Nickel Mines acquires 70% of Angel nickel project

Australia’s Nickel Mines (NIC) has signed an agreement with partner Shanghai Decent Investment to acquire a 70 percent stake, worth £367.2 million, in the Angel nickel project in Indonesia.

In a statement, the miner says that the execution triggers a £14.98 million payment, which NIC will fund from cash reserves. The company plans to acquire the Angel nickel project over two stages: 

• Stage 1 will acquire 30 percent of the project for £157.3 million (less £22.4 million prepayments), which will be due no later than March 31, 2021. 
• Stage 2 will acquire 40 percent of the project for £209.7 million, which is due no later than December 31, 2021.

The Angel nickel project comprises four rotary kiln electric furnaces (RKEF) lines, and a captive 380MW power station, which is currently under construction within the Indonesia Weda Bay Industrial Park (IWIP) on Halmahera Island in North Maluka province, the company says.

It adds that the four RKEF lines are expected to have an annual production capacity of 36,000 tonnes of equivalent contained nickel in nickel pig iron.

In October, Nickel Mines signed a memorandum of understanding to build, own and operate four RKEF lines within the Weda Bay Industrial Park, aiming to double its nickel production profile within two years.

“We are extremely pleased to have converted our initial MoU into a binding Agreement with Shanghai Decent and to have secured our equity participation in the Angel Nickel development project currently under way within the Indonesia Weda Bay Industrial Park," said Nickel Mines managing director Justin Werner.

“This transaction is transformative ... it will essentially double the company’s NPI production capacity and provide us with operational footprints within what will be the two largest nickel production centres globally over the next decade.”

Nickel Mines says that the development of Angel nickel project is not expected to exceed £524 million.

Additionally, Shanghai Decent will purchase the NPI product produced at Angel Nickel at market price. The project is planned to be commissioned no later than October 16 2022.