part in an extensive
a range of measures to improve the quality of its services.                                                                             communities, and improve attractiveness of the Group as a                cultural and leisure program, which included visiting movie
In particular, a renovation of guest rooms was carried out,        In order to promote a healthy and active lifestyle among             potential employer for the local youth.                                  theatres, sports competitions and paintball games, holiday
animation teams started to deliver their programs. The quality     employees and their family members, the Group’s entities                                                                                      events at recreation bases, and a creative festival. The most
of medical treatment services has been continuously improved.      implement a range of sports programs targeting a broad                                                                                        prominent events included the inauguration march of Students’
A new summer movie theater with a seating capacity of 800 and      audience. Under such programs the Company provides support           5.6.5. Vocational guidance and programs for                              Labor Brigades on June 12, the march commemorating the 75th
a fitness complex are close to inauguration. The reconstruction    to employees participating in sports on a regular basis,             children                                                                 anniversary of the Norilsk Combine, the “Star Corporation”
of the lower “seaside” zone of the resort site has started.        organizes a range of annual mass sports events in the regions                                                                                 creative festival, and a mass running event.
                                                                   of operations, and conducts corporate sports festivals and           Vocational guidance programs implemented or supported by
The Company continued to expand the corporate international        competitions. Corporate mass sports events help increase the         the Company are intended to help school students make a                  In 2010, the contest “Dreaming of a Future Career!” was
tourism program. In 2010, over 3.6 thousand Group employees        popularity of various sports and fitness activities.                 conscious choice of an institution for future professional or            carried out for the second time, encouraging school and
and their family members participated in the program, spending                                                                          vocational training, and to help students of vocational training         university students and young specialists of the Company
their vacations in Bulgaria, Spain, and Egypt. In the reporting    In 2010, over 25 thousand employees took part in various             and higher educational institutions make an informed choice of           to make conscious vocational and career choices, analyze
year, the Company’s expenditures on the implementation of the      corporate sports events, while the Company spent a total of          their specific future career with the Company.                           their achievements, and plan their professional and personal
program amounted to some RUB 170 million.                          over RUB 35 million on supporting such events. The Company’s                                                                                  development. Institutions of additional education, such as the
                                                                   Council for Sports and Physical Training resumed its activities.     In 2010, the Profnavigator Club continued its vocational                 Norilsk School of Arts and the Children’s Center of Technical
The objectives of corporate children recuperation and              The most significant corporate sports tournaments and                guidance activities. All educational institutions of the                 Activities, were contributing to vocational guidance activities.
recreation programs include the protection and improvement         festivals include: “Norilsk Nickel Ski Track” (Norilsk), Dudinka–    Company’s areas of operations in the Norilsk Industrial District
of health of employees’ children, disease prevention, and          Alykel–Norilsk runners’ race to commemorate Mettallurgist’s          and the Kola Peninsula took part in the corporate Vocational             The project “Norilsk Nickel through the Eyes of Children” and
creation of appropriate conditions for recuperation, recreation,   Day (Norilsk Industrial District), “Daddy, Mommy, Me – a             Guidance Marathon. Fourteen schools recognized as winners of             the urban sculpture festival “People of the Northern Palmyra”
and summer activities of children.                                 Sports family!” contest for families (Sochi), tournaments in         the team-based competition each received a grant worth RUB               resulted in a number of exhibitions and the publication of
                                                                   futsal (Norilsk), basketball and volleyball (Monchegorsk).           150 thousand for the implementation of a vocational guidance             a children’s art album dedicated to the 75th anniversary of
For children of the Company’s employees, summer recreation         These events are popular not only among Company employees,           project. The individual competition was won by a future student          the Norilsk Combine. Over 60 young artists, whose works
at the “Vita” children’s health resort located on the Black        but also among the general public in the areas of operations.        of the Norilsk Industrial Institute, who was rewarded with an            were selected for the album, expressed their vision of
Sea coast (Anapa Town) and a sports and recuperation camp                                                                               annual stipend worth RUB 45 thousand.                                    various occupations within the Company, people working at
in Tula Region (Aleksin Town) was organized. An important          Supporting professional sports clubs                                                                                                          its operations, and their native city. It is planned to use the
factor that helped improve the affordability of these services     In 2010, the Company continued to support several Russian            An integral component of the vocational guidance activities is           items made by children for decorating vocational guidance
was the decision of the Company’s management to fully cover        professional sports clubs, such as CSKA hockey club, CSKA            the summer employment program for senior school students.                rooms at educational institutions, corporate museums of the
the costs of children’s travel to health resorts and summer        basketball club, and Norilsk Nickel futsal club. These activities    In summer 2010, a number of Group’s operations employed                  operations of Norilsk Nickel, and the Museum of the History
camps. This decision was welcomed by employees and led to a        are also viewed in the context of the overall corporate sports       a total of 622 senior school students as general laborers.               and Development of the Norilsk Industrial District.
significant increase in the demand for services of resorts and     strategy, ultimately aimed at the promotion of healthy lifestyle     In addition to performing their work duties, the students,
summer camps. Under this program, recreation services were         among employees of MMC Norilsk Nickel and the development
provided to over 1.3 thousand children, while the program cost     of the corporate physical education system.
amounted to some RUB 132 million.                                                                                                       The Company pays serious attention to the promotion
                                                                   FC (Futsal Club) Norilsk Nickel is the most active in this regard.   of healthy lifestyle. In December 2010, the tradition of
In 2010, some 1.4 thousand employees and their family              In the reporting year, the club conducted numerous friendly          corporate tournaments between the Group’s entities held
members spent their vacations and improved their health at         matches with futsal teams of the Company’s operations,               in Monchegorsk was restored.
independent resorts, including those based in Altai Region         master classes, and meetings with its fans in Norilsk, Dudinka,
(Belokurikha Resort, Rossiya, and Rodnik) and in the Caucasian     Talnakh, Kayerkan, Mocnhegorsk, Zapolyarny, Nickel etc. The
Mineral Waters resort region. The duration of a standard           club has established and conducted the traditional “FC Norilsk
recreation plan provided by these resorts was increased            Nickel Cup” futsal tournament held in Nickel settlement
from 18 to 21 days. The Company spent RUB 55 million on this       (Murmansk Region).
recreation program in 2010.
                                                                   In addition to social programs targeting the Company’s staff,        It is also important to keep in mind that the Company
An integrated network of reception desks on production,            Norilsk Nickel implements a number of programs and projects          has a serious enough system of corporate social
                                                                                                                                        programs, and is planning to further develop them.
social and labor issues has been effectively functioning at the    where the employees themselves engage in social activities
                                                                                                                                        These programs include employee recuperation and
Company’s divisions and SDCs based in Norilsk. The network         to assist different stakeholder groups. The target groups of         recreation programs, the “Our House” program, which
includes the Company’s Central Reception Desk and 20 reception     such activities include employees’ children, the youth, and          will help many employees purchase housing for a half
desks at various business units In 2010, the reception desks       the communities of the areas of operations as a whole. The           of the price while extending payments over 10 years,
filed and reviewed over 27 thousand enquiries, suggestions, and    Company’s benefits from such projects include improved               and occupational pension programs.
complaints submitted by employees. A total of 750 meetings         cohesion of labor collectives as a result of joint participation
attended by over 21.5 thousand employees were organized. The       in addressing social issues, and increased social activity                                                   Yevgeny Muravyov,
issues most often raised by employees were related to corporate    of employees who contribute to the creation of a favorable                                                   Director of the Polar Division
                                                                                                                                                                                of MMC Norilsk Nickel
recuperation and recreation programs, and pension programs.        social environment in the area. In addition, such programs

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                 2010                                                                                                                                                                                                                                      2010
Within the framework of a “museum orienteering” competition         5.6.6. Social activities of young specialists                      Tati Nickel                                                          transportation costs. Nkomati supports the acquisition of
jointly organized by the Museum of History and Development                                                                             As a part of its personnel retention strategy, Tati Nickel           employees’ own housing, since the company does not provide
of the Norilsk Industrial District and the Center for Children’s    Young specialists of the Company used to congratulate veterans     offers its employees a package of social benefits, which             living quarters for employee family members. In addition to
and Youth Tourism and Excursions, senior school students            of the Great Patriotic War, and this tradition was continued in    includes medical and pension insurance, as well as coverage          monetary benefits, employees are offered social counseling
of the city prepared research works about honorary citizens         2010, the year of the 65th anniversary of the Victory. The first   of transportation costs. In 2010, critical job positions were        services with regard to physical and mental health (for more
of Norilsk. The materials of the competition have been made         builders of Norilsk were also not forgotten.                       identified and a proposal on the measures to retain employees        details see Section 4.1: Occupational Health and Safety Policy).
available at the vocational guidance website of Norilsk                                                                                in those positions was developed.
Nickel,                                             During the preparation of the city for the anniversary                                                                                  Nkomati Mine also has a personnel retention program, which
                                                                    celebrations, the young specialists actively contributed to        Community Outreach Day on Health and Wellness                        includes personal development of employees, market-based
Organizing excursions of senior school students to the Company’s    outdoor cleaning and landscaping activities in the city and        In 2010, Tati Nickel jointly with the national Ministry of Health    benefit packages, and retention incentives for the employees
operations has been a traditional area of activities of the         at industrial sites. They also took care of “Lake Dolgoye”         held a Community Outreach Day on Health and Wellness. The            with scarce skills. At present, the program is under review to
Profnavigator Club. Over 1 thousand students took part in the       socio-cultural site, industrial areas (within the framework        main objective of this annual event was to increase community        ensure that it conforms to the corporate standards and meets
excursion program encompassing the main units of the Polar          of voluntary environmental actions), and monuments of the          awareness on “silent killers” and the importance of regular          specific needs of the mine.
Division, which was conducted in September through December.        history of Norilsk Combine.                                        check-ups, and to promote wellness and a healthy lifestyle
In the reporting year, in addition to this traditional program, a                                                                      within the Company and the surrounding communities. The              Norilsk Nickel Harjavalta Oy
series of excursions titled “Memorial Norilsk” was organized. The                                                                      Government provided dentists, opticians, dieticians and nurses
students visited Urvantsev’s House, the Norilsk Calvary Memorial    5.6.7. Mass cultural events and festivals                          who worked alongside Tati Nickel health team to conduct blood        Norilsk Nickel Harjavalta adheres to the high social
Complex, an ice-class vessel, and the Taimyr Center of Folk Arts.                                                                      sugar tests, measure blood pressure and Body Mass Index.             responsibility and human rights standards. Since EU member
                                                                    In order to foster and preserve traditions and values of the                                                                            states typically have well-developed public social security
The Youth Press Center has been publishing “The Formula             Company, in 2010 a number of events to commemorate                 The theme of the 2010 event was “My Health First”. The program       systems, the need for occupational programs of such kind is
of Success”, a monthly vocational guidance newspaper                important corporate, professional, and national dates and          of the event included competitions and tournaments in such           less than in Russia or Africa. Nevertheless, in addition to its
for children and adolescents. In 2010, the newspaper was            holidays were conducted at the Group’s operations. These           sports as aerobics, football, netball, bicycle racing, volleyball,   mandatory social programs based on the legal requirements,
published on a monthly basis with a circulation of 999 and          include the company-wide KVNN festival in Norilsk, as well as      martial arts etc. Tati Nickel, on its part, provided an ambulance    NNH has medical and social insurance programs, accident
distributed at the schools of the Norilsk Industrial District and   festivals and celebrations dedicated to the 75th anniversary of    on stand-by, 450 branded towels for those who underwent              insurance programs, social programs promoting health
other educational institutions. The main objective of the Youth     the Norilsk Combine, important professional dates and national     health screening, lunch for 300 participants and 50 delegates        improvement and healthy lifestyle etc.
Press Center is raising awareness of the history of the Norilsk     holidays (Metallurgist’s Day, Miner’s Day, Energy Worker’s Day,    from different government departments. The keynote speaker
Combine, MMC Norilsk Nickel, and the city of Norilsk, and of        International Women’s Day etc). In 2010, the overall costs of      was Ms. K. Keapoletswe, the Director of the Department of HIV/       In particular, each employee has medical insurance and
the main professions and skill sets demanded by the Company.        such programs amounted to RUB 167 million.                         AIDS Prevention and Care at the national Ministry of Health.         participates in a pension insurance plan. There are also
                                                                                                                                                                                                            additional benefits in the field of health and occupational
“A Road to the Future”                                                                                                                 Nkomati                                                              disease prevention; opportunities to use cottages rented by
                                                                                                                                       As a part of its personnel retention strategy, Nkomati offers        the company for vacations; subsidized meals at the company’s
                                                                                                                                       its employees a package of social benefits, which includes           cafeteria. The company also provides financial support for
                                                                                                                                       medical and pension insurance, as well as coverage of                additional general education and expanding skill sets.

                                                                                                                                       Table 5.5. Expenditures on social programs at Tati Nickel, 2008-2010 (USD thousand)
                                                                                                                                                                                                                                   2010              2009              2008
                                                                                                                                       Social programs                                                                             181.4            290.0              504.0
                                                                                                                                       Charity programs                                                                                –              3.9               48.0
                                                                                                                                       Pension programs                                                                                –            337.2                  –

                                                                                                                                       Table 5.6. Expenditures on social programs at Nkomati, 2008-2010 (USD thousand)
                                                                                                                                                                                                                                   2010              2009              2008
                                                                                                                                       Social programs                                                                           1,433.0            953.0              627.6
In the reporting year, the traditional children’s arts contest “A   5.6.8. Social programs at the foreign                              Charity programs                                                                             52.5              37.2              37.5
Road to the Future” was held. Over 1.2 thousand children of         entities                                                           Pension programs                                                                          2,216.0           1,199.0             783.6
employees of the Polar Division, Kola MMC, and other entities
of the Group took part in the contest. In 2010, the contest theme   Norilsk Nickel Australia
was “The City of Master Hands”.                                     In 2010, NN Australia did not implement social or charity
                                                                    programs. The expenditures on pension programs in the reporting
                                                                    period amounted to USD 347 thousand.

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                 RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                 2010
6. Contribution to the Development                                                                                                                                 Figure 6.1. Share of tax payments of MMC Norilsk Nickel in the total income of the Krasnoyarsk Region’s budget,
                                                                                                                                                                   2009-2010 (%)
of the Regions of Operations                                                                                                                                                               2009                                                             2010





                                                                                                                                                                                               Share of tax payments of MMC Norilsk Nickel in the total income of the Krasnoyarsk Region’s budget

                                                                                                                                                                   Dmitry Dmitriyenko,
                                                                                                                                                                   Governor of Murmansk Region, about Kola MMC
                                                                                                                                                                                                                                                 6.2. Employment in the
MMC Norilsk Nickel plays a pivotal role in the economic and                                    6.1. Tax Payments                                                                                                                                 Regions of Operations
social life of the areas where its major operations are based.                                                                                                     We listen to each other, move toward each other, and
All of the key Russian operations of the Group are located above                               The main principle of the Company’s tax payment policy is           I believe that this will continue. The Company has                            Maintaining social stability in the regions of operations is an
the Arctic Circle, in the areas characterized by extreme climate                               ensuring timely and full payment of taxes to the budgets at all     been making a very large contribution to the regional                         important priority of the Company’s social policy. The Group’s
conditions. In Norilsk and Dudinka the situation is made even                                  levels.                                                             budget, and I think that it will only increase in the future.                 entities make a major contribution to local employment,
more complicated by the lack of land transport connection to                                                                                                       We identified certain approaches to cooperation, in                           providing jobs with competitive wages to local residents.
the rest of Russia.                                                                            The year 2010 saw the increase in the Company’s tax payments        particular, in the investment sphere. Nothing is going
                                                                                               to the national, regional, and local budgets. The tax payment of    to change for worse; the things are going to get better,                      In the city of Norilsk, the towns of Monchegorsk and Zapolyarny,
MMC Norilsk Nickel is a major taxpayer and employer in the                                     MMC Norilsk Nickel to the consolidated budget of Krasnoyarsk        provided, of course, that the situation in the global                         and the settlement of Nickel – communities with the total
regions and communities where its main production sites                                        Region amounted to RUB 42 billion, or 2.5 times more than in        markets will at least remain at the current level.                            population of 287 thousand – the operations of Norilsk Nickel
are based. Many entities of the Norilsk Nickel Group are the                                   the previous year (above RUB 17 billion). Of this amount, RUB 7.5                                                                                 are by far the largest employers in the local economies, having
largest employers in the communities where they operate.                                       billion was received by Norilsk municipality, RUB 0.15 billion –                                                                                  the official status of “town-forming industries” according to
Guided by social responsibility principles, they make significant                              by Taimyr Dolgano-Nenets Municipal District. The tax payment        The increase in the tax payments was a result of increased                    the Russian legislation. In particular, the Company’s divisions
contribution to the socio-economic development of their regions                                of Kola MMC to the budget of Murmansk Region amounted to            revenue from sales of metal products due to the growth of                     and SDCs account for more than 50% of the total number of
and communities. Maintaining social stability in the regions of                                RUB 6.6 billion, or 2 times more than in 2009.                      prices on the international markets.                                          those employed by large and medium enterprises in Norilsk.
operations is an important priority of the Company’s social policy.                                                                                                                                                                              The entities of Kola MMC located in Monchegorsk and
                                                                                                                                                                                                                                                 Pechenga District also make a comparable contribution to
Table 6.1. Tax payments (including insurance payments and customs duties) to the budgets at different levels,                                                                                                                                    local employment. This means that the well-being of virtually
2009-2010 (RUB million)1                                                                                                                                                                                                                         every family in these communities directly depends on the
                                                                                                                                                                                                                                                 operational and social performance of the Company.
                                                                                                                             20102                        20093
Tax payment – total                                                                                                         78,481                       34,357                                                                                  In 2010, the average monthly salary of the employees of the
including:                                                                                                                                                                                                                                       Polar Division was RUB 63.3 thousand (USD 2.1 thousand)1,
federal budget                                                                                                              16,775                        5,783                                                                                  or 10% more than in the previous year; the average monthly
consolidated budget of Krasnoyarsk Region                                                                                   42,060                       17,017                                                                                  salary of the employees of Kola MMC – RUB 43.9 thousand
Norilsk City budget                                                                                                          7,514                        3,179
                                                                                                                                                                                                                                                 (13.4% more than in the previous year).2
consolidated budget of Taimyr Dolgano-Nenets Municipal District                                                                149                          544
consolidated budget of Murmansk Region                                                                                      10,486                        5,980

1       The 2009 payment to the federal budget presented in the table takes into account the
        corporate income tax refund to OJSC MMC Norilsk Nickel (of RUB 2,989 million of                                                                                                                                                          1     The subsistence level for working age population in Krasnoyarsk Region in Q4 2010 was
        corporate income tax paid to the budget, RUB 2,776 million was then refunded).                                                                                                                                                                 RUB 7,019 (information of the Federal State Statistics Service as of March 21, 2011).
2       Estimated data.                                                                                                                                                                                                                          2     The subsistence level for working age population in Murmansk Region in Q4 2010 was
                                                                                                                                                                                                                                                       RUB 8,515 (information of the Federal State Statistics Service as of March 21, 2011).
3       Actual data.

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    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                                                   RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                                                   2010
6.3. Voluntary Contribution to the Regional and Local                                                                                       Dudinka, as well as two pre-school institutions and a
                                                                                                                                            swimming pool in Norilskе. In addition, the Company
                                                                                                                                                                                                          Division donated RUB 12.3 million to support these activities
                                                                                                                                                                                                          and provided 25 vouchers for the recreation at “Zaplolyarye”
Development                                                                                                                                 will spend substantial funds on the modernization of          health resort to law enforcement officers and representatives
                                                                                                                                            certain elements of utilities infrastructure and housing      of the Ministry of Emergency Situations. The Company’
                                                                                                                                            renovation in Norilsk, Dudinka etc.                           representatives also participated in the activities of northern
                                                                                                                                                                                                          territorial working groups of the Anti-Terrorist and Anti-Drug
                                                                                                                                                                                                          Commissions of Krasnoyarsk Region.
                                                                                                                                       Yevgeny Muravyov,
                                                                                                                                       Director of the Polar Division
                                                                                                                                       of MMC Norilsk Nickel:                                             Lev Kuznetsov,
                                                                                                                                                                                                          Governor of Krasnoyarsk Region:
                                                                                                                                       The resettlement of residents from Norilsk and Dudinka
                                                                                                                                       is a serious social program. We are going not to reduce            The management of the company, despite the difficult
                                                                                                                                       but to increase our workforce, so the condition of                 global economic situation, continues to participate in
                                                                                                                                       housing is important to us. The Company pays much                  the social programs, planning to spend some RUB 300
                                                                                                                                       attention to the living conditions of its employees. And           million on them, in the construction of social facilities.
                                                                                                                                       it is particularly important that people who spent many            We are glad to see that Norilsk Nickel has retained its
                                                                                                                                       years working in an industrial district in the Far North           social focus.
                                                                                                                                       were able to settle in more favorable climate conditions.
                                                                                                                                                                                                          In addition to supporting “tangible” projects, the Company
In addition to mandatory tax payments required by the              it had become impossible to address the problems faced by the                                                                          finances initiatives aimed at promoting spiritual values
legislation, the Company contributes to socio-economic             area without the involvement of socially responsible business.      A number of important dates celebrated in the year 2010 – the      and healthy lifestyle among the population of the areas of
development of the areas of operations on a voluntary basis,       No private company ever participated in tackling major social       75th anniversary of the Norilsk Combine, the 50th anniversary      operations. A prominent example of such support was the
participating in public-private partnerships and supporting        problems of northern areas on such a scale.                         of the Talnakh ore field, and the 45th anniversary of Talnakh      contest of local social projects conducted by Kola MMC. The
significant social projects and programs implemented by                                                                                neighborhood – provided additional motivation for the efforts      company organized the contest and financed the winning
government authorities and municipal bodies.                                                                                           of the Company and the Norilsk Municipal Administration aimed      proposals, while municipal authorities provided technical
                                                                   Sergey Selyandin,                                                   at the improvement of the urban environment. In particular, the    assistance for their implementation. All selected projects were
                                                                   General Director of Kola MMC                                        Company financed a number of social and cultural projects at the   aimed at the qualitative improvement of the living environment
Lev Kuznetsov,                                                                                                                         city level and contributed to financing commemoration events       of Monchegorsk and Nickel residents. They included:
Governor of Krasnoyarsk Region                                     Most of the residents of the towns where our                        organized by the Norilsk Municipal Administration. In 2010, the        • the “Safety School” project by Zapolyarny School #19
                                                                   operations are based are our employees. People are                  Company supported the restoration of historical monuments and            (promotion of a healthy and safe lifestyle among the
The City of Norilsk and the Polar Division live and work           the core capital of any enterprise and, of course, we are           preservation of buildings having architectural value.                    youth);
side by side, speak the same language. I can say with              interested to ensure normal living conditions for them.                                                                                    • a project by “Active Nickel” organization (promotion of
confidence that this cooperation is very important to the          Kola MMC has always positioned itself as a socially                 The development of areas in extreme conditions of the Far                volunteering in the area);
area. Social and economic stability and the quality of life        responsible company and will continue to act this way               North is impossible without an integrated approach toward              • the initiative of the Barents Hockey League aimed at
in Norilsk all depend on the cooperation between the               in the future.                                                      ensuring the security of residents and their living environment.         promoting regular participation in sports among the
city administration and the Company’s management.                                                                                      To promote the development of such approach, the Company                 general public and the development of ice hockey as the
                                                                                                                                       has financed the activities of the “Safe City” Fund for the              most popular sports in Pechenga District;
                                                                   Based on the agreements, in 2010 government authorities             Security of the Population of Norilsk. These activities include        • the “Overcoming” project (development of the information
A landmark event for the socio-economic development of             and the Company developed two long-term targeted regional           research and development in the field of law enforcement and             and rehabilitation center for the blind and visually
Norilsk and Taimyr Municipal District was the signing of two       programs:                                                           ensuring citizens’ security in emergency situations, as well             impaired);
quadripartite agreements between the Russian Ministry                 • “Resettlement of residents of Norilsk Urban District           as the development of programs for the prevention of crime,            • the project for the creation of a literary park, a new
of Regional Development, Krasnoyarsk Region, municipal                  and Dudinka Urban Settlement of Krasnoyarsk Region             terrorist activities, and illicit drug trade. In 2010, the Polar         cultural and leisure venue for children and adults.
authorities of Norilsk, and MMC Norilsk Nickel during the               to Russian regions with favorable environmental and
visit of the Russian Prime Minister Vladimir Putin to Norilsk in        climate conditions in 2011-2020”. MMC Norilsk Nickel is
August 2010. The agreements provide for the resettlement of             expected to finance 46% (RUB 8.3 billion) of the planned
residents of the area to regions with more favorable climate            cost of the program (RUB 18.1 billion).
conditions and the modernization of social infrastructure             • “Development of the social facilities and modernization of
and housing. The respective problems of northern cities                 utilities infrastructure and housing in Norilsk municipality
had been building up for decades. The share of pensioners               and Taimyr (Dolgano-Nenets) Municipal District in 2011-
among the area’s population had been continuously growing,              2020”. The planned cost of the program is RUB 9,412
imposing increasingly heavy burden of social spending on the            million. The Company’s contribution to the program
local budgets, while tax payments to the budgets had been               implementation will include, among other activities,
decreasing. A scarcity of housing began to be felt. As a result,        the construction of a sports and fitness complex in

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                 2010                                                                                                                                                                                                                              2010
6.4. Charity                                                                                                                                                   Units of the Polar Division and the Group’s SDСs based
                                                                                                                                                               in Norilsk Industrial District extend their patronage to 64
                                                                                                                                                                                                                                      Assistance to indigenous communities in
                                                                                                                                                                                                                                      the areas of operations
                                                                                                                                                               educational institutions and 42 pre-school institutions of
                                                                                                                                                               Norilsk and Dudinka, financing the purchase of computer                The Company has been preserving long-time traditions of
                                                                                                                                                               equipment and televisions, gaming and musical equipment,               charitable assistance to communities of minority indigenous
                                                                                                                                                               appliances, and furniture for them. In 2010, 12 educational            peoples of the North residing in Taimyr Dolgano-Nenets Municipal
                                                                                                                                                               institutions, including Norilsk Center of Out-of-School                District. The main components of such assistance include the
                                                                                                                                                               Activities, and Vocational College #105, as well as 4                  implementation of integrated targeted programs on the request of
                                                                                                                                                               pre-school institutions celebrate their anniversaries. To              local authorities, on-time charity actions, and delivery of various
                                                                                                                                                               commemorate these dates, they were donated sports and                  equipment and goods to communities of the Taimyr Peninsula by
                                                                                                                                                               gaming equipment, decoration elements, computer and office             air. In the reporting year, the Company spent RUB 20 million on the
                                                                                                                                                               equipment, as well as musical equipment and instruments.               development of social facilities in Taimyr Municipal District.
                                                                                                                                                               The Company purchased broadcasting equipment for
                                                                                                                                                               schools of Norilsk and Dudinka and flooring for pre-school             In 2010, funds were provided to the municipal administration
                                                                                                                                                               institutions.                                                          of Dudinka for the purchase and installation of equipment
                                                                                                                                                                                                                                      for two outdoor children’s playgrounds. To commemorate
                                                                                                                                                               The total spending on supporting these events amounted to              the important dates of the year 2010, a television, bicycles,
                                                                                                                                                               RUB 16 million.                                                        and sports equipment were donated to Dudinka Children’s
The Company has continued the implementation of charity                                       expenditures on charity activities and maintenance of social                                                                            Home, an institution for orphans and children left without
programs and targeted projects aimed at the objectives in                                     facilities in Russia amounted to over RUR 9 billion, more than   MMC Norilsk Nickel cooperates with a number of professional            parental care; a set of computer equipment was donated to
such areas as socio-economic development of the areas of                                      4.6 times increase in comparison with 2009.                      and vocational training institutions based in Norilsk, including       the Dudinka Cultural Center. To support the preservation of
operations, meeting the needs of vulnerable social groups,                                                                                                     the Norilsk Industrial Institute, Polytechnic College at the Norilsk   traditions and culture of minority indigenous peoples of the
and supporting non-governmental organizations contributing                                                                                                     Industrial Institute, Vocational College #105, and Vocational          North, the Company has participated in the events associated
to the improvement of the quality of education, promotion of                                  Assistance to pre-school and educational                         Lyceum #17. Within the framework of targeted programs and              with the Fisherman’s Day and Reindeer Herder’s Day, providing
culture and healthy lifestyle.1                                                               institutions                                                     cooperation agreements, the Company finances the development           prizes and presents for winners of various competitions and
                                                                                                                                                               of the training infrastructure of these institutions, as well as       distinguished representatives of indigenous communities.
                                                                                              The Company views supporting the development, education          their renovation in modernization. In 2010, the Company spent
M. Savinkova,                                                                                 and upbringing of children and the youth as a priority area of   RUB 43.5 million on the projects in this area.                         The Company donated construction materials, sports and
production director at the Monchegorsk                                                        its charity activities and implements a number of programs                                                                              musical equipment, computer equipment, and digital audio
Cultural Center:                                                                              for providing assistance to educational institutions.            The Company extends its patronage to 8 military units based            and video equipment to health care institutions, pre-school
                                                                                                                                                               in Norilsk and Dudinka, which were provided support for the            institutions, cultural institutions, and other organizations of 22
Despite the fact that our professional activities are                                                                                                          improvement of the infrastructure of their administrative              communities of Taimyr Municipal District. Valuable presents
unrelated to Kola MMC and MMC Norilsk Nickel, the                                             Maria Yelanova,                                                  services.                                                              were purchased and given to graduates and first-graders of
Company’s performance makes a difference to us,                                               press secretary of the Public Chamber                                                                                                   schools based in these communities on the Graduation Day
culture workers. Operations of Kola MMC are the                                               of Moscow Region:                                                Continuing the traditions of charitable support of education           and the Knowledge Day. To support the education process,
foundation of the local economy, and well-being of                                                                                                             and upbringing of the young generation, the Company has been           a Buran snowmobile was donated to the nomadic school of
Monchegorsk residents, the stability of their lives                                           A total if RUB 67 million was transferred to the special         providing support to the “Norilsk Cadet Corps” Boarding School.        Novorybnoye settlement.
directly depend on the company’s business. I believe                                          purpose account to support people affected by forest             Currently the school hosts about 170 students from various
that the current management of MMC Norilsk Nickel                                             fires in Moscow Region. Of this amount, RUB 31 million           districts and towns of Krasnoyarsk Region, with one third of           Contribution to the development of Taimyr is a special priority
took the right approach.                                                                      was donated by Norilsk Nickel.                                   them coming from Norilsk, some – from low-income families.             of the Company’s charity strategy. In 2010, the Company
                                                                                                                                                               In 2010, OJSC Yenisei River Shipping Company donated training          supported the Greater Argish, a unique ethnic festival, whose
Corporate charity programs are implemented in all regions                                     The assistance provided to educational institutions is aimed     literature, materials for renovation, and upholstered furniture        participants included cultural institutions of Dudinka and
where the Group’s operations are based and are aimed                                          at the improvement of their infrastructure, enhancement of       to the institution.                                                    representatives of indigenous family communities of Taimyr. A
primarily at maintaining social stability in the respective                                   vocational guidance and physical education of students, and                                                                             newly established nomadic school was the third one to receive
regions and strengthening partner relations with the authorities                              creation of conditions for their comprehensive development.      Supporting vocational training institutions, where future              support from the Company. Financial support was provided to
and local communities. The Company has a dedicated Charity                                    The Company finances the purchase of equipment and other         specialists with relevant core skill sets are trained, is of           the Taimyr Regional Museum, Taimyr Veterinary Department,
Committee, which coordinates and oversees charity activities                                  goods on per need basis, as well as various events associated    particular importance to Yenisei River Shipping Company,               Taimyr Forest Service, Taimyr College, Tiyakha indigenous
of the Group’s entities.                                                                      with important dates and anniversaries of the institutions.      given the need to provide the company with the necessary               community, and Taimyr Society of People with Disabilities.
                                                                                                                                                               human resources and ensure staff succession. In 2010,
In 2010, the Company spent a total of over RUB 556.2 million                                  For several years the Company has financed the acquisition       the company financed providing meals to the students of
on charity programs and projects. In 2010, the total Group’s                                  of valuable presents given to graduates and first-graders        Vocational Lyceum #5 based in Podtesovo settlement, where a            Assistance to vulnerable social groups
                                                                                              of Norilsk and Dudinka municipal general schools on the          repair and maintenance base of the company is also located. In
1       The Company manages its corporate charity programs on a systematic basis. Corpo-      Graduation Day and the Knowledge Day by representatives of       addition to the main functions of the base, it is used for training    The Company provides substantial support to low-income
        rate documentation for each program includes a specific action plan prepared on the
        basis of stakeholders’ needs and preferences.                                         the sponsoring entities.                                         skilled specialists and re-training its employees.                     families, people with disabilities, specialized child care

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    RESPONSIBILITY REPORT                                                                                                                                                                                                                                                        RESPONSIBILITY REPORT
                     2010                                                                                                                                                                                                                                                        2010
institutions serving children with special needs, families with      Company’s employees residing in Norilsk and Taymyr Municipal        Kola MMC actively supports mass sports activities in the Kola         District, the Group’s operations develop relations with local
many children, pensioners, war veterans, and other vulnerable        District each received RUB 3.5 thousand as an allowance             Peninsula, sponsoring Kola MMC Hockey Club as well as various         businesses and contribute to the socio-economic development
social groups. In the reporting year, among other initiatives, the   associated with the anniversary of the Nickel Combine. The          regional, national, and international sports events, such as the      of the areas. For example, in 2010 OJSC Taimyrgaz spent RUB
Company supported the “Start in Life” adolescents’ vocational        Company’s Allowance Fund was supporting 6.8 thousand                Championship of Russia Ski Marathon in Monchegorsk, and               1.8 million on the development of social, cultural and service
training program aimed to expand employment opportunities            pensioners residing in the “mainland”, providing on average         traditional mass sports events in Murmansk Region – the Festival      facilities, the improvement of the living environment and
for young persons with disabilities and implemented by Victoria      RUB 685 per person on a quarterly basis as an addition to           of the North and the Friendship Ski Race of the Barents Region.       working conditions of indigenous communities of Yamal and
Center for Social and Psychological Rehabilitation of Children       their retirement pensions. The total expenditures of the Fund                                                                             Taimyr, and on environmental activities carried out jointly with
with Special Needs.                                                  amounted to some RUB 9.2 million.                                   The Company also pays much attention to supporting national           the municipal authorities of Tazovsky District.
                                                                                                                                         sports associations, the national Olympic movement, and the
                                                                     Kola MMC also has implemented a social program for the              development of children’s and youth sports in Russia.                 OJSC Norilskgazprom provides financial support to the
Yevgeny Muravyov,                                                    improvement of social security of non-working pensioners –                                                                                Boarding School #2, kindergartens, and municipal authorities
Director of the Polar Division                                       former employees of the company. In 2010, a total of RUB 7.1        In 2010, the Company provided financial support worth RUB             of Ust-Yeniseisky and Tazovsky Districts within the framework
of MMC Norilsk Nickel:                                               million was provided to 4.8 thousand former employees as            13.5 million to the Russian Swimming Federation. The support          of cooperation agreements. In 2010, the total spending on
                                                                     allowance for medical treatment, celebrating significant life       provided by the Company was aimed at the enhancement                  these projects amounted to almost RUB 3 million.
Almost RUB 15 billion will be invested in the social                 events, or as assistance in difficult life situations.              of the training infrastructure, improvement of the training
sphere of Norilsk. A significant portion of these funds                                                                                  system in order to produce world-class athletes, and ensuring         One of the key priorities of the Company’s charity activities
will be spent on the restoration and renovation of                   OJSC Yenisei River Shipping Company on a quarterly basis            successful participation of Russian swimmers in international         is targeted assistance for the mitigation of consequences
housing and engineering networks.                                    has been providing monetary allowance worth RUB 300 as              sports events.                                                        of natural disasters, environmental, industrial, and other
And, of course, all projects somehow associated with                 an addition to the retirement pension of each of its former                                                                               emergencies. In August 2010, the Company’s management
the construction of new social and consumer service                  employees – non-working pensioners. The program managed             In the reporting year, the decision was made to support Dinamo        made the decision to provide charitable assistance to those
facilities will help make life in Norilsk more comfortable.          by Siberian Interregional Non-State Pension Find is aimed at        volleyball club, one of the leading clubs in both the Russian         affected by forest fires in Moscow Region, and a transfer to
                                                                     the improvement of social protection and living standard of the     Volleyball Super League and the European Champions League.            the special purpose account of the Ministry of Social Security
                                                                     company’s veterans.                                                 The donation worth RUB 32 million was provided to support             of Moscow Region was made. Members of the Management
The Polar Division provided financial and organizational                                                                                 activities of the club in the field of children’s and youth sports,   Board of MMC Norilsk Nickel and Vladimir Strzhalkovsky,
support to the traditional charity action “Mage Good Things          In the reporting year, various entities of the Group financed       and to finance sports events and training activities of the club’s    General Director and Chairman of the Management Board,
Happen!”, conducted within the framework of a children’s             providing monetary allowance to veterans and supported              youth teams, a source of players for both the main Dinamo             made additional donations from their personal funds.
volunteer movement project, active since 2006. A number of           commemoration events associated with the 65th anniversary of        team and the national volleyball team.
child care institutions took part in the action, including Norilsk   the Victory in the Great Patriotic War. In particular, Murmansk
Children’s Home, Norilsk Special (Correctional) Boarding             Transport Branch provided funds to the Murmansk City                                                                                      Social and Charity Programs of Operations
School of the 8th Category, General Boarding School #2, and          Charity Fund, OJSC Archangelsk Commercial Seaport – to the          Contribution to the development of social                             in Africa
Victoria Center for Social and Psychological Rehabilitation of       Veterans’ Council of Archangelsk. OJSC Yenisei River Shipping       infrastructure
Children with Special Needs. The Polar Division provided prizes      Company provided financial support to its former employees –                                                                              Tati Nickel
to the institutions, which took part in the “Make Good Things        veterans of the war and the home front.                             The Company finances the modernization of components of social        Tati Nickel has a well-coordinated CSR program launched
Happen!” Review of Charity Projects; also providing jackets                                                                              infrastructure and other municipal facilities in Taimyr Municipal     in 2006 with a view to “promote a healthy, well-educated
and T-shirts branded with the action’s logo to the participants.                                                                         District. In particular, the Company spent RUB 37 million financing   and skilled community with enhanced employment and
The Company also financed the final cultural and entertainment       Contribution to the development of sports                           the renovation of the facade of a residential building in Norilsk     business opportunities”. Over the first three years of the
event for the children who took part in the action. The overall                                                                          (2, Leninsky Avenue) and Neptune Swimming Pool in Dudinka. In         program implementation the main strategy was to empower
cost of the program amounted to RUB 600 thousand.                    Contribution to the socio-economic development of the areas of      accordance with its earlier commitments, the Company continued        communities located in the vicinity of the mine (within 70
                                                                     operations, in particular within the framework of cooperation       to finance the modernization of a sports complex at Zapolyarnik       km), with the two priority areas being social investment
In 2010, the Company also continued to run its popular               programs and agreements with the regional and municipal             Stadium and a bus wash facility of the municipal public transport     (education, health and community development) and business
charitable project in Norilsk, providing daily hot meals to low-     authorities, is an important component of the Company’s social      company, spending RUB 17.2 million on these projects.                 development (commercial, industrial and agriculture).
income residents of the city. The Company was providing 200          policy.
meals on each workday at a total annual cost of RUB 3.4 million.                                                                         In order to support efforts of the municipal administration           TNMC maintains close ties with the Ministry of Education and
The Company provided monetary assistance to veterans of the          Within the framework of its partnership with the Norilsk            on the conservation of historical heritage, the Company               Skills Development, participating in a joint project initiated
Great Patriotic War and veterans’ widows on the Victory Day,         Municipal Administration, the Company co-finances a targeted        financed the renovation of the facade of a residential building       three years ago. The project known as the Performance
and monetary assistance to exonerated victims of repressions         program for the reconstruction and modernization of sports          at the crossing of 50 Years of October street and Bogdana             Improvement Project for Science and Math Subjects focuses
on the Day of Remembrance of the Victims of Political. The           facilities in the city. By the end of 2010, engineering surveys     Khmelnitskogo street. The Company also financed the                   on selected schools in the North East District, where Tati
overall cost of such support amounted to RUB 3.5 million.            and modernization project at the following municipal sports         renovation of the central entrance of Mayakovsky Norilsk Polar        Nickel itself is based. Under this project, six junior secondary
                                                                     facilities were carried out: the swimming pool and the Center       Theater and the installation of a fence around a building close       schools and two senior secondary schools have got their
The Company on a regular basis has provided assistance to            for Sports and Physical Training in Norilsk, as well as the Miner   to the Central Market. The Company spent a total of RUB 33.8          libraries equipped with computers with Internet connectivity
its former employees, residing both in Norilsk and Taymyr            Gym and Talnakh Sports Complex in Talnakh Neighborhood.             million on these projects.                                            and multi-media equipment to assist learning. Additional
Municipal District, and in other regions. RUB 25 million is          Renovation works were carried out at the Umka Indoor Rink                                                                                 computers with math and science software have been
budgeted annually for supporting 7 thousand pensioners –             and two children’s and youth sports schools. The Company            In cooperation with the authorities of Yamalo-Nenets                  installed in classrooms. Since 2009, Tati Nickel spent about
veterans of the Company. In 2010, 5.4 thousand retired               spent a total of RUB 40.3 million on supporting these projects.     Autonomous Okrug and Taimyr Dolgano-Nenets Municipal                  USD 1.2 million on this project, while the government ensured

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                    RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                    2010
the refurbishment of computer rooms and provided guidance
with regard to education policy.
                                                                      Nkomati has participated in the Eye Care program organized
                                                                      by the Department of Health and the Lions club. The program
                                                                                                                                          Objectives achieved in 2010 and new Objectives for 2011
                                                                      activities took place in Badplaas, Machadodorp and Waterval
Tati Nickel also sources interns to work at the mine under the        Boven areas. The project is a part of the worldwide VISION 2020:    Objectives for 2010                          Achievement of objectives                                 Objectives for 2011
Ministry of Labor and Home Affairs internship program for new         The Right to Sight initiative of the World Health Organization
                                                                                                                                          Development of the corporate social reporting system
graduates. The graduates are offered one-year internships to          (WHO), and is based on the Batho Pele Principles (People First).
                                                                                                                                          Continue the preparation of annual Corporate Social Responsibility Report of MMC Norilsk               Prepare Corporate Social Responsibility Report of MMC
gain necessary experience before competing for jobs in the labor      In line with these principles, health professionals came to the     Corporate Social Responsibility Reports.    Nickel 2010 was prepared.                                  Norilsk Nickel 2011.
market. The interns receive allowances from the government.           communities instead of waiting for clients to come to hospitals.    Development of the stakeholder engagement system
                                                                      The program was aimed at elderly people and children.               Build a system for interaction with newly A system for interaction with the elected heads of such      Expand and strengthen relations with legislative and
In 2010, a total of USD 181 thousand was spent on social              Spectacles sponsored by Nkomati were provided to community          elected municipal authorities of Pechenga municipalities as Pechenga District, Zapolyarny town,        executive government authorities and local self-
                                                                                                                                          District in Murmansk Region.                and Nickel settlement, members of municipal councils       government bodies in accordance with the Russian
development projects. Education was the main priority, and            members free of charge. Fifteen health professionals from the                                                   and heads of municipal administrations has been built.     legislation on the basis of partnership and two-way
two new “centers of excellence” were established at McConnel          Department of Health (two doctors, two optometrists, and 11                                                                                                                dialogue.
senior secondary school (Tutume village) and Masunga senior           ophthalmic nurses) and six volunteers from the Lions Club           Make consultations and negotiations of the The Company’s Collective Agreement Commission               Ensure regular and systematic consultations and
secondary school (Masunga village). Each school has been              of Nelspruit assisted by local staff took part in the project.      social partnership parties more regular    made 27 decisions on important corporate issues,            negotiations of the social partnership parties;
                                                                                                                                          and systematic; improve the effectiveness  and over 50 decisions on complaints and suggestions         improve the effectiveness of Collective Agreement
provided with 52 computers, computer desks and chairs, as             Overall, a total of 1600 community members benefited from           of Collective Agreement Commissions;       of individual employees. Based on these decisions,          Commissions; continue the practice of employee/
well as mathematics and science software. It is expected that         the project so far, including 1001 persons screened for different   continue the practice of employee/         a number of corporate regulations were amended,             management meetings in order to facilitate direct
the project will be officially handed over to the Ministry of         eye care condition, 331 persons provided with free spectacles,      management meetings in order to facilitate including the Regulation on Employee Remuneration           dialogue between the management and the personnel.
                                                                                                                                          direct dialogue between the management     and the Regulation on the Procedure of Reimbursement
Education and Skills Development by the end of May 2011.              244 persons treated for minor eye conditions, and 119 persons       and the personnel.                         of Vacation Travel Costs of Employees and Their Family
                                                                      referred to different hospitals within two municipalities for                                                  Members. The list of jobs and positions eligible for free
The Ipopeng mini-factories at Matshelagabedi were completed           cataract surgery.                                                                                              medical nutrition due to their exposure to hazardous
                                                                                                                                                                                     working conditions was expanded.
during 2010, with the total cost of the project since its inception                                                                                                                  In 2010, the reception desks on production, social, and
in 2008 being USD 122 thousand. The mini-factories were               In the reporting year, Nkomati mine provided significant                                                       labor issues received and reviewed over 27.0 thousand
donated by Tati Nickel to the Village Development Committee           charitable assistance to vulnerable social groups in the                                                       enquiries, suggestions, and complaints submitted
                                                                                                                                                                                     by employees. A total of 750 employee/management
(VDC). The initiative was aimed at creating a steady income for       surrounding local communities – children, including orphans,                                                   meetings attended by over 21.5 thousand employees
the VDC to enable it to engage in further village development         elderly people, etc. In particular, funds were donated to the                                                  were organized.
projects, and at creating employment opportunities within the         Emakhazeni Local Municipality for the HIV/AIDS campaign day         Contribution to the socio-economic development of the regions of operations
village, thereby improving the standard of living of its residents.   held in Machadodorp in June 2010 and to Mpumalanga Alliance         Sign a memorandum of cooperation Vladimir Strzhalkovsky, General Director of MMC Norilsk               Fulfill the obligations defined by the Program of the
                                                                      for Street Children during their annual conference held in          between the Company and the Krasnoyarsk Nickel, and Lev Kuznetsov, Governor of Krasnoyarsk             resettlement of residents of Norilsk and Dudinka
                                                                                                                                          Region Government on the development of Region, signed a cooperation agreement for the                 to regions with favorable environmental and socio-
In 2010, Tati Nickel made a number of other social donations,         Nelspruit. School uniforms and blankets were donated to over        an airline hub.                            development of airline services.                            economic conditions.
including donations to primary, junior and senior secondary           350 needy students in Machadodorp and Waterval Boven.                                                                                                                      Fulfill the obligations defined by the quadripartite
schools for different purposes, donations to crime prevention                                                                                                                                                                                    agreement on the modernization and development of
                                                                                                                                                                                                                                                 social facilities, utilities infrastructure, and housing in
committees across the country, coordinated by the Botswana            In 2010, the mine supported education of children in local                                                                                                                 Norilsk.
Police Service, as well as donations to the Chamber of Mines,         communities. In particular, Nkomati made payments to                                                                                                                       Take part in the tender for the development of deposits
local authorities across the country (councils, the Tribal            Waterval Boven’s Oorsteling Primary School and Machadodorp                                                                                                                 in Voronezh Region and sign a socio-economic
                                                                                                                                                                                                                                                 cooperation agreement between the Company and the
Administration etc.) and SOS Children’s villages.                     ChezonTeckna School to cover schools fees of orphans attending                                                                                                             regional government (in case of winning the tender).
                                                                      the schools. A donation was made to Vulingcondo Stimulation
A charity event worthy special mention was the inaugural              Centre for the orphans and disabled children.                       Investment development
General Manager’s Charity Walk held on May 28, 2010. The                                                                                                                                                                                         The Company’s investment budget for 2011 includes
purpose of the walk was to promote wellness, while at the             As a part of educational projects in the reporting year, 60                                                                                                                a total of RUB 4,357.5 million for the implementation
                                                                                                                                                                                                                                                 of socially oriented projects, including both existing
same time raising funds for supporting communities across the         math and science teachers were trained, ABET programs were                                                                                                                 projects to be continued and new projects to be
country. The event was a success as 1.1 thousand people took          delivered in 70 communities in Badplaas, and governing bodies                                                                                                              launched. Among others, the following projects will be
part in the 20 km walk from Matshelagabedi to the Tati Nickel         of local schools received training on school governance and                                                                                                                continued:
                                                                                                                                                                                                                                                 – reconstruction of the corporate “Zapolyarye” health
Recreation Club. A total of USD 9.8 thousand was raised as a          management principles.                                                                                                                                                     resort in Sochi;
result of the event and donated to different community entities.                                                                                                                                                                                 – “Our House” social program;
                                                                      During the 2010 Soccer World Cup, Nkomati provided public                                                                                                                  – construction of “Arena-Norilsk” sports and
                                                                                                                                                                                                                                                 entertainment complex in Norilsk;
Nkomati                                                               viewing areas in Badplaas, Waterval Boven and Ekulindeni.                                                                                                                  – program for the improvement of workplace amenities
In 2010, charity contributions of Nkomati increased three             Nkomati also made contributions to Embhuleni Royal House for                                                                                                               and services at the operations of MMC Norilsk Nickel.
times compared to 2009 (USD 27.5 thousand and 9 thousand              the refurbishment of an administration block, and to Mantjolo                                                                                                              The project for the construction of a swimming pool in
                                                                                                                                                                                                                                                 Norilsk will be re-launched.
respectively). The priorities of charity spending included public     Royal House for their traditional annual celebration.
health, education, and supporting vulnerable social groups.

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RESPONSIBILITY REPORT                                                                                                                                                                                                                                                           RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                                           2010
Objectives for 2010                         Achievement of objectives                                     Objectives for 2011                                           Objectives for 2010                             Achievement of objectives                                      Objectives for 2011
Transport independence                                                                                                                                                  Occupational health and safety
Expand the geography of Taimyr Airline      The creation of the Company’s own Taimyr Airline had a        Complete the construction of the Arctic reinforced ice-       Continue the improvement of the OHS A number of measures were introduced:                                      Consolidate OHS departments of the operations of the
services to support travels of employees    positive effect on the pricing policy in the Norilsk market   class tanker (ARC 7) with a cargo-carrying capacity           management system.                            – mandatory personal participation of heads of structural        Polar Division into a centralized OHS service of the
and their family members to and from        of airline services and helped stabilize the prices in        of 15 thousand tonnes, which will deliver fuel and                                                          units in OHS inspections;                                        Division with subsequent optimization of the service.
vacation destinations.                      Krasnoyarsk Region. To better meet employee needs,            lubricants to the Norilsk Industrial District and transport                                                 – introduction of a corporate OHS oversight system,              Carry out OHS inspection (audits) at the operations of
                                            in 2010 the company expanded the geography of its             gas condensate produced at the Pelyatkisnkoye field to                                                      which involves the assignment of territorial and/or              the Norilsk Nickel Group.
                                            operations, introducing direct services between Norilsk       customers, and put it into service. Start the construction                                                  structural units to specific managers or specialists of
                                            and St. Petersburg and between Norilsk and Sochi.             of a new fuel storage terminal in Archangelsk.                                                              production divisions or functions, and the oversight
                                                                                                          Undertake a modernization of the Company’s fleet:                                                           of unsafe acts of employees and behavioral risks by
                                                                                                          equip the existing Arctic container ships with on-board                                                     responsible groups and managers.
                                                                                                          cranes with 40 tonnes lifting capacity each.                  Continue the development of corporate The corporate standard “The Procedure of Technical                       Continue the development of corporate policies and
                                                                                                          Complete the first stage of the construction of the           policies and standards regarding the OHS Investigation of Causes of Accidents and Incidents                    standards regarding the OHS Management System.
                                                                                                          Company’s own transshipment terminal in Murmansk.             Management System.                            at the Facilities Overseen by the Federal Service for
                                                                                                          During the subsequent modernization, the terminal will                                                      Environmental, Nuclear, and Technological Supervision”
                                                                                                          continue to handle cargo at an increased capacity of 200                                                    was developed and enacted; the standard “Procedure of
                                                                                                          thousand tonnes per year.                                                                                   Informing, Record-Keeping and Reporting in the Field
                                                                                                          Continue expanding container shipping of the Company’s                                                      of Occupational Health and Safety” was amended and
                                                                                                          cargo (construction of 1,500 ISO 1CX containers).                                                           updated.
                                                                                                          Implement a logistics scheme for supplying Russian
                                                                                                          processing operations of the Company with materials           Prepare and review, with the involvement Materials on the OHS performance in 2009, an analysis                 Prepare and review, with the involvement of the
                                                                                                          produced at the Company’s foreign assets.                     of the management of the Company and of incidents involving injuries, and proposals on reducing                management of the Company and its entities, an
                                                                                                                                                                        its entities located in the key areas of occupational injury rate were prepared and submitted to               analysis of incidents involving injuries at the Group’s
Environmental protection                                                                                                                                                operations (Norilsk Industrial District the Company’s management. Based on these materials,                    operations, and proposals on reducing occupational
Achieve reduction in the overall In the reporting year, the Group’s operations were Achieve a reduction in the overall environmental impact                             and Kola sites), an analysis of incidents a videoconference of the Company’s management and                    injury rate and strengthening OHS oversight at the
environmental impact of the Company’s implementing measures aimed at the reduction of of the Company’s operations.                                                      involving injuries at the Group’s operations, representatives of the Occupational Injury Prevention            workplace.
operations.                           adverse environmental impacts. The overall operating                                                                              and proposals on reducing occupational Committee with the heads and OHS specialists of the
                                      environmental expenditures increased by 11.3%                                                                                     injury rate and strengthening OHS oversight Group’s production units based in the key areas of
                                      compared to the previous year reaching RUB 12.5 billion.                                                                          at the workplace.                             operations (Norilsk Industrial District and Kola sites) was
                                            The overall pollutant emissions into the air across the                                                                     Personnel development
                                            Group was reduced by 25.3 thousand tonnes (emissions
                                            of the Polar Division – by 34.7 thousand tonnes,                                                                            Maintain the achieved level of employee In the reporting year, additional professional training                Improve the corporate personnel training and
                                            emissions of sulphur dioxide by the Polar Division – by                                                                     professional training, re-training, and skill was received by over 31.9 thousand employees of the              development system, using modern training methods
                                            36.6 thousand tonnes).                                                                                                      upgrading in the Group.                       Russian entities of the Group (about 40% of the average          and equipment. Ensure training condition as close to
                                                                                                                                                                                                                      headcount), including over 19.8 thousand workers.                real operations as possible.
                                            The overall water withdrawal across the Group                                                                                                                             In 2010, the Kola Personnel Development Center, started          On the basis of the Production Development Strategy
                                            decreased by 7.4 million m3, the amount of recycled                                                                                                                       providing training services. In the reporting year, some         until 2025, prepare the HR Development Strategy,
                                            and reused water increased by 10.8 million m3. The                                                                                                                        2 thousand persons received training at the center.              taking into account innovative training methods and
                                            amount of wastewater treated to the standard quality                                                                                                                                                                                       modern equipment, potential turnover, expected
                                            at the treatment facilities increased 2.8 times; the                                                                                                                                                                                       trends in the age and qualitative structure of the staff,
                                            overall weight of pollutants discharged to water bodies                                                                                                                                                                                    migration processes, and potential personnel retention
                                            decreased by 23.0 thousand tonnes.                                                                                                                                                                                                         measures.
Product responsibility                                                                                                                                                  Improvement of the staff motivation
Maintain the integrity of the IQEMS in the As was demonstrated by the findings of a surveillance          Development of the IQEMS by expanding the area of             Ensure a competitive remuneration level. Plan   In 2010, the average monthly salary at the Russian             Ensure a competitive remuneration level. An overall
process of changes in the organizational audit conducted by Bureau Veritas Certification at the           certification to additional processes, activities, and        an overall increase in the employee income up   Group’s entities grew by 14.7% compared to the previous        increase in the employee income by 8–10% compared
structure of OJSC MMC Norilsk Nickel.       Head Office, the Polar Division, and the Polar Transport      units of the Company.                                         to 10% compared to 2009.                        year.                                                          to 2010 is planned.
                                            Branch in 2010:                                                                                                             The main focus will be on increasing the        In order to increase the guaranteed component of the           Within the framework of the HR Development
Mutual linking of performance indicators of 1) the declared certification area “Production, project                                                                     base (guaranteed) component of the salary       salary, the key operations of the Group introduced             Strategy, develop new mechanisms for improving the
the IQEMS processes and key performance management, sales and delivery of products (nickel,                                                                             by introducing new base rates at certain        new base rates. In order to improve employee social            attractiveness of jobs at the Russian entities of the
indicators of the business units.           copper, cobalt, precious metals, sulphur, selenium,                                                                         Group’s entities, and on modifying the          protection, the Company has decided to increase the            Group.
                                            tellurium)” conforms to the Company’s activities.                                                                           existing rewarding system in order to provide   share of the fixed component in the total salary to 70%,
                                            2) the Company’s IQEMS complies with the requirements                                                                       incentives for employees to contribute to the   beginning December 1, 2010. This means that the variable
                                            of ISO 9001:2008 and ISO 14001:2004 standards.                                                                              achievement of the Company’s short-term         salary component will not exceed 30%. The respective
                                            In the process of annual management reviews of the                                                                          and strategic goals and objectives, and to      amendments to the Collective Agreement of OJSC MMC
                                            IQEMS, the adequacy of the process/activity performance                                                                     improve their productivity.                     Norilsk Nickel were made.
                                            criteria is evaluated, and the criteria are modified to                                                                     Make amendments to the Procedure of
                                            accommodate changing circumstances.                                                                                         Formation of Collective Incentive Funds
                                                                                                                                                                        (develop a new draft).
Update IQEMS documents and requirements IQEMS documents were updated in the following key                 Adapt IQEMS documents and requirements concerning
concerning IQEMS processes/rules, taking areas, taking into account the results of reviewing              IQEMS processes/rules, taking into account                    Improve the effectiveness of corporate          In 2010, over 1.2 thousand persons took part in                Continue the implementation of relevant targeted
into account organizational and structural environmental management activities of various units           organizational and structural changes in the Company.         programs aimed at the attraction and            corporate programs aimed at personnel attraction and           programs for the attraction and selection of prospective
changes in the Company.                     and changes in the Company’s organizational structure:                                                                      retention of young employees.                   adaptation. The Company revised the corporate policies         employees in line with the existing and expected
                                            1) general IQEMS Manual;                                                                                                                                                    and standards regulating programs aimed at attracting          workforce demands, specific requirements arising from
                                            2) IQEMS planning an analysis;                                                                                                                                              young workers and specialists. In particular, it introduced    the nature of the Company’s operations, and trends in
                                            3) analysis of customer satisfaction.                                                                                                                                       standards for the organization of three corporate              the labor market. Introduce additional mechanisms
                                                                                                                                                                                                                        programs, including “Intern”, “Worker Succession”, and         for the attraction and selection of young workers and
                                                                                                                                                                                                                        “Professional Start”, based on the requirements of ISO         specialists and strengthening their motivation for
                                                                                                                                                                                                                        9001:2008 and ISO 14001:2004 international standards.          working with the Company (corporate stipends for
                                                                                                                                                                                                                        In particular, the upper age limit for the participation was   students of educational institutions).
                                                                                                                                                                                                                        increased to 30 years.

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                 2010                                                                                                                                                                                                                                                                                                2010
Objectives for 2010                          Achievement of objectives                                  Objectives for 2011
                                                                                                                                                                   Conclusion of the RUIE Non-Financial Reporting
Personnel recuperation
Increase the overall number of subsidized   Over 20 thousand subsidized vouchers for the recreation     Retain all the existing corporate personnel recuperation   Council on the Findings of the Review of the Corporate
recreation vouchers, and implement a
system of measures to improve the quality
                                            at “Zapolyarye” Health Resort was provided to employees
                                            and their family members. A system of measures to
                                                                                                        and recreation programs.
                                                                                                        Continue phased reconstruction of “Zapolyarye” Health      Social Responsibility Report of MMC Norilsk Nickel
                                                                                                                                                                   2010 for the Purpose of Public Verification
of recreation and health services provided  improve the quality of services was implemented.            Resort and activities aimed at the improvement of the
to the employees and their family members   For children of the Company’s employees, summer             quality of services.
at “Zapolyarye” Health Resort.              recreation at the “Vita” children’s health resort located
                                            on the Black Sea coast (Anapa Town) and a sports and        Increase the total number of employees participating
Improve the quality of the children’s recuperation camp in Tula Region (Aleksin Town) was               in the corporate recuperation and recreation programs,
recreation and health improvement organized. An important social factor was the decision                including the international tourism program.
program.                                    of the Company’s management to fully cover the costs                                                                   The Non-Financial Reporting Council of the Russian Union of          It is MMC Norilsk Nickel that is responsible for the information
                                            of children’s travel to health resorts and summer camps.    Expand the geography of employee recreation in
Further develop the corporate international Under this program, recreation services were provided to    the Russian Federation; increase the number of
                                                                                                                                                                   Industrialists and Entrepreneurs (hereinafter the Council),          and statements included in the Report. Reliability and accuracy
tourism program by expanding its over 1,3 thousand children.                                            independent resorts available to employees.                established pursuant to the decision of the Bureau of the            of the factual data presented in the Report was not subject to
geography and the number of participants. The Company continued to expand the corporate                                                                            RUIE Board (Resolution dated June 28, 2007), reviewed the            the public verification.
                                            international tourism program. Over 3.6 thousand
Expand the geography of Taimyr Airline employees and their family members participated in the
                                                                                                                                                                   Corporate Social Responsibility Report of MMC Norilsk Nickel
services,    while     applying     various program, spending their vacations in Bulgaria, Spain, and                                                              2010 (hereinafter the Report or CSR Report) at the request           This Conclusion was prepared for MMC Norilsk Nickel. The
mechanisms of subsidizing vacation travel Egypt.                                                                                                                   of MMC Norilsk Nickel (hereinafter the Company, the Group,           latter may use this Conclusion both internally and in the
costs (airfares) of employees and their Some 1.7 thousand persons spent their vacations and
family members.                             improved their health at independent resorts, including
                                                                                                                                                                   or Norilsk Nickel). The Company asked the RUIE to provide            context of external stakeholder relations, publishing it without
                                            those based in Altai Region and in the Caucasian Mineral                                                               the public verification of the Report by the Council, which          any changes.
                                            Waters resort region. The duration of a standard                                                                       assesses completeness and relevance of the information on
                                            recreation plan provided by these resorts was increased
                                            from 18 to 21 days.
                                                                                                                                                                   the performance of Norilsk Nickel presented in the Report,
Development of the corporate pension system
                                                                                                                                                                   using principles of the Social Charter of Russian Business as        FINDINGS
Facilitate further development of the The Company provides information support of the                   Continue the improvement of the corporate pension          a benchmark.
corporate system of occupational Program for State Co-Financing of the Accumulation                     system, while retaining its basic principles – voluntary                                                                        Based on the review of the Report, public information available
funded pension schemes available to the Part of the Retirement Pension, helping its employees           participation, accessibility, and employee/employer        Between April 20 and May 20, 2010, Council members reviewed          at the official corporate website of Norilsk Nickel, and collective
Company’s employees, in particular, by increase the size of their future pension. By the end of         co-financing of pension plans – in the new schemes.
introducing mechanisms of employee/ 2010, some 4.2 thousand employees of the Russian                    Expand the range of corporate pension schemes offered      the Report provided by MMC Norilsk Nickel and prepared               discussion of findings of the independent assessment carried
employer co-funding of pension plans.       Group’s entities took part in the program.                  to employees.                                              this Conclusion in accordance with the Procedure of Public           out by members of the RUIE Non-Financial Reporting Council,
                                                                                                                                                                   Verification of Corporate Non-Financial Reports approved             the Council assures the following:
                                                                                                                                                                   by the Council. The Council members have the required
                                                                                                                                                                   competence in the field of corporate social responsibility,          The Corporate Social Responsibility Report of MMC Norilsk
                                                                                                                                                                   sustainability, and non-financial reporting; comply with ethical     Nickel 2010 contains relevant information, covers all the
                                                                                                                                                                   standards regarding independence and objectivity of their            major areas of corporate social responsibility with regard to
                                                                                                                                                                   judgement; express their expert opinion rather than views of         the Russian assets and the key areas with regard to foreign
                                                                                                                                                                   the organizations they represent.                                    assets in accordance with the principles of the Social
                                                                                                                                                                                                                                        Charter of Russian Business, and discloses the information
                                                                                                                                                                   The Report was reviewed in terms of relevance and                    about the Group’s activities in these areas with a fair degree
                                                                                                                                                                   completeness of its content based on the following criteria:         of completeness.

                                                                                                                                                                   Information is considered relevant if it reflects the company’s      The recommendations offered by the RUIE Non-Financial
                                                                                                                                                                   activities on the implementation of the responsible business         Reporting Council based on the findings of the public
                                                                                                                                                                   practice principles as defined by the Social Charter of Russian      verification of the CSR Report of MMC Norilsk Nickel
                                                                                                                                                                   Business (                                              2009 were considered in preparing the 2010 Report. In
                                                                                                                                                                                                                                        particular, the reporting boundary was expanded, more
                                                                                                                                                                   Completeness implies a comprehensive representation of               complete information on the assets covered by the
                                                                                                                                                                   the company’s performance, including values and strategic            Report was provided, and measures to ensure better
                                                                                                                                                                   objectives guiding its activities, governance and management         comparability of information over time were taken.
                                                                                                                                                                   systems and structures, key achievements and results, as well
                                                                                                                                                                   as the stakeholder engagement system.                                The Group’s CSR Report 2010 contains relevant information on
                                                                                                                                                                                                                                        the following aspects of corporate social responsibility:
                                                                                                                                                                   The use of international reporting frameworks by the Company
                                                                                                                                                                   was a significant positive factor taken into account in the course   Economic freedom and responsibility: The Report presents
                                                                                                                                                                   of the public verification of the Report. However, verification of   the key indicators of the Group’s operational and financial
                                                                                                                                                                   the level of compliance with international reporting standards       performance in 2010 and other relevant information, which
                                                                                                                                                                   and frameworks is beyond the scope of this Conclusion.               reflects the Group’s national and global significance as a major
                                                                                                                                                                                                                                        producer of base and precious metals, taxpayer, employer, and

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customer of products of other economic sectors. The priorities      cooperation with government authorities in other countries of       introduction of an integrated environmental reporting system        of the information presented both with the previous Group’s
and key areas of the implementation of investment projects          operations with due account of the local context is provided.       encompassing all the Russian operations of the Group and on         reports and with CSR reports of other companies.
in Russia and abroad are described. The Report contains                                                                                 surveillance audits conducted at these operations on a regular
the information on the Group’s efforts to ensure the energy         The Report describes the Group’s approach to shareholder and        basis in order to confirm compliance of their environmental and
and transport security, viewed as important priorities of the       customer relations, also providing some information about the       quality management systems with the respective international        RECOMMENDATIONS
corporate business strategy. Information about measures             dividend policy and activities aimed at keeping the investment      standards. All production operations of the foreign Group’s
aimed at the improvement of the efficiency of operations            community informed of the Group’s strategy and performance.         assets also have ISO 14001 certifications in place and undergo      While acknowledging the Report’s strengths, the Council
and product quality is available. As stated in the Report, the                                                                          surveillance audits on a regular basis.                             draws the attention of MMC Norilsk Nickel to several aspects
corporate policy with regard to product safety and quality has      The reader is informed of the Group’s practice of prequalifying                                                                         of disclosure relevance and completeness, considering them
been formulated and implemented in accordance with the              potential providers of goods and services based on their            An important aspect covered by the Report is continued              as significant to the stakeholders, and recommends to take
relevant international standards and requirements. Corporate        conformance to the principles of responsible business conduct,      cooperation with a range of organizations, including nature         them into account in the subsequent CRS reporting cycles.
initiatives on the introduction of energy efficient and renewable   and of the Group’s approach to customer relations based on          reserves, on the motoring and restoration of biodiversity in the
energy based products are described. The Report summarizes          corporate sales standards. Information on the improvement of        northern areas of operations.                                       It is worth noting that the recommendations offered on the
the results of the product lifecycle assessment, including          the results of regular surveys measuring customer satisfaction                                                                          basis of the review of the Norilsk Nickel’s Corporate Social
information about the risks managed by MMC Norilsk Nickel at        with the quality of products and business relations with the        Contribution to local community development: The Report             Responsibility Report 2009 remain relevant and can be used in
each lifecycle stage.                                               Group’s companies is also provided.                                 contains a large body of information about the Company’s            the Company’s reporting processes in the future. In addition, it
                                                                                                                                        activities aimed at supporting community development and major      is important to pay attention to the following aspects.
The Report outlines the key corporate documents defining the        The Report contains a number of examples of the Group’s             corporate social programmes targeting local communities. The
Group’s sustainability strategy with regard to the key areas        cooperation with Russian and international entities, including      reader is informed of the main areas of the Group’s contribution    In line with the best non-financial reporting practices, MMC
of its activities. Sustainability management approaches are         various civil society organizations, on the basis of cooperation    to the development of its regions of operations on the basis of     Norilsk Nickel has been continuously expanding the reporting
presented in the context of the corporate governance system         agreements in such fields as education, research and                Socio-Economic Cooperation Agreements with the respective           boundary, encompassing more assets, both Russian and
and the operational management system. The section on the           development, culture, and the implementation of joint socio-        regional and municipal governments. These agreements                foreign, and covering more aspects of their performance. In
corporate governance has been expanded substantially. The           economic and environmental projects.                                provide a general framework for the design and implementation       order to make it easier for the reader to deal with a growing
Report contains detailed information about the key elements                                                                             of specific projects aimed at the development of social             amount of information, it is recommended to use a presentation
of the corporate risk management system as the foundation           Human rights: MMC Norilsk Nickel declares its commitment            infrastructure and improvement of the living conditions in the      format based on the “bottom-up” principle. For example,
of the Group’s sustainable development. Information about the       to the prevention of any forms of discrimination or violation       Group’s regions of operations, assistance to minority indigenous    the Report could provide information on the promotion of the
Group’s efforts on strengthening ethical business conduct in its    of human rights, and to the observance of human rights in           communities of the Far North, other social investments and          Group’s shared corporate culture at these assets, stakeholder
stakeholder relations is also available.                            accordance with the Constitution of the Russian Federation,         charity projects. Examples of charity projects implemented by       engagement approaches, selection of priority community
                                                                    ILO conventions, and the national legislation of the countries of   the Group’s operations based in Africa are also provided.           development projects and material topics for CSR reporting,
Business partnership: The Report describes the Group’s              operations. The Report presents the Group’s practices in such                                                                           taking into account the degree of asset integration.
approach to business partnership and engagement with a              areas as observance of labor rights, protection of the employee     Overall, the material presented in the Report reflects consistent
broad range of stakeholders in Russia and abroad, outlining the     health, and the improvement of environmental conditions in the      efforts of MMC Norilsk Nickel on integrating the corporate          It is recommended to provide a more detailed coverage of the
key principles of the Group’s policy in this area. Engagement       regions of operations both within Russia and abroad.                social responsibility principles into its business practice. The    CSR and sustainability decision-making system in the context
approaches and methods targeting different stakeholder                                                                                  Report contains information on strategic development goals,         of the Group’s overall corporate governance system. A simple
groups are presented. The reader is informed of regular             Environmental performance: The Report describes the                 principles, and priorities guiding the Group’s activities with      organizational chart or a list without additional information on
surveys conducted in order to study stakeholders’ opinions          Group’s management approaches, practices, and performance           regard to the three pillars of sustainability. In particular, the   the delineation of responsibilities is not sufficient for developing
regarding the Group’s companies and to receive stakeholder          in the field of environmental safety, industrial safety, and        reader is informed of the Group’s stakeholder engagement            a clear understanding of the effectiveness of the corporate
feedback.                                                           environmental protection in much detail. The main priorities        practices and management systems, including the corporate           governance and management system at the main levels of the
                                                                    of the Group’s environmental policy are outlined. Information       risk management model encompassing, among others, non-              decision-making hierarchy. It is also important to explain how
The Report addresses in detail various aspects of employee          on the continuous improvement of the corporate Integrated           financial risks, and therefore having direct relevance to the       and in what form different stakeholders are engaged in the
relations, including the development of the human resource          Quality and Environmental Management System (IQEMS), as             responsibility of MMC Norilsk Nickel to the society.                corporate processes of determining priority objectives.
potential, employee training and professional development,          well as measures taken and results achieved in this area is
and available opportunities for employees to participate in         provided. The reader is informed of the Company’s intention         The Report is an evidence of the continuous development of the      The availability of detailed information about the Group’s risk
corporate social programs. Occupational health and safety is        to take due account of the priorities of resource efficiency in     corporate CSR reporting process. A large number of specific         management approaches can be viewed as a strength of the
indentified as a priority topic, and the respective management      pursuing its business objectives, and of energy efficiency          indicators representing the economic, social, and environmental     report. This information can be made even more valuable to
approaches and systems are discussed in sufficient detail.          and conservation measures implemented at the Russian                performance of the Group are provided. The recommendations          stakeholders by adding a description of how the system is
                                                                    operations of the Group. The environmental performance              of the RUIE Non-Financial Reporting Council based on the            functioning in practice, including specific examples of the
The Report provides information on the Group’s participation        is represented by a broad range of indicators measuring             findings of the public verification of the 2009 CSR Report were     identification, assessment, and handling of specific risks. Such
in public-private partnerships with government authorities          significant environmental impacts of the Group’s operations.        used in preparing the 2010 Report.                                  specific information will help better understand the Group’s
aimed at the implementation of large-scale initiatives,             Taking into account the principle of balance, the Report not only                                                                       approach toward managing its responsibility.
including the resettlement of the Norilsk Nickel veterans from      provides information on the reduction of environment impacts        MMC Norilsk Nickel for several years has been constantly using
Polar regions to areas with favourable climate conditions, and      (air and water pollution, waste generation and disposal),           a number of recognized international and Russian reporting          In the future, it would be helpful to explain in more detail
the modernization of social facilities, utilities infrastructure,   but also describes some problematic aspects in the field of         frameworks (IFRS, GRI, RUIE Basic Indicators, AA1000 standards)     the relationship between the Environmental Management
and housing. Information on the Group’s approaches toward           energy conservation. The Report contains information on the         in preparing its CSR reports. This helps ensure the comparability   System (EMS) and the Integrated Quality and Environmental

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    CORPORATE SOCIAL                                                                                                                                                                                                                                    CORPORATE SOCIAL
RESPONSIBILITY REPORT                                                                                                                                                                                                                                   RESPONSIBILITY REPORT
                 2010                                                                                                                                                                                                                                   2010
Management System so that stakeholders are able to better
understand how the two systems are related to each other,
                                                                  efficiency and energy conservation – an important policy goal
                                                                  set by the government.
                                                                                                                                    Annex 1. GRI and RUIE Basic Performance Indicators
how they influence each other, and in what order they are                                                                           Content Index
implemented. This would allow to evaluate the benefits of         In addition to this public verification carried out by the RUIE
using an integrated system for managing environmental             Non-Financial Reporting Council, the Company is advised to
aspects of the Group’s operations.                                hold public hearings open to all stakeholders and involving
                                                                  a presentation of the Report. Public hearings involving           GRI Application Level
The Report presents the information on the achievement            presentation of the main messages of the Report will help
                                                                                                                                                                          C                  C+                   B                     B+                A                 A+
of the Group’s objectives in 2010 and new objectives set          determine material topics for reporting, while at the same time
for 2011 in a convenient and detailed enough manner.              strengthening the reputation of the Group as an organization      Self Declared
However, such information could be made more convincing           open to the dialogue with all stakeholder groups.
by complementing it with measurable quantitative indicators
allowing to evaluate the results achieved against the goals       The Corporate Social Responsibility Report 2010 is the seventh
and objectives set. A similar recommendation can be applied       annual corporate non-financial report prepared by MMC
                                                                                                                                    Third Party Checked                                                                                                   -
to the presentation of the key economic, environmental, and       Norilsk Nickel, which demonstrates the Group’s commitment
                                                                                                                                    GRI Checked                                                                                                           -
social performance indicators. It would be helpful to not only    to the improvement of its transparency and openness on a
show how the indicators change with time, but also disclose       continuous and consistent basis.
the respective targets, which would provide for a better                                                                            GRI disclosure RUIE basic            Disclosure (indicator) definition                              Report section/explanation                Pages
                                                                                                                                    or indicator   performance indicator
understanding of the Group’s performance.                         The RUIE Non-Financial Reporting Council positively evaluates
                                                                  the report and, acknowledging its good quality, supports          1. Strategy and Analysis
The Report is intended to show stakeholders that the Company      the Company’s commitment to the principles of responsible         1.1.                                  Statement from the most senior decision- maker of the Message from the General Director of MMC          4-5
                                                                                                                                                                          organization about the relevance of sustainability to the Norilsk Nickel
is aware of the challenges faced by it and takes steps to         business conduct and sustainability reporting. The Council                                              organization and its strategy
tackle them. In this regard and in order to ensure a consistent   confirms that the Corporate Social Responsibility Report of MMC   1.2.                                  Description of key impacts, risks, and opportunities      1.2. Sustainability Governance and            16-24
application of the principle of balance, it is recommended to     Norilsk Nickel 2010 has received public assurance.                                                                                                                Management System,
pay more attention to describing the challenges faced by the                                                                                                                                                                        Achievement of Objectives Set for 2010 and    113-116
                                                                                                                                                                                                                                    New Objectives for 2011
operations of MMC Norilsk Nickel and approaches toward
                                                                                                                                    2. Organizational Profile
addressing these challenges in the future reports. Providing
                                                                                                                                    2.1.                                  Name of the organization                                    About Norilsk Nickel                        6-8
information on addressing relevant enquiries from different       Chairman of the RUIE Non-Financial Reporting Council
                                                                                                                                    2.2.                                  Primary brands, products, and/or services                   2.6. Product Responsibility,                48-51
stakeholder groups will also help make the future reports         F.T. Prokopov                                                                                                                                                       Annex 2                                     126-130
more complete and compelling.                                                                                                       2.3.                                  Operational structure of the organization, including main About Norilsk Nickel,                         6-8
                                                                                                                                                                          divisions, operating companies, subsidiaries, and joint Annex 4                                         136-137
The future reports can be made more informative by linking                                                                                                                ventures
                                                                                                                                    2.4.                                  Location of organization’s headquarters                     About Norilsk Nickel,                       6-8
the information about the Group’s activities to the relevant                                                                                                                                                                          Contact Information                         142
major events in the external environment (changes in the sales    Deputy Chairman of the RUIE                                       2.5.                                  Number of countries where the organization operates, About Norilsk Nickel                               6-8
markets or legal framework, new policies and initiatives, like    Non-Financial Reporting Council,                                                                        and names of countries with either major operations or
the Climate Doctrine of the Russian Federation etc.). This will   Executive Secretary                                                                                     that are specifically relevant to the sustainability issues
                                                                                                                                                                          covered in the report
underscore the connection between the Group’s actions and         E.N. Feoktistova
                                                                                                                                    2.6.                                  Nature of ownership and legal form                          About Norilsk Nickel                        6-8
the external agenda. The reports can also be improved by
                                                                                                                                    2.7.                                  Markets served (including geographic breakdown, About Norilsk Nickel                                    6-8
including more detailed information on the Company’s vision,                                                                                                              sectors served, and types of customers/beneficiaries)
strategy and position with regard to the improvement of energy                                                                      2.8.                                  Scale of the reporting organization                         About Norilsk Nickel                        6-8
                                                                                                                                    2.9.                                  Significant changes during the reporting period regarding About Norilsk Nickel,                         6-8
                                                                                                                                                                          size, structure, or ownership                               1.2. Sustainability Governance and          16-24
                                                                                                                                                                                                                                      Management System,
                                                                                                                                                                                                                                      Annex 2                                     126-130
                                                                                                                                    2.10.                                 Awards received in the reporting period                     About Norilsk Nickel                        6-8
                                                                                                                                    3. Report Parameters
                                                                                                                                    3.1.                                  Reporting period for information provided                     Reporting Boundary and Principles         13-14
                                                                                                                                    3.2.                                  Date of the most recent previous report (if any)              Reporting Boundary and Principles         13-14
                                                                                                                                    3.3.                                  Reporting cycle                                               Reporting Boundary and Principles         13-14
                                                                                                                                    3.4.                                  Contact point for questions regarding the report or its       Contact Information                       142
                                                                                                                                    3.5.                                  Process for defining report content                           Reporting Boundary and Principles         13-14
                                                                                                                                    3.6.                                  Boundary of the report (e.g., countries, divisions,           Reporting Boundary and Principles         13-14
                                                                                                                                                                          subsidiaries, leased facilities, joint ventures, suppliers)

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GRI disclosure RUIE basic            Disclosure (indicator) definition                               Report section/explanation                  Pages     GRI disclosure RUIE basic            Disclosure (indicator) definition                               Report section/explanation                  Pages
or indicator   performance indicator                                                                                                                       or indicator   performance indicator
3.7.                                 Any specific limitations on the scope or boundary of the        Reporting Boundary and Principles           13-14     4.11.                               Explanation of whether and how the precautionary                 Not applicable
                                     report                                                                                                                                                    approach or principle is addressed by the organization
3.8.                                 Basis for reporting on joint ventures, subsidiaries, leased     Reporting Boundary and Principles           13-14     4.12.                               Externally developed economic, environmental, and                1.4. Stakeholder Engagement                 27-33
                                     facilities, outsourced operations, and other entities that                                                                                                social charters, principles, or other initiatives to which
                                     can significantly affect comparability from period to                                                                                                     the organization subscribes or endorses
                                     period and/or between organizations                                                                                   4.13.                               Memberships in associations (such as industry                    1.4. Stakeholder Engagement                 27-33
3.9.                                 Data measurement techniques and the bases of                    Reporting Boundary and Principles           13-14                                         associations) and/or national/international advocacy
                                     calculations, including assumptions and techniques                                                                                                        organizations
                                     underlying estimations applied to the compilation of the                                                              4.14.                               List of stakeholder groups engaged by the organization           1.4. Stakeholder Engagement                 27-33
                                     Indicators and other information in the report
                                                                                                                                                           4.15.                               Basis for identification and selection of stakeholders           1.4. Stakeholder Engagement                 27-33
3.10.                                Explanation of the effect of any re- statements of              Reporting Boundary and Principles           13-14                                         with whom to engage
                                     information provided in earlier reports, and the reasons
                                     for such re- statement (e.g., mergers/acquisitions,                                                                   4.16.                               Approaches to stakeholder engagement, including                  1.4. Stakeholder Engagement                 27-33
                                     change of base years/periods, nature of business,                                                                                                         frequency of engagement by type and by stakeholder
                                     measurement methods)                                                                                                                                      group
3.11.                                Significant changes from previous reporting periods in          Reporting Boundary and Principles           13-14     4.17.                               Key topics and concerns that have been raised through            1.4. Stakeholder Engagement                 27-33
                                     the scope, boundary, or measurement methods applied                                                                                                       stakeholder engagement, and how the organization has
                                     in the report                                                                                                                                             responded to those key topics and concerns, including
                                                                                                                                                                                               through its reporting
3.12.                                Table identifying the location of the Standard Disclosures      Annex 1                                     121-125
                                     in the report                                                                                                         Management Approach and Performance Indicators
3.13.                                Policy and current practice with regard to seeking              Reporting Boundary and Principles           13-14     Economic Performance Indicators
                                     external assurance for the report                                                                                     EC             1.1                  Management Approach                                              1.2. Sustainability Governance and          16-24
4. Governance, Commitments, and Engagement                                                                                                                                                                                                                      Management System
4.1.                                 Governance structure of the organization, including             1.2. Sustainability Governance and          16-24     EC1               1.2                   Direct economic value generated and distributed,             2.1. Economic Policy and Economic           34-37
                                     committees under the highest governance body                    Management System                                                       1.3                   including revenues, operating costs, employee                Performance,
                                     responsible for specific tasks, such as setting strategy                                                                                1.4                   compensation, donations and other community                  6. Contribution to the Development of the   104-112
                                     or organizational oversight                                                                                                             1.5                   investments, retained earnings, and payments to capital      Regions of Operations,
                                                                                                                                                                             1.6                   providers and governments                                    5.4. Remuneration and Motivation,           86-90
4.2.                                 Indicate whether the Chair of the highest governance            No                                                                      1.7                                                                                5.6.Social Programs,                        97-103
                                     body is also an executive officer (and, if so, their function                                                                                                                                                              Annex 2                                     126-130
                                     within the organization’s management and the reasons
                                     for this arrangement)                                                                                                 EC3               1.8                   Coverage of the organization’s defined benefit plan          5.4. Remuneration and Motivation,           86-90
                                                                                                                                                                                                   obligations                                                  5.6.Social Programs                         97-103
4.3.                                 For organizations that have a unitary board structure,          1.2. Sustainability Governance and          16-24
                                     state the number of members of the highest governance           Management System                                     EC4                                     Significant financial assistance received from               The Company did not receive any financial
                                     body that are independent and/or non-executive                                                                                                                government                                                   assiatance from the government.
                                     members                                                                                                               Market Presence
4.4.                                 Mechanisms for shareholders and employees to provide          1.2. Sustainability Governance and            16-24     ЕС6                                     Policy, practices, and proportion of spending on locally- 6. Contribution to the Development of the      104-112
                                     recommendations or direction to the highest governance        Management System,                                                                              based suppliers at significant locations of operation     Regions of Operations
                                     body                                                          1.4. Stakeholder Engagement,                  27-33     Indirect economic impacts
                                                                                                   5.3. Social Partnership in the Labor Sphere   83-85
                                                                                                                                                           EC8                                     Development and impact of infrastructure investments         6. Contribution to the Development of the   104-112
4.5.                                      Linkage between compensation for members of 5.4. Remuneration and Motivation                           86-90                                             and services provided primarily for public benefit through   Regions of Operations
                                          the highest governance body, senior managers, and                                                                                                        commercial, in- kind, or pro bono engagement
                                          executives (including departure arrangements), and
                                                                                                                                                           EC9                                     Understanding and describing significant indirect            1.2. Sustainability Governance and          16-24
                                          the organization’s performance (including social and
                                                                                                                                                                                                   economic impacts, including the extent of impacts            Management System
                                          environmental performance)
                                                                                                                                                           Environmental Performance Indicators
4.6.                                      Processes in place for the highest governance body to 1.2. Sustainability Governance and               16-24
                                          ensure conflicts of interest are avoided                 Management System                                       EN                                      Management Approaches                                        1.2. Sustainability Governance and          16-24
                                                                                                                                                                                                                                                                Management System,
4.7.                                      Process for determining the qualifications and expertise 1.2. Sustainability Governance and            16-24
                                                                                                                                                                                                                                                                3.1 Development of the Environmental        52-55
                                          of the members of the highest governance body for Management System
                                                                                                                                                                                                                                                                Management System
                                          guiding the organization’s strategy on economic,
                                          environmental, and social topics                                                                                 Materials
4.8.             1.1                      Internally developed statements of mission or values, 1.1 Social Mission and Responsibility            15-16     EN1                                     Materials used by weight or volume                   Annex 3                                             131-135
                                          codes of conduct, and principles relevant to economic, 1.4. Stakeholder Engagement                     27-33     EN2               2.1                   Percentage of materials used that are recycled input Annex 3                                             131-135
                                          environmental, and social performance and the status of                                                                                                  materials
                                          their implementation                                                                                             Energy
4.9.                                      Procedures of the highest governance body for Reporting Boundary and Principles,                       13-14     EN3               2.2                   Direct energy consumption by primary energy source    3.2. Environmental Performance Indicators,         56-64
                                          overseeing the organization’s identification and 1.2. Sustainability Governance and                    16-24                                                                                                   Annex 3                                            131-135
                                          management of economic, environmental, and social Management System
                                          performance, including relevant risks and opportunities,                                                         EN4                                     Indirect energy consumption by primary source         3.2. Environmental Performance Indicators,         56-64
                                          and adherence to or compliance with internationally                                                                                                                                                            Annex 3                                            131-135
                                          agreed standards, codes of conduct, and principles                                                               EN5                                     Energy saved due to conservation and efficiency 3.2. Environmental Performance Indicators,               56-64
4.10.                                     Processes for evaluating the highest governance body’s 1.2. Sustainability Governance and              16-24                                             improvements                                          Annex 3                                            131-135
                                          own performance, particularly with respect to economic, Management System                                        EN6                                     Initiatives to provide energy-efficient or renewable 3.2. Environmental Performance Indicators           56-64
                                          environmental, and social performance                                                                                                                    energy based products and services, and reductions in
                                                                                                                                                                                                   energy requirements as a result of these initiatives

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GRI disclosure RUIE basic            Disclosure (indicator) definition                                 Report section/explanation                    Pages     GRI disclosure RUIE basic            Disclosure (indicator) definition                            Report section/explanation                   Pages
or indicator   performance indicator                                                                                                                           or indicator   performance indicator
Water                                                                                                                                                          LA3                                     Benefits provided to full-time employees that are not 5.4. Remuneration and Motivation                 86-90
EN8              2.3                       Total water withdrawal by source                      3.2. Environmental Performance Indicators,          56-64                                             provided to temporary or part- time employees, by major
                                                                                                 Annex 3                                             131-135                                           operations
EN9                                        Water sources significantly affected by withdrawal of 3.2. Environmental Performance Indicators,          56-64     Labor/management relations
                                           water                                                 Annex 3                                             131-135   LA4           3.1.4                     Percentage of employees covered by collective 5.3. Social Partnership in the Labor Sphere              83-85
EN10             2.4                       Percentage and total volume of water recycled and 3.2. Environmental Performance Indicators,              56-64                                             bargaining agreements
                                           reused                                                Annex 3                                             131-135   Occupational health and safety
Biodiversity                                                                                                                                                   LA6                                     Percentage of total workforce represented in formal joint 4.1. Occupational Health and Safety Policy   67-71
EN13                                       Habitats protected or restored                    3.2. Environmental Performance Indicators               56-64                                             management–worker health and safety committees that
                                                                                                                                                                                                       help monitor and advise on occupational health and
EN14                                       Strategies, current actions, and future plans for 3.2. Environmental Performance Indicators,              56-64                                             safety programs
                                           managing impacts on biodiversity                  3.3. Conservation and Restoration of                    65-66
                                                                                             Biodiversity                                                      LA7             3.1.5                   Rates of injury, occupational diseases, lost days, and 4.3. OHS Performance Indicators,                73-75
                                                                                                                                                                               3.1.6                   absenteeism, and number of work-related fatalities by Annex 2                                          126-130
Emissions, Effluents, and Waste                                                                                                                                                3.1.7                   region
EN20             2.6                       NOx, SOx, and other significant air emissions by type and 3.2. Environmental Performance Indicators,      56-64                     3.1.8
                                           weight                                                      Annex 3                                       131-135   LA9                                     Health and safety topics covered in formal agreements 4.1. Occupational Health and Safety Policy       67-71
EN21             2.7                       Total water discharge by quality and destination            3.2. Environmental Performance Indicators,    56-64                                             with trade unions
                 2.7.2                                                                                 Annex 3                                       131-135   Training and education
EN22             2.8                       Total weight of waste by type and disposal method           3.2. Environmental Performance Indicators,    56-64     LA10            3.1.10                  Average hours of training per year per employee by        5.5. Selection, Professional Training, and   91-96
                                                                                                       Annex 3                                       131-135                                           employee category                                         Development of Personnel
EN25                                       Identity, size, protected status, and biodiversity value of 3.2. Environmental Performance Indicators,    56-64     LA11                                    Programs for skills management and lifelong learning      5.5. Selection, Professional Training, and   91-96
                                           water bodies and related habitats significantly affected Annex 3                                          131-135                                           that support the continued employability of employees     Development of Personnel
                                           by the reporting organization’s discharges of water and                                                                                                     and assist them in managing career endings                5.6. Social Programs                         97-103
                                                                                                                                                               Product Responsibility Performance Indicators
Products and services
                                                                                                                                                               PR                                      Management approach                                       1.2. Sustainability Governance and           16-24
EN26            2.11                       Initiatives to mitigate environmental impacts of products 2.6. Product Responsibility                     48-51                                                                                                       Management System,
                                           and services, and extent of impact mitigation                                                                                                                                                                         2.6. Product Responsibility                  48-51
Overall                                                                                                                                                        Customer health and safety
EN30             2.12                      Total environmental protection expenditures and 3.2. Environmental Performance Indicators                 56-64     PR1                                     Life cycle stages in which health and safety impacts of 2.6. Product Responsibility                    48-51
                                           investments by type                                                                                                                                         products and services are assessed for improvement,
Human Rights Performance Indicators                                                                                                                                                                    and percentage of significant products and services
HR                                         Management approach                                         5.1 Main Principles and Approaches of the     76-78                                             categories subject to such procedures
                                                                                                       Social Policy,                                          Product and service labeling
                                                                                                       1.4. Stakeholder Engagement                   27-33     PR3             3.4.1                   Type of product and service information required by 2.6. Product Responsibility                        48-51
Freedom of association and collective bargaining                                                                                                                                                       procedures, and percentage of significant products and
HR5                                      Operations identified in which the right to exercise          5.3. Social Partnership in the Labor Sphere   83-85                                             services subject to such information requirements
                                         freedom of association and collective bargaining may                                                                  PR5                                     Practices related to customer satisfaction, including 2.6. Product Responsibility                      48-51
                                         be at significant risk, and actions taken to support these                                                                                                    results of surveys measuring customer satisfaction
                                         rights                                                                                                                Customer privacy
Child labor                                                                                                                                                    PR8                                     Total number of substantiated complaints regarding Not applicable, as the Company’s products
HR6                                      Operations identified as having significant risk for          1.4. Stakeholder Engagement                   27-33                                             breaches of customer privacy and losses of customer data target industrial customers (B2B).
                                         incidents of child labor, and measures taken to contribute                                                            Society Performance Indicators
                                         to the elimination of child labor
                                                                                                                                                               SO                                      Management approach                                       1.4. Stakeholder Engagement,                 27-33
Forced and compulsory labor                                                                                                                                                                                                                                      6. Contribution to the Development of the    104-112
HR7                                      Operations identified as having significant risk for          There is no risk of incidents of forced                                                                                                                   Regions of Operations
                                         incidents of forced or compulsory labor, and measures         or compulsory labor at the Company’s                    Community
                                         to contribute to the elimination of forced or compulsory      operations.
                                         labor                                                         1.4. Stakeholder Engagement                   27-33     SO1             3.3.3                   Nature, scope, and effectiveness of any programs          6. Contribution to the Development of the    104-112
                                                                                                                                                                                                       and practices that assess and manage the impacts          Regions of Operations
Indigenous rights                                                                                                                                                                                      of operations on communities, including entering,
HR9              3.2.3                   Total number of incidents of violations involving rights of   There were no incidents of violations                                                           operating, and exiting
                                         indigenous people and actions taken                           involving rights of indigenous people                   Corruption
                                                                                                       associated with the Company’s operations.
                                                                                                                                                               SO4                                     Actions taken in response to incidents of corruption      2.6. Product Responsibility                  48-51
Labor Practices and Decent Work Performance Indicators
                                                                                                                                                               Public policy
LA               1.1                   Management Approach                                             1.4. Stakeholder Engagement,                  27-33
                                                                                                       4.1. Occupational Health and Safety Policy    67-71     SO5             3.3.4                   Public policy positions and participation in public policy 1.4. Stakeholder Engagement                 27-33
                                                                                                       5.6. Social Programs                          97-103                                            development and lobbying
LA1              3.1.1                     Total workforce by employment type, employment About Norilsk Nickel                                       6-8
                                           contract, and region
LA2              3.1.2                     Total number and rate of employee turnover by age 1.4. Stakeholder Engagement,                            27-33
                 3.1.3                     group, gender, and region                         Annex 2                                                 126-130

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Annex 2. Main Performance Indicators                                                                                                                          2.3. Social performance indicators for the Company
                                                                                                                                                              Staff size and salary
2.1. Primary financial and operational indicators for the Group
                                                                                                                                                                                                                                                                       20101                   20092                   20082
                                                                                                                                                                  Average staff size (thousand people)
Financial indicators (USD million)                                                                                                                                Group Total                                                                                            82.7                    83.9                   88.0
                                                                                                                                                                  including Russia                                                                                       80.4                    80.1                   84.1
                                                                                                          2010                   2009*                2008        Average monthly salary (RUB thousand)                                                                  55.9                    48.8                   47.7
Metals sales revenue                                                                                     12,126                   8,075             11,799        Staff turnover (percentage)                                                                             8.0                     7.9                    8.9
Gross profit on metals sales                                                                              7,903                   4,409              6,354    1
                                                                                                                                                                The data for the entities listed in Annex 4 (Personnel) and for OJSC Norilskgazprom also included, and the data for the following entities excluded from the
Profit/(loss) before taxes                                                                                6,782                   3,306              (273)      calculations: LLC Kolabyt, LLC InformKolaService, LLC Arctic-Energo, LLC Vostokgeologiya, LLC Pechengageologiya, LLC Geokomp, OJSC Taimyrenergo, LLC
Continuing operations profit/(loss)                                                                       3,089                   2,651              (555)      Taimyrinvest, OJSC Krasnoyarsk River Port, OJSC Lesosibirsk Port, OJSC Krasnoyarsk Ship Repair Plant, CJSC Normetimpex, CJSC Taimyr Fuel Company, LLC
Retained earnings                                                                                        17,744                  15,600             13,000      Scrap Metal Processing Plant, LLC Renons, OJSC Torginvest, Mediaplatform Group, CJSC SOK Exelent Fitness Center, LLC Norilsk Milk Factory, LLC Sports
                                                                                                                                                                Complex, LLC SGM, LLC NN-INFOCOM, LLC Polar Trade Alliance, LLC Directorate of the Project “Metals of Zabaikalye”.
Cash and cash equivalents                                                                                 5,405                   3,632              1,995    2
                                                                                                                                                                The data for the entities of OJSC «MMC» Norilsk Nickel» and the Russian entities of the Group with more than 500 personnel.
Capital investment                                                                                        1,767                   1,089              2,463
Assets                                                                                                   23,909                  22,760             20,823    Personnel training*
Liabilities                                                                                               5,935                   8,005              9,038
Shareholder equity and reserves                                                                          17,974                  14,755             11,785                                                                                                              2010                    2009                   2008

* Comparative data for 2009 not include information for OGK-3 and SWC due to classification of these companies’ activities as terminated in 2010.                 Employees trained - total (thousand persons)                                                           31.9                    30.0                    32.1
                                                                                                                                                                    managers and specialists                                                                             12.1                    13.9                    15.0
Production Indicators (thousand tonnes or as specified)                                                                                                             workers                                                                                              19.8                    16.1                    17.1
                                                                                                                                                                  Amount of training (thousand man-hours)                                                             4,064.7                 3,606.5                 4,034.8
                                                                                                          2010                    2009                2008        including hours per one trained employee                                                              127.4                   120.0                   126.0
Outputs:                                                                                                                                                          Professional training expenses (RUB million)                                                          293.6                   192.0                   240.0
  Nickel                                                                                                    297                     283                 301       including per trained employee                                                                      9,206.4                 6,398.0                 7,467.0
  Copper                                                                                                    389                     402                 419   * Consolidated data for Group’s entities in accordance with Annex 4.
  Palladium (thousand ounces)                                                                             2,861                   2,805               2,821
  Platinum (thousand ounces)                                                                                694                     661                 661   Social adaptation programs*
                                                                                                                                                                                                                                                                        2010                    2009                   2008
                                                                                                                                                                  Program expenditures (RUB million)                                                                     284.1                   253.4                  760.7
2.2. Group’s tax payments (including insurance payments and customs duties)                                                                                       Program participants (number of people):
in the Russian Federation                                                                                                                                           Lifelong Corporate Pension (as of the end of the year)                                               1,296                   1,302                   1,315
                                                                                                                                                                    Supplementary Corporate Pension (year total)                                                           466                     494                     457
                                                                                                         2010*                 2009**               2008**
                                                                                                                                                                    One-time Retirement Payment (year total)                                                               271                     614                     804
Tax payments – total (RUB billion)                                                                      78.481                  34.357              85.858          Supplementary Pension Payment (year total)                                                               0                       4                      15
                                                                                                                                                              * Consolidated data for Group’s entities in accordance with Annex 4.
  Federal budget                                                                                         16.775                   5.783              30.197
  Krasnoyarsk Region consolidated budget                                                                 42.060                  17.017              44.419
  Norilsk City budget                                                                                     7.514                   3.179               8.037
                                                                                                                                                              Expenditures on personnel recuperation*
  TMD consolidated budget                                                                               149.000                   0.544               1.704
                                                                                                                                                                                                                                                                        2010                    2009                   2008
* Estimate.                                                                                                                                                       Expenditures on health resort treatment and recreation (RUB million)                             1,496.2***                 845.8**                  570.4*
** Confirmed actual data.
                                                                                                                                                                  including per employee (RUB thousand)                                                                  55.5                    40.3                    31.7

                                                                                                                                                              * Consolidated by Group’s entities in accordance with Annex 4.
                                                                                                                                                              ** Confirmed actual data. Including the expenditures on the corporate program «Tourism» 169.1 RUB million.
                                                                                                                                                              *** Including the expenditures on the corporate program «Tourism» 65.9 RUB million.

                                                                                                                                                              Expenditures on charity programs
                                                                                                                                                                                                                                                                         2010                  2009*                  2008**
                                                                                                                                                                  Expenses (RUB million)                                                                                 9,080                   1,967                 2,684

                                                                                                                                                              * Comparative data for 2009 not include the information for OGK-3 and SWC due to classification of these companies’ activities as terminated in 2010.
                                                                                                                                                              ** The IFRS data, USD 108 million, calculated based on an exchange rate of 1 USD = 24.8522 RUB.

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2.4. Occupational health and safety indicators for the Company*                                                                                                            2.6. Social performance indicators of foreign assets of the Group
                                                                                                                   2010                       2009               2008      Staff size and salary
 Occupational injuries (per 1,000 employees)                                                                        1.42                    1.56                  1.73
                                                                                                                                                                                                                                                                                       Norilsk Nickel Africa          Norilsk Nickel            Norilsk Nickel
 Fatalities                                                                                                            9                       8                    12                                                                                                                                                     Australia            Harjavalta Oy
 Serious injuries                                                                                                     24                      23                    17                                                                                                      Nkomati                 Tati Nickel
 Occupational diseases                                                                                               214                     268                   164                                                                                           2010          2009        2010           2009      2010       2009           2010      20091
 Lost work days (in man-days)                                                                                     11,370                  12,055                10,843     Average staff size without contractors                                                 823           631        1,094          1,147       24        268            273        267
 Reference data:                                                                                                                                                           Average annual salary without contractors (USD thousand)                               41.0          51.5        31.3           33.4     390.0      166.0           65.5       66.1
 Injuries per 1,000 employees:                                                                                                                                             Staff turnover without contractors (percentage)                                        12.3          11.9          7.0          10.3      38.0       89.6            2.4        2.4
   Total for Russia                                                                                                      –6                    2.14                2.51
   non-ferrous metallurgy                                                                                              2.07                    2.05                1.92    Personnel training
   raw material extraction                                                                                                –                    2.83                3.31
   processing industries                                                                                                  –                    2.53                3.21                                                                                                                Norilsk Nickel Africa          N