Nickel Industries attracts strong interest for its Indonesian supply

Nickel Industries

09/04/2024 08:17

By Melanie Burton
       MELBOURNE, April 9 (Reuters) - More than 25 global auto
and battery makers have expressed interest in buying nickel from
Australia-listed producer Nickel Industries'  NIC.AX  new
Indonesian plant, CEO Justin Werner said on Tuesday, in the
latest boost to Indonesia's nickel dominance.
    The company is offering 70,000-80,000 metric tons a year
from its new high pressure acid leach (HPAL) plant in Sulawesi
that is due to be finished in the second half of 2025. 
    "We have had very good interest," Werner told Reuters. "We
are not in a rush to make a decision."
    Indonesia has emerged as a supply powerhouse on the back of
low costs, producing more than half of the world's nickel, and
is expected to account for nearly three-quarters of global
supply by the end of the decade.      
    Nickel Industries' HPAL plant will produce nickel in the
form of cathode, as well as mixed hydroxide precipitate (MHP)
and nickel sulphate which are used to make batteries for
electric vehicles. 
    The company is also looking for investors for a stake of as
much as 25% in the plant as its Chinese partner Tsingshan, which
is building the plant, is prepared to sell part of its 45%
holding. 
    Oversupply knocked nickel prices down by 45% last year,
pressuring high cost producers, including top global miner BHP
 BHP.AX  and others in Australia, who have called for a "green
premium" for low carbon nickel.
    The London Metal Exchange (LME) classifies 20 tonnes of
carbon dioxide (CO2) per tonne of nickel as the threshold for
low carbon nickel, and Nickel Industries' HPAL plant will
produce a tonne of nickel for about eight tonnes of CO2.
    "We'd love a green premium and we are more than confident
that we would qualify," Werner said, adding however that
automakers and battery makers don't want to pay a green premium.
    "They want it at a discount," he said. 
    Australian mining magnate Andrew Forrest said last month the
LME should classify its contracts into clean and dirty to give
customers more choice. His company Wyloo will next month shut
nickel mines that it paid $504 million for last year.    

 (Reporting by Melanie Burton; Editing by Sonali Paul)
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