Nickel Industries takes FID on Indonesian HPAL plant

Market: Battery materials, Metals
11/10/23

Indonesia-focused resources firm Nickel Industries has taken a final investment decision (FID) for its Excelsior Nickel Cobalt high-pressure acid leach (HPAL) project in the Morowali industrial park in Indonesia's central Sulawesi.

The project, also known as the Dawn HPAL+ project, is expected to produce 72,000 t/yr of contained nickel equivalent in the form of mixed hydroxide precipitate, nickel sulphate and nickel cathode that are all class 1 nickel products. Production is expected to start during October-December 2025, Nickel Industries said on 11 October. It will hold an extraordinary general meeting in November to approve this, it said.

The firm has been carrying out a feasibility study for the project, which may lead to a stage two expansion. The expansion, if realised, will increase expected production from 72,000 t/yr to 144,000 t/yr of contained nickel equivalent.

The project also obtained a 15-year tax holiday with two more years of 50pc corporate tax cuts from the Indonesian government, said the firm. The firm engaged a "global investment bank" to help with securing offtake and possible project level investment partners, it said, claiming the response has been "very strong".

The firm's largest shareholder Chinese investment firm Shanghai Decent Investment will through its affiliate Decent Resource provide a comprehensive construction guarantee that includes covering the project's capital expenditure, so long the total construction costs do not exceed $2.3bn.

Nickel Industries secured $400mn of financing facilities with Bank Negara Indonesia to help fund the project. The financial facilities include a five-year senior term loan facility of $350mn, comprising a $200mn secured tranche and $150mn unsecured tranche, along with a $50mn revolving credit facility.

Nickel Industries will slowly work its way to owning 55pc of the project in phases, with Shanghai Decent eventually owning 25pc, while Indonesian construction company United Tractors will own the remaining 20pc.

The firm on 9 October signed an agreement with Indonesian solar firm Sumber Energi Surya Nusantara to develop a 200MW peak (MWp), 20 MWh battery solar project in Morowali industrial park. MWp refers to the maximum power output potential a solar farm has when reaching ideal conditions. The project will supply electricity to its existing operations and the planned Dawn HPAL+ project park to reduce its carbon emissions.

By Joseph Ho

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