Nickel matte is a precursor to the production of nickel sulphate, the key material used to produce cathodes for lithium-ion batteries.

Nickel matte is currently priced higher than NPI, and Nickel Mines claims the cash cost of producing the two products is comparable.

Further, the modification cost is insignificant, with Nickel Mines putting it at about US$1 million per line.

The potential move into nickel matte production comes via an MoU signed with Nickel Mines' major shareholder Shanghai Decent, which itself is owned by Tsingshan, the world's largest stainless steel producer.

Tsingshan developed the NPI operations in Indonesia Nickel Mines has a small stake in - albeit a stake that translates to currently growing production profile of more than 50,000tpa of nickel - and was the recent developer of the process enabling NPI production to be converted to matte capacity.

Shares in Nickel Mines traded Monday at A$1.11, capitalising the ASX-listed company at $2.8 billion.