About Nickel Mines
Nickel Mines Limited ('Nickel Mines' or 'the Company') is an Australian public company focused on becoming a globally significant, low cost producer of nickel pig iron ('NPI'), a key ingredient in the production of stainless steel.
Nickel Mines holds an 80% economic interest in the Hengjaya Mineralindo Nickel Mine (Hengjaya Mine), a large tonnage, high grade saprolite deposit located in the Morowali Regency of Central Sulawesi, Indonesia. For additional information click Hengjaya Resource.
Prior to the implementation of the Indonesian Government’s ban on the exportation of unprocessed minerals in January 2014, Nickel Mines operated a small scale DSO operation having advanced the Hengjaya Mine through all necessary exploration, licensing and permitting stages to achieve “clean and clear” status for the direct exporting of its nickel ore.
Shortly after the export ban was enacted, mining operations were suspended and Nickel Mines was forced to pursue ore sales to domestic producers and explore in-country beneficiation options.
The export ban of unprocessed minerals was principally sanctioned to encourage the establishment of a downstream processing industry within Indonesia that would allow Indonesians to increasingly benefit from their country’s great mineral wealth.
Tsingshan, China’ largest stainless steel producer was one of the few groups to commit to the Indonesian Government’s vision of establishing a local processing and in July 2013 set about building what is now its world class Indonesian Morowali Industrial Park (IMIP). As Tsingshan began to build NPI and stainless steel capacity within IMIP there became a growing requirement for nickel as feedstock to their plant. This resulted in Nickel Mines restarting operations on October 2015 and signing an offtake agreement with Tsingshan for the supply of high grade saprolite ore.
In September 2017 this relationship culminated in Nickel Mines executing a Collaboration and Subscription Agreement with Tsingshan. This unprecedented strategic partnership will see Nickel Mines and Tsingshan collaborate on the funding and construction of 2 RKEF lines (‘Hengjaya Nickel Project’) to produce 150kt per annum of NPI containing 15kt of nickel metal equivalent with ore from the HM Mine being the predominant feedstock to the plant.
Nickel Mines was welcomed to the Official List of the Australian Stock Exchange ('ASX') on Monday 20 August 2018. Following the successful completion of the IPO Nickel Mines exercised its option to acquire a further 35% in the Hengjaya Nickel Project for US$70M, taking the Company’s interest to 60%. Nickel Mines has a call option to acquire the remaining 40% interest in the Hengjaya Nickel Project for US$120 million. This option must be exercised no later than 12 months from the commencement of NPI production at Hengjaya Nickel.
In November 2018 the Company announced the conversion of a non-binding Memorandum of Understanding with Shanghai Decent to acquire up to an additional 80% interest in two additional RKEF lines (‘Ranger Nickel Project’) into a binding Collaboration Agreement (‘CA’). Subsequently the Group completed the First Acquisition under the CA, acquiring for US$50 million a 17% of the Ranger Nickel Project. In April 2019 Nickel Mines announced its intention to move to a 60% interest in the Ranger Nickel Project via a US$160M funding package comprising US$100M of senior secured debt and US$60M equity. Nickel Mines retains the contractual right to move to an 80% interest in the Ranger Nickel project, within 18 months of the first NPI production at the Project.
On 1 February 2019 Nickel Mines announced that commissioning had commenced and that the first NPI had been produced from one of Hengjaya Nickel’s two rotary kilns in a maiden production run, well ahead of schedule. Hengjaya Nickel’s first kiln is expected to reach at least 80% of nameplate capacity by early April 2019. The second kiln is anticipated to commence commissioning in early March and is expected to reach at least 80% of capacity in early May 2019. Ramp-up to full scale production is anticipated to be achieved shortly thereafter.