Analyst Note
Jefferies maintained a cautious stance on Nickel Industries Ltd (ASX:NIC) despite the miner’s recent acquisition announcements in Indonesia. In June, Nickel Industries disclosed that it would acquire a 17.5% stake in PT Teluk Metal Industry’s high‑pressure acid leaching (HPAL) project and would purchase a 36% interest in PT Chengsheng New Energy HPAL, which together give the company an effective 18% holding in the Sampala project. HPAL projects employ high‑pressure sulfuric acid leaching to extract nickel and cobalt from low‑grade laterite ores, and Jefferies noted that these transactions represent some of the final opportunities for Nickel Industries to expand its attributable HPAL exposure.
Jefferies cautioned that the firm’s growth outlook is tempered by concerns over Indonesia’s policy environment, which the brokerage described as “capricious.” The analyst highlighted Indonesia’s plan to centralise exports of key commodities such as coal and ferro‑alloys to boost government revenue, signalling potential regulatory risk for future mining and processing activities. Consequently, while the acquisitions are accretive, Jefferies warned that policy volatility could affect the profitability and operational certainty of the deals.
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