Australian firm Nickel Mines has signed an agreement with partner Shanghai Decent Investment to buy a 70% interest in the Angel Nickel project in Indonesia for a consideration of $490m.

The project is located within the Indonesia Weda Bay Industrial Park (IWIP).

It comprises four rotary kiln electric furnace (RKEF) lines as well as a captive 380MW power station, which is currently under construction within the IWIP.

Nickel Mines managing director Justin Werner said: “This transaction is transformative for the Company in that 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.

“Additionally, this Weda Bay collaboration cements and further extends our excellent relationship with Shanghai Decent who have continued to deliver both exceptional operational performance across our existing shared projects and valued shareholder support to the Nickel Mines executive team.”

Under the agreement terms, Nickel Mines will acquire the 70% stake in the project in two tranches.

In the first tranche, Nickel Mines will pay $210m by the end of the Q1- 2021 to purchase an initial stake of 30% in Angel Nickel.

Meanwhile, in the second tranche, Nickel Mines will make a payment of $280m to acquire the remaining 40% interest in the Angel nickel project by the Q4-2021.

Furthermore, Shanghai Decent will also procure all of the nickel pig iron (NPI) product produced at the project for market price.

The Angel Nickel project is planned to be commissioned in October 2022.