Responsible supply chain
At every stage of the supply chain, Nornickel adheres to ethical standards and the principles of sustainable business conduct, prioritising environmental protection, social responsibility, and corporate governance. The Company promotes key sustainability principles among its suppliers of raw materials, goods, works, and services, encouraging them to comply with established standards and guidelines, manage relevant risks, and respond to increasing consumer demands. Committed to openness and transparency in responsible supply chain management, the Company publishes relevant reports Nornickel’s 2024 Responsible Supply Chain Report is available on the Company website. on an annual basis.
The Company has in place PJSC MMC Norilsk Nickel’s Responsible Sourcing Policy (the “Policy”) and Supplier Code of Conduct (the “Code”), which reflect the Company’s principles for building and managing a responsible supply chain. Other internal documents related to the responsible supply chain are listed in Nornickel’s 2023 Sustainability Report and are publicly available on the Company website.
In 2024, the Company launched a training course on responsible supply chains, aimed at familiarising Group employees with Nornickel’s relevant internal documents and processes as well as fostering an understanding of the key approaches and best practices in building responsible supply chains. Details on the training activities conducted in 2024 are available in Nornickel’s 2024 Responsible Supply Chain Report.
Engagement with suppliers to manage a responsible supply chain
When establishing business relationships, suppliers are expected to comply with the Code. In addition, Nornickel expects its suppliers to adhere to the principles outlined in the Policy and meet the requirements of applicable laws and regulations, universally recognised principles, norms of international law, and international treaties.
If suppliers refuse to comply with the Code or clearly fail to demonstrate progress in meeting its requirements, Nornickel may reconsider its relationship with such suppliers.
The General Contracting Terms and Conditions as well as standard forms of master agreements and contracts with suppliers, were amended to include a clause requiring compliance with the Company’s sustainability requirements listed in the Code. This clause also informs suppliers about the opportunity to contact Nornickel’s Corporate Trust Line, which is the Company’s principal grievance mechanism. In addition, supply contracts include an anti‑corruption clause that affirms the implementation of anti‑corruption measures and reflects the Company’s commitment to fostering a corporate culture that does not tolerate any form of corruption.
Nornickel’s approach to assessing sustainability practices of all supplier categories takes into account stakeholder expectations, standards, and regulatory recommendations, including:
- A Guide for Issuers: How to Comply with Best Sustainability Practices, drafted by Moscow Exchange, including responsible supply chain management practices
- Recommendations for Public Joint Stock Companies to Disclose Non‑Financial Information Regarding Their Operations, issued by the Bank of Russia, including recommendations on disclosures related to the management of a sustainable supply chainAppendix to Letter of the Bank of Russia No. IN‑06‑28/49 dated 12 July 2021..
When assessing suppliers for compliance with responsible supply chain principles, the Company categorises them into two groups: mineral suppliersMineral suppliers in this section means suppliers, shippers, and processors of nickel‑, cobalt‑, and copper‑containing minerals. and suppliers of goods, works, and servicesSuppliers of goods, works, and services in this section means all categories of the Group’s suppliers..
Engagement with mineral suppliers
Mineral suppliers’ compliance with the Code is monitored through the due diligence management system (the “System”).
The system is designed to identify potential risks affecting the sustainability and transparency of mineral supply chains and to mitigate risks highlighted in the OECD Guidance, including supply of minerals from conflict areas, human rights violations, money laundering, fraud, and corrupt practices.
The tools provided by the System allow for the collection of additional data on participants in the mineral supply chain, including information about their environmental, social, and governance (ESG) practices and approaches.
Since 2021, the System has been rolled in phases across individual enterprises of the Polar and Trans‑Baikal Divisions. For instance, standards for mineral supplier due diligence were approved, regulating due diligence procedures, interactions between organisational units, and allocation of powers and responsibilities.
The Company has been conducting annual due diligence on mineral suppliers since 2021. In the reporting period, the exercise covered mineral suppliers of the Polar Division’s enterprises. Following due diligence on 100% of mineral suppliers for the Group’s Russian assets, no confirmed risks or risk indicators were identified. Since Trans‑Baikal Division enterprises had no suppliers in this category, due diligence was not carried out.
Engagement with suppliers of goods, works, and services
Since 2023, the Company has been assessing the sustainability practices of its suppliers of goods, works, and services for compliance with the Code’s requirements. The assessment process envisages a survey and includes an analysis and assessment of the supplier operations’ ESG component. In 2024, the Company conducted an assessment of a sample of its largest suppliersThe largest external suppliers of the Group’s Russian assets in terms of payment amounts in 2023. of goods, works, and services, accounting for 35% of the Group’s total procurement volume. The survey results are disclosed in detail in Nornickel’s 2024 Responsible Supply Chain Report.
Procurement
Procurement is carried out in accordance with the Company’s established procedures and policies. Uniform procedures apply to both centralised procurement and independent procurement by Head Office units, Company branches, and Group enterprises. Depending on the budgeted cost, procurement can be organised either as a tender, simple procurement, or simplified procurement. Procurement procedures involve collective procurement bodies at various levels.
Nornickel’s primary focus is on improving the effectiveness of procedures for identifying reliable suppliers of high‑quality products who guarantee supplies at a fair market price.
Counterparty due diligence in procurement activities
Nornickel regularly conducts mandatory due diligence on its current and potential contractors to verify their reliability, solvency, and financial stabilityDue diligence is mandatory if at least one of the following conditions applies: the counterparty has not previously undergone due diligence; more than 12 months have passed since the last review; or the procurement involves a major purchase. The process includes an analysis of the counterparty’s registration data, financial and operational performance, management team, beneficiaries, and business environment, as well as a check for inclusion on restricted lists.. The procurement process includes controls for compliance with sustainability requirements. For a description of the key stages of procurement procedures, including a list of regulatory documents and the monitoring process for non‑financial factors, please see Nornickel’s 2023 Sustainability Report.
Ensuring procurement efficiency and transparency
The Company has implemented an SAP SRM automated solution for supplier relationship management (“SAP SRM”), which helps enhance transparency in supplier selection and increase competition in procurement procedures.
Suppliers’ personal accounts within the SRM system allow counterparties to manage document flow, track task progress across stages, share files, and exchange instant messages
Current and prospective suppliers can use SAP SRM to communicate online with procurement teams across all product categories and access up‑to‑date information about upcoming procurements
In addition, the Company website has a dedicated Suppliers section, containing key information about the Group’s procurement principles and procedures and planned needs. The section also features a register of unreliable counterparties as well as announcements and invitations to participate in procurement procedures.
Nornickel fosters relationships with manufacturers of equipment and materials that have the greatest impact on its ability to achieve strategic goals. In an effort to boost the share of domestic manufacturers, Nornickel has developed a centralised pilot testing procedure aimed at increasing competition and replacing imported materials and equipment with Russian‑made alternatives. Foreign suppliers are mainly engaged for supplying unique equipment or systems that do not have Russian alternatives.
Product quality and supply reliability
Product quality assurance
The interests of product consumers and society at large have always been and remain a top priority for Nornickel. In quality management, the Company adheres to the principles outlined in ISO 9001:2015.
Quality‑related goals and objectives are aligned with corporate strategic goals and approved by management based on annual performance reviews of the Corporate Integrated Management System. Nornickel’s overall approach to quality management is grounded in strict compliance with applicable laws, standards, and regulations; effective risk management; continuous production improvement and technological development; and a strong focus on enhancing customer satisfaction with product and service quality.
In manufacturing, Nornickel ensures that its products meet the requirements of regulatory documents while also considering customer‑specific demands – improving chemical composition, appearance, and packaging – as well as expanding the product range and venturing into new product segments. In 2024, the Polar Division shipped copper concentrate compliant with TU 07.29.11‑040‑49156713‑2024 to China, introduced new nickel grades – NORNICKEL PLATING GRADE and NORNICKEL HIGH PURITY – for electroplating and superalloy production, and produced nickel sulphate at its Kola site.
Nornickel’s Corporate Integrated Management System
In 2024, more than 170 employees from the Polar Division’s enterprises and the Group’s transport divisions were trained in environmental safety, environmental reporting, environmental impact assessment, and requirements of ISO standards.
To enhance the competitiveness and marketability of its products and services, ensure production safety, and improve supply reliability, the Company has implemented a Corporate Integrated Management System (“CIMS”)The Kola site has in place an integrated management system (IMS) compliant with ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018., which is evolving in compliance with ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018.
Customer satisfaction at the Company is governed by PJSC MMC Norilsk Nickel’s Quality Policy, which is aligned with internal documents and corporate standards.
In 2024, a number of recertification and surveillance audits were conducted across MMC Norilsk Nickel. The audits confirmed that the CIMS complies with ISO standards (with the compliance certificates available on the Company website).
Ensuring reliable and uninterrupted supplies
Nornickel’s system for product supply planning and monitoring, close coordination between its sales and production units, own cargo fleet, and regular customer feedback ensure the reliable and uninterrupted supply of Nornickel products.
The Company’s sales strategy is focused on securing a stable position in the market. Nornickel aims to maintain a balanced distribution of nickel supplies across various end‑use sectors. As the world’s largest producer of palladium, the Company prioritises direct long‑term contracts with end consumers to help stabilise the palladium market while promoting market development, in particular, through efforts to explore and implement new applications and uses for palladium.
One of the key focus areas of the 2024–2026 Operational Efficiency Programme is to expand the Company’s presence in external markets.
Throughout the history of Nornickel, it has never failed to meet its obligations to deliver products to consumers.
Information on the consumer properties of each product is provided in the relevant specifications and contract documents, in full compliance with Russian and international laws.
Customer satisfaction
Nornickel annually assesses customer satisfaction through questionnaire surveys. Compliance with contractual obligations is audited and analysed on a regular basis.
The Company has set a target customer satisfaction level of at least 2.50 points on a three‑point scale. Survey results from 2022 to 2024 consistently exceeded this benchmark, reflecting Nornickel’s robust performance. Each year, Nornickel develops a comprehensive action plan focused on enhancing customer satisfaction.
