Russian mining giant Norilsk is predicting a fall in production this year, as the area it has been mining will contain less metal.

It said that it would be increasing its capital investment over the next four years in order to combat this, raising spending to between $800 million and $1 billion a year.

The company said in a statement: "This increase in investments during the period from 2007-2010 is focused on intensive development of the mineral reserve base that compensates for the planned depletion of existing sources of ore and creates a solid foundation for long-term production development."

It added capital expenditure would return to the current spending level of between $450 and $500 million after 2010.

Norilsk plans to produce 2.90 million to 2.95 million ounces of palladium and 690,000 to 700,000 ounces of platinum this year, down form the volumes produced in 2005.

Last year, it produced 243,000 tonnes of nickel and 452,000 tonnes of copper. Palladium output was 3.133 million ounces in 2005 and platinum output 751,000 ounces.

Platinum group metals output would be about 114 tonnes (3.67 million troy ounces) to 2011, the company said.

Ÿ Adfero Ltd