Merdeka Battery will have 60 percent of PT Huaneng Metal Industry (HNMI), with the remainder owned by a subsidiary of Chinese stainless-steel producer Tsingshan.
T Merdeka Battery Materials, a nickel unit of miner Merdeka Copper Gold, has entered a conditional agreement to acquire 60-percent shares in PT Huaneng Metal Industry (HNMI), a nickel-processing facility in Indonesia Morowali Industrial Park (IMIP), Sulawesi.
The nickel facility was built by Eternal Tsingshan Group Limited, which happens to own IMIP and Indonesia Weda Bay Industrial Park. Both housed mining and processing firms related to nickel in Indonesia, mostly also Tsingshan’s subsidiary.
In a statement, Merdeka Battery, which comes under ticker MBMA, explained the proposed acquisition was valued around US$75 million and it targeted the deal to be completed by the middle of this year.
HNMI processes low-grade nickel matte produced by smelters that typically contain between 18-22 percent nickel and turns it into a more-refined product that contains 70-percent nickel.
HNMI has an annual production capacity of 50,000 tonnes of nickel matte. Compared to nickel pig iron (NPI), which only has a low concentration of pure nickel, high-grade nickel matte has a better selling price of around $2,000 per tonne.
Read also: Two nickel IPOs this month point to downstream industry potential
In its prospectus, Merdeka Battery mentioned Tsingshan as its "operating partner" and the sole buyer of the NPI produced by the company.
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