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Introduction & Market Context
Nickel Mines Ltd (ASX:NIC) released its quarterly activities presentation for the period ended September 30, 2025, revealing a stable overall performance with mixed results across business segments. The company reported an adjusted EBITDA of US$87 million, maintaining consistent financial performance despite challenges in the mining sector. The stock closed at $0.74, down 3.04% following the announcement, with the company currently valued at a market capitalization of $1.84 billion.
The presentation comes amid ongoing regulatory challenges in Indonesia, where the company is awaiting revised RKAB mining quota approvals that could significantly enhance its mining capacity. Despite these headwinds, Nickel Mines continues to advance its strategic projects while implementing a major debt refinancing initiative.
Quarterly Performance Highlights
Nickel Mines delivered a stable quarterly performance with US$87 million in adjusted EBITDA from operations. The company’s RKEF (Rotary Kiln Electric Furnace) operations showed strong improvement, while mining operations experienced some pressure on margins.
As shown in the following quarterly highlights:
Key achievements include RKEF nickel metal production of 31,148 tonnes, representing a 2% increase from the June quarter, with RKEF Adjusted EBITDA rising 20% to US$40.5 million. The company’s HPAL (High-Pressure Acid Leaching) operations continued to exceed nameplate capacity by 44%, contributing US$13.1 million in attributable EBITDA, a 21% increase quarter-on-quarter.
The company also achieved record mining ore sales of 3,094,230 wet metric tonnes (wmt), a 2% increase from the previous quarter. However, Mining Adjusted EBITDA declined by 21% to US$32.8 million, with EBITDA per tonne falling 23% to US$10.6/t.
Detailed Financial Analysis by Segment
The RKEF segment demonstrated robust performance improvements in Q3 2025, with nickel production increasing by 2% to 31,148 tonnes. More significantly, cash costs decreased by 5% to US$9,846 per tonne of nickel, contributing to a 20% increase in Adjusted EBITDA to US$40.5 million despite a 3% decrease in sale prices.
The detailed RKEF performance metrics show:
The HPAL operations also delivered strong results, with production increasing by 4% to 21,656 tonnes of nickel and 3% to 1,924 tonnes of cobalt. Cash costs improved by 3% to US$7,610 per tonne of nickel. While the 100%-owned HNC operations saw a slight 4% decrease in EBITDA to US$96.2 million, Nickel Mines’ attributable EBITDA (including trading) increased by 21% to US$13.1 million, driven by a remarkable 343% increase in trading EBITDA.
The HPAL segment’s performance is illustrated below:
In contrast to the strong performance in metal production segments, the mining operations faced challenges in Q3 2025. While total production remained stable at approximately 5.9 million wmt, the sales mix shifted toward lower-value limonite (+20%) and away from higher-value saprolite (-18%). Combined with a 4% decrease in average sale price to US$25.2/wmt and a 17% increase in unit operating costs to US$14.6/wmt, these factors led to a 21% decrease in Adjusted EBITDA to US$32.8 million.
The mining segment’s detailed performance metrics reveal these challenges:
Strategic Initiatives and Project Updates
A significant development during the quarter was Nickel Mines’ debt refinancing, which involved raising US$800 million through new bond issuance. These proceeds were used to fully repay US$400 million in Senior Unsecured notes and US$150 million of bank facilities, substantially restructuring the company’s debt maturity profile.
The refinancing has significantly improved the company’s debt structure, as illustrated below:
The company continues to make progress on its ENC (Eastern Nickel Central) project, with key reagents delivered and final optimizations ongoing for full commissioning of the integrated nickel refinery. Integration has commenced for utilities and key reagents at the HPAL smelter, while power and water infrastructure are largely complete. The ENC project is on track for commissioning in early 2026, with the company aiming to establish it as the lowest cost, lowest carbon-intensive HPAL operation globally.
The Sampala Project is also advancing, with a detailed mine plan completed for the PT Erabaru Timur Lestari (ETL) IUP and a feasibility study being prepared for the PT ANN tenement. Construction of haul roads, bridges, and accommodation is progressing well, with approximately 800 new jobs created through construction activities.
Forward-Looking Statements
During the earnings call accompanying the presentation, management expressed confidence in receiving a revised RKAB mining quota approval in the coming weeks, which could significantly enhance mining capacity. The company has stockpiled nearly 2 million tonnes of ore ready for sale and anticipates exceeding US$50 million in monthly mine EBITDA once approvals are secured.
Nickel Mines maintains its focus on safety and sustainability, highlighting a lost time injury frequency rate (LTIFR) of 0.00 as of June 2025, with no lost time injuries recorded during the quarter against 4.5 million safe man hours. The company’s sustainability efforts were recognized with a Gold award for Biodiversity Management at the 2025 Indonesia Sustainable Responsible Awards.
While the presentation portrays a generally positive outlook, investors should note the regulatory challenges in Indonesia that could impact mining operations, potential market saturation affecting pricing, and environmental approval processes that may influence project timelines. The stock’s recent decline suggests some investor caution despite the company’s operational achievements and strategic initiatives.
As Nickel Mines continues to navigate these challenges and opportunities, its integrated operations and strategic positioning in the nickel market provide a foundation for potential growth, particularly as the ENC project moves toward commissioning in early 2026.
Full presentation:
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