(Bloomberg) -- Russia’s MMC Norilsk Nickel PJSC plans to cut nickel output and slash production of key battery metal cobalt this year, due to delayed plant repairs and a fire at a refinery.

The top refined nickel producer will likely lower output of that metal by 4% to 5% from 2022’s level of 219,000 tons as it conducts maintenance that had been put off from last year as it faced equipment-supply issues, Senior Vice President Sergey Stepanov told reporters from Moscow. Cobalt production will be less than half of what it was before September’s Kola site fire.

While the US and UK have sanctioned Nornickel’s top shareholder, Vladimir Potanin, no penalties have been placed on the company itself or exports of Russian metals. Still, the war in Ukraine has led to logistics, insurance and shipping disruptions. Nornickel’s output curbs also highlight how Russian metals production is being affected by Western firms cutting off equipment and technology supplies.

Nornickel controls roughly a 10th of the global nickel market. The metal and cobalt are both used in batteries and crucial to the green revolution. Bloomberg reported in December that Nornickel was mulling reducing nickel output as some European buyers shun Russian supplies and amid a potential surplus.

Nickel prices have been volatile amid low liquidity since an unprecedented short squeeze on the London Metal Exchange in March. Cobalt has slumped since reaching a multiyear high in mid-2022, partly on weaker electronics demand in China and prospects for more future supply.

Nornickel expects its nickel output to be between 204,000 tons and 214,000 tons this year. Cobalt production may total 1,000 tons, compared with 2,500 tons in recent years, Stepanov said.

The company last year focused on rebuilding its supply chains and managed to bring in some production equipment from Asia, he said. So this year it will need to carry out the postponed repairs.

For cobalt, Nornickel managed to restore a portion of output that was affected after the September fire in the cobalt section of one of its Kola division shops. It can sell the metal in the form of nickel-cobalt concentrate, and extracting 1,000 tons of cobalt a year should be enough to meet clients’ contracts, Stepanov said. 

The miner may produce as many as 2.6 million ounces of palladium and 643,000 ounces of platinum this year, it said in a statement. Last year, it produced 2.79 million ounces of palladium and 651,000 ounces of platinum.

--With assistance from Mark Burton.

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