Analysts think that the postponing of the terms of the Bystrinskoye deposit development by Norilsk Nickel is reasonable in current conditions

A. Milostnova.  UFS analyst

Norilsk Nickel GMK postpones the terms of the Zabaikalye polymetal deposits development to 2018. The company is unable to do that earlier due to the lack of the completion of the railway construction and a lack of a power network. In the current conditions, when it’s necessary to optimize the structure of the assets and to reduce the investment program, due to high dividend liabilities, the freezing of the Chita project seems rather reasonable.

Despite the fact, that the company explains the decision by unreadiness of infrastructure, The Chita  deposit cannot be actually named ‘premium-class project’ agreed within the bounds of the recent revision of the investment policy. The project should be profitable at a level of EBITDA not less than 40%, but profitability of the Chita project is a half of that with the current non-ferrous metal prices.