Australian nickel developer, Nickel Industries, will supply Glencore with nickel matte from its Hengjaya operation, which it owns 80% and operates within the Indonesia Morowali Industrial Park (IMIP). While announcing the sales contract, Nickel Industries did not disclose volumes or pricing terms for the agreement.

According to trade data, Glencore has already been receiving nickel matte from Indonesia. During the first 10 months of 2023, Indonesia exported 31.1kt nickel matte to Norway, which is further refined into Class I nickel products at Glencore’s Nikkelverk refinery.

Nickel matte produced from converted nickel pig iron (NPI) has become an important feedstock for nickel sulphate producers in China to supply the battery sector. The process involves adding elemental sulphur to NPI in a converter where it is blown with air to oxidise and separate iron to produce a high-grade nickel matte. Nickel matte produced in this way has provided NPI producers with a degree of optionality to convert rotary kiln electric furnace (RKEF) lines to produce matte targeting battery and other end markets, rather than solely the traditional stainless steel industry. However, nickel produced via this route has been shown to be associated with some of the highest carbon intensities in the nickel industry and this intermediate does not come with the additional cobalt units that mixed hydroxide precipitate (MHP) offers.

In March 2021, Chinese nickel giant Tsingshan shook the market when it signed supply agreements for 100kt of nickel matte (75% Ni) with two Chinese battery nickel producers based on converted NPI. This first-of-its-kind move in Indonesia shattered the bull nickel narrative at the time of an impending battery-grade nickel shortage. Since then, others have followed suit, with Nickel Industries taking the decision to convert the two RKEFs at its Hengjaya operation. Production has risen steadily, and in the first three-quarters of 2023, the company reported output of 15kt Ni-in-matte.

For Nickel Industries, this deal is significant given that it is with a leading Western metals producer/trader and represents a certain degree of vindication for its investments in Indonesia. Having initially targeted investment in RKEF to produce NPI for the stainless steel sector, the company is now actively focusing on the EV battery supply chain. In October, it took a final investment decision (FID) to proceed with plans for its participation in the development of the Excelsior Nickel Cobalt (ENC) HPAL project to produce battery-grade nickel products. The plant is expected to commence production in Q4 2025 and is being designed to produce 72ktpy Ni across the three main nickel products: mixed hydroxide precipitate (MHP), nickel sulphate, and nickel cathode. It also purchased a 10% stake in the Huayue Nickel Cobalt HPAL in August.

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