PERTH (miningweekly.com) – ASX-listed Nickel Mines has inked a definitive agreement with partner Shanghai Decent Investment to acquire a 70% equity interest in the Oracle nickel project, in Indonesia.
The agreement over the Oracle project followed a November memorandum of understanding (MoU).
The development project, comprising four rotary kiln electric furnace (RKEF) lines on which construction has commenced within the Indonesia Morowali Industrial Park, will have an annual nameplate capacity of 36 000 t/y of contained nickel in nickel pig iron.
Under the terms of the agreement, Nickel Mines would acquire the majority interest in the project for $371-million, along with the obligation to provide Oracle with $154-million of construction funding by way of shareholder loans.
The terms of the agreement provide for Shanghai Decent to take a lead role in the design and construction of Oracle Nickel with commissioning of the four Oracle RKEF lines to commence no later than February 19, 2023 and the power plant to commence commissioning no later than July 19, 2023.
Actual construction costs for the Oracle nickel project together with the power plant will not exceed $750-million, with Shanghai Decent undertaking to indemnify Nickel Mines for any construction costs exceeding $750-million.
“Once again we are extremely pleased to have quickly converted a project acquisition MoU into a binding agreement with Shanghai Decent,” said Nickel Mines MD Justin Werner.
“This transaction not only further cements our strategic partnership with Tsingshan but importantly continues to position Nickel Mines as a globally significant nickel producer. With our commitment to the Oracle nickel project coming rapidly on the heels of the fast-tracked commissioning of our 80%-owned Angel nickel project, Nickel Mines is set to more than triple the size of its attributable nickel production and operational cash flows over the next 15 months.
“With 12 RKEF lines in operation by the first quarter of 2023 and approximately 100 000 t of attributable nickel production, Nickel Mines will sit comfortably amongst the top-10 global producers and be arguably the largest listed pure-play nickel exposure globally. In collaboration with our trusted partner Shanghai Decent we are excited to continue our remarkable growth trajectory and look forward to further broadening our relationship as we jointly explore future high pressure acid leach opportunities and renewable energy projects to support the sustainability of the Indonesian nickel industry.”