Russian watchdog seeks nearly $3B in damages over Arctic fuel spill in Siberia

Russia's environmental watchdog has asked a power subsidiary of Russian mining giant Norilsk Nickel to pay almost 148 billion rubles, or $2.8 billion Cdn, in damages over an Arctic fuel spill in Siberia.

Rosprirodnadzor, the Federal Service for Supervision of Use of Natural Resources, said in a statement on Monday that it had already sent a request for "voluntary compensation" to the subsidiary, NTEK, after calculating the damage caused by the May 29 fuel spill.

Norilsk Nickel's Moscow-listed shares fell by 3 per cent after the watchdog's statement.

A fuel tank at the power plant lost pressure and released 21,000 tonnes of diesel into rivers and subsoil near the city of Norilsk, 2,900 kilometres northeast of Moscow. Russian President Vladimir Putin subsequently declared a state of emergency in the region, and investigators detained three staff at the power plant.

At the time of the spill, a company statement said it was concerned about facilities constructed on sinking soil above permafrost. The company did not immediately reply to a request for comment.

Norilsk, a remote city of 180,000 people situated 300 kilometres inside the Arctic Circle, is built around Norilsk Nickel, the world's leading nickel and palladium producer, and has a reputation for its pollution.

Rosprirodnadzor said the damages included the cost for nearby water bodies, estimated at 147.05 billion rubles, $2.8 billion Cdn, and for subsoil, estimated at 738.62 million roubles, $14 million Cdn.

Greenpeace has compared the incident to the devastating 1989 Exxon Valdez oil spill off Alaska.

"The amount of the damage to Arctic water resources is unprecedented. The sum corresponds to it," Russia's natural  resources and environment minister, Dmitry Kobylkin, said in a separate statement.

"If one remembers the Exxon Valdez tanker accident off the coast of Alaska, the amount of the damage and charged fines [in that case] was over $5 billion," the minister added.