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Russia’s Nornickel H1 profit slides as it sets aside $2…

MOSCOW, Aug 11 – Russia’s Norilsk Nickel said on Tuesday its net profit plunged in the first six months of 2020 after setting aside $2.1 billion in reserves for an environmental damage claim after a major fuel spill in the Arctic.

Nornickel, the world’s largest producer of palladium and the leading producer of nickel, disputes the amount of compensation Russia’s environmental watchdog has asked it pay voluntarily following the May 29 leak, which the watchdog has said threatens unprecedented damage to the Arctic.

The company said net profit fell to $45 million in January-June from $3 billion in the first half of 2019. Its core earnings, known as EBITDA, were down 51% year-on-year to $1.8 billion.

“The Company sees the possibility for an out-of-court settlement of all issues related to the assessment of environmental damages, terms and timing of the compensation terms within the established working group,” Nornickel said in a statement.

It also said that it had reduced its capital expenditure plan for this year to less than $2 billion from $2.2-$2.5 billion previously due to weakening of the rouble and the novel coronavirus outbreak. Its 2021 capex is expected at between $3.0 billion and $3.4 billion. (Reporting by Anastasia Lyrchikova; writing by Polina Devitt; Editing by Kirsten Donovan)

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