Russian firm first mining company to launch metal ETCs

Two further ETCs are set to launch, with nickel and copper funds available. Photo: Norilsk Nickel

Two further ETCs are set to launch, with nickel and copper funds available. Photo: Norilsk Nickel

Norilsk Nickel, the world’s largest producer of palladium and high-grade nickel, has launched a series of exchange-traded commodities (ETCs), offering investors access to physically backed metals.

The firm, which was forced to pay a record $2.1bn fine for an environmental disaster only last year, has become the first mining company to launch physically-backed ETCs.

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Its first four ETCs, managed by the Global Palladium fund and issued by Ridgex, offer investors access to gold for a management fee of 0.145%, and silver, palladium and platinum for a fee of 0.2% each.

Two further ETCs are set to launch, with nickel and copper funds available for fees of 0.75% and 0.85% respectively.

The ETCs will utilise bBlockchain to record bar information in addition to the traditional recording processes used by the custodian, and the firm has stated they will have a “strong focus” on ESG, only using suppliers and producers who support the UN Sustainable Development Goals.

Norilsk Nickel has tried to improve its environmental image recently, but alongside the $2.1bn fine which it initially refused to pay, the firm received a public admonishment from Russian president Vladimir Putin as a result of a fuel spill which saw 21,163 metric tons of diesel flood the area surrounding a power plant in May 2020.

According to data from Util, 100% of Norilsk Nickel’s $14bn revenue negatively impacts the world according to goals 13 (climate action) and 15 (life on land) of the UN SDGs.

Alexander Stoyanov, CEO of Global Pallidum fund, said: “Our way of digitalisation of commodities allows one to capture and trace the source of underlying metals and the way they were produced, coupled with ESG credentials.

“Nornickel, whose products we carry, sets a new standard for responsible mining by fully endorsing the UN2030 charter and the existing LBMA source of metal standards. This gives our ETC platform a market-leading position and a clear differentiator.”

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Anton Berlin, vice president, sales and distribution at Norilks Nickel, added: “The exchange-traded products carry the benefit of financial assets with no restrictions pertaining to investing in LME deliverable metal and issuing warrants. They offer investors competitive cost of ownership and transaction fees”.

Patrick Wood Uribe, chief executive of Util, said: “The company highlights its own metrics on some SDGs, some of which are commendable in their own right and are initiatives that are important — a good example is that they provide wellness programmes and health insurance to employees, and align this with SDG 3 (Good Health and Well-Being).

“While it is obviously worth doing, the contribution to SDG 3 is not as strong as it seems, as this does not take into account the impact of the company’s core revenue-generating activities in mining: these activities have significant consequences in water and air pollution, soil contamination, and deforestation, all of which create negative impacts on SDG 3 (hence Util’s negative revenue alignment on the chart).”


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