Russian mining giant agrees to pay £1.4 billion in damages for Arctic’s largest fuel spill

Norilsk, home of most of Nornickel's assets, has been plagued by industrial incidents and stunning levels of pollution

Credit: Maria Turchenkova/Telegraph

Russian industrial giant Nornickel has agreed to pay a whopping £1.4 billion in damages for what has been described as the Arctic’s largest fuel spill.

A massive tank at the company’s power station in the town of Norilsk collapsed in May last year, churning out some 21,000 tonnes of diesel fuel into the river system.

Nornickel, the London-traded largest producer of nickel and palladium in the world, initially played down the scale of the disaster and blamed it on the thaw of permafrost.

The company, which posted nearly £10.4 billion in revenue in 2019, has balked at the stunning £1.5 billion that the Russian environmental watchdog tried to claim from it last year.

Two weeks after a Siberian court ruled in favour of the environmental watchdog, Andrei Bugrov, Nornickel’s vice-president for sustainable development, said on Friday that the company would comply with the fine of 146.2 billion rubles (£1.4 billion), which would make it the biggest pay-out for environmental damage in Russian history.

Vladimir Potanin, Nornickel’s billionaire co-owner, in comments on Russian state television earlier this month conceded defeat, calling the ruling a “message for the whole business community.”

“We will have to treat the environment and industrial safety even more seriously,” he said.

Separately, Russian prosecutors are pressing charges against two local officials who allegedly failed to report the fuel spill on time.

Nornickel has blamed the incident on the thaw of permafrost, and maintained that the fuel tank was in good condition.

But Russian authorities in November released the results of their own investigation, insisting that the thaw of permafrost had no impact and that the tank got burst due to poor maintenance and flaws in construction.

Official records show that Nornickel has listed the tank as being under repair since 2016, making it off limits for official inspections.

One of Power Plant 3's tanks at Nornickel's power station in Norilsk collapsed last May, churning diesel fuel into the local river

Credit: Maria Turchenkova/Telegraph

The disastrous impact of the fuel spill was first reported by whistleblower Vasily Ryabanin, an environmental inspector, who filmed the local river bubble with crimson water and accused the government of a cover-up.

Nornickel early on played down the scale of the disaster, insisting that it managed to catch 90 percent of the fuel spill.

Calculations by independent hydrogeologist Georgiy Kavanosyan showed that the diesel reached the Arctic’s Kara Sea two weeks after the incident.