NCKL, ITMG and UNTR Boost Nickel Business Through Acquisitions
NCKL, ITMG and UNTR Boost Nickel Business Through Acquisitions
Admin Ugems
A number of mining issuers starting from PT Trimegah Bangun Persada Tbk. (NCKL), PT Indo Tambangraya Megah Tbk. (ITMG) to PT United Tractors Tbk. (UNTR) is busy encouraging the nickel business through a series of acquisitions in line with the brightening prospects for this metal commodity.
Most recently, the Harita Group mining issuer, PT Trimegah Bangun Persada Tbk. (NCKL) announced that the company has acquired 99% of the shares of PT Gane Tambang Sentosa located on Obi Island, South Halmahera, with a transaction value of IDR 7.9 billion. The takeover action will increase the company’s nickel reserves to 302 million wmt.
“[This addition] will make Harita Nickel the 5th largest nickel mining company in Indonesia based on resources,” said management in an official statement, quoted Friday (1/12/2023).
For information, PT GTS has a non-operating nickel mining concession with an area of 2,314 hectares with an IUP valid until 2040. NCKL plans to carry out drilling activities to determine the size of nickel ore reserves and resources.
At the same time, Harita Nickel also increased its share ownership in PT Gane Permai Sentosa (GPS) from 70% to 99%. Apart from increasing nickel ore resources and reserves, the acquisition worth IDR 48.8 billion is expected to strengthen the financial contribution to NCKL.
At the end of November 2023, NCKL has estimated nickel ore reserves of around 302 million wmt. By carrying out further exploration at the 4 mines owned, namely PT Obi Anugerah Mineral, PT Jikodolong Mega Pertiwi, PT Karya Tambang Sentosa, and PT Gane Tambang Sentosa, the nickel ore reserves needed by the Harita Nickel subsidiary will increase.
As is known, NCKL itself has a Mining Business Permit (IUP) area of around 9,000 hectares, consisting of four mining concessions. Currently, there are two mines that are already operating, and two other mines will be operated to support the supply of nickel ore raw materials in the future.
Apart from that, Harita Nickel will also continue to strive to increase mine life and nickel ore reserves by acquiring other mining concessions and collaborating with other local mining companies.
PT Indo Tambangraya Megah Tbk. (ITMG)
Not wanting to be left behind, PT Indo Tambangraya Megah Tbk. (ITMG) belonging to the Banpu Group is known to be looking for potential nickel mines to acquire.
Chief Executive Officer of Banpu Public Company Limited Somruedee Somphong, who is ITMG’s parent company, said that his party is very open to collaborating with Indonesian companies, to become partners in green energy projects from upstream, midstream to downstream. In the mineral sector, ITMG is also targeting the nickel business.
However, the woman who is familiarly called Som said that if ITMG later gets a nickel mine, Banpu will not integrate the mine with battery producer Durapower.
“Durapower will focus on producing battery cells in China, the southern part of China,” said Som recently.
Apart from that, he continued, it is impossible to move Indonesian nickel to be produced in other countries. With existing regulations, ITMG cannot send its nickel to Durapower.
However, said Som, if his party is lucky, ITMG can collaborate with several companies in Indonesia. Thus, there will be many battery value chains as a whole.
“This will create great value for ITMG, and also Banpu,” he said.
ITMG Director of Corporate Communications and Investor Relations Yulius Gozali said the company is looking for potential nickel mines to acquire. And currently, ITMG has held talks with a number of nickel companies.
“We plan to diversify the nickel business, and are currently looking for mines to acquire,” he said.
Yulius explained that ITMG’s entry into the nickel business was an effort to diversify its non- coal business while also helping develop the electric vehicle ecosystem. Therefore, the mine that will be acquired is expected to be able to provide products for battery raw materials.
PT PAM Mineral Tbk. (NICL)
Furthermore, some time ago it was reported that the mining issuer belonging to the conglomerate Christopher Sumasto Tjia, PT PAM Mineral Tbk. (NICL), would acquire 50 percent of the nickel mine owned by PT Sumber Mineral Abadi (SMA).
PAM Mineral management explained that NICL will buy new shares of a maximum of 50 percent of the shares issued by SMA or a maximum of IDR 140 billion. The transaction is contained in the Conditional New Share Purchase Agreement (PPSBB).
“The signing of the agreement occurred on September 12 2023,” said management, several months ago.
Completion of the PPSBB depends on the fulfillment of all prerequisite conditions by SMA which must be fulfilled no later than December 29 2023. The settlement date is the effective date of the new SMA share purchase transaction by NICL.
PAM Mineral President Director Ruddy Tjanaka said NICL would focus on increasing nickel production from the previous 2.1 million tonnes to 2.6 million tonnes.
“We have obtained RKAB approval from ESDM for our production increase plan,” he said, quoted from previous Bisnis reports.
Ruddy explained that the future focus will be to increase nickel reserves both through optimization of the Company’s IUP area in Morowali and the subsidiary’s IUP area in Konawe.
“Apart from that, we will also look for new IUP opportunities both organically and inorganically to support the Company’s plans,” he said.
NICL explained that it is committed to carrying out sustainable exploration and maintaining the principles of mineral conservation through optimizing the use of nickel ore, namely utilizing mineral resources and diversifying products.
Product diversification is carried out by dividing based on the percentage of nickel content contained in the ore into low grade ore, medium grade ore and high grade ore (low grade, middle grade and high grade).
PT United Tractors Tbk. (UNTR)
Furthermore, Astra Group mining issuer, PT United Tractors Tbk. (UNTR) is also aggressively diversifying its business into the non-coal sector through the acquisition of companies in the nickel mining sector.
United Tractors Corporate Secretary Sara K. Loebis explained that this acquisition commitment was based on UNTR’s view of non-coal mining business opportunities.
“What is clear is that we have committed to no longer acquiring coal mines, but targeting other mineral mines,” he said when met in Jakarta, Thursday (23/11/2023).
Recently, UNTR announced the purchase of the PT Anugrah Surya Pacific Resources nickel mine through its subsidiary. The acquisition of this nickel company has a transaction value of USD 104.91 million or around IDR 1.64 trillion.
UNTR’s subsidiary, PT Danusa Tambang Nusantara (DTN) signed a share sale and purchase agreement ( CSPA) for Anugerah Surya Pacific shares on October 16 2023.
DTN bought 33.33% of Anugerah Surya Pacific (ASPR) shares from PT Kalira Pascama (KP), 16.67% shares from PT Bintang Prima Investama (BPI), and 16 shares from PT Anugerah Dayakaya Angkasa (ADA). 67% shares.
Sara admitted that the nickel mining acquisition currently being carried out takes into account long-term business opportunities, especially since throughout 2023 the price of the nickel commodity will still be in a downtrend phase.
“Let’s look at the long term, nickel still has an important role in the government’s steps towards electrification. Likewise with copper and others,” he explained.
Nickel Price Projections
The rise in nickel mining acquisitions is occurring amidst weakening nickel prices due to slowing global economic growth, especially in China, as well as a decline in demand for stainless steel. Apart from that, selling price competition between companies providing electric vehicles also influences price movements, especially the price of batteries and battery raw materials.
Ciptadana Sekuritas’ 2024 Market Outlook document states that the nickel market, especially for class II nickel, is experiencing further pressure due to the abundance of nickel products on the market. This situation is further exacerbated by the limitations of China, the largest importer of nickel, in absorbing this commodity for the production of electric vehicles (EV) and stainless steel.
Even though nickel prices are currently experiencing a downtrend phase caused by a supply surplus, Ciptadana Sekuritas analysts maintain their price prediction above USD 20,000 per ton. This was mainly driven by the limited supply of class I nickel as indicated by very low London Metal Exchange (LME) stocks, falling 22.3% to 43,086 tons throughout 2023.
While the surplus nickel supply, especially class II nickel, puts pressure on prices, Ciptadana Sekuritas projects that the tight supply of class I nickel will remain a supporting factor for overall nickel prices. Although a supply surplus may put downward pressure on prices, growing demand, especially from the electric vehicle sector, is expected to keep prices at relatively high levels.
According to Ciptadana Sekuritas, global nickel consumption is predicted to grow by 3.2% year on year in 2023, driven by China’s economic recovery which has resulted in an increase in nickel consumption. However, steel producers in the European Union, United States and Brazil are experiencing problems, which could cause a decrease in projected nickel consumption in 2023.
Based on these considerations, Ciptadana Sekuritas maintains its projected nickel price in 2023 at USD 23,000 per ton, 2024 at USD 22,000 per ton, and 2025 at USD 21,000 per ton. However, price projections according to Bloomberg data present figures for 2023 at USD 22,245 per ton, 2024 at USD 19,996 per ton, and 2025 at USD 20,196 per ton.
Image source: mind.id
Source: https://market.bisnis.com/read/20231202/192/1720138/ramai-ramai-emiten-tambang-nckl-itmg-hingga-untr-pacu-bisnis-nikel-lewat-akuisisi