Nickel Industries Limited (ASX: NIC) has announced a significant expansion of its nickel resources through the acquisition of the Sampala Project in Indonesia.
The company has signed Conditional Share Purchase Agreements for three highly prospective nickel-cobalt projects covering 6,654 hectares, strategically located near its existing operations.
The Sampala Project boasts an initial JORC 2012-compliant mineral resource of 187 million dry metric tonnes, containing 1.2 per cent nickel and 0.09 per cent cobalt.
This translates to 2.3 million tonnes of contained nickel metal and 0.2 million tonnes of cobalt.
Notably, this resource estimate covers only 900 hectares of the 4,700-hectare prospective laterite area, suggesting significant potential for future resource expansion.
Justin Werner, Managing Director of Nickel Industries, expressed enthusiasm about the acquisition, stating: “With an initial resource of 2.285 million tonnes of contained nickel metal in just 900ha explored and over 4,700ha of mapped prospective laterite, the opportunity to increase this resource substantially is significant.”
The Sampala Project’s strategic location, just 36.9 kilometres from the Indonesia Morowali Industrial Park (IMIP) where Nickel Industries’ existing operations are situated, is expected to deliver operational synergies.
A 22-kilometre haul road has been designed to connect with existing infrastructure, potentially fast-tracking ore production and sales.
This acquisition is set to bolster Nickel Industries’ resource base significantly. Combined with the company’s existing Hengjaya Mine resource, the total nickel resource inventory will exceed five million tonnes of contained nickel metal.
This positions Nickel Industries as one of the largest owners of nickel resources globally, ensuring supply for its operations for the next 40-50 years.
The financial terms of the deal appear favourable, with the majority of acquisition payments expected in 2026.
Project development costs are anticipated to be comparable to existing operations.
Werner highlighted the attractive economics, noting: “We expect the Sampala Project to deliver similar economics to our HM mine operation where we have seen EBITDA as high as US$42M for a quarter.”
This strategic move comes at a time of increasing competition for nickel resources and growing emphasis on supply security.
The acquisition is expected to make Nickel Industries’ operations in the IMIP self-sufficient, enhancing the company’s vertical integration and resource traceability.
As the global demand for nickel continues to rise, driven by the electric vehicle and renewable energy sectors, Nickel Industries’ expanded resource base positions the company favourably in the evolving market landscape.
