Nickel Industries Ltd has announced a strategic partnership with South Korean company Sphere Corp, marking a significant milestone in the nickel market. The collaboration involves a $2.4 billion valuation for the ENC High-Pressure Acid Leach (HPAL) project and represents the first Western offtake agreement for ENC nickel cathode.
Under the terms of the agreement, Sphere Corp will acquire a 10% stake in the ENC HPAL project. Additionally, the company will enter into an offtake agreement for ENC nickel cathode at market prices, which includes volumes exceeding its ownership share. Despite this new partnership, Nickel Industries’ stake in ENC remains unchanged at 44%, with funding completion expected in early Q1 2026.
Strategic Focus on Aerospace and Sustainability
This partnership is particularly noteworthy as it marks ENC’s inaugural offtake deal targeting Western markets, specifically aiming at the burgeoning aerospace and aeronautical sectors. Sphere Corp is recognized as a Tier 1 supplier to global aerospace companies, including a long-term supply contract with SpaceX. By qualifying ENC nickel cathode through Sphere, Nickel Industries could significantly enhance its position within North American aerospace supply chains.
Nickel Industries highlights that this transaction aligns with its commitment to sustainable operations, aiming to reduce its carbon emissions profile. The company is set to produce 72,000 tonnes of nickel metal annually once the project is commissioned, diversifying its offerings to include nickel cathode, mixed hydroxide precipitate (MHP), and cobalt sulphate.
Management Commentary and Future Prospects
In a statement regarding the partnership, Nickel Industries Managing Director Justin Werner expressed enthusiasm for the collaboration, stating, “We are very pleased to announce this transaction with Sphere for the acquisition of a 10% interest in ENC and associated offtake of nickel cathode.” He emphasized that Sphere’s investment underscores the quality and traceability of the ENC cathode product, reinforcing the company’s ambition to serve as a low-cost, sustainable producer of high-quality nickel.
The partnership is seen as a pivotal step in positioning ENC as a key supplier to the aerospace industry, which is projected to grow at approximately 8% CAGR through 2030. As Nickel Industries shifts its focus from traditional stainless steel markets to emerging sectors, this deal opens new avenues in the electric vehicle battery and aerospace supply chains.
Over the past year, Nickel Industries shares have experienced a modest increase of 1%, lagging behind the S&P/ASX 200 Index, which has risen by 6% during the same period. As the company progresses towards the commissioning of the ENC HPAL project, stakeholders will be watching closely to see how this strategic partnership unfolds and its impact on the broader market.
The arrangement with Sphere Corp not only solidifies Nickel Industries’ position in the nickel market but also enhances its reach into high-demand sectors, potentially transforming its operational landscape in the coming years.
