PT Merdeka Battery Materials, a nickel unit of mining company Merdeka Copper Gold, has entered a conditional agreement to acquire 60 percent shares in PT Huaneng Metal Industry (HNMI), a nickel-processing facility in Indonesia Morowali Industrial Park (IMIP), Sulawesi.
The nickel facility was built by Eternal Tsingshan Group Limited, which happens to own IMIP and Indonesia Weda Bay Industrial Park. Both housed mining and processing firms related to nickel in Indonesia, mostly also Tsingshan’s subsidiary.
For Merdeka Battery, acquiring HNMI shares demonstrates their ability to capture additional profit margins from producing and selling high-grade nickel matte. This is done by creating various types of nickel to take advantage of market dynamics.
The company management says, “The proposed acquisition will enable MBMA to transition its larger RKEF [Rotary Kiln Electric Furnace] asset base to class 1 nickel production. The purchase is targeted for completion in mid-2023.”
Merdeka Battery goals to expansion projects
MBMA continues to evaluate additional nickel matte production and other downstream expansion projects as part of its strategy to add value. The goal is to produce first-class, high-value-added electric vehicle battery materials critical to supporting the rapidly growing electric vehicle value chain.
Last month, Merdeka Battery held an initial public offering (IPO) and raised IDR 9.2 trillion in funds. MBMA used the IPO funds to finance the construction and development of several nickel processing projects, including a high-pressure acid leach (HPAL) technology smelter, a matte nickel converter, and a sulfuric acid production facility through the Acid Iron Metal I (AIM I) project.
Part of the IPO funds was also used to strengthen the working capital of MBMA’s subsidiaries, including PT Sulawesi Cahaya Mineral (SCM).
About HNMI
HNMI was founded and operated by Eternal Tsingshan Group Limited and has been in production since 2022. The HNMI facility processes low-grade nickel matte (LGNM) produced by the RKEF smelter and can reduce the iron content to make high-grade nickel matte (HGNM) containing more than 70 percent nickel.
HNMI has maintained an annual production of 50,000 tons of nickel matte. Recently, the company has achieved an additional EBITDA margin on nickel pig iron (NPI) of US$2,000 per ton.
