Nickel Industries rallies as South Korea's Sphere buys 10% stake in ENC project
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The news: Nickel Industries shares surged in early trading after South Korea's Sphere Corp agreed to buy a 10% stake in its Excelsior Nickel Cobalt (ENC) project at a USD2.4 billion ($3.6 billion) valuation.
The numbers: Nickel Industries shares were up 6.9% to 89.3 cents at 11am AEDT.
The deal will see Sphere offtake its 10% share of nickel from Indonesia-based ENC as cathode. It has also entered into an offtake agreement for further volumes above its 10% ownership share.
The context: Nickel Industries said qualification of ENC nickel cathode through Sphere may open new potential supply opportunities in the Northern American aeronautical and aerospace markets. The transaction marks the first offtake agreement for ENC material into Western markets.
Kosdaq-listed Sphere is a premium alloy and precision materials manufacturer for the global aerospace industry. It is one of the key vendors supplying special alloys to Elon Musk's SpaceX, having recently announced a 10-year supply contract to provide nickel and superalloys for the company's rocket components.
What they said: "The fact that Sphere, as one of the key accredited suppliers to SpaceX, has chosen to invest in ENC demonstrates the quality of the ENC cathode, the traceability of the product and our goal for ENC to be a global showpiece as a bottom cost-quartile, sustainable producer of high-quality nickel," said managing director Justin Werner.
The source: ASX
