Nickel Industries Ltd (ASX: NIC) has announced a significant partnership with South Korean company Sphere Corp, involving a strategic investment in its ENC HPAL project valued at US$2.4 billion. This collaboration marks the first Western offtake agreement for ENC nickel cathode, aiming to expand the company’s footprint in the aerospace sector.
Under the terms of the agreement, Sphere Corp will acquire a 10% stake in the ENC HPAL project, while simultaneously entering into an offtake agreement for nickel cathode at market prices, which will include volumes beyond its ownership share. Notably, Nickel Industries’ ownership in ENC remains stable at 44% despite this new investment. The completion of funding is projected for early Q1 2026.
The ENC project aims to achieve an impressive annual production capacity of 72,000 tonnes of nickel metal once fully operational. This partnership is particularly significant as it represents ENC’s initial foray into Western markets, specifically targeting the rapidly expanding aerospace and aeronautical industries.
Sphere Corp is recognized as a Tier 1 supplier to major global aerospace companies, holding a 10-year supply contract with SpaceX. By qualifying ENC nickel cathode through Sphere, Nickel Industries is poised to tap into broader opportunities within North American aerospace supply chains. The company emphasizes that this transaction aligns with its commitment to sustainable operations and reducing its carbon emissions profile.
Nickel Industries Managing Director Justin Werner expressed enthusiasm for the partnership, stating, “We are very pleased to announce this transaction with Sphere for the acquisition of a 10% interest in ENC and associated offtake of nickel cathode. 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.”
The partnership is expected to help position ENC as a vital supplier to the aerospace sector, further diversifying Nickel Industries’ product offerings to include nickel cathode, mixed hydroxide precipitate (MHP), and cobalt sulphate. This strategic shift is designed to transition from traditional stainless steel markets toward serving the burgeoning electric vehicle battery and aerospace supply chains.
In terms of market performance, Nickel Industries shares have seen a modest increase of 1% over the past year, in contrast to the 6% rise of the S&P/ASX 200 Index (ASX: XJO) during the same period. The company’s strategic maneuvers are closely watched by investors, particularly as the aerospace sector anticipates a compound annual growth rate (CAGR) of approximately 8% through 2030.
As Nickel Industries moves closer to the commissioning of the ENC HPAL project, the partnership with Sphere Corp is set to enhance its market presence, potentially transforming the company into a key player in the aerospace supply chain.
