Nickel Industries reported a 57% drop in quarterly EBITDA due to mining quota delays but showcased robust HPAL margins and advanced commissioning at its Excelsior project, supported by a strategic investment from Sphere Corp.
- Q4 2025 EBITDA from operations fell 57% to US$37.3m due to RKAB mining quota delay
- RKEF nickel production slightly up but EBITDA down 13% from higher costs
- HPAL operations delivered 32% EBITDA growth with Huayue project exceeding capacity
- Excelsior Nickel Cobalt HPAL project nearing commissioning with key infrastructure tests underway
- Sphere Corp acquired 10% stake in ENC, marking first Western market offtake into aerospace sector
Quarterly Performance Overview
Nickel Industries Limited has released its December 2025 quarterly report, revealing a mixed operational and financial picture. The company’s adjusted EBITDA from operations dropped sharply by 57% to US$37.3 million compared to the prior quarter, primarily due to a significant delay in the approval of the RKAB mining quota extension. This delay severely impacted mining operations at the Hengjaya Mine, resulting in a 72% plunge in ore production and a US$18 million cost hit from contractor standby charges.
Despite these setbacks, the company’s rotary kiln electric furnace (RKEF) operations showed resilience with a 1% increase in nickel production to 31,561 tonnes. However, higher nickel ore costs and timing of contract settlements led to a 13% decline in RKEF adjusted EBITDA to US$35 million. The nickel pig iron (NPI) contract prices remained stable quarter-on-quarter, cushioning the impact somewhat.
HPAL Operations and Project Advancements
In contrast, the high-pressure acid leach (HPAL) operations, particularly the Huayue Nickel Cobalt (HNC) project in which Nickel Industries holds a 10% interest, delivered a standout performance. The HNC project exceeded its nameplate capacity by 43%, producing 21,441 tonnes of nickel and 2,301 tonnes of cobalt. This operational excellence translated into a 32% increase in attributable EBITDA to US$17.2 million, with margins improving to US$8,012 per tonne of nickel.
Meanwhile, the Excelsior Nickel Cobalt (ENC) HPAL project, where the company holds a 44% stake, is progressing steadily towards commissioning. Key infrastructure tests, including sulfuric acid plant trials and mechanical testing of critical circuits, have commenced. The company anticipates full commissioning to begin late in the March quarter, with the refinery’s standalone unit testing complete and wet commissioning underway.
Strategic Partnerships and Market Positioning
A notable highlight was the strategic investment by Sphere Corp, a key accredited supplier to SpaceX, acquiring a 10% interest in the ENC project. This partnership not only brings capital but also secures an offtake agreement for nickel cathode into Western aerospace and aeronautical markets, sectors forecasted to grow at approximately 8% CAGR to 2030. Sphere’s involvement underscores the quality and traceability of Nickel Industries’ product and positions ENC as a sustainable, low-cost nickel producer on the global stage.
Sustainability and Financial Health
Nickel Industries also reinforced its commitment to sustainability, winning multiple national awards recognizing its governance and ESG leadership. The company achieved financial close on a landmark 262MWp solar and 80MWh battery energy storage project in Indonesia’s Morowali Industrial Park, which will supply renewable power to the ENC HPAL operation. This initiative is set to make ENC one of the lowest carbon nickel producers worldwide.
On the financial front, Nickel Industries took steps to strengthen its balance sheet by tendering US$400 million in senior unsecured notes and repaying US$183 million in bank loans. At quarter-end, total debt stood at US$1.223 billion, balanced by cash and receivables of over US$500 million.
Outlook
Looking ahead, the company is optimistic about 2026, buoyed by rising LME and NPI prices, the imminent commissioning of the ENC project, and the expected increase in ore sales following the resolution of the RKAB quota. The ramp-up at Hengjaya Mine and ongoing exploration at Sampala and Siduarsi projects also offer growth potential.
Bottom Line?
With key projects advancing and strategic partnerships in place, Nickel Industries is poised for a pivotal 2026 despite near-term operational challenges.
Questions in the middle?
- How will the delay in RKAB approvals affect Nickel Industries’ full-year production and profitability?
- What impact will Sphere Corp’s investment have on ENC’s market access and pricing power?
- Can the ENC project meet its commissioning timeline and deliver on sustainability targets?