Nickel producer Nickel Industries (ASX:NIC) has posted record quarterly earnings from its Indonesian operations as production rises and costs fall.
The $3.3 billion market capitalisation nickel specialist reported US$120.7 million in earnings before interest, tax, depreciation and amortisation (EBITDA) from its rotary kiln electric furnace (RKEF) projects and its Hengjaya mine over the three months to the end of September 2023.
From its RKEF operations, Nickel Industries produced 33,852 tonnes of nickel metal — 28,561 tonnes of nickel in nickel pig iron (NPI) and 5,291 of nickel in nickel matte. For comparison, the company produced 27,454 tonnes and 5,104 tonnes from NPI and nickel matte over the June quarter, respectively.
The company sold 34,263 nickel metal tonnes from its RKEF operations over the quarter for US$97.6 million in EBITDA — more than doubling its June quarter EBITDA of $43.9 million.
Meanwhile, from the Hengjaya mine, Nickel Industries produced over 3.6 million wet metric tonnes of nickel ore and tabled US$23.1 million in EBITDA, up from the June quarter’s US$12 million.
The bolstered earnings come amid lower production costs from Nickel Industries’ RKEF operations; from the Hengjaya RKEF project, production costs averaged US$11,379 per tonne compared to US$13,146 per tonne over the June quarter; from Ranger Nickel, production costs were US$11,242 per tonne compared to June’s US$13,005; from Angel Nickel, US$9,467 per tonne compared to US$10,907; and from Oracle Nickel US$9,973 per tonne compared to US$12,794.
Nickel Industries Managing Director Justin Werner says these September quarter results signify the company’s financial strength and its focus on sustainable growth and value creation.
“We are delighted to report another record quarter of 33,852 tonnes of nickel metal as we enjoyed the first full quarter of contribution from our ramped-up Oracle Nickel (ONI) operations.
This quarterly production number equates to 135,408 tonnes on an annualised basis and makes us easily Australia’s largest listed diversified nickel producer, well ahead of our nearest peers BHP’s Nickel West (83,000 tonnes pa) and Independence Group (36,000 tonnes pa).
“This quarterly production number equates to 135,408 tonnes on an annualised basis and makes us easily Australia’s largest listed diversified nickel producer”
We saw a significant increase in EBITDA across all our operations, with our Hengjaya Mine enjoying a record quarter of US$23.1M in EBITDA, a 93.6% increase on the June quarter and our RKEF operations delivering US$97.6M in EBITDA, a 122.3% increase on the June quarter. This combined to deliver US$120.7M of EBITDA from operations.”
Werner adds that on the back of a $942.7 million share placement to United Tractors first announced in June, the company remains ‘well-funded’ to secure a 55% interest in the ENC Project from Decent Resource.
“This will be the world’s first HPAL plant with a capacity of 72,000 tonnes pa to produce the three key class one nickel products, being MHP, nickel sulphate and nickel cathode, which will provide the flexibility and opportunity to capture superior margins across the class one nickel complex.”
During the September quarter, Nickel Industries made a positive final investment decision for its Excelsior Nickel Cobalt Project, supported by US$400 million in Indonesian bank loans.
The company ended the quarter with US$827.6 million cash and cash equivalents at hand.
Write to Joshua Smith at Mining.com.au
Images: Nickel Industries
