Nickel Industries HPAL Expansion Targets Indonesian MHP Growth Through Acquisitions

Tsingshan

Nickel Industries HPAL expansion will move forward through acquisitions rather than new project development as Indonesia tightens control over additional high pressure acid leach capacity. The Australian producer will acquire stakes in two MHP projects next to its existing Excelsior Nickel Cobalt operation in Central Sulawesi.

Nickel Industries HPAL expansion is strategically important because Indonesia has stopped issuing licences for new HPAL developments since late 2025, according to the company. That makes existing permitted projects increasingly valuable to producers seeking battery-grade nickel growth.

Nickel Industries HPAL expansion covers the planned Teluk Metal Industry and Chengsheng New Energy projects. Together, the stakes would give NI attributable MHP capacity of almost 17,000 t/yr.

Both projects are located in the Indonesia Morowali Industrial Park and will use ore from NI’s Sampala mine. Their output will feed the electric vehicle battery supply chain.

TMI and CNE Add MHP Capacity Around Existing ENC Platform

NI will pay $169mn for a 17.5% stake in the Teluk Metal Industry HPAL project. TMI has planned nameplate MHP capacity of 38,640 t/yr, giving NI 6,775 t/yr of attributable output.

The transaction also carries construction protection from Tsingshan. The Chinese nickel and stainless steel producer has guaranteed that NI’s investment will be capped at $169mn and that TMI will reach nameplate production by September 2027.

This lowers construction risk for NI and reinforces its relationship with Tsingshan, which already owns an indirect 44% stake in the ENC project.

TMI’s remaining ownership includes Singapore-based Sumber International Investment and a South Korean-Japanese consortium involving LS MnM, Hanwa and another strategic investor. The structure shows how Asian industrial groups are positioning themselves around Indonesian battery nickel supply.

NI is also pursuing a 36% stake in the Chengsheng New Energy HPAL project together with a local partner. The acquisition will be funded by transferring 30% of their combined ownership in the Sampala nickel mine.

CNE has MHP capacity of 28,357 t/yr, with 10,208 t/yr attributable to NI. Commissioning is expected by mid-2027.

The CNE transaction still requires shareholder approval because an NI director is associated with the selling investment firm. That adds a governance step before completion.

Indonesia Licensing Limits Increase Value of Existing HPAL Assets

Indonesia’s decision to stop issuing new HPAL licences changes the economics of nickel expansion. Producers can no longer rely on greenfield development to add battery-grade processing capacity.

This gives existing permitted projects a scarcity premium. Companies seeking growth must acquire stakes, partner with current licence holders or expand existing operations.

For NI, TMI and CNE extend the company’s battery nickel platform around ENC. The 46%-owned ENC project is preparing to produce nickel cathode and nickel sulphate, giving NI exposure further downstream than MHP alone.

The strategy also integrates mining and processing. Ore from the Sampala project will supply both TMI and CNE, linking captive feedstock with HPAL conversion and battery-material output.

That integration matters because Indonesia’s nickel industry is increasingly constrained by ore availability, regulatory approvals and government efforts to manage oversupply.

The policy shift could support nickel prices by slowing future HPAL growth. But it also raises the value of projects already holding development rights.

For NI, acquisitions therefore become more than a growth option. They are now the main route to expanding Indonesian MHP production under a tighter licensing regime.

The Metalnomist Commentary

Indonesia’s HPAL licensing freeze is turning permitted projects into strategic assets. Nickel Industries is responding by buying access to existing capacity, showing how policy can shift competition from project development to asset acquisition.