Norilsk Nickel admits trouble as Russia’s war-torn economy suffers due to sanctions
In a meeting with Putin in the Kremlin, Vladimir Potanin said his Norilsk Nickel company is forced to operate under difficult conditions.
Norilsk Nickel has been a money machine for investors, and especially Vladimir Potanin, since the early 1990s when the giant metal producer was privatised. Today the oligarch is Russia’s fifth richest person with a net worth of more than €25 billion according to Forbes.
With the war all is now changing. Norilsk Nickel’s revenue has been declining for several years in a row. In late October, the company announced consolidated production results for the nine first months of 2025. Output of all key metals decreased compared to the same period last year.
“We have to work in difficult conditions,” Potanin said in a recent meeting with Putin. From time to time, the leader in the Kremlin orders Russia’s oligarchs to come to his office to talk about the state of affairs concerning their businesses.
Norilsk Nickel’s CEO talked about falling global prices and troubles caused by sanctions.
The difficulties are caused by “disruption of supply chains, payment chains, the need to reorient ourselves to new, unfamiliar markets,” Vladimir Potanin said.
The withdrawal of suppliers of key Western mining equipment due to sanctions has forced Norilsk Nickel to transition to alternative sources for its factories in Norilsk. This is a major reason for the dip in production, the company’s CEO explained.
Indirectly hit
Although Norilsk Nickel itself is not directly sanctioned, more than ten companies associated with the mining and metallurgy giant are included in the U.S. list of sanctions, the Barents Observer has previously reported. Rosatomflot, the icebreaker operator securing year-around transport of metals from the Arctic, has also been hit by sanctions.
Norilsk-Nickel posted a 13% drop in revenue and a 37% decline in net profits in 2024. Compared to 2021, the company’s profits decreased fourfold.
With its main production units on the Taymyr Peninsula in Siberia and on the Kola Peninsula in the Murmansk region, Norilsk-Nickel is still one of the world’s largest producers of nickel, copper, palladium and platinum.
Nickel, copper and cobalt are key metals in batteries for electric vehicles, the production of which China is the global leader. Last year, Potanin said plans were under development to establish a joint venture with a Chinese company to move parts of the the copper smelting operation from Norilsk to China.
How that idea is developing is unclear.
Towards recession
Other Russian major companies are also currently suffering due to the slowdown of the war-torn economy, according to the online news service Sever.Realii.
245,000 employees have been laid off due to economic problems, Russia’s Ministry of Labour reported. Especially companies involved in metal, coal, automobile, cement, and railway production are in trouble.
Experts speaking with Sever.Realii said Western sanctions, high interest rates on loans, and a decline in both domestic demand and imports are the main factors negatively impacting Russian industry. The same experts believe the Russian economy is sliding into recession.
Related stories from around the North:
Canada: PM, Manitoba reaffirm Arctic Gateway push, though project absent from recent federal priority list, CBC News
Greenland: Greenland’s leader hails EU as trusted friend and urges investment in its minerals, The Associated Press
Iceland: Europe’s Von der Leyen strengthens Arctic security ties with Iceland during visit, Eye on the Arctic
Russia: New UK sanctions target Putin’s main funder of war, The Independent Barents Observer
Sweden: Just how significant is the discovery of rare earth metals in Arctic Sweden?
United States: Alaska Ambler Road project back in focus as company outlines vision for work ahead, Reuters
