Nickel Industries Hits Record Hengjaya EBITDA and Launches First MHP Production

Hengjaya Mine Sets New EBITDA Benchmark

Nickel Industries (ASX:NIC) marked a milestone in the June 2026 quarter with its Hengjaya Mine delivering a record Adjusted EBITDA of US$45.7 million, a 58% jump from the prior quarter. This surge was driven principally by a 50% rise in average realised nickel ore prices following Indonesian government revisions to the nickel ore Mineral Benchmark Price (HPM), which lifted saprolite and limonite sale prices by 72% and 14% respectively. Despite a 5% decline in ore sales volume to 2.88 million wet metric tonnes (wmt), the price uplift outweighed volume impacts, pushing adjusted EBITDA per wmt up 66% to US$15.90.

Production rose 4% to 4.13 million wmt despite an eight-day mining suspension in early April, though unit operating costs climbed 40% to US$21.90 per wmt, largely reflecting higher royalties linked to the HPM hike. Hengjaya Mine’s strong quarterly performance positions it well for the September quarter, especially as LME nickel prices rallied from US$16,200/t in early July to US$17,200/t by late July.

First Mixed Hydroxide Precipitate Production at ENC HPAL

The company’s Excelsior Nickel Cobalt (ENC) HPAL project reached a key commissioning milestone, producing its first mixed hydroxide precipitate (MHP) in July and targeting first nickel cathode output by mid-August. The integrated commissioning phase saw ore transferred via pipeline from Hengjaya Mine, with sulphuric acid and steam supplied from the onsite plant, and the first autoclave feeding ore into the smelter. Production is progressing through neutralisation, crystallisation, and solvent extraction circuits, setting the stage for cathode registration on the London Metal Exchange and Shanghai Futures Exchange, which will enhance product liquidity and flexibility.

Sampala Project Resource Upgrade and Strategic HPAL Acquisitions

Nickel Industries confirmed an updated JORC Resource for its Sampala Project of 1.095 billion wmt at 1.24% nickel and 0.09% cobalt, containing 8 million tonnes of nickel metal. This positions Sampala as one of the world’s largest known nickel laterite resources. The project’s value was underscored by a share swap deal announced in June, exchanging an 18% interest in Sampala for a 36% stake in the PT Chengsheng New Energy (CNE) HPAL project, valued at over US$1.3 billion. This transaction allows Nickel Industries to secure 10,000 tonnes of nickel in MHP annually without cash outlay.

Additionally, the company agreed to acquire a 17.5% interest in the PT Teluk Metal Industry (TMI) HPAL project for US$169 million, with a construction guarantee capping costs and commissioning expected by mid-2027. Combined, these HPAL investments expand Nickel Industries’ footprint in high-pressure acid leach processing, leveraging the Sampala Project as the exclusive ore supplier to both CNE and TMI. The deal effectively provides access to 17,000 tonnes of nickel at a cost significantly below Indonesian HPAL peers.

RKEF Operations Impacted by Maintenance and Cost Pressures

Nickel pig iron production from the company’s rotary kiln electric furnace (RKEF) operations declined 8% to 27,864 tonnes of nickel due to planned maintenance, including kiln relining at Angel Nickel. Cash costs rose 20% to US$12,595 per tonne, pressured by increased nickel ore prices and higher electricity costs from third-party power during power plant repairs. While production at Angel Nickel and Oracle Nickel is expected to rebound in the September quarter, Hengjaya Nickel will undergo a major overhaul of one RKEF line, operating at half capacity for about four months.

Financial Position Bolstered by Refinancing and Cash Flow

The group’s balance sheet was strengthened by a US$450 million syndicated loan refinancing completed in April, replacing existing debt with lower interest costs and increased leverage capacity. Cash and equivalents rose to US$268 million at quarter-end, supported by strong operating cash flows and dividend receipts from joint ventures. The company reported an attributable EBITDA of US$99.3 million for the quarter, down 12% from the prior quarter, reflecting the mixed operational impacts across its portfolio.

Safety and Sustainability Achievements

Nickel Industries maintained a perfect safety record with zero lost time injuries over 18 million safe man hours in the past 12 months. The Hengjaya Mine retained its Green PROPER environmental rating for the fourth consecutive year, placing it among the top nickel producers in Indonesia. The company advanced environmental stewardship through the inauguration of a 197-hectare biodiversity conservation area and published its first independently assured AASB S2 climate-related disclosure. Social initiatives included community development awards and ongoing university scholarships in Sulawesi.