Australia' Nickel Mines raises its ownerships in Indonesian Hengjaya Nickel and the Ranger Nickel projects from 60 to 80 percent, the company announced on Tuesday (05/19) - Photo by the Company

JAKARTA (TheInsiderStories) – Australia’ Nickel Mines Ltd., raises its ownerships in Indonesian Hengjaya Nickel and the Ranger Nickel projects from 60 to 80 percent, the company announced on Tuesday (05/19). It said, the transactions has valued A$231 million (US$150.98 million).

The company said, these decisions have been made in consultation with its partner, China’ Shanghai Decent Investment Group Co. Ltd., and associates, which currently holds the other 40 percent interests in both projects. In addition, the miner also will increase its current holding of Hengjaya Holdings Pte. Ltd, the Singaporean domiciled holding company that wholly owns PT Hengjaya Nickel Industry and an Indonesian company that owns 100 percent of of the unit.

The nickel producer said, to finances the deal, the miner has announced that it is undertaking a A$231 million fully underwritten, accelerated pro-rata non-renounceable entitlement offer. Upon completion of the transactions, the company’ nickel production will increase from 26,000 tones per annum to 35,000 tones per year.

Nickel Mines is an Australian public company and produced low cost producer of nickel pig iron (NPI), a key ingredient in the production of stainless steel. The unit, Hengjaya Mine with a large tonnage and high grade saprolite deposit located in the Morowali, Central Sulawesi.

Nickel Mines’ unit in Indonesia restarting the operations on October 2015 and has signed an off-taker agreement with Tsingshan Holding to supply of high grade saprolite ore. The China’ largest stainless steel producer was one of the few groups committed to establish a local processing in a world class industrial zones, PT Indonesia Morowali Industrial Park (IMIP).

As Tsingshan began to build NPI and stainless steel capacity around the zones, there became a growing requirement for nickel as feedstock to their plant. In September 2017, Nickel Mines executed a collaboration and subscription agreement with Tsingshan. With the strategic partnership, collaboration funding and construction of two lines in Hengjaya, its expecting the mines to produce 150 kilo tones per annum of NPI, containing 15 kilo tones of nickel metal equivalent.

The miner was welcomed to the official list of the Australian Stock Exchange on August 20, 2018. Following the completion of the initial public offering, Nickel Mines exercised its option to acquire a further 35 percent in the Hengjaya for $70M, taking its interest to 60 percent.

The company has a call option to acquire the remaining 40 percent interest in the Hengjaya for $120 million. This option must be exercised no later than 12 months from the commencement of NPI production at Hengjaya Mines.

In April 2019, Nickel Mines announced its intention to move to a 60 percent interest in the Ranger Nickel Project. And, in August 2019 Nickel Mines completed its acquisition of the additional 43 percent interest in Ranger Nickel, taking its interest to 60 percent.

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