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Nornickel fund launches carbon neutral nickel ETCs on Wiener Börse

Nornickel reemphasises its commitment to clean energy with launch of physically-backed carbon neutral nickel ETC.

Norilsk Nickel’s Global Palladium Fund (GPF) has launched the world’s only physically-backed carbon neutral nickel Exchange Traded Commodity (ETC), offering investors exposure to the spot prices of nickel without owning them.

Nornickel, the world’s largest producer of refined nickel and a major producer of copper, hopes to attract more European-based investors in these base metals through ETCs launched earlier on the London Stock Exchange (LSE).

Targeting institutional investors, the new ETC has a low investment cost, with its total expense ratio standing at 0.75 per cent. The minimum investment is 100,000 US dollars and daily valuations are available on Wiener Börse (the Vienna Stock Exchange). Prior to the issue on the exchange, the carbon-neutral metal was tokenised on Atomyze, a blockchain platform.

Nornickel Vice President, Sales and Distribution Anton Berlin says that carbon neutral nickel ETC is another important development for the firm and testament to its commitment to the global climate change agenda.

“This announcement furthers our ambition to be the leading producer of green metals, highlighting the attractiveness of our portfolio of low-carbon commodities which provide a transparent and fully-audited source of sustainable metals,” adds Berlin.

The carbon credits embedded into the carbon neutral nickel ETC represent the carbon saving generated by Nornickel during 2019 and 2020. International auditor EY verified the volume of Nornickel’s emissions and Sphera GmbH, a leading European environmental and sustainability consultant, confirmed the methodology behind emission calculations.

Nornickel and Sphera have been working together since 2013 to record the company’s CO2 emissions. The data show Nornickel’s long-term commitment and strategy to cut greenhouse gas (CO2) emissions at all stages of the production chain, from underground ore mining to processing and refining.

Alexander Stoyanov, CEO of GPF says: “This is yet another tangible benchmark achieved and thanks to Nornickel’s commitment to emissions reduction we can bring the world’s first carbon-neutral nickel ETC to market. Investors can take advantage of low-cost access to nickel which plays a fundamental role in the transition to clean energy in the knowledge it has been mined and produced responsibly.”

Carbon savings

The carbon savings were made possible thanks to upgrades to the hydro power plant which feeds Nornickel’s production facilities in the Norilsk Industrial District and the upgrade and repair of power equipment, rollout of the automated control and metering system, reduction of heat losses in buildings and pipelines, and decommissioning of obsolete power units.

The carbon neutral nickel ETC is an addition to GPF’s portfolio of six physically-backed, low-cost metal ETCs, which include gold, silver, platinum, palladium, nickel and copper, and are now listed on Xetra. The ETCs are also available on the LSE, Xtra, SIX and Borsa Italiana.

Digital assets that backed by ESG-compliant products have an important difference from conventional financial instruments. Given the specifications of the blockchain technology, the origin of goods and services at all stages of their production up to disposal will be transparent, news outlets reported.

Potentially, tokens for such products can become an investment tool, in demand not only among traditional industrial clients, but also among other categories of investors focused on ESG.

Previously, Norilsk Nickel issued the first metal contract tokens to its main industrial partners Traxys SA and Umicore SA, becoming one of the first companies in the industry to do so.

This content has been produced in collaboration with an Emerging Europe partner organisation.