Scenario analysis of the consolidated financial and economic model until 2040

Based on the updated scenarios, Nornickel conducted a scenario analysis of its consolidated financial and economic model until 2040. The analysis showed that under any scenario – whether accelerated decarbonisation or a global retreat from such efforts – Nornickel’s basket of metals supports the resilience of its financial position through to 2040.

The analysis has shown that the EBITDA forecast is most favourable for the Company in the Global Growth scenario and least favourable in the Rapid Transition scenario. The key growth drivers behind the highest EBITDA figures in the Global Growth scenario include the highest GDP and population growth rates, which will fuel the strongest demand for palladium and copper vs the other two scenarios. The Company estimates the probability of the Global Growth scenario at 5%.

Although the Rapid Transition scenario is based on the most aggressive decarbonisation rates, which is impossible without green metals – nickel and copper, – the scenario projects the global economy to slow down, with the lowest GDP and population growth rates. On top of that, the total car fleet, including the fleet of passenger EVs, hydrogen cars, and plug‑in hybrids, in the Rapid Transition scenario will be lower than that in the Sustainable Palladium scenario as a result of the general trend towards reduction in car ownership and use as well as ride‑sharing development. The probability of the Rapid Transition scenario is estimated at 20%.

After 2034, the stress scenarios are closer to the Sustainable Palladium baseline scenario due to their different metal price growth rates, which are higher in Rapid Transition and, in contrast, lower in Global Growth vs Sustainable Palladium.