How Is Nickel Industries (ASX:NIC) Ramping Up Its ENC HPAL Project While Record Ore Sales Lift Quarterly Earnings?

Sonal Goyal

06 November 2026 12:17 PM AEDT

How Is Nickel Industries (ASX:NIC) Ramping Up Its ENC HPAL Project While Record Ore Sales Lift Quarterly Earnings?

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Key Highlights

• Hengjaya Mine ore sales were a record 4.49 million wet metric tonnes, up 56 per cent on the June quarter.

• After quarter-end, Nickel Industries secured a US$245 million Debt Facility for ENC.

• Hengjaya's record Earnings could be harder to repeat if volumes normalise, because the June to September increase of 56 per cent in ore sales was large.

• Hengjaya adjusted EBITDA was a record US$76.9 million, up 68 per cent, and unit operating costs fell 15 per cent to US$18.5 per wet tonne.

How is a nickel producer coping when dry weather limits hauling and water supply, yet record ore sales still lift earnings? That is the picture in Nickel Industries' (ASX:NIC) September 2026 quarterly report, released on 22 October 2026. Group adjusted EBITDA was US$125.9 million, up 4 per cent on the June quarter, driven by a record quarter at the Hengjaya Mine, while the ENC high pressure acid leach (HPAL) project produced its first mixed hydroxide precipitate and cathode. The company expects a full ramp-up in the December 2026 quarter, subject to rain and water availability.

The central development: ore records and an HPAL start-up

Nickel Industries is an Indonesia-focused nickel producer. Its exposure is to nickel, through nickel pig iron-type products from rotary kiln electric furnace (RKEF) smelters, nickel in HPAL products, and nickel ore sold from its Hengjaya Mine.

Hengjaya Mine ore sales were a record 4.49 million wet metric tonnes, up 56 per cent on the June quarter. Hengjaya adjusted EBITDA was a record US$76.9 million, up 68 per cent, and unit operating costs fell 15 per cent to US$18.5 per wet tonne. Attributable group EBITDA, which reflects the company's ownership share, was US$102.4 million, up 3 per cent.

That concentration suggests the quarter relied heavily on ore, whose sales can depend on government quotas and weather.

Business model and Revenue drivers

Nickel Industries' revenue comes from three linked activities. RKEF smelters convert ore into nickel products used mainly in stainless steel. HPAL plants process lower-grade ore into intermediate products suited to batteries. The Hengjaya Mine supplies ore, which the company can use internally or sell externally.

The ENC HPAL project has reached an important operating milestone. Producing a first mixed hydroxide precipitate and cathode shows the plant is functioning, but commissioning and ramp-up are different tests. The report says ENC's full ramp-up is expected in the December 2026 quarter, dependent on rain and water availability. A severe El Niño-driven dry period temporarily limited ore hauling and water Supply at some operations.

Funding and guidance

After quarter-end, Nickel Industries secured a US$245 million debt facility for ENC.

Guidance for the 2026 year is mine sales of 14.3 million wet metric tonnes, RKEF nickel sales of 100,000 to 110,000 tonnes and attributable HPAL nickel sales of 10,000 to 11,000 tonnes. Given that ENC is only now ramping up, the HPAL range will be a key test in the December quarter.

Development projects

The report names several projects in development: Sampala, Siduarsi, TMI and CNE. Large project pipelines add growth potential but also require capital, and Nickel Industries has just raised new debt for ENC.

Sector and competitive position

Indonesia has become the dominant source of new nickel supply, and many producers there use RKEF and HPAL technology. Nickel Industries' integration from ore to processed product gives it some control over feedstock, which Hengjaya's record quarter illustrates. This is general sector background rather than information drawn from the quarterly report.

Competition also comes from other Indonesian operators and from regulation of ore quotas and exports, which can change the Economics for miners that sell ore externally.

Risks and developments to monitor

Key risks include nickel price weakness, ENC ramp-up delays, water availability, cost inflation, regulatory changes in Indonesia (including ore quotas), currency movements and rising debt. Hengjaya's record earnings could be harder to repeat if volumes normalise, because the June to September increase of 56 per cent in ore sales was large.

Upcoming items include the December 2026 quarter report, evidence of ENC reaching steady-state operation, any detail on the new US$245 million facility, and progress on Sampala, Siduarsi, TMI and CNE. Investors should also compare actual 2026 sales with the stated guidance ranges.

FAQs

Q: What does Nickel Industries do?

A: Nickel Industries is an Indonesia-focused nickel producer.

Q: What is the latest development?

A: Hengjaya Mine ore sales were a record 4.49 million wet metric tonnes, up 56 per cent on the June quarter.

Q: What are the main risks to consider?

A: Key risks include nickel price weakness, ENC ramp-up delays, water availability, cost inflation, regulatory changes in Indonesia (including ore quotas), currency movements and rising debt.

Q: What should investors watch next?

A: The ENC HPAL project has reached an important operating milestone.

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