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 Nickel Capacity Reaches 400,000 t/yr at Obi Island

Lygend

Lygend nickel capacity in Indonesia has increased to around 400,000 t/yr in nickel metal equivalent following the commissioning of all phase 2 rotary kiln electric furnace lines at its Obi Island complex.

Lygend nickel capacity now spans nickel pig iron, mixed hydroxide precipitate and nickel sulphate, giving the Chinese producer exposure to both stainless steel and battery supply chains. The latest expansion highlights Lygend's ability to complete large projects despite weaker margins and tighter Indonesian nickel policies.

Lygend nickel capacity growth comes from 12 new RKEF lines commissioned in May. The phase 2 facilities add 185,000 t/yr of nameplate nickel metal equivalent capacity for NPI production in North Maluku.

The expansion strengthens Obi Island's position as one of Indonesia's major integrated nickel production centres and adds more supply to an already heavily concentrated global nickel market.

Obi Island Expansion Deepens Lygend's Integrated Nickel Position

The phase 2 project significantly expands Lygend's pyrometallurgical capacity. NPI produced through RKEF technology remains a major feedstock for stainless steel production, particularly across Asia.

Lygend also produces MHP and nickel sulphate, extending its position beyond stainless steel into battery materials. MHP can be refined into nickel sulphate for lithium-ion battery cathodes, giving the company exposure to multiple downstream markets.

This integrated structure can provide greater flexibility during weak nickel cycles. Producers focused entirely on one product face greater exposure to changes in stainless steel or battery demand.

Obi Island also gives Lygend scale advantages. Concentrating mining, smelting and downstream processing in one industrial location can reduce logistics costs and improve feedstock integration.

The company's ability to complete phase 2 is notable because other Indonesian nickel projects have faced delays, financing problems and weak economics. Higher operating costs and lower nickel prices have made new capacity increasingly difficult to justify.

Indonesian Policy Raises the Bar for New Nickel Projects

Lygend's expansion comes as Indonesia increases government control over nickel production, pricing and exports. Reduced RKAB mining quotas are tightening access to ore and increasing competition for feedstock.

Adjustments to the HPM pricing formula have also raised raw material costs for processors. At the same time, higher royalty rates are putting additional pressure on smelter margins.

These changes are affecting project development. Several NPI and HPAL projects have been delayed, slowed or cancelled as companies reassess returns under weaker market conditions.

The contrast with Lygend is important. Large integrated producers with existing infrastructure, financing and downstream capacity are better positioned to absorb policy changes than smaller standalone operators.

Indonesia's nickel industry may therefore enter a consolidation phase. Future growth could become increasingly concentrated among large producers capable of controlling ore supply, processing costs and multiple product routes.

For the global nickel market, Lygend's new capacity adds further supply pressure. But Indonesia's tighter policy framework could limit how quickly other projects follow.

The Metalnomist Commentary

Lygend's Obi expansion shows that scale and integration are becoming decisive in Indonesia's nickel industry. As margins tighten and Jakarta strengthens control over ore and exports, smaller projects may struggle while established producers continue to consolidate supply.

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.

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.

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.

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.