Nickel Mines has signed an agreement with partner Shanghai Decent Investment to acquire a 70% stake in the Angel nickel project in Indonesia, for $490m.
The Angel nickel project comprises four rotary kiln electric furnace (RKEF) lines and a captive 380MW power station, which is currently under construction within the Indonesia Weda Bay Industrial Park (IWIP) on Halmahera Island in North Maluku province.
The four RKEF lines are expected to have an annual production capacity of 36,000 tonnes of equivalent contained nickel in nickel pig iron (NPI).
Last month, Nickel Mines signed a memorandum of understanding to build, own and operate four RKEF lines within the Weda Bay industrial park, to double its nickel production profile within two years.
Nickel Mines to buy stake in two tranches
Under the terms of the bidding agreement, Nickel Mines will acquire 70% stake in the Angel nickel project in two tranches.
In the first trench, the firm will pay $210m by the end of the first quarter of 2021 to purchase an initial stake of 30%.
The second trench will see Nickel Mines paying $280m to acquire 40% interest in the Angel nickel project by the end of 31 December 2021.
Nickel Mines managing director Justin Werner said: “We are extremely pleased to have converted our initial MoU into a binding Agreement with Shanghai Decent and to have secured our equity participation in the Angel Nickel development project currently under way within the Indonesia Weda Bay Industrial Park.
“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.”
Nickel Mines said that the development of Angel nickel project is not expected exceed $700m.
Additionally, Shanghai Decent will purchase the NPI product produced at Angel Nickel at market price. The project is planned to be commissioned no later than 16 October 2022.
