Nickel Mines acquires 70% of Angel nickel project
Australia’s Nickel Mines (NIC) has signed an agreement with partner Shanghai Decent Investment to acquire a 70 percent stake, worth £367.2 million, in the Angel nickel project in Indonesia.
In a statement, the miner says that the execution triggers a £14.98 million payment, which NIC will fund from cash reserves. The company plans to acquire the Angel nickel project over two stages:
- Stage 1 will acquire 30 percent of the project for £157.3 million (less £22.4 million prepayments), which will be due no later than March 31, 2021.
- Stage 2 will acquire 40 percent of the project for £209.7 million, which is due no later than December 31, 2021.
The Angel nickel project comprises four rotary kiln electric furnaces (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 Maluka province, the company says.
It adds that the four RKEF lines are expected to have an annual production capacity of 36,000 tonnes of equivalent contained nickel in nickel pig iron.
In October, Nickel Mines signed a memorandum of understanding to build, own and operate four RKEF lines within the Weda Bay Industrial Park, aiming to double its nickel production profile within two years.
“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," said Nickel Mines managing director Justin Werner.
“This transaction is transformative ... 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 says that the development of Angel nickel project is not expected to exceed £524 million.
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 October 16 2022.
Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”