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Challenges for Indonesian HPAL projects

➔ Indonesian projects similar to Chinese-built Ramu
project in PNG, the lowest cost HPAL (reported) Reported/Calculated HPAL C1 cash costs
$/tonne Ni
➔ Indonesian HPAL capital costs – lower than previous 30000

projects: $25,000-35,000/tonne of capacity,
compared with $50-60,000/tonne best recent projects
25000
➔ Operating costs highly dependent on cobalt

➔ Environmental challenges: Ramu uses deep-sea 20000
tailing placement (DSTP). Indonesian projects want
to use DSTP in first 3 projects – some automakers $/tonne Ni after Co credit 15000
will not accept this product in their batteries. We
think dry stack tailings (DST) will ultimately be used. 10000

➔ Previous projects took longer to build, had major
capital cost over-runs. Already significant delays 5000

➔ Incentive price for NPI projects in the $10-11,000/t
range while HPAL incentive prices anywhere from 0
$15-20,000/t, depending on assumptions made. Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
Ramu to MHP VNC Moa
➔ Fall-back option could be to convert NPI to nickel
Ambatovy Murrin Ramu to finished
sulphate but only makes sense if NPI trades at big
discount to NiS04
Source: Company reports (for Murrin Murrin, calculated from Glencore financial data), Macquarie Commodities Strategy, October 2020
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