Nickel Industries delivered record quarterly earnings from its flagship Hengjaya Mine during the September 2026 quarter, with adjusted EBITDA surging 68% to US$76.9 million on ore sales up 56% to 4.49 million tonnes. The standout result reflects the tangible benefits of integrating the mine with the Excelsior Nickel Cobalt (ENC) high-pressure acid leaching (HPAL) facility, which began receiving ore slurry via pipeline in July and is now operating at 50% of nameplate capacity. The company reported total adjusted EBITDA of US$125.9 million, up 4% quarter-on-quarter, with attributable EBITDA of US$102.4 million reflecting the company’s proportionate contribution across its operating assets.
The mine’s performance demonstrates the value of vertical integration within Nickel Industries’ portfolio. By directing limonite ore directly to the ENC Feed Preparation Plant just 6 kilometers away rather than 24 kilometers to third-party customers in the industrial park, the company reduced unit operating costs by 15% to US$18.5 per wmt. The shift in product mix toward higher-margin limonite accounted for a 104% increase in limonite sales during the quarter. This operational optimization illustrates how capex investments in integrated facilities can unlock significant cost synergies that flow through to earnings, a key consideration for investors evaluating the company’s capital allocation decisions.
The ENC project advanced meaningfully during the quarter, producing 4,840 tonnes of nickel and 494 tonnes of cobalt in mixed hydroxide precipitate form at a cash cost of US$13,943 per tonne of nickel, below the company’s established HPAL benchmark. The refinery began consistently producing Class 1 nickel cathode from ENC’s own material in August, with conversion costs of US$3,888 per tonne expected to decline toward a targeted US$2,500 per tonne as capacity scales. Subsequent to quarter end, the ENC joint venture secured US$245 million in non-recourse project finance, led by OCBC, comprising a seven-year term loan at SOFR plus 200 basis points and a working capital facility. The financing shows third-party confidence in the asset and is structured such that Nickel Industries’ 46% share of distributions is available for corporate purposes, providing financial flexibility to fund growth in adjacent projects.
The quarter’s achievements were constrained by unusually severe El Niño conditions that left the Hengjaya region with just 7 millimeters of rainfall between early August and late October, compared to a 10-year average of 474 millimeters over the same period. Water shortages curtailed ENC ramp-up and forced RKEF operations to operate at approximately 75% of nameplate capacity during October. Despite these temporary headwinds, management expects these constraints to ease when the wet season returns in December, positioning the company to accelerate production from both the mine and HPAL assets.
Investors should monitor several near-term catalysts. The company expects to receive its industrial business licence (IUI) for ENC in the fourth quarter, clearing the way for first product sales. The Sampala nickel ore project, where the company holds a right to acquire a 60% interest, advanced with bridge construction and haul road work completed or underway, though feasibility studies remain under Indonesian Government review. The company raised its full-year 2026 guidance for HPAL attributable nickel sales to 48-53 kilotonnes, reflecting ENC’s production ramp. The completion of a major overhaul at the Hengjaya Nickel RKEF line, expected to lift that facility’s capacity by 17% upon completion, represents another intermediate target. This announcement is classified as price sensitive and has been flagged as material by the ASX.
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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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