Revised terms for Dawn HPAL+ project lifts nameplate capacity, lowers capex guarantee -Nickel Industries

6th March 2023

By: Donna Slater

Creamer Media Chief Photographer and Senior Contributing Editor


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Australia-based Nickel Industries on Monday unveiled plans for a 67 000 t/y high-pressure acid leach (HPAL) project, in Indonesia, that would cost no more than $2.3-billion to bring to nameplate capacity.

The ASX-listed company announced revised terms for the Dawn HPAL+ project which forms part of an electric vehicle battery supply chain strategic framework agreement that it entered into with Shanghai Decent in January this year.

The new terms include the nameplate capacity boost and a “capex guarantee” whereby the total construction and commissioning will not exceed $2.3-billion. The agreement previously committed to a maximum of $2.5-billion.

In addition to producing a mixed hydroxide precipitate (MHP), the project – to be known as the Excelsior Nickel Cobalt project (ENC) – will be capable of producing both nickel sulphate and nickel cathode.

This differentiates it from the current generation of HPAL plants currently being constructed across Indonesia, and provides Nickel Industries with significant operating flexibility through the cycle.

Nickel Industries MD Justin Werner said the ability of the project to produce not only MHP, but also go further downstream to produce nickel sulphate and nickel cathode, would allow for greater margin capture.

“[This will] make us one of the first truly diversified HPAL producers with a mix of class 1 nickel products that can be selectively sold into different sectors of the nickel market as pricing dynamics dictate,” he stated.

Nickel Industries and Shanghai Decent were currently working on a feasibility study for ENC ahead of a final investment decision by Nickel Industries’ board.

Construction is expected to start in December 2023, or March 2024, or anytime earlier that both parties agree. Following this, commissioning will start no later than 24 months thereafter.

Nickel Industries would own a 60% to 70% equity interest in the project with Shanghai Decent owning 30% to 40%; however, both parties were open to the introduction of other strategic partners which may lead to a dilution of these interests.

“Most importantly, the $2.3-billion capital expenditure guarantee we have secured represents a highly competitive capital intensity compared to several recently announced projects, particularly considering this cost guarantee goes beyond purely engineering, procurement and construction costs and is inclusive of seeing the project delivered to operational nameplate capacity,” said Werner.

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

“Given the recent slew of announced capex blowouts in the nickel and battery metals industry, the value of a capex guarantee to deliver a leading HPAL solution cannot be overstated,” he said.

Nickel Industries also reported that it had reached agreement with Shanghai Decent to switch two of Angel Nickel’s rotary kiln electric furnace lines to the production of nickel matte.

Following the successful switch of Hengjaya Nickel’s production from nickel pig iron to nickel matte in the December quarter of 2022, two of Angel Nickel’s rotary kiln electric furnace lines will undergo minor capital modifications to the value of $2-million to enable the transition to matte production.

The switch to nickel matte production, which will be subject to market conditions, is not expected to occur until early 2024, as low-grade to high-grade converter capacity is currently under construction within the Indonesia Weda Bay Industrial Park.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online


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