Why are Nickel Mines (ASX:NIC) shares in limelight today?

January 19, 2022 01:28 PM AEDT

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ASX NIC, Nickel Mines MOU, ASX NIC share price — Image source: © A2dstudiodesign | Megapixl.com

Highlights

Australian nickel producer Nickel Mines signed an MOU with Indonesia’s SESNA.

The Company plans to develop a 200MWP solar capacity within Indonesia Morowali Industrial Park.

Nickel Mines will be the long-term offtake partner for SESNA.

The shares of ASX listed global nickel producer Nickel Mines Limited (ASX:NIC) have been grabbing the spotlight today after the Company announced a new MOU.

Nickel Mines shared on Wednesday that it has signed a memorandum of understanding (MoU) with PT Sumber Energi Surya Nusantara (SESNA) to implement a 200MWp solar project in Indonesia.

Meanwhile, NIC shares were spotted trading 0.31% higher at AU$1.62 at 12.57 pm AEDT.

The Company plans to execute the capacity within the Indonesia Morowali Industrial Park (MIP), subject to specific economic parameters. NIC expects to implement the project in stages once SESNA gives a final commitment over the project proposal within three months of signing the MOU.

Key Highlights -

As per the MOU, Nickel Mines will be the long-term off-take partner for SESNA. However, NIC will not pay for any capital funding.
Also, the indicative tariff for electricity will remain commercial-in-confidence, competitive with other similar scale solar projects, and are likely to remain constant throughout the project.
SESNA will act as the project initiator and is responsible for construction, financing, commissioning, and operating a 200MWp solar farm project.
This will significantly accelerate the renewable energy supply to the Company’s Hengjaya and Ranger nickel processing operations within the region.
The 200MWp solar project adds to NIC’s ongoing 396kWp plus 250kWh battery storage project with SESNA at Hengjaya Mine.
NIC aims to reduce diesel consumption by nearly 31 million litres over the 25-year project life, scheduled to be commissioned in Q1 FY2022.

About SESNA

Indonesia-based SESNA is a leading solar development firm that owns and operates a portfolio of microgrid & solar feed-in tariff projects while providing a range of engineering & related solutions.

Bottomline

The latest MOU is likely to help NIC reduce its greenhouse gas emission targets and marks a significant milestone in NIC’s future energy collaboration with SESNA.