Nickel Industries invests to accelerate the transition to battery grade nickel

About Nickel Industries

Nickel Industries Limited (Nickel Industries, the Company, ASX:NIC) is a nickel processing business that owns a portfolio of mining and low-cost downstream nickel processing assets in Indonesia, including control of the world-class Hengjaya Mine. The Company also owns four rotary kiln electric furnace (RKEF) projects which produce nickel matte for the electric vehicle (EV) supply chain and nickel pig-iron (NPI) for the stainless-steel industry.

Accelerating the transition to battery grade nickel

An additional 8.25 percent interest in the Indonesia-based Excelsior Nickel Cobalt (ENC) High-Pressure Acid Leach (HPAL) Project to 13.75 percent continues NIC’s transformative step to producing intermediate product crucial to the lithium-ion battery supply chain for EVs. Nickel Industries’ payment of US$190 million for the additional 8.25 percent stake is in accordance with its acquisition payment schedule for a further US$949 million in four additional payments to October 2025. At this time, NIC’s equity interest in the ENC HPAL Project will reach 55 percent.

The strategic importance of this Project lies in its capability of producing contained nickel equivalent across the three major class 1 nickel products being mixed hydroxide precipitate (MHP), nickel sulphate and nickel cathode. These three major class 1 nickel products are critical for their use in the rechargeable EV battery market. The ENC HPAL Project is expected to produce 72,000 metric tons per annum of contained nickel equivalent when completed.

The ENC Project is supported by a US$400 million financing facility from Indonesian Bank, BNI, which comfortably positions NIC to fund its 55 percent stake in the ENC Project to completion. The Project has received a 15-year tax holiday from the Indonesian government, from commencement of production, scheduled for the fourth quarter of 2025. This tax concession enhances the Project’s overall economics and profitability.

Comprehensive Construction Guarantee

NIC’s exposure to construction risk of the ENC HPAL Project is mitigated by a comprehensive construction guarantee provided by Shanghai Decent Investment (Group) Co Ltd (Shanghai Decent), covering capex, nameplate performance, and timing of commissioning. Shanghai Decent is NIC’s largest shareholder and a key operating partner in the Project. The construction guarantee ensures that total construction costs will not exceed US$2.3 billion. The guarantee covers Project commissioning and production build-up to nameplate capacity of at least 60,000 metric tons per annum of contained nickel equivalent.

This guarantee is significant given the recent series of announced capex overruns in the nickel and battery metals industry.

The Future

NIC’s focus on the EV battery supply chain with vertical integration of supply leaves the Company well positioned for the future as global EV manufacturers look to secure long-term nickel-equivalent supply agreements. NIC’s sustainability strategy to implement several Environment, Social and Governance (ESG) initiatives ensures that ESG conscious EV manufacturers around the globe are especially drawn to NIC’s low carbon emission product which is essential for the global energy transition to a less carbon intense world.

NIC’s position as a large, established top 10 global nickel producer is certain to maintain its strong investor support for decades to come.