Nov 25, 2020

Nickel Mines acquires 70% of Angel nickel project

Australia
Indonesia
Acquisition
Dominic Ellis
2 min
£367m acquisition will take place in two stages
£367m acquisition will take place in two stages...

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.

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Apr 22, 2021

Lynas revenue jumps 21% as rare earth prices jump

Lynas
RareEarth
WindTurbines
electricvehicles
2 min
Lynas Rare Earths sees revenue boost as selling prices for the key metals hit record highs amid strong demand for neodymium and praseodymium (NdPr)

Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).

NdPr

NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.

The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.

“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.

“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”

Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.

Rare Earths

It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.

Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.

Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.

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