Nickel Industries' Hengjaya Mine posted a record US$45.7 million quarterly profit, up 58%, while its new Excelsior Nickel Cobalt plant produced its first battery-grade nickel-cobalt output in July 2026.
At a glance
- Hengjaya Mine posted record Adjusted EBITDA of US$45.7 million in the June 2026 quarter, up 58% quarter-on-quarter, as ore sales rose 50% in average price to US$37.8 per wet metric tonne and production grew 4% to 4.1 million wmt.
- Nickel Industries raised its stake in the Excelsior Nickel Cobalt (ENC) HPAL project to 46% on June 24 via a zero-cash swap of an 18% Sampala stake for an additional 36% of ENC, becoming ENC's largest shareholder; ENC produced its first mixed hydroxide precipitate in July 2026, with first nickel cathode targeted for mid-August and full 72,000-tonne annual nameplate capacity targeted by October 2026.
- The company's RKEF (nickel pig iron) operations softened: contained-nickel output fell 8% to 27,864 tonnes and Adjusted EBITDA dropped 30% to US$60.3 million, as unit cash costs rose 20% against only a 10% rise in sale prices.
- An updated JORC Mineral Resource for the Sampala project, released May 25, 2026, confirmed 1.095 billion wet metric tonnes of ore at 1.24% nickel and 0.09% cobalt, containing roughly 8 million tonnes of nickel and 583,000 tonnes of cobalt, implying a valuation exceeding US$1.3 billion in the June 24 swap.
What happened
Nickel Industries Limited's Hengjaya Mine, an 80%-owned nickel-ore operation in Sulawesi, Indonesia, generated record Adjusted EBITDA of US$45.7 million in the June 2026 quarter, up 58% from the March quarter, the Sydney-listed miner said in its quarterly update. The mine sold 2.9 million wet metric tonnes (wmt) of ore at an average price of US$37.8 per tonne, a 50% jump from the prior quarter, while total ore production rose 4% to 4.1 million wmt. At the same time, the company's Excelsior Nickel Cobalt (ENC) high-pressure acid leach (HPAL) project produced its first batch of mixed hydroxide precipitate (MHP), an intermediate nickel-cobalt product, in July 2026, with first nickel cathode output targeted for mid-August. Nickel Industries raised its stake in ENC to 46%, becoming the project's largest shareholder, through a June 24 asset swap in which it exchanged an 18% interest in its undeveloped Sampala nickel-cobalt deposit for an additional 36% of ENC at no cash cost. Not every part of the business improved: the company's rotary kiln-electric furnace (RKEF) operations, which produce nickel pig iron (NPI) mainly for the stainless steel industry, saw contained-nickel output fall 8% to 27,864 tonnes and Adjusted EBITDA drop 30% to US$60.3 million, as unit cash costs rose 20% to US$12,595 per tonne against only a 10% rise in sale prices. Group Adjusted EBITDA for the first half of 2026 reached US$256 million, though the June quarter's US$120.5 million was down 11% from the March quarter, and net debt stood at US$982 million as of June 30 against a cash balance of US$268 million.
The details
The headline number in Nickel Industries' June-quarter update is straightforward: Hengjaya Mine's Adjusted EBITDA jumped 58% to US$45.7 million, a record for the operation. But the mechanism behind it matters more than the number itself. Production only grew 4%, to 4.1 million wet metric tonnes of ore. The real driver was price. The mine's average ore sale price climbed 50% to US$37.8 per tonne, which the company tied to a shift in Indonesia's domestic nickel-ore reference-pricing rules. Saprolite, the higher-grade ore type used directly in furnace feed, saw the sharpest price gain, up 72% to US$29.9 per tonne, while limonite, the lower-grade ore processed through HPAL circuits, rose a more modest 14% to US$22.7 per tonne. That split matters for how the rest of the quarter reads.
Downstream, the picture reverses. Nickel Industries' RKEF plants, which smelt ore into nickel pig iron for the stainless steel industry, turned less profitable even as the mine that feeds them got more so. Contained-nickel output fell 8% to 27,864 tonnes, and unit cash costs rose 20% to US$12,595 per tonne, a bigger jump than the 10% increase RKEF operators were able to pass through in sale prices. Adjusted EBITDA for that segment fell 30% to US$60.3 million. The same higher ore prices that lifted Hengjaya Mine's margin squeezed the furnace operations that buy ore as an input, a reminder that an integrated miner-and-smelter doesn't automatically benefit from a rising ore price across its whole business.
The more structurally significant news sits in the company's HPAL projects, where Nickel Industries is trying to shift part of its output away from stainless-steel-grade NPI toward the higher-purity 'Class 1' nickel and cobalt that battery makers need. The Excelsior Nickel Cobalt plant produced its first mixed hydroxide precipitate in July 2026, an intermediate product that gets refined further into nickel sulphate or cathode material, and the company is targeting first nickel cathode output in mid-August, with the plant's full 72,000-tonne annual MHP nameplate capacity targeted for October. Nickel Industries also used a non-cash mechanism, swapping 18 percentage points of its Sampala deposit for a further 36% of ENC, to lift its ENC stake to 46% and become the project's largest shareholder without touching its cash balance. That trade was made possible by a May 25 JORC resource update that put Sampala's contained nickel at roughly 8 million tonnes, one of the larger undeveloped nickel-cobalt resources reported globally this year, and implied a valuation above US$1.3 billion for the stake exchanged.
None of this comes free. Group net debt stood at US$982 million on June 30, against US$268 million in cash, after an April refinancing of US$450 million in loan facilities. The company is simultaneously funding the ENC ramp-up and agreeing to acquire further stakes in two more HPAL projects, Chengsheng New Energy and Teluk Metal Industry, while its RKEF segment's margins are under pressure. Group Adjusted EBITDA for the June quarter came in at US$120.5 million, down 11% from March, which shows the RKEF weakness outweighed the mine's record result at the consolidated level even before accounting for the capital being deployed into new HPAL interests. Whether that balance shifts back in Nickel Industries' favor depends on two things playing out roughly as planned: Indonesia's domestic ore pricing holding near its current levels, and the ENC plant actually reaching nameplate output on the timeline the company has laid out.
Why it matters
Nickel Industries operates one of the larger integrated nickel-mining-and-processing footprints in Indonesia, which supplies the large majority of the ore feeding both the world's stainless steel industry and its fast-growing electric-vehicle battery supply chain. This quarter's split result, a record mining segment alongside a weaker smelting segment, illustrates how sensitive even a single integrated producer's earnings are to Indonesia's domestic ore-pricing settings. The ENC HPAL project's shift toward mixed hydroxide precipitate and nickel cathode is also a concrete example of Indonesia's nickel industry reorienting part of its output away from stainless-steel-grade material and toward the battery-grade nickel and cobalt that EV makers need, a trend that touches nickel buyers and stainless steel importers well beyond Australia and Indonesia.
Our read
Outlook: neutral. The quarter was genuinely mixed: Hengjaya Mine posted record EBITDA growth and the ENC HPAL project hit a real production milestone, but the RKEF segment's Adjusted EBITDA fell 30% and group-level Adjusted EBITDA for the quarter declined 11%, while net debt remains elevated at US$982 million. Nickel Industries shares rose modestly (1.52%) on the day of Kalkine's report, suggesting the market read the update as broadly neutral rather than a clear directional signal for the stock or for nickel.
What to watch
- Whether the Excelsior Nickel Cobalt HPAL project reaches its targeted 72,000-tonne annual MHP nameplate capacity by October 2026
- First nickel cathode output at ENC, targeted for mid-August 2026
- Group net debt trends from the US$982 million balance at June 30, 2026, as Nickel Industries continues acquiring stakes in the Chengsheng New Energy and Teluk Metal Industry HPAL projects
- Indonesian domestic nickel-ore benchmark pricing in the September quarter, after the roughly 50% jump that lifted Hengjaya Mine's June-quarter ore sale price
For information only, not investment advice.
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metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-04-28: Nickel Industries refinances US$450 million in unsecured syndicated loan facilities.
- 2026-05-25: Nickel Industries releases an updated JORC Mineral Resource for its Sampala project: 1.095 billion wet metric tonnes at 1.24% nickel and 0.09% cobalt, containing roughly 8 million tonnes of nickel and 583,000 tonnes of cobalt.
- 2026-06-24: Nickel Industries exchanges an 18% interest in the Sampala project for an additional 36% stake in the Excelsior Nickel Cobalt (ENC) HPAL project at zero cash cost, raising its ENC interest to 46% and becoming the project's largest shareholder.
- 2026-06-30: End of the June 2026 quarter: Nickel Industries reports group net debt of US$982 million against a cash balance of US$268 million.
- 2026-07: The Excelsior Nickel Cobalt HPAL project produces its first batch of mixed hydroxide precipitate (MHP).
- 2026-08-19: Kalkine reports on Nickel Industries' quarterly update; shares trade at AUD 0.8325, up 1.52% on the day.
Demand Drivers
The commissioning of Nickel Industries' Excelsior Nickel Cobalt (ENC) HPAL plant, which produced its first mixed hydroxide precipitate in July 2026 and is targeting first nickel cathode output in mid-August, reflects the pull of electric-vehicle battery demand toward higher-purity 'Class 1' nickel and cobalt products, distinct from the nickel pig iron that has traditionally fed the stainless steel industry.
Supply Drivers
Hengjaya Mine lifted ore production 4% to 4.1 million wet metric tonnes in the June quarter, with saprolite output up 32% and limonite output down 9%, while a rise in Indonesian domestic ore benchmark pricing lifted the average sale price of that ore 50% quarter-on-quarter to US$37.8 per tonne.
Government Policies
A shift in Indonesia's domestic nickel-ore reference-pricing rules was cited as the driver behind the roughly 50% quarter-on-quarter jump in the average price Hengjaya Mine received for its ore, underscoring how domestic pricing policy shapes margins across Indonesia's integrated mining-and-processing industry.
Mining Production
Hengjaya Mine produced 4.1 million wet metric tonnes of nickel ore in the June 2026 quarter, up 4% from the March quarter, comprising 1.7 million wmt of saprolite (up 32%) and 2.4 million wmt of limonite (down 9%); the mine sold 2.9 million wmt in total.
Refinery Output
Nickel Industries' RKEF operations produced nickel pig iron containing 27,864 tonnes of nickel, down 8% quarter-on-quarter, while the newly commissioned ENC HPAL plant produced its first batch of mixed hydroxide precipitate in July 2026, with first nickel cathode output targeted for mid-August.
Global Consumption
ENC's design targets a mix of mixed hydroxide precipitate, nickel sulphate and nickel cathode aimed at the electric-vehicle battery supply chain, alongside Nickel Industries' existing nickel pig iron output that continues to serve global stainless steel demand.
What could lift prices
- Hengjaya Mine posted record Adjusted EBITDA of US$45.7 million, up 58% quarter-on-quarter, on a 50% rise in average ore sale price.
- The Excelsior Nickel Cobalt HPAL project reached first mixed hydroxide precipitate production on schedule in July 2026, with first nickel cathode targeted for mid-August and full nameplate capacity targeted by October 2026, expanding Nickel Industries' exposure to higher-value Class 1 nickel-cobalt products.
- An updated JORC resource confirmed roughly 8 million tonnes of contained nickel at the Sampala project, implying a valuation above US$1.3 billion that let Nickel Industries lift its ENC stake to 46% without spending cash.
- Nickel Industries shares rose 1.52% to AUD 0.8325 on the day Kalkine's report on the quarterly update was published.
What could weigh on prices
- RKEF (nickel pig iron) output fell 8% and Adjusted EBITDA dropped 30% to US$60.3 million, as unit cash costs rose 20% against only a 10% rise in sale prices.
- Group net debt reached US$982 million as of June 30, 2026, against US$268 million in cash, even as the company continues acquiring further stakes in the Chengsheng New Energy and Teluk Metal Industry HPAL projects.
- Group Adjusted EBITDA for the June quarter fell 11% from the March quarter, showing the RKEF segment's weakness outweighed the mining segment's record result at the consolidated level.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Indonesia | High | Nickel Industries' Hengjaya Mine, its RKEF plants and the Excelsior Nickel Cobalt HPAL project are all located in Sulawesi, Indonesia, so the quarter's production, cost and pricing trends directly reflect conditions in the world's largest nickel-producing country. |
| Australia | Medium | Nickel Industries is listed on the Australian Securities Exchange and headquartered in Sydney, so its quarterly results and the ENC stake increase flow directly through to ASX-listed shareholders' exposure to Indonesian nickel assets. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Mining | Positive | Record Adjusted EBITDA at Hengjaya Mine and a Sampala resource update confirming roughly 8 million tonnes of contained nickel reflect strong economics for Nickel Industries' Indonesian ore-mining operations this quarter. |
| Stainless Steel | Negative | Nickel Industries' RKEF segment, which produces nickel pig iron for the stainless steel industry, saw contained-nickel output fall 8% and Adjusted EBITDA drop 30% as unit costs rose faster than sale prices. |
| Battery Manufacturing | Positive | The ENC HPAL plant's first production of mixed hydroxide precipitate, with nickel cathode output targeted next, adds a new source of battery-grade Class 1 nickel-cobalt material for electric-vehicle battery makers. |
Who gains, who loses
- Electric-vehicle battery and cathode material makers: ENC's first mixed hydroxide precipitate output and planned nickel cathode production add a new Indonesia-based source of Class 1 nickel-cobalt feedstock for battery supply chains.
- Nickel Industries shareholders: Record Hengjaya Mine EBITDA and a zero-cash increase in ENC ownership, backed by a Sampala resource now valued above US$1.3 billion, add to the company's asset base without new share issuance.
- Nickel Industries' RKEF (nickel pig iron) operations: Unit cash costs rose 20% to US$12,595 per tonne while sale prices rose only 10%, cutting RKEF Adjusted EBITDA 30% to US$60.3 million and dragging on the group's overall quarterly result despite the mine's record performance.
Other ways this could play out
- If the Excelsior Nickel Cobalt plant's ramp to its full 72,000-tonne nameplate capacity slips past the targeted October 2026 date, the anticipated increase in higher-value Class 1 nickel output could be delayed.
- If Indonesia's domestic ore benchmark pricing reverses from its June-quarter levels, Hengjaya Mine's outsized ore-price and EBITDA growth this quarter may not repeat in the September quarter.
- If RKEF unit costs continue rising faster than nickel pig iron sale prices, group-level Adjusted EBITDA could keep declining even if the mining segment stays strong.
Price risks
- A reversal in Indonesia's domestic ore benchmark pricing could remove the tailwind behind this quarter's Hengjaya Mine EBITDA growth.
- Delays in ramping the ENC HPAL plant to full nameplate capacity could push back the anticipated increase in higher-value Class 1 nickel output.
- Elevated net debt of US$982 million, combined with further HPAL stake acquisitions, adds refinancing and leverage risk if nickel prices soften.
Historical comparison
- March quarter 2026 (Q1): The baseline for this quarter's reported changes: Hengjaya Mine's Adjusted EBITDA of US$45.7 million is 58% higher than the March quarter, while RKEF Adjusted EBITDA of US$60.3 million is 30% lower.
- Before the May 25, 2026 JORC update: Sampala's contained-nickel tonnage had not been confirmed at its current scale; the updated resource of roughly 8 million tonnes of nickel underpinned the more than US$1.3 billion valuation used in the June 24 stake swap for additional ENC ownership.
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.
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