Results of the Board of directors’ meeting

A scheduled meeting of the Board of Directors of MMC Norilsk Nickel took place yesterday. Among other issues, the Board discussed the 2009 budget of the Company and its strategy regarding energy assets.

I.  Key Objectives and Budget for 2009

The Board of Directors approved the current year’s budget drafted by the management taking into consideration the mid-term strategic goals of the Company. One of the main points highlighted in the budget is the ability of the Company to generate free cash flow in order to preserve its strategic and operational potential even in a depressed metal prices environment.

«2009 budget process took unprecedentedly long time mainly due to negative global economy trends and uncertainty in metals & mining industry. In such circumstances it was extremely important to find optimal solutions, to analyze all existing alternatives in different macroeconomic scenarios. The management believes that the budget approved today fully accounts for actual economic conditions allowing the Company not only to survive the period of recession but also to continue its most important and promising investment projects, - said Dmitry Kostoyev, Deputy General Director at MMC Norilsk Nickel.

Key strategic objectives:

• Maintain stable metal production at the Russian operations.

• Sell 100% of metals produced.

• Secure jobs & social obligations, ensure social stability in the regions of presence, especially where the Company is a major employer.

• Continue modernization of production facilities, further reducing harmful emissions and lessening the environmental impact.

• Improve the corporate governance standards, ensure involvement of the members of the Board of Directors in corporate strategic planning, protect all shareholders’ interests.

Key budget parameters:

• As envisaged in the 2009 production program, Russian operations of the Company will maintain steady metal output. Annual nickel production at the Polar and Kola Divisions is expected at the level not less than 220 thousand tons. A minor decrease in copper and PGM production (4-5% and 3-4% respectively) is explained by lower contents of these metals in the mined ore.

• Average annual prices used in the budget are as follows: Ni $ 10,000 per tn, Cu $ 3,300 per tn, Pt $ 850 per ounce, Pd $ 190 per ounce. Price forecasts were made in December of 2008, and the Company followed this scenario in the first quarter of 2009.

• The target amount of revenues from Russian production sales in 2009 is about $ 6.3 bln, and  EBITDA over $ 1.8 bln.

• Investment plan for the Russian divisions approximately amounts to $ 1.0 bln including more than $ 600 mln to be spent in capital construction and about $ 200 mln allocated for the purchases of new equipment.

• As stated in the budget, commercial expenses related to metal sales will be cut by 60%. Expenditures in the Company’s sports projects will also be reduced by 40%. A substantial cost reduction will be carried out in the Head Office, where both the salary fund and administrative expenses will become lower. The construction of non-core facilities in Norilsk will be suspended. Up to 4% of geology and administrative staff, while the number of production personnel in Norilsk and Kola MMC will not change.

• Implementation of the aforementioned measures will allow reducing metal production costs.

• The budget is based on the annual average RUB/USD exchange rate of 35.1.

The Board of Directors instructed the management to continue cost reduction efforts.

II. MMC Norilsk Nickel  strategy as regards its energy assets

The Board of Directors also discussed a number of divestment alternatives for the non-core energy assets. It was decided that the issue needed further elaboration, thoughtful consideration and coordination with all interested parties, and in the management’s opinion no divestment of energy assets, regardless of its form, should undermine the financial standing of MMC Norilsk Nickel. It is understood that such elaboration may take a considerable period of time, thus no dates were set for the next review of this issue.

III. Disclosure of confidential information

Having discussed the issue, the members of the Board of Directors agreed on the need to take a responsible attitude towards the disclosure of confidential and other sensitive information, which may affect the Company’s financial or market position.