ASX-listed Nickel Industries has taken another significant step in its strategy to expand its exposure to the electric vehicle (EV) battery supply chain, agreeing to invest $169-million for a 17.5% interest in the PT Teluk Metal Industry (TMI) High-Pressure Acid Leaching (HPAL) project in Indonesia.

TMI is being developed as an expansion to the company's Excelsior nickel/cobalt project within the Indonesia Morowali Industrial Park and will produce mixed hydroxide precipitate (MHP) - a key feedstock for EV batteries.

The investment positions Nickel Industries alongside a consortium of major Korean and Japanese industrial groups, with LS MnM, Hanwa and an undisclosed strategic investor collectively holding a 72.5% interest in the project. A further 10% interest is held by Singapore-based investment company Sumber International Investment.

Importantly, Nickel Industries' investment is underpinned by a comprehensive construction guarantee that caps Nickel Industries' acquisition cost at $169-million while also providing certainty that TMI will achieve nameplate production capacity by September 2027.

Construction of TMI is already underway, with commissioning expected to start in mid-2027.

Once operational, TMI is expected to have a yearly nameplate production capacity of about 38 640 t of nickel in MHP, delivering attributable production to Nickel Industries of around 6 775 t/y of nickel.

Nickel Industries MD Justin Werner says the investment represented one of the final opportunities to secure large-scale exposure to Indonesia's rapidly expanding HPAL sector following the Indonesian government's recent moratorium on new HPAL developments.

“Securing a 17.5% interest in TMI is a transformative step for Nickel Industries and one of the last opportunities of this scale in the HPAL sector following the Indonesian government’s moratorium on new HPAL projects,’’ he said.

“Alongside a consortium of leading Korean and Japanese companies, LS MnM, Hanwa and an undisclosed strategic investor, we are investing in a world-class asset with a clear path to production by September 2027, underwritten by the construction guarantee capping construction costs at $965-million.

“TMI is one of the most capital-efficient HPAL developments globally, and the HPAL economics are already proven within our portfolio. Our 17.5% interest delivers about 6 775 t/y of nickel in MHP, materially advancing our transition into the EV battery supply chain,’’ Werner explains.

“Critically, our Sampala project has been identified as the exclusive ore supplier to TMI, aligning Nickel Industries as both a downstream processing investor (as desired by the Indonesian government) and upstream supplier. The world-class scale and grade of Sampala was central to securing our investment in TMI,’’ he concludes.

For context, Nickel Industries' investment in another project based in the Indonesia Morowali Industrial Park, Huayue Nickel Cobalt, which is also an HPAL project, delivered adjusted earnings margins to the company of $9 996/t nickel in the first quarter.