Nickel Industries has entered a critical inflection point, with first mid-conversion product emerging from the Excelsior Nickel Cobalt HPAL project on 21 July and exchange-grade nickel cathode expected by mid-August. This milestone represents the culmination of years of development and marks the company’s transition from an ore and ore-to-intermediate processor into a full vertical supplier capable of producing exchange-grade nickel cathode, the highest-value form of the metal. For a company whose valuation has historically hinged on operational leverage through its rotary kiln electric furnace operations, this diversification into high-margin cathode production addresses a structural weakness in the commodity nickel market and positions Nickel Industries to capture additional margin across the production chain.
The June quarter results reveal both progress and near-term headwinds. Total adjusted EBITDA from operations reached US$120.5 million, reflecting the company’s diversified asset base across mining, high-pressure acid leaching, and rotary kiln electric furnace operations. However, individual segments show softening results. Mining operations generated US$45.7 million in adjusted EBITDA, down 5 percent from the prior quarter, despite a modest 3 percent increase in ore sales to 4.1 million tonnes. This disconnect highlights rising unit operating costs, which climbed to US$15.9 per wet metric tonne. The RKEF operations experienced sharper pressure, with adjusted EBITDA falling 24 percent to US$60.3 million as cash costs surged 30 percent to US$12,595 per tonne of nickel. The company attributed this cost inflation to rising sulphur prices, a critical input for RKEF operations. HPAL operations, which should benefit most from the cathode production pathway, posted adjusted EBITDA of US$14.4 million, down 30 percent from the prior quarter, with sales falling 14 percent to 1,782 nickel tonnes.
Beyond quarterly performance, the announcement highlights significant strategic progress. The company has secured a valued position exceeding US$1.3 billion in the Sampala nickel ore resource project through a share swap transaction, adding resource assets to underpin future production. Concurrently, Nickel Industries has agreed to acquire 36 percent of the PT Chengsheng New Energy HPAL project and 17.5 percent of the PT Teluk Metal Industry HPAL project, further expanding its processing capacity and market reach. To fund these expansions and capitalise on the cathode production opportunity, the company executed US$450 million in unsecured loan facilities, providing financial firepower for the growth phase.
The path forward depends on execution. Near-term focus should centre on the ramp-up of cathode production from the Excelsior facility and the company’s ability to absorb or pass through elevated input costs such as sulphur. The acquisitions of interests in TMI and CNE HPAL projects signal management’s confidence in HPAL-to-cathode economics and appetite for consolidation within the regional processing landscape. Investors should monitor production volumes, unit costs, and margin realisations as the cathode facility reaches steady-state operations. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Nickel Industries Limited (ASX: NIC)
Nickel Industries Limited is an ASX-listed mining company that owns and operates a portfolio of nickel mining and downstream processing assets located primarily in Indonesia. The company produces nickel through high pressure acid leach (HPAL) technology and rotary kiln electric furnace (RKEF) projects, supplying nickel for stainless steel production and the electric vehicle supply chain.
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