Nickel Industries’ Hengjaya Rebound Shows Indonesia’s Ore Controls Reshaping Mine Economics

Nickel Industries’ March quarter shows how quickly Indonesia’s nickel market can shift when ore availability, licensing and processing demand move together. The company reported US$135.6 million in adjusted EBITDA from operations, its strongest operating earnings since December 2023, with the Hengjaya Mine delivering more than 3 million wet metric tonnes of ore sales during the quarter. 

The recovery was led by Hengjaya’s mining division. Total ore production rose to 3.96 million wet metric tonnes, up 138 per cent from the December quarter, while total ore sales rose 222 per cent to 3.04 million wet metric tonnes. Saprolite sales reached 1.62 million wet metric tonnes and limonite sales 1.43 million wet metric tonnes, with unit operating costs falling sharply to US$15.70 per wet metric tonne. 

The operating rebound followed disruption in the previous quarter and came despite a six-day suspension during the March period after a contractor fatality associated with transmission line construction for the ENC project infrastructure. Nickel Industries said relevant authorities completed investigations and that all areas, including Hengjaya Mine operations and slurry plant and dry stack tailings construction, had been allowed back to work, with transmission line work expected to recommence after corrective actions. 

Indonesia’s RKAB system is now central to the commercial story. Nickel Industries’ 2026 RKAB sales licence increased from 9 million wet metric tonnes to 14.3 million wet metric tonnes per annum, giving Hengjaya a stronger ore sales pathway at a time when many Indonesian peers faced quota reductions. The company also linked tighter national control over RKAB volumes to a stronger LME nickel price, with the March quarter average rising to US$17,338 per tonne from US$14,892 per tonne in the December quarter. 

Hengjaya’s importance extends beyond standalone mine earnings. The mine supplies ore into Nickel Industries’ broader Indonesian processing platform and is preparing to feed the ENC HPAL system through limonite deliveries to the feed preparation plant. Commissioning of the integrated HPAL operation is expected to begin in May and move through the pipeline, feed preparation plant, smelter, tailings neutralisation and filtration circuits before targeted full nameplate production by the end of October 2026. 

For Indonesia’s nickel sector, Hengjaya illustrates the new operating equation. Mine output, licence volume, ore quality, sulfur costs, HPAL feed strategy and downstream price exposure are now moving together. Nickel Industries’ March quarter was strong, but the wider significance lies in how vertically integrated Indonesian nickel operators are being reshaped by state-controlled ore availability and the rapid expansion of processing capacity.