Silkroad Nickel said on Monday it would supply 2.7 million tons of high-grade Nickel ore to Chinese stainless steel giant Tsingshan Holding Group in Indonesia by the end of 2022, marking the second time it has won a major customer this year.
Singapore-listed Silk Road Nickel mines ore on Indonesia's Sulawesi island.
The company said in a filing that it has signed a contract with Aoyama subsidiary PT Ekasa Yad Resources worth more than $90 million at current prices and will deliver at least 50,000 tonnes of nickel ore per month from March 2021 to December 2022.
Castle Hill uses nickel ore to produce nickel pig iron (NPI), a raw material for stainless steel, in Indonesia and is working on projects including a production of nickel chemicals for electric car batteries in Sulawesi.
Indonesia, the world's largest nickel miner, has banned the export of nickel ore from January 2020 in a bid to process more of its resources at home.
Hong Kah-Ing, chief executive of Silk Road Nickel, said the company was preparing to deliver the first shipment [to Castle Peak] in the next two weeks and expected to gradually ramp up production from April 2021 to meet the new off-take commitments.
"Nickel ore is expected to be used to meet the growing demand of the emerging electric vehicle battery industry," he added in the document.
Silk Road Nickel signed a 10-year deal in January to sell nickel ore to Ganfeng Lithium, one of the world's largest lithium producers.
The company intends to use some of the proceeds from the Castle Peak deal to build a rotary kiln electric furnace (RKEF) smelter to produce new products.
