Australian miner Nickel Industries has called an Extraordinary General Meeting (EGM) seeking a share deal with PT Danusa Tambang Nusantara (DTN). The company wants shareholder approval for the placement of 857 million shares at A$1.10 per share, equivalent to $620m (A$943m) of investment.
The 857 million shares equate to roughly 20% of the total shareholding of Nickel Industries. Indonesia’s DTN is a subsidiary of manufacturer PT United Tractors (UT), and is the holding company for its mineral business, aiming to expand in the nickel market.
Much of the $620m investment will be used to finance Nickel Industries’ purchase of a 55% stake in the Excelsior Nickel Cobalt project (ENC). The high-pressure acid leaching plant expects to produce as much as 72 tonnes per year of nickel equivalent.
A feasibility study is currently under way for the ENC project, ahead of a final investment decision for its initial stage. As part of the share purchase, DTN can choose to take a 20% interest in the ENC project. Nickel Industries said that investment in the plant by DTN would reduce the capital burden on Nickel Industries and expedite the project’s completion.
In June, Nickel Industries managing director Justin Werner said: “We believe that benefits of collaboration with UT are significant for Nickel Industries and will enable us to partner with a large and influential Indonesian mining company to jointly pursue growth opportunities in Indonesian nickel.
“UT with its significant mining, power and infrastructure development and operating experience in Indonesia, substantial financial resources, and long-term return focus will add substantial value to us.”
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The ENC project is set to be housed in the Morowali Industrial Park in Indonesia. This week, Nickel Industries announced the completion of a haulage road between the industrial park and its 80%-owned Hengjaya mine.
The road is expected to as much a -triple ore sales by expediting delivery, with the current 2.5 million tonne per year (mtpa) sales level estimated to rise to 10mtpa. The investment into the ENC project then could further increase production for the company in the country that was the world’s largest producer of the metal in 2022.
In April, Nickel Industries finalised the 100% purchase of the Cyclops nickel-cobalt project, also in Indonesia.