Nickel Industries has executed financing facilities totalling $400m with PT Bank Negara Indonesia (BNI), which includes a $350m senior term loan facility, and also secured a $50m revolving credit facility (RCF) for general working capital purposes
Excelsior HPAL project in Indonesia. (Credit: Nickel Industries)
Nickel Industries has made a positive final investment decision (FID) for its participation and investment in the Excelsior nickel cobalt high-pressure acid leach (HPAL) project.
The total construction cost of the project is estimated at more than $2.3bn (Capex Guarantee).
Shanghai Decent Investment, through its affiliate Decent Resource, will provide the complete construction guarantee, covering capex, nameplate performance and timing of commissioning.
The company will acquire a 55% equity interest in ENC before 28 December 2023, subject to shareholder approval, by making a refundable deposit of $126.5m before 31 October 2023.
It has executed financing facilities totalling $400m with PT Bank Negara Indonesia (Persero) Singapore Branch (BNI), to support the ENC project funding.
The financing facility includes a $350m senior term loan facility, split across two tranches. Tranche A: $200m against the company’s Angel Nickel Project and Tranche B: $150m (unsecured)
In addition, Nickel Industries has secured a $50m revolving credit facility (RCF) for general working capital purposes.
The project has received a 15-year tax holiday from the Indonesian government, plus an additional two-year rebate at 50% of the current tax rate, with production expected in Q4 2025.
Nickel Industries managing director Justin Werner said: “We have once again been provided with a capex, nameplate performance and timeframe guarantee, which given the large number of historical capex ‘blow-outs’ in HPAL projects and more recently across various nickel and battery-related projects, is extremely valuable in the current high inflationary environment.
“Participation in the ENC Project will allow us to continue to significantly diversify our business into a suite of class 1 nickel products, our existing nickel matte production, supplemented with MHP, nickel sulphate and nickel cathode.
“The ENC Project will be the first global nickel project to have this operating flexibility and will allow us to significantly diversify our customer base and seek to capture maximum value across different sectors of the class 1 nickel market.”
ENC HPAL project is planned to be constructed within the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi, Indonesia.
It is expected to produce 72,000 metric tons per annum (mtpa) of contained nickel equivalent across the three major class-1 nickel products, mixed hydroxide precipitate (MHP), nickel sulphate and nickel cathode.
ENC will be the world’s first HPAL to produce the three major class-1 nickel products, all of which are suitable for use in the electric vehicle (EV) battery market, said Nickel Industries.
Also, it will be one of the world’s lowest-carbon-emitting HPAL projects, supported by the company’s recent SESNA, the largest solar project in Indonesia.
Nickel Industries’ feasibility study for the second stage expansion project may double the production from the current 72,000mtpa to 144,000mtpa of contained nickel equivalent.
Nickel Industries director Weifeng Huang said: “We are delighted to note that the Board of Nickel Industries is recommending its shareholders to approve the investment in the ENC HPAL Project and we look forward to continuing our successful collaboration with Nickel Industries.
“Nickel Industries will remain as Tsingshan’s most important partner as we continue our strategy in enlarging our nickel product offerings, particularly for the EV battery and storage industry, in an environmentally responsible and sustainable manner.
“Tsingshan is committed to delivering a top-of-the-class HPAL Project on schedule and continue to play our part in contributing towards Indonesian and the world’s decarbonisation plans.”