The UK government imposed economic measures on Vladimir Potanin, the president of Nornickel, in its latest escalation of sanctions against Moscow.

With the news only having broken late last week, it remains unclear as to whether the sanctions on Potanin will have any impact on the nickel, cobalt and PGM supply chains.  Nornickel’s vice-president, Vladimir Zhukov, noted that the UK sanctions do not apply to the company but also confirmed that “…the issue is currently being studied by [its] lawyers”.  Meanwhile, the LME announced that it is “examining sanctions” and their impact on Norilsk brands.  

Potanin was sanctioned by Canada in April, but some commentators have speculated that he had so far avoided being sanctioned by the EU, USA, and UK because of the importance of Nornickel to the global automotive and semiconductor industry. 

Given the company’s size and position in the global supply chain, any impact from sanctions on its ability to supply its customers would be felt severely.  It is the world’s largest refined nickel and palladium producer, a top-three producer of platinum and a significant player in rhodium, cobalt, and copper.  It also produces gold, silver, iridium, selenium, ruthenium, tellurium, and sulphur. 

If sanctions were to affect Nornickel supply, the impact would be particularly felt in Europe and dent plans to build more sustainable, regional supply chains for lithium-ion batteries and electric vehicles.  The company signed a long-term deal with BASF for cobalt and nickel supply from its Harjavalta plant in Finland in 2018 and signed a similar supply deal with Johnson Matthey in 2021.  The European market is central to Nornickel’s plans as it looks to leverage its unique position to supply the European value chain.