Harjavalta’s Expansion Project on Track Despite Sanctions Against Russia’s Potanin | Finland Today | News in English | finlandtoday.fi


Vladimir Potanin is known as Russia’s ‘Nickel King.’ Photo illustration: FINLAND TODAY

Finland’s Harjavalta Refinery—one of Europe’s largest battery-grade nickel suppliers—maintains its plans to expand production from 65,000 tons to 75,000 tons as early as 2023, and the UK sanctions against Russia’s Vladimir Potanin are not in the way.

Potanin, known as Russia’s “Nickel King,” was included in the latest list of UK sanctions. which also put restrictions on other businessmen and firms.

Finland is home to Norilsk Nickel’s only foreign asset—Harjavalta.

The Harjavalta refinery will boost output in 2023 to 75,000 tons and then drive the capacity further up to 100,000 tons by early 2026, Nornickel had noted in a statement. The plant uses renewable energy and currently produces 65,000 tons of nickel per year.

The expansion is expected to cost tens of millions of euros, the company had estimated.

The refinery is a core supplier of battery-grade raw materials for large European manufacturers. Harjavalta’s nickel is key to the production of high-capacity batteries used in electric cars.

The Harjavalta operations are the main reason why the value of Russian nickel imports to Finland outstripped oil imports, according to Finnish customs data for the first five months of 2022.

At Harjavalta, Norilsk Nickel produces about 5% of the global high purity nickel supplies.

In Finland, Norilsk Nickel is closely linked to the industrial center of Harjavalta, which employs a total of 1,000 people. Nornickel Harjavalta employs about 300 people.

If the EU and the US follow the UK’s lead, the mining giant could face a production freeze, which may cause another spike in nickel prices and jeopardize planned investment in battery manufacturing in Europe, according to Kauppalehti.

According to the law firm Neuschwil and Bayer, unlike US sanctions, British sanctions apply to companies only if a sanctioned entrepreneur owns 50 percent of its shares or more.

Currently, the other two significant shareholders of the Russian nickel giant, Oleg Deripaska and Roman Abramovich, are under UK and US sanctions, and together with Potanin, their combined stake in the company exceeds 50 percent. However, the parties are known to be in a shareholder conflict; therefore, it does not make sense to combine the ownerships for sanction consideration.

As Neuschwil and Bayer explained, as long as only Potanin is involved in the operational management of Norilsk Nickel, the miner is not threatened by sanctions, even if other countries extend sanctions on him.




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