Nornickel Had a Bad Month

Steve Fiscor

Russia’s Nornickel is the world’s largest palladium miner and one of the largest nickel miners. With palladium prices hovering around $2,000/oz, one would think this mining company would be set, and they were until a fuel tank at a power plant near Norilsk ruptured. The spill quickly snow-balled into full-blown environmental disaster. No one was injured, but this event has brought unwanted attention to a proud mining company. During June, the company decided to sell non-core assets in Australia and, as this edition was going to press, it was defending itself from damages assessed by the federal environmental regulatory authority.

E&MJ doesn’t normally report minor equipment mishaps and engineering fails. They happen every month. When the first press release from Nornickel arrived regarding the leak, it seemed like a formal acknowledgement of a minor incident. In a normal year, much like other mining companies, Nornickel would issue a dozen or so press releases. Soon, biweekly updates began to arrive with photos of the progress. It seemed the company was doing its best to be transparent, but no good deed goes unpunished.

On May 29, ground that had supported the tank for 30 years subsided causing the leak. By the end of the following day, Nornickel had pumped more than 100 metric tons of diesel fuel into a containment area, treated the contaminated ground with sorbents and began installing booms on a tributary to the Ambarnaya River. More people and equipment steadily arrived on-site to assist with the cleanup. By June 7, one week after the spill, more than 500 people had become involved in the cleanup (300 from Nornickel). They had removed 50,000 mt of contaminated soil, pumped 949 mt of fuel from the area around the power plant and skimmed more than 913 mt of a fuel/water mixture from 18 boom lines on the river. A week later, Nornickel COO Sergey Dyachenko announced that the first stage of the cleanup efforts had been completed. He thanked everyone involved in the effort including experts from LaFarge-Holcim and Norway who had experience and arrived on-site almost immediately to advise the company.

A week later, Russian President Vladimir Putin hosted a meeting to discuss the progress. The Minister of Emergency Control Evgeny Zinichev reported the second phase of the cleanup was almost complete, with a total of 32,000 m3 of water-fuel mixture collected and 103,000 mt of contaminated soil removed. Nornickel President Vladimir Potanin emphasized that the company intended to fully fund the environment rehabilitation costs related to the accident and added that the company has already spent RUB5 billion ($70 million). “Truly remarkable work has been accomplished,” Putin said. “I know that the situation has been successfully reversed.”

The next step will be the restoration of biodiversity. Nornickel said it would provide financing for the construction of a fish hatchery, but the government wants more. It launched an ethnological expert review on the Taimyr Peninsula to assess the damage caused to the indigenous minorities of the North. They have invited experts from the Federal Agency for Ethnic Affairs and several academic institutions. The commission is expected to assess the impact of the fuel spill on the lifestyle and traditional industries of the indigenous northern minorities by studying current and future influences of the incident on hunting and fishing, reindeer herding and preservation of cultural traditions. As this edition was going to press, the Federal Service for Supervision of Natural Resources Management had estimated that the complete restoration will cost Nornickel approximately $2 billion. While it reiterated its commitment to covering the costs of remediation, the company was vigorously disputing that figure.

Steve Fiscor, Publisher & Editor-in-Chief, E&MJ

As featured in Womp 2020 Vol 07 -