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Introduction & Market Context
Nickel Mines Ltd (ASX:NIC) released its June Quarter 2025 activities presentation on July 30, showing mixed operational performance across its business segments. The company reported US$86 million in adjusted EBITDA from operations, with strong mining results helping to offset weaker performance in its RKEF (Rotary Kiln Electric Furnace) and HPAL (High-Pressure Acid Leaching) divisions.
The presentation comes as Nickel Mines ’ stock price has experienced recent volatility, closing at $0.77 on July 30, down 2.6% on the day, but still significantly above its 52-week low of $0.42. The company continues to navigate challenging market conditions while advancing its strategic expansion projects.
Quarterly Performance Highlights
Nickel Mines maintained its strong safety record with a 12-month lost time injury frequency rate (LTIFR) of just 0.05 as of June 2025, with no lost time injuries recorded during the quarter despite registering 4.6 million work hours. The company also highlighted its sustainability initiatives, including the formal establishment of the Nickel Industries Foundation and advancement of programs focused on education, health, environmental conservation, and economic empowerment.
From a financial perspective, the company’s performance varied significantly across its business segments. RKEF operations saw nickel metal production decrease by 4.0% to 30,463 tonnes compared to the March quarter, with adjusted EBITDA falling 24% to US$33.7 million. Meanwhile, the mining segment delivered record ore sales of 3,021,678 wet metric tonnes (wmt), up 6% from the previous quarter, driving a 33% increase in mining EBITDA to US$41.4 million.
Detailed Financial Analysis
RKEF Operations
The RKEF segment experienced operational challenges during the quarter, with production decreasing 4.0% compared to Q1 2025. This decline was primarily attributed to realignment work on two of ONI’s kilns, which was completed sequentially over a two-week period in April and May.
Cash costs increased by 5% to US$10,348 per tonne of nickel, driven by repairs and maintenance, higher fixed costs per tonne due to lower production, and elevated electricity costs resulting from maintenance activities at the integrated power plants. While NPI contract pricing improved slightly by 1% to US$11,449 per tonne, the combination of increased costs and lower sales volume resulted in adjusted EBITDA falling 24% to US$33.7 million.
HPAL Operations
The HPAL operations continued to exceed nameplate capacity, with attributable production of 2,075 tonnes of nickel and 188 tonnes of cobalt in MHP, representing 38% above design capacity. However, financial performance was mixed.
While HNC’s EBITDA (100% basis) increased by 11% to US$100.5 million, driven by higher MHP prices, Nickel Industries’ attributable EBITDA from HPAL operations decreased by 51% to US$10.8 million. This decline was largely due to a 94% drop in trading division EBITDA to US$0.8 million, resulting from changes in the ENC integrated refinery commissioning schedule and final contract settlements from previous months.
Mining Operations
The mining segment emerged as the standout performer for the quarter, with total production increasing by 5% to 5,923,539 wmt and sales rising 6% to 3,021,678 wmt.
Particularly notable was the 53% increase in saprolite production to 1,411,238 wmt, while limonite sales rose 10% to 1,626,526 wmt. Despite a 63% increase in the strip ratio and an 8% rise in operating costs (partly due to Indonesian government increasing royalties on nickel ore from 10% to 14%), the average sale price improved by 16% to US$26.2 per wmt. This favorable pricing environment helped drive a 33% increase in adjusted EBITDA to US$41.4 million, with EBITDA per tonne improving 25% to US$13.7.
Strategic Initiatives & Project Updates
Nickel Mines continues to advance its strategic growth projects, though with some timeline adjustments. The ENC integrated nickel refinery, which has reached a stage where commissioning could commence, will now see its commissioning deferred to better align with the anticipated issuance of the project’s commercial sales license (IUI) in early Q1 2026.
Meanwhile, the HPAL smelter development is progressing well, with all key process equipment in place, including all three autoclaves. Mechanical installations are occurring across the site, with commissioning activities expected by the end of Q4 2025. The company is still targeting completion of the sulphate circuit in Q4 2025.
The Sampala Project is also advancing, with a detailed mine plan completed for the PT Erabaru Timur Lestari (ETL) IUP, targeting a production license of 6 million wmt per annum.
Construction of an 8km haul road, a 60-metre bridge, internal road systems, and stage one accommodation is progressing well, creating approximately 450 new jobs. During the quarter, 16 drill rigs completed 1,031 drill holes for 31,497 metres, further defining the resource.
Forward-Looking Statements
Looking ahead, Nickel Mines appears focused on completing its major projects while optimizing existing operations. The company expects saprolite grades to improve in August as a result of opening a new mining pit area. All maintenance work on the RKEF operations is expected to be completed by the end of July, which should help normalize production and electricity costs.
The timeline adjustment for the ENC integrated nickel refinery suggests a more measured approach to capital deployment, aligning working capital requirements with regulatory milestones. This strategic patience may prove beneficial in the current market environment, allowing the company to better manage its resources while preparing for future growth.
While the presentation highlights several operational challenges, the strong performance of the mining segment demonstrates the value of the company’s diversified business model, providing resilience during periods when other segments face headwinds. As Nickel Mines continues to execute its growth strategy, investors will likely focus on the company’s ability to maintain this balance while successfully bringing its development projects online.
Full presentation:
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