Russian Norilsk Nickel reports third fuel spill as it wards off $2bn fine

Russian Norilsk Nickel reports third fuel spill as it wards off $2bn fine
The cleanup following a separate Norilsk Nickel spill earlier this year.
By Vadim Dumesh in Paris July 13, 2020

Russian metals major Norilsk Nickel reported the third fuel spill in less than two months, with about 44.5 tonnes of aviation fuel spilled near Tukhard village from its subsidiary Norilsktransgaz’ depressurised pipeline. 

As reported by bne IntelliNews, at the beginning of June Norilsk Nickel faced an environmental emergency of federal scale with one of the worst diesel fuel spills in the Arctic region on record. This was followed by a second minor incident with waste discharge from its Arctic Talnakh enrichment plant.

The timing for yet another fuel spill is unfortunate as the company is contesting RUB148bn ($2.1bn) environmental damages estimated by the RosPrirodNadzor watchdog.

The damages estimated for the latest environmental embarrassment are not likely to add a lot to the fine, but could weaken NorNickel's case. 

"Current estimates of the potential damages Norilsk Nickel will have to pay are low (circa $2.8mn, 0.01% of market capitalisation) and may be reduced, but the third environmental accident within several months is negative for market sentiment," BCS Global Markets commented on July 13.

The analysts previously believed that even though the potential fine had been more than offset by the company's recent market capitalisation loss, the negative news flow around the company's impact on the environment and the negative sentiment will remain the main driver for Norilsk shares. 

As followed by bne IntelliNews, the amount of the fine is also likely to influence the distribution of NorNickel's massive dividends (almost $5bn in 2019).