Annual report 2013

Transportation Activities

The Company has a transport and logistics complex involved in the value chain and aimed at maintaining its products’ competitiveness and increasing the efficiency of the Company’s operations. In addition, the activities of a number of transport enterprises contribute to the successful implementation of the Company’s social programmes in its areas of operation.

Water Transport and Freight Turnover

MMC Norilsk Nickel owns a unique reinforced ice-class arctic transportation fleet (ARC 7 in accordance with the PMPC classification), consisting of five container vessels of the Norilsk Nickel type and the Yenisei tanker. The Company’s dry cargo fleet provides a year-round service between the seaports of Dudinka, Murmansk, Archangel, Rotterdam, and Hamburg. In 2013, the container vessels of the Company undertook 58 freight voyages and transported 1.1 million tonnes of cargo, including 11 direct trips to European ports carrying exported metal products.

The Yenisei tanker provides a year-round and reliable supply of oil products to the Norilsk industrial district and the transportation of gas condensate from the Pelyatkinsky gas condensate field (currently under development) to European ports for export. During the reporting period, the tanker carried a total of 203.5 thousand tonnes of cargo belonging to the subsidiaries and affiliates of the Company (gas condensate and oil products) and 58.3 thousand tonnes of other cargoes.

In 2013, the total water transport freight turnover of the Dudinka port (Zapolalrny Transport Branch) amounted to 3.1 million tonnes, of which some 30% were transported via the Northern Sea Route, and 75% —by the river fleet up and down the Yenisei River.

Aircraft Fleet and Air Transportation

In 2013, the aircraft fleet operated by the enterprises belonging to the Norilsk Nickel Group comprised 45 units, including 18 helicopters (operator: Norilsk Branch of OJSC Taimyr Airlines) and 27 aircraft (operators: CJSC Nordavia—Regional Airlines, and the Moscow Branch of OJSC Taimyr Airlines (NordStar).

By the end of 2013, the airlines had carried a total of 2.06 million passengers and 11.8 thousand tonnes of cargo, which amounts to 102% and 91% of passengers and cargo carried in 2012, respectively.

The Norilsk Branch of Taimyr Airlines is the only airline in the region providing helicopter services that is able to promptly respond to any contingencies that may arise in all areas of production and social life in the region. The Taimyr Airlines helicopters not only support the operational activity of the Company’s enterprises (transportation of the rotating work teams, production equipment, and life necessities etc.), but also perform search and rescue operations and carry passengers on domestic routes. In 2013, the total flying time was 7,195.5 hours, with passenger transportation amounting to 6.5% of the total flying time.

Development of Transport and Logistics Infrastructure

In 2013, the development and modernisation of production facilities of the transport and logistics complex continued. Construction of transshipment terminal proceeded at the Murmansk Transport Branch. The reconstruction of four river quays and production and transshipment complex No. 1 was completed at the Zapolarny Transport Branch, which allowed the restoration of a permissible load level for the operation of heavy cranes on the quays. Quays are used for the transshipment of sand utilised in the Company’s metal production (over 50% of cargos transported along the Yenisei River). Two additional gantry cranes were installed at this location, thus raising the transshipment productivity of river vessels. The acquisition of 800 new specialised containers for the transportation of converter matte from the Zapolarny Branch for processing at Kola MMC fully met the needs of metal production in specialised packaging. Investment in the Archangel Transport Branch and the Archangel Sea Commercial Port contributed to the increased efficiency of processing commercial metal products intended for the domestic market and also cargos needed for the material and technical supply of the Company enterprises located in the Norilsk industrial district. Transshipment conditions for the bulk of cargos intended for the material and technical supply were improved at the Archangel Transport Branch as a result of the modernisation of two gantry cranes and the additional installment of special port equipment units. A non-self-propelled fleet modernisation programme was proposed at the Yenisei River Shipping Company: 4th and 5th barges with a carrying capacity of 3,000 tonnes were built; and construction of the 6th barge was started.

In 2013, work on the automation of organisational processes involved in the transportation and management of the Company’s transport and logistics infrastructure continued on the basis of the state-of-the-art IT solutions. An automated commodity-transport logistics system based on the Oracle Transportation Management platform and designed to increase the efficiency of planning and management of cargo transportation was put into pilot operation. The system will also allow for the systematisation document circulation and create and maintain operational and management reports required for an economic analysis of transport operations and managerial decision-making.