Nickel Industries surged to a US$74 million profit in H1 2026, driven by higher nickel prices, expanded mining quotas, and strategic HPAL investments including first nickel cathode production at ENC.
- Profit after tax rises 366% to US$74.3 million
- 62,019 tonnes of nickel metal produced despite planned maintenance
- Hengjaya Mine sales quota increased 60% to 14.3 million wmt
- ENC project achieves first MHP and nickel cathode production
- Strategic HPAL stakes acquired in TMI and CNE projects
Profit Surge Amid Higher Nickel Prices and Operational Growth
Nickel Industries Limited (ASX:NIC) posted a striking 366% jump in profit after tax to US$74.3 million for the half year ended 30 June 2026, underpinned by a 13% increase in sales revenue to US$938.4 million. The company’s operating profit also soared to US$164.3 million, reflecting strong leverage to rising nickel prices and improved operational efficiency.
Production of finished nickel metal reached 62,019 tonnes, comprising 58,128 tonnes from nickel pig iron (NPI) and 3,891 tonnes from mixed hydroxide precipitate (MHP). This output was achieved despite a slight 1% dip in NPI production due to planned maintenance, illustrating resilience in the company’s core rotary-kiln electric furnace (RKEF) operations.
Hengjaya Mine Expansion Boosts Ore Sales and EBITDA
The Hengjaya Mine, Nickel Industries’ key nickel ore asset in Indonesia, saw a 40% increase in its 2026 RKAB sales quota, lifted from 9.0 million to 14.3 million wet metric tonnes (wmt). This regulatory approval positions the mine for significantly higher ore sales in the second half of the year, with 5.9 million wmt sold in H1, a 1% increase over the prior period.
Ore prices benefited from Indonesian government reforms to the mineral benchmark price (HPM), with saprolite ore prices jumping 55.4% to US$40.4/wmt. While higher royalties and operating costs pushed unit costs up 50% to US$18.7/wmt, the mine still delivered a record Adjusted EBITDA of US$73.4 million, a 4.4% increase year-on-year, maintaining a solid margin of 40%.
ENC Project Hits Key Milestones with Nickel Cathode Production
The Excelsior Nickel Cobalt (ENC) HPAL project, in which Nickel Industries holds a 46% interest, achieved major commissioning milestones in the half. After integrated commissioning began in June, the project produced its first MHP in July followed by the inaugural nickel cathode in early August, marking a global first for HPAL technology.
This milestone unlocks the next phase of commercialisation, with registration of nickel cathodes on the London Metal Exchange and Shanghai Futures Exchange expected to enhance product liquidity. The project’s sulphuric acid plant and autoclaves are operating as planned, with full nameplate capacity targeted by October 2026.
Strategic HPAL Investments Expand Class 1 Nickel Footprint
Nickel Industries is expanding its HPAL portfolio with two significant investments announced in June 2026. The company agreed to acquire a 17.5% stake in the Teluk Metal Industry (TMI) HPAL project for US$169 million, with payment due in November and commissioning expected by September 2027. This project, developed alongside major Korean and Japanese industrial partners, will add approximately 6,775 tonnes of nickel per annum in MHP attributable to Nickel Industries.
In a cashless share swap, Nickel Industries secured a 36% indirect interest in the Chengsheng New Energy (CNE) HPAL project by exchanging an 18% stake in its Sampala Project mining concessions. The Sampala Project, with an updated JORC resource of 1.095 billion wmt at 1.24% nickel, is designated as the exclusive ore supplier to both CNE and TMI, cementing a vertically integrated supply chain.
Balance Sheet Strength and Refinancing Support Growth
The company refinanced its existing US$398 million bank loans with a new US$450 million syndicated facility in April 2026, securing lower borrowing costs and more flexible covenants. Despite a net debt increase to US$982 million, leverage remained stable at 2.3x trailing EBITDA, reflecting disciplined financial management amid expansion.
Nickel Industries ended the half with US$260 million in cash and cash equivalents and a net current asset surplus of US$605 million, supporting ongoing capital expenditure of US$38 million focused largely on the Sampala Project and Hengjaya Mine development.
Sustainability and Safety Credentials Reinforced
Safety performance remained exemplary with zero lost time injuries over 18 million work hours, and a rolling total recordable injury frequency rate of 0.45. The Hengjaya Mine earned a fourth consecutive Green PROPER rating from Indonesia’s Ministry of Environment and Forestry, underscoring the company’s beyond-compliance ESG practices.
Nickel Industries also advanced community initiatives including scholarship programs and infrastructure development, earning multiple CSR and HR Asia awards. The company published its first independently assured climate-related disclosure under AASB S2, and inaugurated a 197-hectare Biodiversity Conservation Area within the Hengjaya concession.
Incentives and Governance
As part of its long-term incentive plan, Nickel Industries issued over 4.5 million performance rights to executives and employees, linked to total shareholder return, earnings per share, and strategic objectives over a three-year vesting period. No dividends were declared for the half.
The company’s governance includes a diverse board and ongoing shareholder engagement, with a forthcoming Extraordinary General Meeting to approve related party transactions linked to the CNE HPAL acquisition.
Bottom Line?
Nickel Industries is leveraging rising nickel prices and strategic HPAL investments to fuel growth, but execution of project commissioning and regulatory approvals remain key near-term tests.
Questions in the middle?
- How will ENC’s nickel cathode production ramp impact revenue and margins in H2 2026 and beyond?
- What are the risks and timelines associated with government approvals for the Sampala Project acquisition?
- How might evolving nickel market dynamics and input cost inflation affect future profitability and capital allocation?