Canadian Mining Journal


Norilsk Nickel growth strategy risks dividend cut

Norilsk Nickel (US-OTC: NILSY) plans to boost spending on new projects over the next decade to increase production and capitalize on the growing electric car trend, but investors may need to brace for lower dividends down the road.

The Russian metals and mining company currently pays out 60% of its earnings before interest, tax, depreciation and amortization as dividends to shareholders, making it one of the biggest dividend payers in the mining industry.

Norilsk – which describes itself as the world’s largest producer of palladium and refined nickel as well as one of the largest producers of platinum and copper — signalled dividends may be reduced between 2022 and 2025 to maintain its investment-grade credit rating, as capital expenditures are expected to peak at between US$3.4 billion to US$4 billion per year.

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