Nickel Mines is buying a 70 per cent stake in the Oracle Nickel project in Indonesia for $525m
Australian miner Nickel Mines said on Wednesday it would buy a 70 per cent stake in Indonesia's Oracle Nickel project for $525m, putting it on track to become the world's top 10 producer.
Under the agreement, the company will pay $371 million to Qingshan subsidiary Shanghai Dingxin Investment (Group) Co., Ltd. and invest $154 million for the construction of the project.
According to Mysteel, the Oracle Nickel project will be constructed in Morowali Industrial Park, Indonesia, with four RKEF production lines and an annual production capacity of 36,000 metal tons of nickel pig iron. Commissioning of the production line will start no later than February 19, 2023. The project will also build a 380MW self-owned power plant and commissioning will begin before July 19, 2023. The actual construction cost of the project, together with the power plant, will not exceed $750 million.
Nickel Mines has acquired its interest in Oracle Nickel through two Singapore-registered holding companies, which will wholly own an Indonesian registered PMA operating company, PT Oracle Nickel Industry ('PT ONI'), The company will wholly own Oracle Nickel's four RKEF production lines and its power plants.
The sub-purchase of NPI is stated in the Agreement as follows: Shanghai Dingxin irrevocably and unconditionally undertakes to purchase all NPI products from PT ONI at the market price of NPI in China, and shall indemnify Nickel Mines for all and any losses and costs if it fails to perform this obligation.
In October, the company increased its stake in the Angel nickel project in Indonesia after buying an additional 30 percent stake from a Subsidiary of Tsingshan group. "These transactions will help Nickel Mines more than triple its Nickel production and operating cash flow over the next 15 months," said Justin Werner, managing director. "By the first quarter of 2023, with 12 RKEF lines in operation and nickel production of around 100,000 tonnes, we will easily be among the top 10 producers in the world and arguably the largest publicly traded nickel company in the world."
