Russian magnate breaks wealth record despite pollution fine

Russia’s richest man Vladimir Potanin has set a new wealth record despite his mining giant Norilsk Nickel being slapped this month with a $2 billion fine over an Arctic fuel spill.Vladimir Potanin wearing a suit and tie: Vladimir Potanin is said by Forbes to be worth over $30 billionVladimir Potanin is said by Forbes to be worth over $30 billion

Potanin’s fortune has crossed the $30 billion threshold, Forbes reported, in a new record for a Russian business owner.  Shares in the company, also known as Nornickel, have risen by some 40 percent over the past year as a result of a sharp increase in prices of non-ferrous metals such as nickel and palladium. 

The Russian company is the world’s largest producer of palladium and one of the largest of nickel. Nickel in particular is used in electric vehicles, which are facing growing demand worldwide, Potanin holds a near 35 percent stake in Nornickel. Its value has grown despite a court order on February 5 for the company to pay a 146.2 billion ruble ($1.99 billion) fine over a fuel spill last May.

More than 20,000 tonnes of diesel leaked into lakes and rivers in the Russian Arctic after a fuel reservoir collapsed at a power plant owned by the company. It has been working to improve its environmental image in the wake of the disaster.  In recent months Nornickel announced the closure of two smelters in the towns of Monchegorsk and Nikel in the northwestern region of Murmansk. Both locations are considered to be among the most polluted in the world, in particular due to sulphur dioxide emissions.

And on Tuesday, when publishing its financial results, the company set itself a target of reducing sulphur dioxide emissions in Murmansk by 85 percent by the end of 2021. The results showed that Nornickel had earned a net profit of $3.6 billion in 2020, down 39 percent year-on-year. The company also announced a gross operating profit of $7.6 billion, down three percent. The Russian producer explained the profit decline by the $2 billion it has set aside to pay its pollution fine, but also by the costs generated by the coronavirus pandemic. 

It claimed to have “learnt an important lesson” from the Arctic catastrophe and “completely revised its approach to environmental risk management”, noting in particular that it wants to gradually replace diesel fuel with cleaner natural gas in its activities.

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