Nickel 28 Capital sold 8,967 tonnes of nickel and 881 tonnes of cobalt from its Ramu, Papua New Guinea stake last quarter, earning $2.8 million as it flagged rising sulphur costs squeezing margins ahead.
At a glance
- Nickel 28 sold 8,967 tonnes of contained nickel and 881 tonnes of contained cobalt in the quarter ended July 31, 2026, more than the 8,234 tonnes of nickel and 811 tonnes of cobalt actually produced, as sales drew down inventory.
- The company's unit cash production cost was US$4.81 per pound of contained nickel, net of cobalt by-product credits -- against an LME nickel price that traded around US$16,100 per tonne (roughly US$7.30/lb) in mid-September, implying a meaningful cash margin.
- Net profit for the quarter was US$2.8 million (US$0.03 per share), with US$9.2 million cash on hand against US$32.7 million of non-recourse construction debt tied to the Ramu operation.
- Management guided for second-half 2026 production and sales broadly in line with the first half, but flagged anticipated higher sulphur costs -- a key input for Ramu's acid-leach processing -- as a margin risk unless revenue factors improve.
What happened
Nickel 28 Capital Corp sold 8,967 tonnes of contained nickel and 881 tonnes of contained cobalt in its fiscal second quarter, the three months ended July 31, 2026, drawing down inventory built up from the 8,234 tonnes of nickel and 811 tonnes of cobalt actually produced at the Ramu high-pressure acid leach operation in Papua New Guinea over the same period. Nickel 28 holds an 8.56% joint-venture interest in Ramu. The unit cash cost of production came in at US$4.81 per pound of contained nickel, net of by-product credits from cobalt sales. The company posted net profit of US$2.8 million, or US$0.03 per share, and ended the quarter with US$9.2 million in cash against US$32.7 million of non-recourse construction debt. Management said it expects production and sales in the second half of 2026 to run broadly in line with the first half, but warned that margins face pressure from anticipated higher sulphur costs.
The details
Nickel 28 Capital is not an operator in the usual sense -- it holds an 8.56% joint-venture interest in the Ramu nickel-cobalt mine in Papua New Guinea, giving shareholders exposure to Ramu's output without running the mine itself. That structure means the company's quarterly numbers are really a read on Ramu's own performance, filtered through a minority stake and a construction-debt balance sheet still being paid down.
The headline figure -- 8,967 tonnes of nickel sold against 8,234 tonnes actually produced -- is a reminder that sales and production rarely match exactly at a processing operation; the gap reflects material pulled from inventory built up in prior periods rather than a production shortfall. Ramu uses a high-pressure acid leach (HPAL) process, which dissolves nickel and cobalt out of laterite ore using large volumes of sulphuric acid. That makes sulphur one of the operation's biggest controllable cost inputs, and it's exactly the line item management flagged as a margin risk heading into the second half of 2026.
The cost figure that matters most here is the US$4.81 per pound unit cash cost, net of cobalt by-product credits -- cobalt sales effectively subsidize the cost of producing nickel, a common structure at polymetallic operations like Ramu. With LME nickel trading around US$16,100 per tonne in mid-September, equivalent to roughly US$7.30 per pound, that cost structure implies a cash margin of somewhere near US$2.50 per pound before accounting for Nickel 28's minority-stake dilution and debt service. It's a workable margin, but a thin one by historical nickel-cycle standards, and it's the kind of spread that erodes quickly if sulphur costs climb as management expects while nickel prices stay range-bound.
The US$32.7 million of non-recourse construction debt is the other detail worth sitting with. Non-recourse debt means Nickel 28's broader balance sheet isn't on the hook if the underlying project can't service it -- a structural protection for shareholders -- but it also means cash flow from Ramu gets split between debt service and dividends before profit reaches the parent company. With only US$9.2 million cash on hand, the company's near-term financial flexibility is tied tightly to Ramu continuing to perform at least in line with the guidance management just gave.
Why it matters
Ramu is one of a shrinking number of nickel-cobalt operations outside Indonesia, which now dominates global nickel supply after aggressively expanding laterite processing capacity. A Papua New Guinea operation that keeps producing profitably at a sub-US$5/lb cash cost, even through a period of Indonesian oversupply that has pressured LME nickel toward US$16,000 a tonne, is a data point for anyone tracking how much of the world's nickel-cobalt supply can still compete outside Indonesia's cost structure -- relevant to Indian battery and stainless-steel manufacturers weighing supply diversification beyond a single dominant source.
Our read
Outlook: neutral. This is a company-specific quarterly update from a minority joint-venture holder, not a market-moving supply or demand event -- Ramu's continued profitable operation at a sub-US$5/lb cash cost is a modest positive data point for non-Indonesian nickel supply, offset by management's own warning of rising sulphur costs pressuring margins ahead.
What to watch
- Sulphur and other input cost trends at Ramu through the second half of 2026
- LME nickel price direction relative to Ramu's roughly US$4.81/lb cash cost
- Nickel 28's cash position and construction debt paydown progress
For information only, not investment advice.
Nickel price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2026-07-31: Nickel 28's fiscal second quarter (Q2 FY2027) ended, covering the three months in which Ramu sold 8,967 tonnes of contained nickel and 881 tonnes of contained cobalt.
- 2026-09-21: Nickel 28 filed its fiscal Q2 2027 financial statements disclosing the quarter's sales, production and cost figures.
Supply Drivers
Nickel 28's Ramu output is one of a shrinking number of major nickel-cobalt supply sources outside Indonesia, which has expanded laterite HPAL capacity aggressively enough to pressure global nickel prices toward US$16,000 per tonne in recent weeks.
Inventory Drivers
Nickel 28 sold more contained nickel (8,967 tonnes) than Ramu produced in the quarter (8,234 tonnes), drawing down existing inventory rather than reflecting a production shortfall.
Mining Production
Ramu produced 8,234 tonnes of contained nickel and 811 tonnes of contained cobalt in mixed hydroxide precipitate (MHP) during the quarter ended July 31, 2026, via a high-pressure acid leach process at Nickel 28's 8.56%-owned joint venture in Papua New Guinea.
What could lift prices
- Ramu's US$4.81/lb unit cash cost leaves a meaningful margin against LME nickel prices near US$16,100 per tonne (about US$7.30/lb), and management guided for H2 2026 production and sales broadly in line with H1.
- Non-recourse construction debt structure shields Nickel 28's broader balance sheet if project-level cash flow ever came under pressure.
What could weigh on prices
- Management explicitly flagged anticipated higher sulphur costs -- a major input for Ramu's acid-leach processing -- as a margin risk in the second half of 2026 unless revenue factors improve.
- Cash on hand of just US$9.2 million against US$32.7 million of construction debt leaves limited financial cushion at the project level.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Papua New Guinea | Medium | The Ramu nickel-cobalt operation is a significant source of mineral export revenue and employment in Papua New Guinea, continuing profitable production despite broader industry margin pressure from Indonesian oversupply. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Mining | Positive | Ramu's continued profitable production at a sub-US$5/lb cash cost demonstrates that select nickel-cobalt operations outside Indonesia can still compete even amid industry-wide margin pressure from Indonesian supply growth. |
Who gains, who loses
- Nickel 28 shareholders: The company remains profitable at current cost levels, but net profit of US$0.03 per share reflects a minority joint-venture stake diluted by debt service, not the full economics of Ramu's output.
- Higher-cost nickel-cobalt producers outside Indonesia: Operations with cash costs closer to or above current LME nickel prices near US$16,100 per tonne face far tighter margins than Ramu's sub-US$5/lb cost structure, especially if input costs like sulphur keep climbing industry-wide.
Other ways this could play out
- If nickel prices firm from current levels near US$16,100 per tonne, Ramu's cash margin would widen even if sulphur costs rise as management expects, supporting stronger cash flow to Nickel 28's minority stake.
- If sulphur costs rise faster than nickel prices recover, as management's own guidance suggests is possible, margins could compress further in the second half, pressuring the already-thin US$9.2 million cash position.
Price risks
- Continued Indonesian nickel supply growth could keep LME prices range-bound or pressured even as Ramu's own input costs rise
- Rising sulphur costs, as management flagged, could compress Ramu's margin regardless of where nickel prices trade
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
