Nickel Industries (ASX:NIC) reports it has produced its first batch of nickel pig iron (NPI) at the 70% owned Oracle Nickel Project, located in Central Sulawesi, Indonesia.
The company says a maiden NPI tap was completed on November 14, ahead of the scheduled delivery date of February 2023, and it reports the other 3 RKEF lines will be progressively commissioned over the coming months with all 4 rotary kiln electric furnace (RKEF) lines anticipated to commence operations by the end of Q1 2023.
Nickel Industries reports the ramp up of Oracle will be ‘transformative’ to the company’s existing operations, increasing annual attributable nickel metal nameplate capacity from 52,800 tonnes to 78,000 tonnes with actual attributable production levels expected to exceed 100,000 tonnes per annum based on historical levels of outperformance above nameplate capacity.
Nickel Industries Managing Director Justin Werner said Oracle’s maiden NPI production represents another milestone in the company’s evolution into a globally significant and diversified nickel producer.
“Having commissioned and successfully ramped up our Angel Nickel Project, which is now operating in the first quartile for costs and significantly lower than our Hengjaya Nickel Project and Ranger Nickel Project lines, the early introduction of Oracle to our production profile once again confirms Tsingshan’s unrivalled project execution credentials and will deliver us significant additional low-cost nickel units.
With numerous development projects around the globe beset by capex overruns and time delays, Tsingshan’s ability to deliver these RKEF projects well ahead of schedule and within budget has been outstanding and their construction teams are to be highly commended for their efforts.
“With our developments at Hengjaya, we are unique among global listed nickel producers given our ability to produce nickel products which have pricing exposure to both Class 1 and Class 2 nickel markets”
As Oracle’s remaining lines progressively come online and ramp-up in the months ahead, we look forward to seeing a steady increase in our monthly production rates that will in time see the company with annual attributable production in excess of 100,000 tonnes, comfortably establishing us as a global top 10 nickel producer.
With our developments at Hengjaya, we are unique among global listed nickel producers given our ability to produce nickel products which have pricing exposure to both Class 1 and Class 2 nickel markets, thereby providing significant diversification and importantly exposure to the electric vehicle battery supply chain.”
Nickel Industries reports the ramp up of Oracle’s RKEF lines is expected to follow a similar path to the Angel Nickel Project at Indonesia Weda Bay Industrial Park, with each line progressively ramping up to around 60% of the nameplate capacity until such a time as Oracle’s own power plant comes online.
Upon the commissioning of Oracle’s power plant currently scheduled for Q2 2023, all RKEF lines are expected to rapidly increase their production levels to a similar level of outperformance as the company’s existing operations, and Oracle is expected to have a similar cost profile to Angel which is below Nickel Industries’ existing RKEF operations, with cost benefits from ownership of a power plant and also the scale benefits associated with a larger production capacity.
Nickel Industries also states as with Angel, Oracle will require the issuance of an industrial business licence (Izin Usaha Industri) to commence commercial sales of NPI, and all NPI produced ahead of the industrial business licence issuance will be stockpiled, and the company expects Oracle’s licence will be in place to allow first commercial sales in early 2023.
The company further states it is now producing nickel matte at the 80% owned Hengjaya Nickel Project, and the production switch from NPI to nickel matte was smooth and in line with expectations.
Revenue from the production at Hengjaya is also now linked to the pricing on the Shanghai Futures Exchange, and further information regarding nickel matte will be provided in the upcoming fourth quarter report.
Nickel Industries is an Australian nickel pig iron producer that holds an 80% interest in the Hengjaya Nickel and Ranger Nickel Projects in Indonesia.
The company also holds an 80% interest in the Angel Nickel Project, and a 70% interest in the Oracle Nickel Project also in Indonesia.
Images: Nickel Industries Ltd
