Oct 16 (Reuters) - Nickel Mines Ltd said on Friday it will buy 70% of Indonesia’s PT Angel Nickel Industry (ANI) for $490 million in a deal that it says will double its nickel production within two years.
The Australian miner will buy the stake from a unit of Tsingshan Group, the world’s largest stainless steel producer, and build four rotary kiln electric furnace lines in Weda Bay Industrial Park (IWIP) on Halmahera Island in Indonesia’s North Maluku province.
With a 70% stake, Nickel Mines said it will be entitled to about 25,200 tonnes of nickel pig iron output a year, out of a total production capacity of 36,000 tonnes.
Nickel Mines shares jumped 5.8% in early trade to a record high of A$0.815.
Tsingshan’s unit, Shanghai Decent Investment, has already been paid $10 million as a deposit and Nickel Mines said the majority of the deal value will be funded through cash, debt and equity.
The IWIP project is among those that the Indonesian government have made a “national priority” to boost processing of nickel at home after it stopped exporting unprocessed ore. (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Muralikumar Anantharaman)