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Excelsior nickel cobalt project, Indonesia – update

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13th October 2023

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Excelsior nickel cobalt (ENC) project.

Location
Indonesia.

Project Owner/s
Nickel Industries and Shanghai Decent.

Project Description
The project envisages production of about 72 000 t/y of contained nickel equivalent.

In addition to producing a mixed hydroxide precipitate, the project will be capable of producing nickel sulphate and cathode, differentiating it from the current generation of high-pressure acid leach (HPAL) plants being built across Indonesia, and providing Nickel Industries with significant operating flexibility through the cycle.

The project will benefit from the existing infrastructure of Indonesia Morowali Industrial Park, and will be supported by existing and future laterite resources that Nickel Industries has identified.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Shanghai Decent will provide a capital expenditure (capex) guarantee, whereby total construction and commissioning costs will not exceed $2.3-billion.

The capex guarantee includes a tailings solution, which is best of breed for tailings storage and management, and an integrated sulphuric acid plant that will generate significant heat that can be turned into power, significantly lowering the carbon footprint of the operation.

Planned Start/End Date
Construction is expected to start in either December 2023 or March 2024, or sooner, if both parties agree. Commissioning will start no later than 24 months thereafter.

Latest Developments
Nickel Industries has made a final investment decision (FID) on its participation in the project.

It previously acquired options to collaborate with Shanghai Decent on future battery nickel opportunities for $40-million comprising $25-million for an option to participate in the construction of the ENC project and $15-million for an option to invest in and build a high-grade matte converter at Oracle.

Nickel Industries will acquire a 55% interest in ENC, with the $1.26-billion payment to be completed in instalments over the next two years. The ENC acquisition is subject to shareholder approval before the end of December this year, and the payment of a refundable deposit of $126.5-million before the end of October.

The company is expected to call an extraordinary general meeting in November to enable the shareholders to vote on the transaction.

Nickel Industries raised A$209.1-million this year to fund its various transactions and struck a A$943-million placement deal in June with PT Danusa Tambang Nusantara (DTN), a subsidiary of PT United Tractors, to give that company a 20% shareholding in the ENC project.

With the introduction of DTN as a major shareholder and potential operating partner of Nickel Industries, Nickel Industries and Shanghai Decent are investigating the expansion of the ENC project to 144 000 t/y of contained nickel equivalent. The Stage 2 expansion will be subject to a positive FID by the joint venture partners, with the ownership interests expected to match those of Stage 1.

Nickel Industries has also reported the execution of financing facilities totalling $400-million with PT Bank Negara Indonesia to support the funding obligations for the ENC project.

The facilities comprise a five-year senior term loan facility of $350-million, split across two tranches, and a $50-million revolving credit facility for general working capital purposes. The facility, along with the placement funds from DTN and existing cash flows from its existing operations, have left the company comfortably positioned to fund its share of the ENC acquisition payments over the project construction period from 2023 to 2025.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Nickel Industries, tel +61 2 9300 3311 or email info@nickelindustries.com.

Edited by Creamer Media Reporter

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