Nickel Industries delivered its strongest quarterly earnings since late 2023, propelled by a 222% jump in ore sales and significant margin improvements across its nickel processing operations amid favourable regulatory changes and rising nickel prices.
- Ore sales triple after Indonesian RKAB licence hike
- RKEF nickel pig iron margins surge 155%
- HPAL operations outperform capacity with 20% margin lift
- Excelsior HPAL commissioning delayed to May, ramp-up by October
- US$450 million loan refinancing lowers costs, boosts leverage
Surge in Ore Sales and Nickel Prices Drive Earnings
Nickel Industries (ASX:NIC) reported a remarkable rebound in its March 2026 quarter, posting its strongest earnings from operations since December 2023. The company’s Hengjaya Mine ore sales soared 222% quarter-on-quarter to over 3 million wet metric tonnes (wmt), following a near 60% increase in its Indonesian RKAB sales licence to 14.3 million wmt per annum. This regulatory boost came despite widespread cuts among peers, underpinning a 16% rise in the LME nickel price to US$17,338/t and translating into a 19% and 15% increase in nickel pig iron (NPI) and mixed hydroxide precipitate (MHP) prices respectively.
RKEF operations, where Nickel Industries holds an 80% interest, saw nickel pig iron margins explode by 155% to US$2,842 per tonne, driven by a 19% lift in realised contract prices to US$13,201/t and only a modest 4% increase in cash costs. Meanwhile, HPAL operations at Huayue Nickel Cobalt (10% interest) outperformed nameplate capacity by 44%, delivering a 20% increase in adjusted EBITDA per tonne to US$9,992 despite a 22% rise in cash costs due to surging sulfur prices amid Middle East geopolitical tensions.
Excelsior Project Commissioning and Strategic Partnerships
The Excelsior Nickel Cobalt (ENC) HPAL project, where Nickel Industries recently increased its stake from 44% to 46%, experienced a slight delay in commissioning with the start now expected in May and full ramp-up targeted for late October 2026. Pre-commissioning milestones were achieved across key infrastructure including the smelter and refinery, with internal limonite ore deliveries already underway. The company’s strategic partner Sphere Corp, a SpaceX supplier, completed a US$2.4 billion valuation acquisition of a 10% ENC stake, reinforcing external confidence in the project’s low-carbon credentials and growth potential. Preparations to list ENC’s nickel cathodes on the LME and Shanghai Futures Exchange are underway to enhance market liquidity.
Safety Incident and Sustainability Advances
Tragically, the quarter was marred by a fatal accident involving a contractor working on high voltage transmission lines at the ENC project, leading to a six-day suspension of operations and US$1.8 million in standby costs. Investigations have been completed, and corrective actions are in place to resume work shortly. On the sustainability front, Nickel Industries advanced a 197-hectare biodiversity conservation area within the Hengjaya Mine concession, aiming to protect local ecosystems and support education and eco-tourism. The company also expanded its community scholarship program with Hasanuddin University, supporting 20 scholars and planning to increase to 30 by year-end.
Growth Projects and Financial Position
Development progress continued on the Sampala nickel project, where the company holds rights to acquire a 60% interest, with haul road construction nearing completion and infill drilling supporting mine planning. The Siduarsi project (51% interest) reported positive hydrometallurgical test results, reinforcing its suitability for HPAL processing. Financially, Nickel Industries secured a US$450 million syndicated loan refinancing to replace existing debt, reducing interest costs and increasing leverage flexibility, with net debt standing at approximately US$994 million post-refinancing. The company’s adjusted EBITDA from operations surged 264% quarter-on-quarter to US$135.6 million, reflecting the combined strength of mining, RKEF, and HPAL segments.
The March quarter performance builds on prior milestones including the RKAB licence increase and strategic partnership deals, as detailed in the company’s recent 2026 ore sales licence increase and Sphere’s ENC stake acquisition announcements. These underpin Nickel Industries’ positioning to capitalise on tightening Indonesian nickel ore supply and elevated global nickel demand amid a shifting pricing regime.
Bottom Line?
Nickel Industries’ record quarter underscores its resilience and strategic positioning, but commissioning delays and evolving Indonesian pricing rules warrant close monitoring.
Questions in the middle?
- How will the new Indonesian nickel ore pricing formula impact long-term project economics?
- What operational safeguards will prevent recurrence of fatal incidents at ENC?
- Can the company sustain margin gains amid volatile sulfur and energy costs?