Merdeka Battery Materials Sees Surge in Nickel Output for 1H 2024

Merdeka Battery Materials

Merdeka Battery Materials (MBMA), an Indonesian nickel producer, reported a significant increase in its production during the first half of 2024. The company more than doubled its output compared to the same period last year, driven by strategic expansions and enhancements in infrastructure at its Sulawesi Cahaya Mineral (SCM) mine. This growth reflects MBMA’s ongoing efforts to meet rising global demand for nickel, particularly as it prepares for increased production in the coming years.

Expansion and Strategic Adjustments Boost Output

From January to June 2024, MBMA produced 3.93 million wet metric tonnes (wmt) of material at the SCM mine, with 3 million wmt of limonite ore and 0.93 million wmt of saprolite ore. The rise in production was facilitated by stronger-than-expected demand for limonite, which is anticipated to grow further in 2025. To support this trend, MBMA engaged more mining contractors during the first half of the year, allowing it to scale up its mining activities efficiently.

Despite these gains, MBMA has slightly adjusted its production targets for 2024. The company revised its limonite ore guidance downward to 9.5-10.5 million wmt from the previous forecast of 10-11 million wmt. However, it expects output to recover and increase in 2025, following the mid-year commissioning of a second feed preparation plant at SCM. Meanwhile, the production guidance for saprolite ore remained steady at 4-5 million wmt, reflecting consistent demand and operational stability.

The SCM mine plays a crucial role in MBMA’s supply chain, providing saprolite ore for its rotary kiln electric furnaces (RKEF) to produce nickel pig iron (NPI) and supplying limonite ore to the Huayue Nickel Cobalt high-pressure acid leaching (HPAL) plants. Additionally, MBMA plans to begin delivering limonite ore to PT ESG New Energy Material and PT Meiming New Energy Material once their new feed preparation plants are operational by mid-2025.

During the first half of 2024, MBMA’s RKEF smelters produced 42,782 tonnes of nickel in NPI, doubling from 21,238 tonnes in the same period of 2023. Matte production surged even more impressively, more than quintupling to 25,443 tonnes. These robust results underscore MBMA’s expanding capabilities and strategic investments in infrastructure and production processes.

Looking ahead, the company has maintained its production guidance for matte at 50,000-55,000 tonnes of nickel for 2024. However, it has slightly lowered its NPI target to 80,000-85,000 tonnes from the previous range of 85,000-92,000 tonnes. This adjustment accounts for planned relining works scheduled at one of the smelters in September, which are expected to temporarily impact production levels.