Nickel Industries Reports US$97.3m EBITDA, 50% Jump in HPAL Earnings, Hengjaya Mine Quota Doubled

Strong Financial Performance Amid Market Pressures

Nickel Industries Limited has reported a solid start to 2025 with an Adjusted EBITDA of US$97.3 million for the March quarter, marking a 4% increase compared to the previous quarter. This performance is notable given a 3% decline in rotary kiln electric furnace (RKEF) nickel production and a 21% drop in mining output, alongside a softer average LME nickel price of US$15,530 per tonne.

The company’s ability to sustain earnings despite these headwinds underscores the operational resilience and cost discipline across its portfolio. Cash costs in RKEF operations fell by 6.4%, driven largely by lower nickel ore costs, which helped offset the 5% decline in realised nickel prices.

Hengjaya Mine Expansion: A Game Changer

A major highlight was the approval of the Hengjaya Mine feasibility study to increase the annual ore sales quota from 9 million to 19 million wet metric tonnes (wmt). This near doubling of capacity is a pivotal development for Nickel Industries, as the mine delivered an Adjusted EBITDA of US$100.9 million in 2024 at the lower quota.

The environmental assessment supporting this expansion is currently under review by Indonesian authorities, with management confident of imminent approval. The ramp-up is expected to significantly enhance nickel supply from the mine, which has also been recognised for its sustainability credentials, having earned a third consecutive Green PROPER rating from Indonesia’s Ministry of Environment and Forestry.

HPAL Operations and ENC Project Progress

The company’s high-pressure acid leach (HPAL) operations at the Huayue Nickel Cobalt project delivered a record attributable EBITDA of US$22 million, a 50% increase quarter-on-quarter. Production exceeded nameplate capacity by 41%, signaling strong operational momentum ahead of the Excelsior Nickel Cobalt (ENC) project commissioning planned for Q3 2025.

Significant construction milestones were achieved at ENC, including progress on thickeners, reactors, and refinery equipment installation. In a strategic move to preserve cash flow during this critical phase, Nickel Industries agreed with its largest shareholder, Shanghai Decent, to defer the remaining US$253 million in ENC acquisition payments by six months each, now due in January and April 2026.

Dividend and Sustainability Leadership

Reflecting confidence in its financial position, Nickel Industries declared a final dividend of A$1.5 cents per share, bringing total dividends for 2024 to A$4 cents per share. This contrasts with peers who have cut or suspended dividends amid market volatility.

On the sustainability front, the company’s Hengjaya Mine continues to set industry benchmarks, being the sole mining operation in Central Sulawesi to achieve the Green PROPER rating three years running. Additional accolades include recognition on the Fortune Indonesia Change the World 2024 list and an award for corporate social responsibility in Asia, underscoring Nickel Industries’ commitment to responsible mining and community development.

Operational Challenges and Outlook

Mining production at Hengjaya declined 21% in the quarter due to contractor underperformance and lower-grade ore access, but management reports a return to normal production levels in April with grade improvements expected by July. The recent Indonesian government increase in nickel ore royalties from 10% to 14% will raise future operating costs, estimated at an additional US$8 million annually based on 2024 sales.

Exploration and development continue apace at the Sampala and Siduarsi projects, with drilling and infrastructure mobilization underway and production anticipated to commence in the first half of 2026. These projects represent important growth avenues for the company’s nickel supply chain.