Potanin admits trouble as Russia’s war-torn economy suffers due to sanctions
In a meeting with Putin in the Kremlin, Vladimir Potanin said his Norilsk Nickel is forced to operate under difficult conditions.
Norilsk Nickel has been a money machine for investors, and especially Vladimir Potanin, since the early 1990s when the giant metal producer was privatised. Today the oligarch is Russia's fifth richest with a net worth of more than €25 billion according to Forbes.
With the war all is now changing. Norilsk Nickel’s revenue has been declining for several years in a row. In late October, the company announced consolidated production results for the nine first months of 2025. Output of all key metals decreased compared to the same period last year.
“We have to work in difficult conditions,” Potanin said in a recent meeting with Putin. From time to time, the leader in the Kremlin orders Russia’s oligarchs to come to his office to talk about the state of affairs concerning the businesses.
Norilsk Nickel's CEO told about falling global prices and troubles caused by sanctions.
The difficulties are caused by "disruption of supply chains, payment chains, the need to reorient ourselves to new, unfamiliar markets," Vladimir Potanin said.
The withdrawal of suppliers of key Western mining equipment due to sanctions has forced Norilsk Nickel to transition to alternative sources for its factories in Norilsk. This is a main reason for a dip in production, the company explains.
Indirectly hit
Although Norilsk Nickel itself is not directly sanctioned, more than ten companies associated with the mining and metallurgy giant are included in the U.S. list of sanctions, the Barents Observer has previously reported. Also Rosatomflot, the icebreaker operator securing year-around transport of metals from the Arctic, is hit by sanctions.
Norilsk-Nickel posted a 13% drop in revenue and a 37% decline in net profit in 2024. Compared to 2021, the company’s profit decreased fourfold.
With its main production units on the Taymyr Peninsula in Siberia and on the Kola Peninsula in the Murmansk region, Norilsk-Nickel is still one of the world’s largest producers of nickel, copper, palladium and platinum.
Nickel, copper and cobalt are key metals for batteries to electric vehicles, of which China is the global leader. Last year, Potanin said plans were under development to establish a joint venture with a Chinese company to move parts of the the copper smelting from Norilsk to China.
How that idea is developing is unclear.
Towards recession
Also other Russian major companies are currently suffering due to the slowdown of the war-torn economy, according to news-online Sever.Realii.
245,000 employees have been laid off due to economic problems, Russia's Ministry of Labour. Especially companies in metal, coal, automobile, cement, and railways are troubled.
Experts speaking with Sever.Realii said Western sanctions, high interest rates on loans, and a decline in both domestic demand and imports are the main factors negatively impacting Russian industry. The same experts believe the Russian economy is sliding into recession.
