INTERVIEW: Nickel Industries to add battery products, grow ore throughput fivefold by 2026-27

Nickel Industries' revenue-generating product mix, comprising nickel pig iron and mixed hydroxide precipitate, will soon expand to include nickel cathode and nickel sulfate, Managing Director Justin Werner told Platts, part of S&P Global Energy.

At the moment, Nickel Industries sells 135,000 mt/year of nickel contained in nickel pig iron, over 8,000 mt/year of nickel in MHP, with the ore feedstock mostly sourced from the company's own mine.

The company also sells raw nickel ore and cobalt in the form of mixed hydroxide precipitate. "We don't usually report it, but our cobalt production is around 700-800 mt/year and it will grow to 4,000 to 5,000 mt/year from 2026-27," Werner told Platts in an interview.

In 2026, Nickel Industries plans to extract 25 million mt of ore, up from 2024's 19 million mt. Downstream, it is looking at about 136,000 mt of nickel in nickel pig iron, and 60,000 mt to 70,000 mt of nickel as MHP.

New HPAL, resource-rich brownfield

Nickel Industries holds an 80% interest across 12 rotary kiln electric furnaces in Indonesia, which convert a chunk of its ore into nickel pig iron, and owns minority stakes in two MHP producers, also in Indonesia -- 10% in Huayue Nickel Cobalt High Pressure Acid Leaching (HPAL) and 44% in the Excelsior Nickel Cobalt HPAL. However, it is in the process of increasing its stake in the latter to 55%.

This, along with the actual commissioning of the Excelsior plant in the year's fourth quarter, will be the major drivers behind the anticipated jump in MHP tonnage.

"Moving forward, nickel pig iron output will stay the same, but we will produce 72,000 mt of the metal in MHP, cathode, and sulfate. And we're looking to move mine ore output to 40 million - 50 million mt/year within the next two to three years," said Werner, adding that at the moment, the company sells about 50%, or 9 million mt/year, of its ore to third parties, but the goal is to maximize its processing at the captive facilities.

Nickel Industries currently operates one mine -- Hengjaya -- but is establishing a second one -- Sampala -- which is expected to enter production in about 12 months, and eventually drive the more than twofold growth in mined ore the company envisages beyond 2026.

"[Sampala] is a brownfield, but a very exciting one because it is expected to host 1 billion wet mt of ore resources and is estimated to have a profit margin of $10/mt, like the existing Hengjaya Mine," Werner said. "If we dig 20 million to 25 million mt a year, then 1 billion mt will make it last for 50 years plus."

Indonesian ban

Nickel Industries is going through a rapid growth phase with a bullish outlook underpinning the strategy.

In August 2024, the Indonesian government put a moratorium on the construction of new smelters producing mid-stream nickel products like nickel pig iron to curb their expansion while stimulating downstream higher-value-added production.

"The ban was imposed because of oversupply of nickel pig iron and also because in producing saprolite for nickel pig iron, you dig up a lot of the limonite ore, which is valuable for high-pressure acid leach production of nickel and cobalt in MHP, so high-purity materials for the battery market," Werner said, outlining the reasons why the Indonesian government does not want to spend the limonite ore producing cheaper products.

"The ban is indefinite. I think they will not reverse it, and it is positive [for the global nickel market] because it means there'll be no new supply coming on," said Werner.

Given this and also strong stainless-steel production growth in China, at a 3.5%-5.5% CAGR over the past decade, Nickel Industries has no concerns over demand.

"Growth prospects for India look very good too," he said. "What's particularly interesting is that Tsingshan and Jindal are building a stainless-steel plant in Indonesia."

In August 2024, Glory Metal Indonesia, a joint venture between the largest stainless steel producers of China and India, Tsingshan and Jindal Stainless, broke ground on a 1.2 million mt/year stainless steel plant in Central Sulawesi, according to the Indonesia Morowali Industrial Park, where the mill is being built.

West prefers nickel batteries

Nickel Industries is equally positive about the global demand for MHP and similar intermediate inputs used to make high-purity materials for EV batteries.

"Major Chinese EV battery manufacturer CATL completed in May an IPO in Hong Kong with the prospectus forecasting a 900,000 mt/year increase in battery-grade nickel demand by the end of the decade, so we think the battery market is looking okay," said Werner.

Despite China largely forgoing nickel chemistries for its domestic market, it still produces a lot of nickel-based EV batteries and battery materials, which it supplies to Europe and North America, where people mostly rely on nickel-dominant chemistries.

When asked about the company's configuration -- it is registered in Australia, mines in Indonesia, and sells to China -- Werner said the collaboration has been successful so far.

"Australia is not competitive for nickel production, so we're very focused on maintaining our presence in Indonesia, where Nickel Industries has been since 2008," he said, adding that Indonesia has the most nickel resources of anywhere in the world. "By the end of the decade, they'll probably be producing 75% of the world's nickel. It is about 65% now."