Nickel Industries HPAL Expansion Targets More Indonesian MHP Supply

Nickel Ore

Nickel Industries HPAL expansion will add stakes in two Indonesian high-pressure acid leach projects next to its existing Excelsior Nickel Cobalt operation in Central Sulawesi. The acquisitions give the company access to additional mixed hydroxide precipitate capacity for the electric vehicle battery market.

Nickel Industries HPAL expansion comes as Indonesia restricts new HPAL project development. The government stopped issuing new licences in late 2025, making acquisitions of existing permitted projects increasingly important for producers seeking growth.

Nickel Industries HPAL expansion covers the Teluk Metal Industry and Chengsheng New Energy projects, both located in the Indonesia Morowali Industrial Park. Together, the transactions could add nearly 17,000 t/yr of attributable MHP capacity to Nickel Industries.

The strategy deepens the company’s downstream exposure beyond nickel ore and conventional smelting into battery-grade nickel intermediates, nickel sulphate and cathode production.

HPAL Licence Restrictions Increase the Value of Existing Projects

Nickel Industries will pay $169mn for a 17.5% stake in the planned Teluk Metal Industry HPAL project.

TMI has nameplate MHP capacity of 38,640 t/yr. Nickel Industries’ equity share will provide around 6,775 t/yr of attributable production.

Tsingshan has provided a construction guarantee covering the project, capping Nickel Industries’ investment at $169mn and targeting nameplate production by September 2027.

The company will also gain exposure to the Chengsheng New Energy project through a separate transaction involving equity in its Sampala nickel mine.

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

The two acquisitions are especially valuable because Indonesia is no longer approving new HPAL developments. This effectively raises the strategic value of existing permits and projects already in development.

For producers seeking to expand battery-nickel capacity, buying into permitted facilities may now be more realistic than pursuing greenfield HPAL projects.

MHP Growth Strengthens Battery-Nickel Integration

Both TMI and CNE will operate alongside Nickel Industries’ 46%-owned Excelsior Nickel Cobalt project in the Morowali industrial complex.

ENC is expected to produce nickel cathode and nickel sulphate, extending the company further downstream into products used in battery supply chains.

TMI and CNE will produce MHP using ore from the Sampala project, strengthening the link between mine supply and downstream processing.

This integration can improve control over ore quality, operating costs and feedstock availability.

Indonesia’s policy shift also suggests that future nickel growth may become more concentrated among producers that already control mines, processing infrastructure and approved HPAL projects.

That could slow the pace of new supply while strengthening larger integrated groups with existing licences and partnerships.

For the global battery market, the acquisitions reinforce Indonesia’s central role in nickel intermediates even as Jakarta tries to limit oversupply and support prices.

The Metalnomist Commentary

Indonesia’s HPAL restrictions are turning existing licences into strategic assets. Nickel Industries is responding by buying into permitted projects, allowing it to expand battery-grade nickel supply without relying on new greenfield approvals.