Transcript of the beginning of the meeting:

Vladimir Putin: Mr Strzhalkovsky, how was your company’s performance last year? What are your plans for the future? What measures has the company taken to execute the agreements that were reached during my last visit to Norilsk?

Vladimir Strzhalkovsky: Last year was a success for us – not only in my view, but also in the opinion of international experts.

Last year, the company’s capitalisation grew by almost 90% – this is the highest level of growth among worldwide ore mining and smelting companies. In all honesty, we did not expect such outstanding results. It was possible for both objective and subjective reasons. We fulfilled our production plans and even exceeded them by a modest 1%. This is a fair outcome, but not as impressive as the results that were achieved in the Soviet era. We expect revenues of $15 billion with a net profit of over $5 billion. In our net budget, we accounted for around 75 billion roubles in expenditures – almost a threefold increase over 2009. That amount this year has been planned at 85 billion. If current trends persist, the real numbers will be even larger.

On January 1, we also announced a 10% pay rise for employees. Currently, the average salary at Norilsk is 72,000 roubles per month, which is three times higher than the national average. Naturally, people in Norilsk live in more difficult conditions, but nevertheless, that figure already amounts to decent pay. We have increased our social expenditures and set aside 1.6 billion roubles for our health spa programme this year. We have also devised a development strategy for the company through 2025 – it has been preliminarily assessed by the board of directors, but is still pending approval. According to the strategy, we will allocate $32 billion in investment projects to help us boost our overall production capacity.

This year we plan to invest around 90 billion roubles. That’s a 130% increase over the 40 billion we set aside last year toward the same end. It is also worth noting that we are investing in our mines and in our ore. Our ore is degrading, so we need to mine more of it in order to achieve the same levels of production. Finally, we will be actively working with the government on the Chita project, which you have already approved.

As for the instructions you delivered in Norilsk at the end of last August, I am happy to report that we now have a 10-year programme to resettle residents of Norilsk and Dudinka, mainly pensioners, to areas with a friendlier climate. Our company drew it up together with the Ministry of Regional Development and the Krasnoyarsk Region administration, and it has recently been approved. The company has earmarked 8.3 billion roubles to fund the programme. Together with regional and territorial authorities, we intend to resettle more than 11,000 families. We also have our own programme, Our Home, which we are currently implementing to similar ends. I have already explained its operation to you as well as its status as a supplementary programme. We do not intend to replace the new programme but rather to amplify it.

Under our current budget and planning, we also anticipate the construction of two kindergartens to compensate for the lack of early education institutions in Norilsk. We have earmarked 920 million roubles for this purpose, and the design stage is already underway.

We are also fulfilling your order to build a swimming pool in Norilsk, towards which we have allocated more than 270 million roubles. The construction of a fitness centre in Dudinka will cost an additional 135 million. Finally, the construction of the Zapolyarnik stadium, also in Dudinka, will be completed this year, even if we don’t manage to complete the pool in time.

Vladimir Putin: You’ve been building the pool for two or three years, if I am not mistaken?

Vladimir Strzhalkowsky: This is the third year of construction. We live in an adverse climate, and construction can proceed only in fair weather, which is very seasonally limited. That’s why the project has taken so long. Regardless, it will be ready within the year. Then there is the large-scale reconstruction of the Zapolyarye health resort and spa in Sochi. We will add a four-star hotel in preparation for the Olympics.

Vladimir Putin: What about your natural resource base? You have assets in Irkutsk and another site.

Vladimir Strzhalkowsky: It’s in Voronezh. Mr Putin, I have just drawn up a request for you to call for a competition this year. Europe’s last undeveloped nickel deposit, and the largest, for that matter, is located in the Voronezh nickel province. We have surveyed it already, although no deep prospecting was authorised, and we now know that there are two very promising deposits there – Lankovskoye and Yolkinskoye. If we win the competition for their development, we are ready to invest 1.2 billion roubles and do everything necessary from this year through 2018. The mines at these deposits will produce pellets to be delivered to the Murmansk-based Kola MMC after being processed. Up to two million tonnes of ore will be processed annually, and many new jobs will be created. Moreover, the underground operations will not pollute the environment in Voronezh. So we ask you to execute the relevant orders.

Vladimir Putin: Good. We’ll see.