Analyst Note
Jefferies reiterated a cautious outlook on Nickel Industries Ltd (ASX:NIC) even after the miner disclosed two significant Indonesian acquisition agreements in June. The company announced it will acquire a 17.5% stake in PT Teluk Metal Industry’s High‑Pressure Acid Leaching (HPAL) project and a 36% interest in PT Chengsheng New Energy’s HPAL venture, which together translate into an effective 18% ownership of the Sampala HPAL project in Indonesia.
HPAL technology employs 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. While the brokerage acknowledged that the deals could be accretive to earnings, it expressed wariness about Indonesia’s policy environment, describing it as “capricious.”
Jefferies further highlighted Indonesia’s intention to centralize the export of key commodities such as coal and ferroalloys to boost government revenue, a move that could introduce additional regulatory risk for the miner’s future growth prospects.
This article was generated with AI assistance and reviewed by an editor.