Australia-based Nickel Industries has forged binding agreements with Shanghai Decent Investment to acquire 10% stakes in two producing nickel assets in Indonesia.

To fund the acquisitions, the nickel pig iron producer has announced its plans to undertake a $471m capital raise.

As per the terms of the agreement, Nickel Industries will buy a 10% indirect interest in PT Huayue Nickel Cobalt from Newstride Development, which is an affiliate of Shanghai Decent, in a deal worth $270m.

The Huayue nickel-cobalt project is a high-pressure acid leach project in the Indonesia Morowali industrial park.

Nickel Industries will also acquire an additional 10% stake in the Oracle nickel project in an all-cash deal worth $75m. The acquisition of an additional 10% interest will increase the company’s stake in the project to 80%.

Besides, the Australia-based nickel producer has signed an electric vehicle (EV) battery supply chain strategic framework agreement with Shanghai Decent.

Furthermore, Nickel Industries has acquired options to collaborate with Shanghai Decent on future battery nickel opportunities for $40m.

This will include the participation in and construction of nickel sulphate and electrolytic nickel plant by using the HPAL process along with an option to invest and construct a low-grade to high-grade nickel matte converter at the Oracle nickel project.

The announced capital raise comprises a $185m fully underwritten institutional placement, a $270m placement to Newstride, a $15m placement to Shanghai Wanlu Investment and a $1.4m placement to non-executive director Mark Lochtenberg.

It also involves a non-underwritten share purchase plan (SPP) to shareholders in Australia and New Zealand to raise up to $20m.

In November last year, Nickel Industries announced the production of the first batch of nickel pig iron at the Oracle nickel project.