Indonesia’s Merdeka posts lower nickel output in 1Q

Market: Metals
05/06/24

Indonesian nickel firm Merdeka Battery Materials' (MBMA) production decreased during January-March from the previous quarter, weighed down by wet weather issues and a lack of equipment availability.

MBMA produced 2.1mn wet metric tonnes (wmt) of material at its Sulawesi Cahaya Mineral (SCM) mine during the quarter, down by 36pc from the previous quarter's 3.3mn wmt. Output was weighed down by higher-than-average rainfall and lower-than-planned contractor equipment availability. Limonite ore supplies fell by 25pc from October-December to 1.2mn wmt, while the volume of saprolite ore more than halved to 0.5mn wmt over the same period. The firm did not provide its production figures for the year-earlier period.

The production guidance for limonite and saprolite ore for 2024 has been kept largely steady at 10mn-11mn wmt and 4mn-5mn wmt, respectively. But production volumes are anticipated to increase in 2025, with PT ESG New Energy Material's (PT ESG) feed preparation plant commissioning by mid-2025. Limonite ore sales to PT ESG is expected to be about 5mn wmt/yr.

The SCM mine supplies limonite ores to the Huayue Nickel Cobalt high-pressure acid leaching (HPAL) plants and saprolite ore to MBMA's rotary kiln electric furnaces (RKEF) smelters.

The RKEF smelters produced 20,900t of nickel in nickel pig iron (NPI) during January-March, falling by 5.6pc from the previous quarter's 22,141t. Matte output was at 12,041t of nickel, a 5.1pc drop from 12,684t in the previous quarter.

The company maintained the 2024 production guidance for its nickel intermediates at 85,000-92,000t of nickel in NPI and 50,000-55,000t of nickel in matte.

Developments at MBMA's projects remained on track during the quarter. Widening works on the main haul road connecting the SCM mine to Indonesia's Morowali Industrial Park, and the construction of a more direct haul road to replace the use of a third party's road are underway.

A collaboration with Chinese cathode precursor and nickel producer Green Eco-Manufacture to develop PT ESG's HPAL plant, with a nameplate capacity of 30,000 t/yr of nickel in mixed hydroxide precipitate (MHP), is projected to be commissioned in late 2024.

MBMA has another HPAL plant partnership with Brunp, a subsidiary of China's largest power battery manufacturer Contemporary Amperex Technology, with a nameplate capacity of 60,000 t/yr of nickel in MHP.

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