Photo by: Reuters
PERTH (miningweekly.com) – ASX-listed Nickel Industries has completed the acquisition of a 10% interest in the Huayue nickel/cobalt (HNC) project and an additional 10% interest in the Oracle nickel project, following Foreign Investment Review Board (FIRB) and shareholder approval.
Nickel Industries earlier this year struck an electric vehicle battery supply chain strategic framework agreement with Shanghai Decent Investment to acquire a 10% interest in the PT HNC high-pressure acid leach (HPAL) project in the Indonesia Morowali Industrial Park (IMIP) for $270-million.
The company also agreed to acquire an additional 10% stake in the Oracle nickel project for $75-million, taking its stake in the operation to 80%.
Having received no objection from the FIRB, and having shareholders agree to the transaction, Nickel Industries has now issued Shanghai Decent more than 381.36-million shares in the company, at an issue price of A$1.02 each as consideration for the HNC transaction, and has made a cash payment of $75-million for the stake in the Oracle project.
The company also completed the payment obligations for two acquired options, with a cash payment of $40-million to Shanghai Decent, consisting of $25-million for an option to participate in the construction of the Excelsior nickel/cobalt (ENC) project, and a $15-million consideration for an option to invest in and construct a high-grade matte converter at Oracle.
“We are very pleased to have now completed the various asset and options acquisitions outlined in our electric vehicle battery supply chain strategic framework agreement,” said Nickel Industries MD Justin Werner.
“The completion of these transactions further consolidates our strong existing relationship with Tsingshan and importantly represents an important advancement in our continuing diversification into higher margin, lower carbon forms of nickel production as we seek to become a globally significant producer of sustainable nickel.”
Expected yearly production from the ENC project is some 72 000 t of contained nickel equivalent, and Shanghai Decent will provide a “capex guarantee” whereby total construction and commissioning costs will not exceed $2.3-billion. In addition to producing a mixed hydroxide precipitate, the project will be capable of producing both nickel sulphate and nickel cathode, differentiating it from the current generation of HPAL plants currently being constructed across Indonesia, and providing Nickel Industries with significant operating flexibility through the cycle.
The two companies are currently working together to complete a feasibility study for ENC ahead of a final investment decision, with construction expected to commence during the December 2023 or March 2024 quarters or anytime earlier that both parties agree, and commissioning to commence no later than 24 months thereafter.