Nickel Industries Ltd (ASX: NIC) shares are slipping on Wednesday despite the company releasing a new market update.
At the time of writing, Nickel Industries shares are down 2.67% to 91 cents.
Even so, the ASX nickel stock has still had a solid longer-term run. Its shares are up around 9% since the start of 2026 and 28% higher than this time last year.
The latest announcement comes after a strong 12-month run, with the stock still holding onto gains in 2026.
Here's what the company told the market.
Nickel Industries buys into TMI
In a statement to the ASX, Nickel Industries said it has agreed to invest US$169 million for a 17.5% stake in the PT Teluk Metal Industry HPAL project, known as TMI.
The payment is expected to be made in November 2026.
TMI is majority-owned by a Korean-Japanese consortium comprising LS MnM, Hawa, and another strategic investor, which together hold 72.5% of the project. A Singapore-based investment company owns the remaining 10%.
According to the release, TMI has an annual nameplate capacity of about 38,640 tonnes of nickel in mixed hydroxide precipitate, or MHP.
Based on Nickel Industries' stake, that works out to about 6,775 tonnes of attributable nickel in MHP each year.
The company will also receive a construction guarantee. This caps its acquisition cost at US$169 million and requires TMI to reach nameplate capacity by September 2027.
Why Nickel Industries wants more HPAL
The deal gives Nickel Industries a bigger position in battery nickel as it looks beyond nickel pig iron.
TMI isn't starting from scratch either. By the end of the March quarter, the project had already spent US$996 million on HPAL development and was about 40% complete.
The company also pointed to its existing HNC HPAL project, which delivered adjusted EBITDA of US$86.2 million in the March quarter.
Nickel Industries expects to fund the TMI investment from its cash reserves and operating cash flow. If it needs extra funding, major shareholder Shanghai Decent has agreed to provide debt funding on commercial terms.
Another move into battery nickel
This isn't the first move Nickel Industries has made in this part of the market.
The company is already commissioning the Excelsior Nickel Cobalt HPAL project, which can produce MHP, nickel cathode, and nickel sulphate. It also has a stake in the HNC HPAL project.
The TMI deal gives Nickel Industries another source of MHP production and adds to its position in the electric vehicle battery supply chain.
Of course, shareholders will still want to see the project delivered on time and running as planned.
The post This ASX 200 stock is up almost 30% in a year. Now it is making another big move appeared first on The Motley Fool Australia.
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