Why Nickel Industries' (ASX:NIC) Record Ore Sales and HPAL Start-Up Matter for the ASX 200 Nickel Producer

Sonal Goyal

11 November 2026 06:45 PM AEDT

Why Nickel Industries' (ASX:NIC) Record Ore Sales and HPAL Start-Up Matter for the ASX 200 Nickel Producer

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Key Highlights

Hengjaya mine ore sales rose 56% to a record 4.49 million wet metric tonnes.
Hengjaya adjusted EBITDA rose 68% to US$76.9 million, the second consecutive record quarter.
Group adjusted EBITDA was US$125.9 million, up 4%.
The ENC HPAL project reached first production, and a US$245 million Debt Facility was secured after the quarter.

Why did Nickel Industries (ASX:NIC) report a record quarter for its Hengjaya mine while group Earnings rose only modestly? Understanding the split between those parts explains both the opportunity and the risk.

The central development: record mine earnings, ENC start-up

For the September 2026 quarter, the company reported:

Hengjaya Mine ore sales of 4.49 million wet metric tonnes (wmt), up 56% on the June quarter and a record.

Hengjaya adjusted EBITDA of US$76.9 million, up 68% and the second consecutive record quarter.

Group adjusted EBITDA of US$125.9 million, up 4%, and attributable EBITDA of US$102.4 million, up 3%.

The company also said its ENC HPAL project reached first production of mixed hydroxide precipitate (MHP) and cathode, with commissioning well advanced, and that a US$245 million debt facility for ENC was secured after the quarter ended. A full ramp-up depends on rain returning and water availability improving, which management expects in the December quarter.

The arithmetic points to the main message. Hengjaya contributed US$76.9 million of the US$125.9 million group total, which implies the rest of the group, including the smelting and processing operations, contributed about US$49 million.

Business model and Revenue drivers

It has three overlapping earnings streams.

Mining: the Hengjaya Mine sells nickel ore, mainly to processors. Ore sales are governed by an annual Mining quota, known as RKAB, and by Indonesian ore benchmark prices.

RKEF smelting: rotary kiln electric furnace plants convert ore into nickel pig iron and matte, which are sold mainly into stainless steel Supply chains.

HPAL: high-pressure acid leach plants convert lower-grade limonite ore into MHP and nickel products that can be used in batteries. ENC is the company's HPAL project, and its cathode production shows a move towards battery-materials supply chains.

Revenue depends on nickel prices, volumes, costs and the US dollar.

FY2026 guidance

Guidance reported on 22 October 2026 was mine sales of 14.3 million wmt, RKEF nickel sales of 100,000 to 110,000 tonnes, and attributable HPAL sales of 10,000 to 11,000 tonnes. These are management targets.

Operating conditions and risks

This is a good reminder that weather and logistics, not only prices, can move results. The ENC ramp-up is explicitly tied to rainfall and water availability.

Other material risks include:

Nickel price: Indonesian supply growth has put pressure on nickel prices in recent years, and a weak price would squeeze smelter margins. (This is general market context, not from the cited sources.)

Regulatory risk: Indonesian quotas, export rules and royalties can change, and the RKAB Quota affects Hengjaya volumes.

Project execution: expansion projects, including Sampala, Siduarsi, TMI and CNE, remain in development and could face cost or timing issues.

Technology risk: HPAL plants are complex and have a history of long ramp-ups across the industry.

Concentration: operations are concentrated in one country and one commodity.

Sector and competitive position

Indonesia's nickel sector includes large Chinese-backed producers as well as Nickel Industries, and competition for ore, power and customers is intense. Nickel Industries has positioned itself as a lower-cost, ore-integrated producer, with its own mine supplying part of its processing needs, and has partnerships with larger Chinese groups.

The HPAL push is the company's attempt to move into higher-value battery chain materials.

What to watch

Key developments include ENC's ramp-up during the December quarter, as rain returns, the RKAB quota outcome, progress on the expansion projects, delivery against FY2026 guidance, and the next half-year result.

Bottom line

Nickel Industries' September 2026 quarter showed a mine performing encouragingly, group EBITDA edging higher and a battery-materials project taking its first steps. The Business remains exposed to nickel prices, Indonesian policy, weather and execution risk.

FAQs

Q: How did Nickel Industries (ASX:NIC) perform in the September quarter?

A: Hengjaya ore sales reached a record 4.49 million wet metric tonnes, with adjusted EBITDA of US$76.9 million, up 68%.

Q: Why did group earnings rise only modestly?

A: Weather-hit processing operations offset the strength of the mining division, so the group's adjusted EBITDA rose 4% to US$125.9 million.

Q: What is the ENC project?

A: ENC is a high-pressure acid leach (HPAL) project that has only just started producing mixed hydroxide precipitate and cathode, with commissioning well advanced.

Q: What could affect the ramp-up?

A: A full ramp-up depends on rain returning and water availability.

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