Leading Producer of Base and Precious Metals

Leonid Rozhetskin
Member of the Management Board
BMO Nesbitt Burns Natural Resources Conference
February 24, 2003
Tampa, Florida

Norilsk Nickel - Today

Norilsk Nickel is the worlds largest producer of nickel and palladium and a significant
producer of platinum, gold, copper and cobalt
Norilsk Nickel shares are traded on:

RTS (GMKN$ RU) and MICEX (GMKN4(5) RM) in Moscow

ADRs in New York (NILSY US), London (MNOD LI) and Berlin (NNIA GR)
Norilsk Nickel Share Price Performance vs. Mining Indexes
(In US dollars for NN; indexes adjusted to NN share price)

Norilsk Nickel in RT S
Morgan Stanley - World Metals & Minerals
HSBC Global Mining 100

26.00

HSBC Global Nickel

HSBC Global Platinum

24.00
22.00
20.00
18.00
16.00
14.00

Norilsk Nickel - Operations Overview

Kola Peninsula
Zapolyarny/ Nickel mining and metallurgy
Monchegorsk/ Metallurgy
16 600 employees

Taimyr Peninsula
Norilsk/ Talnakh
mining and metallurgy
62 000 employees

Kola Peninsula

Taimyr Peninsula
St. Petersburg
Research institute
(Gypronickel)

Murmansk
Murmansk

St.Petersburg
St.Petersburg

Norilsk

Moscow
Moscow

Krasnoyarsk
Krasnoyarsk

ZAO Polyus
Head office

Krasnoyarsk Region (ZAO Polyus)

Gold mine and metallurgy

Periodic Table of Elements

13%

18%

3%

>40%
16%

1%

Market Share
Metal

World Leading Producer of Nickel

Largest nickel producers in 2002
(In thousand tons, share of world production)
250

18%

18%

200
150

8%

100

6%

5%

50
0

Norilsk
Nickel

Inco

Falconbridge
5

BHP
Billiton

WMC

World Leading Producer of Palladium

Largest palladium producers in 2002
(Share of world
production)
50%
>40%
40%
30%
20%

17%
12%
8%

10%
0%

Norilsk
Nickel
Source: Company reports except for Norilsk Nickel

6%

Anglo
Impala Stillwater Lonmin
Platinum Platinum
6

World Leading Producer of Platinum

Largest platinum producers in 2002
(Share of world production)
50%
38%

40%
30%

24%
20%

16%

13%

10%
3%
0%

Anglo
Platinum

Source: Company reports except for Norilsk Nickel

Impala
Platinum

Norilsk
Nickel

Lonmin

Inco

Leading Producer of Gold in Russia

After the acquisition of ZAO "Polyus" Norilsk Nickel has become the largest gold
producer in Russia with a 12,7 % pro forma market share in 2001 and expected market
share of 16-18% in 2002

Norilsk Nickel holds almost 1% share in world gold production

Top Russian gold producers in 2001
(In tons; as % of the total 2001 gold production of 155 tons)

25

Norilsk Nickel
ZAO Polyus

12.7%

20

4.0
15

8.7%

10
15.6
5

4.6%
3.1% 3.0%

13.5
7.1

4.8

4.6

4.5

ly
us
on

Po
+

O
m
ol

N
N

Note: (*) Proforma

1.9% 1.8%

1.7%

1.5% 1.5%

3.0

2.6

2.4

2.8

2.3

M
in
in
g
Co
L
M
e
n
no
zo
go
lo
to
ve
rs
hi
nn
Bu
oy
ry
e
at
zo
Su
lo
su
to
m
an
zo
lo
to
Po
A
kr
m
ur
ov
sk
y
M
i
Po n e
lim
et
al
l
Vi
tim
A
ld
an
zo
lo
to

0
Source: Company date

2.9%

Product and Geographical Distribution of Revenues

Revenue split in 2001
100% = USD 4 378 MM

By metal

By geography

Other
6%

Asia
17%

Nickel
32%

Precious
metals
46%

Russia
9%

America
17%
Copper
Cobalt14%
2%

Europe
57%

Production (Base Metals)

Nickel

Copper

(In thousand tonnes)

(In thousand tonnes)

250
209
200

203

217
192

223

500

218
218

400

190

150

300

100

200

50

100

1999

2000

2001

2002

Production
Sales

10

474
396
399

413
412

472

1999

2000

2001

454
437

2002

Metal Prices in 2002

Nickel price (LME, spot)

PGMs price (spot)

(In US dollars per ton)

(In US dollars per ounce)

7 500

600

7 000

500

6 500

400

6 000

300

5 500

Mar

May

Jul

Sep

200

Nov

Mar

May

Copper price (LME, spot)

Gold price (spot)

(In US dollars per ton)

1 800

360
340

1 600

320

1 500

300

1 400

280
Source: Bloomberg

1 300
May

Jul

Jul

Sep

Nov

Jul

Sep

Nov

(In US dollars per ounce)

1 700

Mar

Platinum
Palladium

700

8 000

Sep

Nov

11

260

Mar

May

Financial Highlights of Norilsk Nickel Group (IAS*)

(In millions of US dollars)
(2)

2001

2000

1999

4 378
1 380
631
2 033
78

6 031
2 058
880
2 755
100

4 458
1 790
927
1 469
133

979 (1)
22%

2 302
38%

1 277
29%

Net After Tax Profit (as reported)

Adjusted Net Profit
margin, %

1 222
468 (1)
11%

1 616
1 616
27%

816
816
18%

Total Assets
Shareholders' Equity

7 212
4 876

7 233
5 000

6 637
3 671

Revenues, incl.
Nickel
Copper
Precious metals/ PGMs
Cobalt
Adjusted EBIT
margin, %

Notes:
(1) Adjusted to exclude the Net Financing Gains: Changes in fair value of derivatives of $753.4 MM
(2) 1999 financial data has been restated using Goskomstat inflation rates
* Restatement in accordance with International Accounting Standards (IAS)

12

2002 Objectives
Improvement of Corporate Governance

Amendment of the charter and corporate by-laws to reflect the

provisions of the Federal Securities Commission Code of Corporate
Conduct and last versions of the Corporate Law

Election of 3 independent directors to the Board

Creation of the
responsibilities

Announcement of a long-term dividend policy

Lifting of the secrecy regime on production and sales numbers for base
metals

Management Compensation System has been put on hold

Management

Cost Reduction

Procurement tenders

13

Board

with

clearly

allocated

2002 Objectives (continued)

Publication of financials based on IAS

Release of 2000 and 2001 IAS financial statements

Publish quarterly production statements starting in 2002

Audit of 2002 financial statements according to IAS to be prepared before

General Shareholder Meeting

Increase transparency

Declassification of base-metals reserves in Taimyr (Ministry of Natural

Resources is to issue formal approval)

Continue effort to lift secrecy on production/ sales volumes (base metals

and PGMs)

Regular Investor presentations & Conference calls

Extension of coverage by leading international investment banks

14

2002 Objectives (continued)

Pursue efficient M&A policy

Divestment of non-core assets - Sale of Novolipetsk Metallurgical Combine

Abandonment of Nakety-project

Acquisition of Russias largest gold producer ZAO Polyus - diversification

of revenues
Acquisition of Stillwater Mining Company - increase reliability and supply
certainty in palladium market

Sale of Novolipetsk Metallurgical Combine

+ USD 177.9 million*

Abandonment of Nakety-project

- USD 7.5 million

Acquisition of Russias largest gold producer ZAO Polyus- USD 226 million
Acquisition of Stillwater Mining Company

- USD 100 million**

Acquisition of 24% stake in Krasnoyarskenergo***

- USD 40 million

Net Cash Outflow

Note:

- USD 195.6 million

* Norilsk Nickel received the consideration of RUR 5 513 million in March 2002.
** The deal is subject to several approvals: by Russian Central Bank, by US anti-trust authorities, by SWC shareholders.
*** Regional monopoly utility company in Krasnoyarsk region

15

The Stillwater Transaction Summary

Form

Norilsk Nickel will acquire 51.0% of Stillwater Mining Company (NYSE:

SWC) in the form of 45,463,222 newly issued shares

Consideration

Total of $341 million, or $7.50 per share (palladium and cash combination)
$100,000,540 in cash
Approximately 876,270 ounces of palladium, valued at $241 million
based on the November 19, 2002, London PM Fix price ($275/oz)

Conditions

PGM Agreement

Intent to enter into Platinum Group Metal Agreement (at least 1,000,000
ounces of palladium per annum for resale in North America)

Corporate Governance

Stockholders Agreement allowing Norilsk Nickel to nominate 5 of 9 Board

members, 2 of which must be independent as defined in NYSE and SEC
regulations

Other Transactions

Norilsk Nickel will tender for up to 10% of the shares after the close of the
transaction
Based upon the pre-closing fully diluted number of Common Shares
$7.50 per share in cash

U.S. anti-trust approval (the Hart-Scott-Rodino Act)

Stillwater shareholders approval
Bank waiver of change of control covenants
Russian Central Bank approval

16

The Stillwater Transaction/ Corporate Governance

Board of Directors

Size of the Board of Directors - 9

Norilsk Nickels board representation will reflect its shareholding in Stillwater:

Norilsk Nickel will nominate 5 of 9 Board members, 2 of which must be independent
3 existing directors will remain on the Board of Directors (all independent directors)
CEO will be the 9th Board member

Majority of the directors on the Board will be independent

CEO will remain Chairman of the Board of Directors

17

Creating Value for Norilsk Nickel Shareholders

Provides a solid distribution platform for PGMs in the US with improved access to the
key end-users in the US
Inventory outside Russia and US marketing effort increases buyer confidence in supply
North American market represents about 39% of global palladium demand and 47% of
global palladium demand for auto catalysts

Realizes value for Norilsk Nickels palladium inventory

Increased reliability and certainty of palladium supply preempting the substitution effect
and promoting the use of palladium

Geographical diversification of the mineral resource base/reduction of country risk

Access to acid leaching technology (currently being studied as refining technology in

Norilsk Nickels operations)

Immediately accretive to earnings

18

Creating Value for Stillwater Stakeholders

Norilsk Nickel investment provides liquidity to reduce debt, fund capital expenditures,
and keep the mines operating

Access to Norilsk Nickels palladium makes Stillwater a reliable supplier for users

Support from Norilsk Nickel to promote usage of palladium in exhaust systems, fuel cells
and other applications

Potential to increase demand for palladium

Norilsk Nickel is committed to continuing Stillwaters transparency, corporate

governance and environment standards and practices and NYSE listing

Potential of long-term value creation for all stakeholders

19

Creating Value for Palladium Users

Increases palladium supply to North American consumers

Assures users greater access to strategic metal, hence offering confidence to apply
palladium to new uses

Norilsk Nickel and Stillwater intend to jointly promote the usage of palladium

20

Next Step Objectives

Corporate governance
Publish 2002 IAS fully audited financials before general shareholder meeting
Start releasing quarterly IAS unaudited results
Introduce performance-related management compensation schemes
Continue effort to lift the state secrecy regime on reserves and on PGM
production and sales

Distribution
Focus on long-term contracts directly with end-users
Enter into long-term PGM agreements with major car producers

21

Next Step Objectives (continued)

Improvement of financial management
Continue reducing labor costs by reducing number of employees
Put Pelyatka natural gas field into operation as a major step in long-term energy
strategy implementation
Implement management information system
Continue to reduce burden of social legacies - expenditures to support social
infrastructure to be financed by local authorities from 2003-2004
Improve working capital management
Optimization of production
Implement development strategy to be released in the first months of 2003
M&A activity
Realize the full potential of the ZAO Polyus acquisition
Complete the transaction with Stillwater Mining Company

22