Lygend Indonesian Nickel Output Drives Sharp Profit Growth in 2025

Lygend Indonesia

Lygend Indonesian nickel output drove a sharp increase in the company’s revenue and profit in 2025. China’s major nickel producer reported revenue of 40.24bn yuan, or about $5.85bn, up 379% from a year earlier.

Net profit attributable to shareholders rose by 61% to 2.85bn yuan. The improvement reflected higher production from Lygend’s Indonesian nickel operations and stronger cobalt prices after export controls in the Democratic Republic of Congo tightened the cobalt market.

Lygend Indonesian nickel output also strengthened the company’s position across both battery and stainless steel raw material chains. Its Indonesian assets produce mixed hydroxide precipitate, nickel sulphate, cobalt sulphate and ferronickel, giving the company flexibility across demand cycles.

HPAL and RKEF Projects Lifted Nickel and Cobalt Volumes

Lygend’s Obi Island HPAL project operated at full capacity in 2025. The six-line facility produced 120,000t in nickel metal equivalent and 14,250t in cobalt metal equivalent during the year.

The HPAL project can produce mixed hydroxide precipitate, nickel sulphate or cobalt sulphate depending on market demand. This flexibility matters because battery materials markets can shift quickly between intermediate products and refined sulphate demand.

The company’s HJF phase I project also ran at nameplate capacity, producing 95,000t in nickel metal equivalent through rotary kiln electric furnace technology. Meanwhile, Lygend ramped up output at its KPS phase II project, which has nameplate capacity of 185,000 t/yr in nickel metal equivalent.

Cobalt Prices Helped Offset Rising Input Costs

Lygend benefited from higher cobalt prices because its MHP contains cobalt. The DRC’s cobalt export controls lifted cobalt market sentiment and increased the value of cobalt-bearing intermediates.

Cobalt prices more than doubled during 2025, rising to about $25/lb in December from around $11.5/lb in January. This gave Lygend additional revenue support from MHP sales.

The stronger cobalt contribution helped offset higher costs for sulphur, energy and other consumables. These inputs remain critical for HPAL operations, where sulphuric acid availability and cost can directly affect processing economics.

Lygend also received approval from Indonesia for sulphuric acid import quotas. This allows partial substitution of sulphur with sulphuric acid when needed, improving feedstock flexibility and supply chain resilience.

The Metalnomist Commentary

Lygend’s 2025 results show how Indonesia has become the operating center of China-linked nickel growth. The company’s advantage now comes from scale, HPAL flexibility and cobalt exposure, but sulphuric acid supply will remain a key cost variable.

Lygend posts higher nickel profits in 1H as Indonesia capacity ramps

Lygend Cobalt Mining

Lygend posts higher nickel profits in 1H on rapid capacity ramp-up. Lygend posts higher nickel profits in 1H as revenue rises 67%. As a result, Lygend posts higher nickel profits in 1H while expanding HPAL and RKEF projects.

Indonesia growth drives earnings

Lygend’s operating income rose 67% to 18.15bn yuan in January–June. Profit more than doubled to 1.43bn yuan. The company cited the ramp-up of new capacity. It did not disclose output figures. However, stronger project execution clearly supported margins. Investors will focus on volume disclosure next.

HPAL and RKEF projects advance on schedule

The ONC HPAL Phase 3 remains on track this year. It targets 65,000 t/yr nickel metal equivalent as MHP at nameplate. Meanwhile, the KPS RKEF Phase 2 already started production. Four lines are running now at the Indonesian site. The project plans eight further lines by early 2026. Four lines arrive in 2H 2025, and four in 1Q 2026. Designed capacity is 185,000 t/yr NPI.

The Metalnomist Commentary

Lygend’s profits reflect disciplined execution across HPAL and RKEF. The staggered line commissioning reduces ramp risk and smooths cash flow. Watch MHP-NPI price spreads and Indonesian policy as key drivers of 2026 earnings.

Lygend's Indonesian HPAL Project Surpasses Output Target Ahead of Schedule

Lygend

China’s leading nickel producer, Lygend, has achieved its annual output target at its high-pressure acid leaching (HPAL) project in Indonesia on December 19, nearly 10 days ahead of schedule. The project, known as HPL, produced 65,000 tonnes (t) of nickel metal equivalent in mixed hydroxide precipitate (MHP)—exceeding its designed capacity of 55,000 t/yr.

Located at Lygend’s industrial park on Obi Island in Indonesia’s North Maluku province, the facility is divided into two phases with three production lines. Operations commenced in May 2021, and after reaching its designed capacity in November 2023, the plant has now surpassed expectations, reinforcing Indonesia’s role as a global nickel production hub.

Expanding Nickel Capacity Through ONC Project

Lygend is further expanding its HPAL nickel operations with its ONC project, which includes another three production lines on Obi Island. With this expansion, Lygend’s total HPAL nickel production capacity has now reached 120,000 t/yr, strengthening its position as a key supplier in the battery-grade nickel market.

MHP, a crucial feedstock for nickel sulphate production, is widely used in the nickel-cobalt-manganese (NCM) battery industry. On December 19, the assessed payable indicator for MHP remained stable at 81-82% of London Metal Exchange (LME) nickel cash official prices, as long-term contracts continued to dominate market activity.

Chinese Nickel Producer Lygend Begins Cobalt Production in Indonesia

In a significant milestone, Chinese nickel producer Ningbo Lygend commenced cobalt metal production on Indonesia's Obi Island in early July. This marks the first instance of a Chinese refinery producing cobalt metal overseas. The initial phase of Lygend's project has a production capacity of 4,000 tons per year, potentially expanding to 6,000 tons annually.

"Whether and when the second phase (2,000 tons per year) will begin construction depends on market conditions," a source informed Metalnomist. The produced cobalt will be distributed to China and other international markets.

Additionally, Lygend's Indonesian subsidiary launched the third production line at its ONC nickel high-pressure acid leaching (HPAL) project on July 1. The HPAL project aims to produce mixed hydroxide precipitate (MHP), with a portion processed into cobalt sulfate, cobalt metal, and nickel sulfate.

Lygend's cobalt production in 2023 was approximately 7,000 tons metal equivalent, and it is expected to increase to around 10,000 tons this year.

Record Highs in China's Ferro-Nickel Imports Amid Booming Stainless Steel Industry in 2024

Ferro-Nickel

Surging Demand Drives Unprecedented Import Volumes

In 2024, China's ferro-nickel imports reached a new record, driven by robust demand from its stainless steel mills and alloy producers, particularly those with operations in Indonesia. The total import volume surged to 8.98 million tons, marking a 6.2% increase from the previous year. A significant portion of these imports, amounting to 8.67 million tons, came from Indonesia, reflecting a 9.5% rise over the period.

Indonesian Production Boom Fuels Export Growth

The surge in imports from Indonesia is attributed to new production capacities at companies like Lygend, Nadesico Nickel Industry (NNI), and Shuoshi. These firms have effectively compensated for reduced shipments from other countries such as New Caledonia, Colombia, and Brazil, which saw declines in their export volumes to China by 27%, 0.9%, and 36% respectively.

Strategic Expansion and Technological Advancements in Nickel Production

The expansion in Indonesia includes significant developments like Shuoshi's commissioning of 12 Rotary Kiln Electric Furnaces (RKEF) and NNI's ongoing project, which involves six of eight planned RKEF lines. Moreover, Ningbo Lygend's nickel pig iron (NPI) project showcases substantial production, with its subsidiary HJF already at full capacity since August 2023, and its second phase under construction aiming for completion by 2026. NPI, with its high nickel content, remains crucial for stainless steel manufacturing, underscoring the strategic importance of these expansions.

Indonesia’s Nickel Ambitions Face Obstacles Amid HPAL Expansion

HPAL

Indonesia is poised to increase its nickel production in the coming years, primarily by boosting its high-pressure acid-leaching (HPAL) capacity. However, this ambitious plan faces significant hurdles, notably the scarcity of sulphuric acid and challenges in managing tailings waste effectively. Despite these concerns, production is still expected to grow, even as the global nickel market anticipates a surplus.

Sulphuric Acid Supply and Tailings Management: Key Challenges

The HPAL process relies heavily on sulphuric acid to extract nickel and cobalt from ore, producing mixed hydroxide precipitate (MHP), which is essential for downstream nickel sulphate and battery production. Indonesia is projected to produce between 325,000 to 345,000 tons of MHP this year, a jump from 269,000 tons in 2023. With several new MHP projects on the horizon, output is expected to rise significantly, potentially tripling to 800,000-900,000 tons by 2026, as highlighted by Indonesia's Deputy Minister Septian Hario Seto during a recent metal industry event in London.

The increase in MHP production will necessitate more nickel ore and sulphuric acid, raising concerns about the sustainability of limonite ore supplies, which could deplete quickly like saprolite ore, currently used for nickel pig iron and matte production. The Indonesian government plans to address these issues with industry stakeholders.

Currently, Indonesia's four operational HPAL facilities—Huayou's Huayue and Huafei projects, GEM's QMB project, and Lygend's HPAL project—have been importing sulphuric acid primarily from China and South Korea. However, the rising cost has led some producers, such as Halmahera Persada Lygend, to switch to cheaper sulphur alternatives. The startup of new smelters, like Freeport McMoran's Manyar in Java and AMNT's copper smelter in Nusa Tenggara, is expected to add 3 million tons per year of acid capacity by 2025, potentially easing supply pressures.

Another critical issue is the proper disposal of tailings waste, which has come under increased scrutiny due to environmental, social, and governance (ESG) standards. The HPAL process generates substantial amounts of waste, with energy consultancy Wood Mackenzie estimating 1.4-1.6 tons of tailings per ton of nickel produced. Three disposal methods—tailings dams, deep sea disposal, and dry stacking—each have their risks, with dry stacking viewed as the more sustainable option. Yet, Indonesia’s wet climate and seismic activity pose challenges for safe waste storage.

To ensure the successful expansion of its HPAL production, Indonesia must secure a stable supply of sulphuric acid and implement sustainable methods for managing tailings waste. Addressing these issues is critical for maintaining the momentum in the country’s nickel production growth while adhering to stricter ESG standards.

Weak NCM Demand Restrains Nickel Consumption Growth in China

Lygend

China’s nickel consumption growth has been constrained this year, primarily due to weak demand in the nickel-cobalt-manganese (NCM) cathode active material (CAM) sector and the increasing market dominance of lithium-iron-phosphate (LFP) CAM.

NEV Battery Market Trends

Despite a 37% year-on-year increase in China’s new energy vehicle (NEV) battery production from January to September, NCM battery growth lagged at 19.2%, while LFP surged by 45.6%, according to the China Innovative Alliance of Automotive Battery Industry.

• NCM precursor output grew by 4%.
• NCM CAM production rose by 10%, highlighting a slower growth trend compared to downstream NEV battery production.
• Nickel sulphate output is projected to decline by 1%, even though total supply is expected to rise by 6% due to increased imports.

The discrepancy in growth rates between upstream, midstream, and downstream sectors is expected to stabilize next year as inventories decline and buying interest increases.

Rising Imports of MHP and Matte

China’s imports of mixed hydroxide precipitate (MHP) and matte, key feedstocks for nickel sulphate and class I nickel production, have risen sharply:

• MHP Imports: Up 17% to 1.07 million tons during January-September, with Indonesia accounting for 57% growth due to increased capacity from Chinese companies such as Lygend’s ONC, GEM’s QMB project, and Huayou’s Huafei facility.
• Matte Imports: Increased by 61% to 341,494 tons, driven by the ramp-up in new capacities.

Transition in Nickel Matte Production

A significant portion of the matte imports consists of low-grade matte (20% nickel content), which is further refined into high-grade matte (70% nickel content) in China for nickel sulphate or cathode production. However, some matte producers have shifted focus to producing nickel pig iron (NPI) due to its higher profit margins.

Nickel Metal Output Outlook

While nickel sulphate production is forecast to dip, China’s overall nickel metal output is expected to surge by 34%, reaching 320,000 tons in 2024. This increase underscores the country’s reliance on imported feedstocks and growing domestic capacity to meet demand.

Future Prospects

As inventories dwindle and buying interest rebounds, 2024 is likely to see a narrowing of growth disparities across the supply chain. However, China’s nickel market remains under pressure from fluctuating demand patterns, shifts in feedstock sourcing, and competition between NCM and LFP technologies.

China’s FeNi and MHP Imports Decline in August, but Nickel Matte Surges

FeNi

China experienced a decline in Ferro-Nickel (FeNi) and mixed hydroxide precipitate (MHP) imports during August, largely due to shipment delays caused by typhoons. Despite this, the country saw a rise in nickel matte imports, reflecting increased availability of matte with lower nickel content.

Indonesia's Role in Nickel Supply Dominates

In August, China imported 522,315 metric tons of ferro-nickel, marking a significant 36% drop compared to the same period last year and a 43% decline from July. Although imports from other suppliers like New Caledonia, Brazil, and Colombia rose, the drop from Indonesia, China’s largest supplier, was much steeper.

Indonesia continues to dominate China’s nickel supply, providing 95% of nickel pig iron (NPI), 90% of nickel matte, and 80% of MHP imports. Indonesia’s expanding stainless steel output, driven by lower production costs, boosted NPI exports to markets like India, South Korea, Italy, and Germany, further emphasizing Indonesia’s role in the global nickel supply chain.

China’s nickel matte imports surged in August, increasing by 25% from the previous month and by 72% on the year. Much of this rise is attributed to low-nickel matte imports, which have a nickel content of around 20%, compared to high-nickel matte with about 70% nickel content. Low-nickel matte is processed in China to produce higher-value nickel sulphate or nickel cathode.

Imports of nickel matte from Russia also saw notable growth, reaching 5,155 metric tons in August—a year-on-year increase of 18% and a doubling of imports from the previous month.

MHP Imports Drop Despite Lygend Project Growth

Mixed hydroxide precipitate (MHP) imports dropped by 11% compared to July, totaling 122,272 metric tons in August. This decline was driven by a 15% decrease in Indonesian arrivals, despite an 11% year-on-year rise fueled by the ramp-up of Indonesia’s Lygend project. Market participants are closely watching how these developments will shape future trends in China’s nickel imports.