Nornickel Dismissed Claims of Arctic Oil Spill Cover-up

Pressure is mounting on Russian mining company Norilsk Nickel over an Arctic oil spill that has wiped about 17% off its share price, left it with a hefty compensation bill and exposed it to accusations of covering up the full extent of the damage, Reuters reported.

Nornickel, as it is better known, denies the cover-up allegations by green campaigners, a regional governor and a former official at Russia’s environmental watchdog, who have spoken out publicly and, in some cases, published tests, photographs and witness accounts to support their allegations.

Their evidence, which Reuters has been unable to verify, shows diesel has spread into a lake and, according to witnesses, into a river that feeds into the Arctic Ocean.

Nornickel, citing official tests and satellite images, denies pollution has spread into either body of water.

It says it has contained the leak, from a power station near the industrial city of Norilsk on May 29, and that it has recovered 90% of the diesel by using containment booms and pumps.

It also denies hiding the extent of the damage, saying the vast number of companies, regulators and others officials involved in the clean-up operation guarantees full transparency.

“We cannot imagine how it would be possible to hide anything in such conditions,” a company spokeswoman said. “An investigation into the incident is being carried out by regulatory and monitoring agencies.”

Reuters has no independent evidence to support the allegations that Nornickel has suppressed information.

Nornickel’s shares fell 5% in one day in Moscow on Monday after Russia’s environmental watchdog demanded over $2 billion in damages. Nornickel said on Wednesday it disputed the size of the claim and the methodology used for its calculation.

President Vladimir Putin in June chided Vladimir Potanin, the billionaire boss of Norilsk, for not replacing the source of the spill, a fuel tank, in timely fashion and said significant damage had been caused to the fragile Arctic environment.

Potanin told Putin Nornickel would spare no expense to restore the environment and was committed to fund programs that would increase the deer population and maintain rare fish stocks. Nornickel has said publicly it is also committed to a federal investigation into the incident, takes full responsibility for what happened, and wants to avoid a repeat.

At the market close on Thursday, Nornickel’s shares were almost 17.3% lower than at the May 29 opening.

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