Supplier due diligence in 2021–2022

The Company’s mineral supply chain due diligence involves assessing any and all suppliers, whether internal or external. As mentioned above, the key distinctive feature of the Company’s mineral supply chain is that most of its mineral suppliers are internal suppliers of the Group.

In 2021–2022, Nornickel conducted due diligence on eight mineral suppliersNo due diligence took place at GRK Bystrinskoye as it does not have any mineral suppliers., including one supplier of Kola MMC and seven suppliers of Polar Division. In the reporting period, the Company had only one external supplier that shipped minerals to Polar Division. This supplier delivers ore concentrate from a technogenic deposit. The supplier’s volumes processed into non-ferrous metals are immaterial in terms of Polar Division output.

Following supplier due diligence by divisions, we identified a risk indicator associated with the external supplier of minerals to Polar Division. When assessing how well the supplier complied with the Code, the supplier was found to have no corporate responsible supply chain policies or procedures in place relating to human rights.

After a risk indicator was identified, Polar Division conducted an enhanced due diligence, including an on-site visit to the actual production site. Following an enhanced due diligence, no risk was identified or confirmed. The supplier was advised on corrective actions to close the gaps identified and to produce the missing documents required for responsible supply chain.

The corrective actions were implemented in full. The supplier developed and approved the respective regulations, specifically the responsible sourcing policy, the supplier code of conduct, and the human rights policy.

Since no risks were confirmed for the Company’s suppliers in the reporting period, we finalised due diligence at this stage. However, the DDMS also includes the risk management stage described below.