Thank you. Could I please ask that we turn to Page 2 of the slide presentation deck? Thank you everyone, and welcome to Nickel Industries' September Quarterly results. Again, pleased to announce a record quarter in terms of EBITDA and nickel production. Could I please ask that you go to the next slide? As I said, record RKEF nickel metal production of 33,852 tons. And this was the first quarter where we saw a full contribution from our Oracle Nickel operations. That helped us to deliver record EBITDA from operations of $120.7 million, which also included 1,410 tons. And this is NIC attributable from our HNC operations.
That 1,410 tons represents in excess of 70,000 tons of nickel metal production from HNC. So it's operating well above capacity, and this is our first quarter, where we've been able to capture, and that was just two months of MHP production. We've already seen strong interest in terms of buyers who are looking to purchase that MHP from us, and I'll talk about that a little bit later on. RKEF EBITDA was $97.6 million. That was a 117% increase on the June quarter, despite a slightly softening NPI price. That higher EBITDA was primarily driven by lower coal prices, lower nickel ore, and electricity prices.
We saw a very strong improvement in EBITDA per ton margins, up 86%, from 1,533 tons- 2,849 tons. ANI and ONI continue to deliver the lion's share of our EBITDA and have very strong margins, as you can see, $3,247 and $3,502 a ton, respectively, from ANI and ONI. I think that justifies our decision to move into the integrated ANI and ONI operations, where we have a significant cost benefit from the integrated or from the power that we generate. Also the fact that they are newer generation RKEF lines as compared to HNI and RNI.
Pleasingly, we also reported a record Hengjaya Mine production, 3.6 million wet metric tons, a 33% increase on the June quarter. And also, record Hengjaya Mine EBITDA of $23 million, almost or 94% higher than the June quarter of $12 million. Predominantly being driven by a significant increase in satellite sales, which went from about 227,000 tons in the June quarter to about 1 million tons in the September quarter. We were able to sell more satellite via the jetty because of the opening of the haul road. We're now hauling all limonite down that haul road. So in summary, it's been a very, very strong quarter. If we could please move to page three of the presentation.
All of the results are summarized here. Again, on a 100% basis, 33,852 tons of nickel, that's in excess of 120,000 tons of nickel on an annualized basis. Easily makes us the largest listed nickel producer on the ASX. And then when you look at the numbers below us, we have BHP on about 83,000, IGO on about 36,000, and then below that, look, the rest really aren't worth mentioning when you compare it to the scale of 120,000. We have also seen from a number of companies, including Glencore, recent downgrades to their expected nickel output. On the other hand, we're seeing continued ramp up and very strong results.
We moved to an additional 10% of Oracle Nickel, and so we're now also capturing an additional 10% of ONI, and that is sitting at 80%. As I said, record Hengjaya Mine production, and we expect to see that continue into the final quarter of this year. We are still focused on optimizing costs. NPI pricing is remaining relatively stable, and so we expect to see a continued strong results through to the end of this year. In terms of the cash balance, following the Australian AUD 943 million placement by UT, you can see that cash of $827.6 million. So the company is extremely well capitalized, but not only that, is also generating significant EBITDA.
If we could just move to page 4, please. You can see here, quarter-on-quarter, the significant increase in production. Looking back at September of 2022, we were at 20,000, and now September of 2023, where we're almost at 34,000. I'll also mention that this is the first quarter where we've seen only two months of contribution of MHP from HNC, and so we look forward to reporting over the coming quarters, further MHP from our HNC operations. If we just move to Slide 5, please, page 5. Hengjaya Mine production is a record quarter, predominantly driven by the opening of the haul road during the quarter.
Satellite production was up 46%, limonite production up 28.9%, and EBITDA was up 92.5%. We expect to see a continued ramp up in the sales of limonite, and we are actually currently experiencing quite a strong nickel ore pricing environment. And so the timing of the haul road has really allowed us to capitalize on, on, on that strong nickel price environment that, that we're currently seeing at the moment. If we could just move to Page 6, please. I've mentioned the haul road. You can see the chart there on the right. Last year, for the full year, we did about 3.5 million tons. That delivered us EBITDA of $54 million.
We're now basically tripling that to a targeted run rate of about 10-11 million tons of ore per year, which will be 6.5 million tons of limonite, 3.5 million tons of saprolite. I'll leave you to make your own assumptions there, but assuming that margins remain the same, and in fact, we've seen stronger margins this quarter, you know, you could reasonably expect a doubling in that annualized EBITDA. And in fact, this quarter's EBITDA of $23.1 million is almost half of the full year quarter of the full year result of $54 million, which was delivered in 2022. Move to page seven, please. Pleased to announce, during the quarter, a positive final investment decision for the ENC HPAL project.
That was off the back of a detailed feasibility study and also an independent review from a tier one, very experienced, consultant, who identified no red flags. ENC will basically be a carbon copy of HNC, and as you can see from this quarter, HNC is actually already operating significantly above its nameplate capacity of 60,000. It's actually well in excess of seventy thousand tons per annum. It comes again with a CapEx guarantee of $2.3 billion. NIC will own 55%. There's a timeframe guarantee of two years and a 15-year tax holiday, with a further additional two years at 50% of the Indonesian tax rate, which brings that number down to about 11%.
Importantly, during the quarter, with the completion of the funding to UT at $1.10 a share, which is about a 30% or more than a 30% premium to today's price, and with the recently announced $400 million loan facilities from BNI, that means that NIC's share of the ENC HPAL project is, is fully funded. We also, during the course of that positive FID announcement, released to the market the payment schedule, and so that payment of $1.265 is actually spread out over the next two years. The final point that I would make on ENC: work has already commenced, and so we look forward to providing further updates to the market.
But it will be the first HPAL globally that will produce three of the key Class 1 nickel products, and that's MHP, nickel sulfate, and nickel cathode. And I think we've already seen within our RKEF operations, that product flexibility to move between different markets where we see margin opportunities, has paid off very well, and so we're obviously excited about now moving forward with the, with the ENC, HPAL project. If we could just move to Slide 8. On the previous page there, there was a chart that showed the capital intensity for ENC, and it is one of the lowest capital intensity HPAL projects in Indonesia, and the only one with a CapEx guarantee, in fact, the only HPAL project globally with a CapEx guarantee.
If you look at slide eight, looking at the chart here, over on the far left there, you can see all of the projects that NIC has brought online over the past few years. The average capital intensity for the 120,000+ nickel units that we're now producing sits at around $19,650 a ton. That's that broken green line there. Over on the right there, you can see a number of our peers also in the battery or nickel markets. You can see the quantum of the CapEx blowouts that is occurring across the market. The other thing that you can also quite clearly see there is the capital intensity is significantly higher than ours against the chart there on the left.
In fact, you know, one of the more recent scoping studies that was announced on a nickel equivalent basis, you're looking at a capital intensity of in excess of $120,000 a ton. You have projects there that announced their first numbers in 2008. We're now sitting here in 2023. Nothing's been built yet, and numbers are still being revised up. So again, we have a nameplate guarantee, but also importantly, we have a timeframe guarantee. Moving to Slide 9. I'll hand over to Chris for this one, just to give a bit of a background on the funding for the ENC project over the next two years and how we do that.
Yeah, thanks very much, Justin. Thank you, everyone. Just on this page, we thought we'd set out a very high-level illustrative overview of how we see the next two years' cash flow. We've had a lot of questions, obviously, around how we intend to fund our 55% of $2.3 billion. As Justin mentioned earlier, we've closed the United Tractors transaction recently, and we obviously have also secured the BNI loan facilities of $400 million. What we've tried to do here is just set out the larger items. So as you can see, the funding required totals to just over $2 billion. This is over the next two years.
That includes our April 2024 bonds, the repayment of those or the maturity of those April 2024 bonds, so in six months' time, debt servicing over the next two years, including amortization of the October 2028 bonds. We've included dividends there, and as you can see in the footnote, we've assumed the current $8.02 per share, per half year. And that is purely illustrative purposes only. There's no guarantee that will be at that level, or below or above. You can see our cap, our dividend policy in our ASX release in July 2021. How we're looking to fund that $2 billion?
We've obviously got our current cash, attributable cash on the balance sheet, which you can see there at $800 million, just over $800 million. We've got interest on the attributable cash, which that's an assumed number over the next two years. Our BNI loan facilities of $400 million, and then we've assumed a bond refinancing in April 2024 of the $245. Again, that's an assumption just as a base case, and there's no guarantee that we will actually pursue a refinancing. It will depend on market conditions at the time. Where that leaves us, and where I'm really handing over to investors and analysts to make your own assumptions, is the required cash flow from our existing operations. We've now got 12 RKEF lines operating at steady, safe production.
We've got the Hengjaya Mine, and we've got the HNC interest. That required cash flow from existing operations over the next eight quarters is $552 million, which equates to $69 million a quarter. So from our existing operations on the right-hand side there, it's we believe we are fully funded and comfortably funded for the ENC project, but it's really up to you to make your own assumptions. Justin?
Thanks, Chris. If I could just ask to move to slide 10. I'm delighted during the quarter to complete the placement with UT Tractors at AUD 1.10, as I mentioned, 30%+ premium to today's price. They've appointed Mr. Muliady Sutio as a non-executive director to the company. We're obviously delighted to have UT. We view them as one of the top blue-chip Indonesian partners that we could have. And they also, through their interest to Astra and then ultimately back to Jardine, you know, that is a company with very long, deep roots into Indonesia and Southeast Asia. They're a long-term value investor. They saw obviously significant value in the company, hence the willingness to pay the premium that they have.
We look forward to a long and fruitful relationship with them. That placement, combined with the BNI loan, obviously, as Chris has just touched on, effectively means that we're fully funded for our 55% interest in the ENC HPAL project. During the quarter, we completed the acquisition of 10% of the HNC HPAL, and we've seen what that's delivered in just two months, in terms of 1,410 tons of nickel in MHP. That has allowed us to go out and already start marketing to global Tier 1 EV and battery makers, and we've had a very strong response, not just to offtake of HNC products, but also to offtake and even possible small participation in the ENC project.
We are running a process, and we already have in excess of 20 of the top, tier one global EV and battery makers showing significant interest. These include Europeans, North Americans. I think the penny has finally dropped. Everyone has realized that the only real place, if you want nickel of any scale, is out of Indonesia. And these HPALs, the HNC HPAL, is one of the lowest carbon-intensive HPALs globally, 8 tons of carbon per ton of nickel, and with a roadmap to becoming carbon zero. We will be looking to replicate that with the ENC HPAL, and I'll talk about the solar project that was also signed post-quarterly. We also acquired an additional 10% of Oracle Nickel.
That was at a price that wasn't marked up, so we're paying - we paid the same price that we paid when we originally started the ONI transaction. So again, another very strong value accretive deal for a project that's generating margins in excess of $3,000 a ton. And I think reflective of the very strong relationship with Shanghai Decent, and also the fact that the majority of the acquisition - of the consideration for the HNC HPAL was taken as NIC shares, rather than just trying to take cash off the table. Moving to Slide 11. Chris touched on the $400 million loan facility with BNI. They're one of Indonesia's leading banks.
It's a five-year senior term loan facility, split across two tranches: $200 million, which is secured against Angel Nickel. Tranche Two, which is $150 million, which is unsecured, and then a revolving or working capital facility of $50 million. Combined with the placement funds, this brings our balance sheet to strength in excess of $1 billion. And with the strong ongoing cash flows from our existing operations, as Chris touched on, we believe leave us comfortably positioned to fund our share of the ENC acquisition payments over the next two years. On an ESG front, again, a lot of good progress was made. We've once again been shortlisted for a Green PROPER rating.
Again, it will most likely be only us and Vale, the only two to receive a Green PROPER rating across all of the mining operations in Indonesia. MSCI recently awarded us a triple B rating, which is the highest ESG rating that's given to an Indonesian-based metals and mining company. S&P Global upgraded us from the 56th percentile to the 69th percentile. TrenAsia is a domestic award by an independent group of industry bodies and experts. We won the TrenAsia ESG Award for excellence in the nickel sector. Moving through to Slide 12. I mentioned we have signed a binding operational lease agreement for a 200-MWp plus 20-MWh battery energy storage system solar project within the IMIP.
Indonesia's current installed capacity is only 269 MWp, so we're almost doubling that. So this is the largest solar project to be undertaken within Indonesia. It underscores our commitment to pursuing and looking at renewable forms of energy and reducing our carbon footprint. It's very attractive to NIC because we are not required to fund any of the capital to build the solar project. We're simply entering into a 25-year agreement at a fixed price with no inflation escalation. That price is currently very competitive with coal-fired power prices today, and I think importantly, removes a significant amount of the volatility that we have seen in the electricity market over the last one to two years.
just supplements and builds really on our existing solar project, which is 450 kW plus, which has been in operation at the Hengjaya mine for almost two years. That's been extremely successful, and that has reduced our diesel consumption by approximately 31 million liters over the projected 25-year project life for that solar project. So like HNC, ENC is striving to be one of the lowest carbon-intensive nickel producers globally. But not only that, it will be the only diversified HPAL that can produce three of the Class One nickel products. And we expect, similar to HNC, it will generate very strong margins, and it will sit in the first quartile for OpEx costs.
So in summary, another very strong quarter with record nickel metal production, and that has been building over the last few quarters. That's translated into very strong EBITDA numbers, 117% increase on June in our RKEF numbers, and 93% increase in EBITDA for our, for our mine numbers. ENC, I can't underscore how transformative that is to the company, and we're obviously delighted that that is now fully funded. As I said, progress is already underway, and we look forward to providing further updates in upcoming quarterly reports. And then I think finally, as I said, we're seeing very strong interest from global Tier One EV and battery makers. We've had a number of site visits from some of the largest players globally.
Given NIC's strong track record, the fact that we're Western listed, the transparency, the sustainability records, we think positions us extremely well as we diversify our business into Class One, to be able to partner with, hopefully, you know, some of the best and well-known names in the EV and battery market. So it's an exciting time for the company moving forward. With that, I will hand over to Q&A.
...Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the headset to ask your question. Your first question comes from Daniel Roden from Jefferies. Please go ahead.
Good day, good day, Justin and team. Congratulations on the quarter. I just wanted to dive into the ongoing illegal mining activity in and investigations in Indonesia, which are threatening nickel laterite supply to the IMIP. While you mine your own nickel, and the opening of the Hengjaya haul road is extremely at all times. I just wanted to confirm the structure of the offtake agreements, and both IMIP's and your own exposure to any potential near-term shortfall in the nickel laterite supply. From memory, you sell your nickel ore to Tsingshan's IMIP, and you receive a blended allocation from a blended stockpile. Is that correct?
Yeah. So the illegal mining issue is being addressed by the Indonesian government, and I think that's a very strong positive. We have seen small amounts of supply come out of the market. Important to remember that these are illegal, they're not large scale. If you look at Hengjaya Mine, we're about the third largest supplier to the IMIP. We have seen, as you said, a small amount taken out of the market that's resulted in increases in ore pricing. We expect that to normalize. Obviously, given the very strong margins that are being generated by nickel mines across the archipelago, you know, there are a number that are under development that are also coming online.
To our particular ore, we are now supplying directly into our RKEF operations, and in the future, we will look to supply directly into our HPAL operations. One of the reasons for that is that, the Hengjaya Mine has become a real showpiece for sustainability and responsible mining. Those tier one EV and battery names that I've mentioned have obviously taken a very strong interest in the upstream sources of ore. And it gives them great comfort to know that a majority of the ore for our operations is coming from our mine operation. We are working on securing additional resources. We have the Siduarsi project, which we're looking forward to announcing a maiden joint resource on in the coming weeks.
We also are working on other new mine acquisitions, which are getting very close, so we will look to grow that resource base and that production output. But, short answer to the question is, there's been no supply disruptions in terms of shortages of ore to operations and we don't expect that there will be moving forward.
Yeah, perfect. And I just wanted to ask as well on, I guess there's been a lot of noise obviously around Indonesia and, the U.S. IRA accreditation process. You know, what, what conversations are you seeing going on, I guess, around IMIP's involvement in that? And, I guess the, the, you know, crux of the question would be, you know, what flow-through benefits would you be expecting for the HPAL offtakes, if that IRA funding accreditation was to proceed?
Yeah. Without giving too much away, I can say we've been directly involved in those discussions at both the U.S. and the Indonesian level. It's safe to say that the U.S. is looking very, very, very hard at a free trade agreement with Indonesia. The reason for that is I think they've come to the realization that the nickel supply is not gonna come from North America. In fact, there's not really many jurisdictions that it is going to come from. Hence, that's why there is some very active dialogue going on at the moment.
We will obviously see any free trade agreement between Indonesia and America as a very strong positive, not just for us, but I think a strong positive in terms of an endorsement of the nickel industry in Indonesia, and how that is evolving with continued foreign investment. And with that continued foreign investment, obviously comes significant improvement in practices.
Yeah. Awesome. Thank you very much. Just last one from me. Can you just remind us what the Excelsior Nickel's timing guarantee process would be? I think, you know, there's obviously been a demonstrated pathway that for construction being, you know, on or ahead of time, but just in the event that that was to be delayed, what is, I guess, the process around the timing guarantee and how it's structured?
Yes. So there is penalties payable if for whatever reason Tsingshan doesn't meet the nameplate or the timing guarantee. I think, though, if you look at the track record, everything that's been delivered well ahead of schedule. I think even if you look at HNC, that was built during the COVID pandemic, again, in less than two years. We, I think importantly, have secured the same team that built the HNC HPAL, who are now building the ENC HPAL. So it's really a continuation of that same skilled team that is just merely rolling onto another project. And I think we've seen through the rollout of RKEF, their ability to be able just to continuously replicate these projects.
In fact, not just replicate, but also improve. So, you know, as I said, work is actually already started. Tsingshan wasn't sitting on their hands waiting for us to reach a positive FID. They were—they'd already started, and they were going ahead with or without us. We're obviously lucky to be given the opportunity to participate and to be able to demonstrate that we could fund our interest, which we have.
Awesome. Perfect. Thank you. I'll pass it on. Thanks.
Your next question comes from Cameron Taylor, from Bank of America. Please go ahead.
Good morning, Justin and Chris. Just curious when we can expect cash costs and realized price details for HNC? Just given that ENC is gonna be a carbon copy, you know, are we expecting shareholders to have enough information on operating costs and profitability before the vote next month?
We will have an independent expert's report, which will form part of that shareholder vote. And so, you know, that will obviously have expected margins and costs, and a lot of that will be based off HNC. In terms of reporting, I'll hand over to Chris on that in terms of reporting at HNC.
Yes, sure. Thanks, Justin. As we noted in the quarterly, we're still working through this with KPMG and our team here internally. One of the constraints we've got, Cameron, is as a 10% shareholder, we, our two larger shareholders or our two larger partners in HNC are both obviously public companies. So we're working through with them as well, what we can and can't release. And we obviously can't go ahead of any schedule that they are willing to disclose.
Yeah, that makes sense. Thank you. That's what I, what I expecting. Just with the Hengjaya mine, you've omitted tons sold for saprolite and limonite, despite, you know, having increased your production. Is there any underlying reason you've omitted those figures, other than just changing your reporting?
Yeah, Cam, it's primarily the reason is, it's for commercial reasons, or commercial sensitivity. It's really around both our sales, our sales into the HPALs. But more importantly, Justin's alluded to the fact that we are pursuing other resource opportunities, resource acquisition opportunities, and we don't want any of our quarterly disclosure to get in the way of any of our negotiations there.
Okay, fair enough. Thank you. And just one last one. I know I've asked this in the past, but obviously you're flexible. Are you still looking at converting some of your Angel lines to nickel matte? I've seen that obviously you have a strong margin on at Hengjaya over Ranger, but are you expecting, you know, to move those lines to matte for Angel, or are you still undecided at this stage?
We, we are still looking at pursuing a nickel matte converter. And so, yeah, look, that, that, that, that is certainly still on the radar. We, we've paid the option. I think we, we sort of bit off the larger one first, which was, which was ENC. But, yeah, we have paid an option for a nickel matte converter, and, and we are still working towards looking to, to, to execute that as well.
Okay, thanks, team. Thanks a lot.
Your next question comes from Adam Baker, from Macquarie. Please go ahead.
Morning, guys. Thanks for taking my questions. Maybe just following up on the Hengjaya Mine ore sales, maybe asking in a different way. Now that you've got the, the ore road, the ore road open, you know, are you comfortable with getting to that 10 million tons per annum of sales rate? And also, what about the barging? Is, is that now ceased, or could you get that 3.5 million ton per annum of barging ongoing and, and potentially get closer to that 15 million ton per annum run rate? Thanks.
Yeah. We-- so last year we did 3.5 million tons, and that was all through barging. And that was a mix of saprolite and limonite. This quarter, we've switched purely to all of the saprolite being barged, and that was what allowed us to deliver 1 million tons of saprolite. And we've now moved to all of the limonite being moved down the ore road. So that's sort of how we see the mix about three and a half staying through the jetty as saprolite, the remaining 6.5 million as limonite, which will be taken down the ore road. That's still in the process of ramping up. We're sort of currently at around sort of...
60-70 trucks. We're looking to get that up to around sort of 120 trucks. So new trucks are coming and being commissioned along with drivers and things as we speak. So that ramp up will continue over this quarter, and we expect by the end of this year or early next year that we should be at that 10 million ton sales rate.
Okay, thanks for that. Just on the ENC project, if my memory serves correct, there was a possibility to reduce attributable ownership below that 55%. Are you guys still happy to maintain 55%, or, you know, bringing another partner on board, that's still a possibility?
Look, for the right strategic partner, we would consider possibly reducing that. And that process and those discussions are ongoing at the moment. As I said, pleasingly, we've had a very strong response. And so I think over the coming months, we'll work through firstly, offtake, and then secondly, if any sort of strategic interest is going to be sold down.
Great. Thanks for that. I'll hand it on.
Your next question comes from Kate McCutcheon from Citi. Please go ahead.
Oh, hi. Good morning, Justin and team. So just to clarify, you're asking us to come up with our own cash flow assumptions, but you've reduced disclosures for the mine in terms of grade, costs, and sales, and it was 20% of your EBITDA this quarter. Is that temporary while you're working through your other projects? And then secondly, on disclosures, Chris, did I hear correctly that we need to wait for clarity on how HNC will be accounted through the P&L and cash flow?
Yes, on the second one, Kate, that's correct. We will be giving more information over the course of the next coming months. On the first one, it is most likely a temporary situation, but if it is not, well, then, yeah, you will need to make your own assumptions.
Okay. And then for HNI, RNI, and ANI, the revenue minus the cash cost times tons sold, there's about a $15 million delta there. Is there some CapEx that's been spent at those operations, or what's the difference there between reported EBITDA?
Sorry, can you just do the question again, Kate? Sorry.
So if I take reported revenue for those-
Mm-hmm
-assets and-
Mm-hmm
take away cash costs times tons sold
Mm-hmm
... there's a bit of a delta between reported EBITDA.
Look, oh-
Wondering if-
Yeah
There's some capital being
There is a little bit of CapEx in there. There is a little bit of CapEx, but that's not our CapEx. That's Oracle Construction CapEx, which Shanghai Decent fully funds. That's in the cash flow waterfall. I'm gonna have to do that cal- I'm not gonna try to do it on the fly there for you, Kate. I'm going to,
Okay, cool
... do that calc and just check a rec for you after this call.
Excellent. I will circle back. Thank you.
Yeah, no worries.
Then on the matte, it looks like all those sales this quarter were low-grade. Is it dependent on pricing, whether you pay to convert that to high-grade, or should we assume that's all low-grade matte going forward and therefore lower pricing versus Class 1? How do we think about that?
Justin, do you want that one?
Yeah. So, yes, look, moving forward, we will be selling low-grade nickel matte. The reason for that is that there has been an increase in the tolling costs to go to high grade. One of the other things that we've had to consider in terms of the move to lower-grade nickel matte is ensuring that we maintain our tax holidays. And so by selling low-grade nickel matte, that ensures that we are also in compliance with the conditions under which HNI has secured its tax holidays. That is why we are looking at, and we paid an option to secure our own converters, which is something that we'll continue to work on over this quarter.
Yeah. Okay. Thank you, Justin.
Your next question comes from David Coates from Bell Potter Securities. Please go ahead.
Morning, Justin. Morning, Chris. Congratulations on a great quarter. Couple of questions from me, mostly following on from ones that have been asked now. The HPAL margins out of the HNC plant and ENC, are you mentioning the independent expert report, but can you give us a sense of where they've sat kind of relative to your RKEF margins this quarter? That's my first question.
Yeah, look, Tracy, we, we've only really got two months of production data for this quarter. So we don't have a full quarter, unfortunately. So I think over the next quarter will allow us to build a better picture of what those margins are. But I think it's safe to say, and when we originally looked into the opportunity, we were seeing RKEF margins of sort of $3,000-$5,000 a ton, whereas for HPAL, we're seeing margins of sort of $7,000-$10,000 a ton.
Right. Thank you. And then another follow-up on the Inflation Reduction Act funding, and it sounds like you guys are quite up to speed with that. One of the restrictions around that appeared to be around levels of Chinese ownership. Do you have a sense of how that may or may not be negotiated around, if you know, the IMIP and your operations have become eligible?
Yeah, look, we had some dialogue with a very, very, very senior person on the American side who’s leading this from a government perspective. We talked them through the ENC transaction, and they were very comfortable with that, with that level of ownership.
Okay. All right. And finally, and another follow-up. You mentioned, or the question was asked about a partner in the ENC, and you said, you know, maybe for the right partner. What does that right partner kind of look like? If you can give us a, you know, is it an OEM or, you know, like, what attributes are you looking for in that, you know, to be the right partner?
Yeah, look, we have a diversified group of interested parties from OEMs to some of the world's largest EV manufacturers, some of the world's largest battery makers, even, you know, groups that are building and some of the world's largest giga factories, traders. So look, I think as with all these things, we're still running a process.
Sure.
- and we're still waiting for submissions in terms of pricing and tenure and then, you know, possible participation at a project level. I mean, one of the things that, you know, a potential partner of the sort of style that we're looking at could bring, which we would find attractive, is, you know, project financing-
Right. Okay.
or, you know, access to lines of credit that would be larger and cheaper than what we're potentially currently accessing. So, you know, there's a number of different things that'll be taken into consideration, but that's sort of, you know, one of the many things that we'll weigh up.
Sure. Okay. That's great. Okay, thanks, Justin. Cheers. Thanks, Chris.
Thanks, mate.
Yeah, no further questions at this time. I will now hand back to Mr. Werner for closing remarks.
Thank you, everyone, for your time again today. Look, just to reiterate, it's a very strong quarter, really being built off the back of the RKEF capacity that we've built over the last few years. But yeah, excited that we are now diversifying the business into that Class 1 nickel space. And to reiterate, you know, that's where we see superior margins, lower carbon intensity, and I think importantly, a diversified customer base and the opportunity to really partner with a tier one global partner. So thank you everyone again for your attendance at today's call. And as always, we look forward to providing further updates throughout the quarter and look forward to another strong quarter to round out the year.
Thank you, everyone.