Mining and Metallurgical Norilsk Nickel : 2022 Annual Report of PJSC MMC Norilsk Nickel (including audited consolidated IFRS financial statements)

MOMENTUM

OF RENEWAL

Annual report

2022

Nornickel

CONTENT

ABOUT NORNICKEL		STRATEGIC REPORT		BUSINESS
				OVERVIEW
Company profile	4	Chairman's letter	16	Mineral resourse base	52
Our History	6	President's Letter	18	Operational performance	63
Performance highlights	8	Commodity markets	22	Logistics operations and product sales ...	70
Investment highlights	10	Our Strategy	42	Energy assets	75
Business model	12			Innovation and digital technology	77
				Financial performance (MD&A)	90

ABOUT THE REPORT

SUSTAINABLE		CORPORATE
DEVELOPMENT		GOVERNANCE
Strategic approach	106	Chairman's letter	166
HR management	112	Corporate governance structure	167
Health and safety	130	General Meeting of Shareholders	176
Environmental protection		Board of Directors
and climate change	140	and Board committees	178
Social strategy	156	Executive bodies	199
		Control system	208
		Remuneration	216
		Risk management system	219

SHAREHOLDER
INFORMATION
Share capital	238
Dividend policy	242
Bonds and debt management	245
Shareholder relations	248
ADDITIONAL
INFORMATION
IFRS Financial statements	خ.... 252
Glossary	332
Contacts	336

We are pleased to present to you the Annual Report of MMC Norilsk Nickel and entities comprising the same group of companies (the "Group", "Nornickel", the "Company")

for the year ended 31 December 2022. The main controlled entities and PJSC MMC NORILSK NICKEL's interest in their capital are listed

in the 2022 consolidated financial statements in accordance with International Financial Reporting Standards (IFRS).

The Report discloses all aspects of Nornickel's operations in the context of sustainability. Nornickel has a unique resource base underpinning its strategy of production growth and operational excellence as well as its unprecedented environmental programme. This clean growth strategy not only lays out long- term ore production and capital investment targets but also sets out concrete action plans to reduce the Company's environmental footprint in its regions of operation.

This Annual Report was prepared by the Investor Relations Department, taking into account

the requirements and recommendations of:

• the Bank of Russia's Regulations No. 714-p On Information Disclosure by Issuers
  of Issue-Grade Securities, dated 27 March 2020
• the Bank of Russia's Letter No. 06-52/2463 On the Corporate Governance Code, dated 10 April 2014
• the Bank of Russia's Information Letter No. IN-06-28/49 On Recommendations
  for Public Joint Stock Companies to Disclose Non-financial Information Related to Their Activities, dated 12 July 2021
• the Bank of Russia's Information Letter No. IN-06-28/96 On Recommendations for the Board of Directors of a Public Joint Stock Company to Consider ESG Factors and Sustainable Development Issues, dated 16 December 2021
• the Listing Rules of PJSC Moscow Exchange.

The Report discloses financial metrics based on the Group's IFRS consolidated financial statements for 2022 audited by Kept in accordance with International Standards on Auditing.

Interactive

Sustainability

version

Report

of the Annual

Report

Human Rights	Responsible Supply
Report	Chain Report

PRE-APPROVED by the Board of Directors	ACCURACY OF INFORMATION IS CONFIRMED
(Minutes No. GMK/18 -pr-sd dated 28 April 2023)	by the Audit Commission
	(Opinion dated 26 April 2023)

VLADIMIR POTANIN	SERGEY MALYSHEV
President, Chairman	Senior Vice President -
of the Management Board	Chief Financial Officer

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Nornickel

ABOUT NORNICKEL

Nornickel is the leader in Russia's metals and mining industry and one of the world's largest metal producer.

The Company produces metals essential

for the development of a low-carbon economy and green transport.

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Nornickel

COMPANY PROFILE

Nornickel is the leader in Russia's metals and mining industry

and the largest palladium and high-grade nickel producer globally

as well as a leading producer of platinum and copper. The Company also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, and tellurium.

The Group has more than 85 companies located in Russia and other countries. Major production assets include the Norilsk Division, Kola Division (including Kola MMC and Norilsk Nickel Harjavalta Oy nickel refinery in Finland) and also Trans-Baikal Division (including GRK Bystrinskoye, 50.01% owned by the Company).

10.8%	>78,000	RUB 180,000	>30 countries
the Company's share	employees	average monthly salary	consume the Company's
in Russia's metals production		at the Company	products

The Company also operates a captive sales network and owns a wide range of R&D facilities, energy assets, river fleet, river and sea port terminals, a unique Arctic cargo sea fleet as well as a number of other auxiliary units.

Operating assets

Energy

Transport

R&D

Sales

Metal Trade Overseas SA (Switzerland)

Gipronickel

Institute

Kola Division, including Norilsk Nickel Harjavalta Oy

Murmansk Transport Division

MMC Norilsk Nickel (Head office)

Norilsk Nickel Metals

Trading (Shanghai)

Co., Ltd (China)

NORMETIMPEX

Norilsk Nickel Asia

Ltd (Hong Kong)

Norilsk Nickel USA

Inc. (USA)

Arkhangelsk Transport Division

Energy Division

Krasnoyarsk

Transport

Division

Polar Transport Division

Norilsk

Division

Trans-Baikal

Division

Bystrinsky Transport

Division (part

of the Trans-Baikal

Division)

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Nornickel

OUR HISTORY

In recent years, Nornickel has become the leader in Russia's metals

and mining industry, a reliable social partner and one of the world's largest producers of palladium and high-grade nickel.

IMPLEMENTING A NEW STRATEGY

ENVIRONMENTALLY GROWTH STRATEGY

2022

•	Nornickel fully delivered on its production programme,
	with CAPEX hitting a record USD 4.3 billion.
•	Nornickel pioneered the free, prior and informed consent
	(FPIC) procedure in Russia to discuss a relocation programme
	with indigenous peoples, with FPIC obtained from Tukhard

Construction of the Norilsk Metallurgical Plant was launched

in the Monchetundra.

The first batch of converter matte was produced. By late 1953, Norilsk Plant produced

35% of nickel,

12% of copper,

30% of cobalt, and

90% of platinum group metals (PGMs) of the Soviet Union's total output.

New deposits developed and new facilities put online

Major sulphide deposits of copper-nickel ores of the Talnakh deposit were discovered, giving a new lease on life to Norilsk Plant. The construction of mines

and the town of Talnakh started on the Taimyr Peninsula. The first batch of carbonyl nickel was produced at Severonickel Plant on the Kola Peninsula.

Komsomolsky, Oktyabrsky

and Taimyrsky Mines were launched; Talnakh Concentrator and Nadezhda Metallurgical Plant were commissioned. Severonickel Plant celebrated first production of electrolytic copper.

Company transformation

In 1993, the Company was transformed

into RJSC Norilsk Nickel and privatised. In 2001, the Company was restruc- tured, with shareholders of RJSC Norilsk Nickel exchanging 96.9% of their stock to shares

in PJSC MMC NORILSK NICKEL. The Company shares started trading on the RTS and MICEX stock exchanges, and first American Depositary Receipts (ADRs)

were issued in June.

Vladimir Potanin and his new management team took the helm of the Company. The Board of Directors adopted a new long-

term development strategy focused on world-class assets of the Polar Division and Kola MMC. Bystrinsky GOK, the largest green- field project in the Russian metals industry, was constructed from scratch

in the Zabaykalsky Territory. At that time, a programme was launched to improve the environmental situation across the Company's foot- print, including the shuttering of Nickel Plant in Norilsk, the launch of the Sulphur Project to drastically reduce sulphur dioxide emissions and the closure of obsolete metallurgical facilities in the Murmansk Region.

The Company announced a new investment cycle aimed at the comprehensive development of mining assets and the expansion of processing capacities

as well as the implementation of its environmentally friendly growth strategy that not only lays out long-term ore production and capital investment targets but also sets out concrete action plans to reduce the Company's environmental footprint in its regions

of operation.

NORNICKEL IN

residents.

• Nornickel received equipment for the Sulphur Project

and celebrated first production of limestone (23.5 thousand

tonnes) from the Mokulayevskoye field. The mine will become

the key producer of limestone for the Sulphur Project.

• The Company launched two icebreakers, including a nuclear-

powered one, enabling future expansion of transport capacity

to cover the needs of the Taimyr Peninsula.

• The Company launched an integrated control unit in Norilsk

to monitor the condition of buildings and structures, which

tracks the condition of permafrost soils.

• In March, Nornickel sold NordStar Airlines.

• Nornickel reached a settlement agreement with the Federal

Agency for Fishery, stipulating that NTEC will ensure full

in-kind compensation for accident-related damage to aquatic

bioresources by releasing fry into the affected water bodies

between 2023 to 2050.

• Nornickel signed an agreement with RusHydro to purchase

electricity generated from renewable sources to Trans-Baikal

Division. Over the next three years, Bystrinsky GOK plans

to switch all its external energy consumption to carbon-

free sources leveraging similar contracts and thus unlock

significant GHG emission reductions.

1935-1959

1960-1992

1993-2012

2013-2020

2021-2030