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The New Nickel Mining Project Aims to Produce Ferronickel That Will Be Targeted at the Global Stainless Steel Market and Nickel Matte for the Production of Batteries for Electric Vehicles
Horizonte Minerals, a London-based company, has obtained authorization for a surprising undertaking in northern Pará: extracting ores in the municipality of Conceição do Araguaia, at the Araguaia Nickel Project. The venture, which involves an investment of US$ 537 million (R$ 2.6 billion), represents the largest greenfield investment in nickel in Brazil. The project aims to produce 14,500 tons of nickel per year, with the first metal production scheduled for March 2024, according to MSN.
Promising Scenario for Nickel in Brazil
At a time when the possibility of a nickel deficit is being debated due to the growing demand for electric batteries in the future, Horizonte Minerals has chosen to meet the current market demand. The company will allocate investments for the production of ferronickel in Line 1, targeted at the global stainless steel market, which represents 72% of the global nickel demand, compared to 12% for batteries.
Line 2 is currently under feasibility study, with completion expected in the second half of the year. In this line, the company is exploring investment possibilities for the production of nickel matte, used in battery manufacturing, with a portion of the furnace product. This expansion will allow the company to double the project’s production, increase production flexibility, and improve operating margins.
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Investment and Partnerships
To enable the investment for Line 1, Horizonte Minerals secured a financing package of US$ 713 million (R$ 3.4 billion), combining long-term senior debt and equity. The company obtained financing from five banks, led by BNP Paribas, as well as support from international development agencies from Finland (Finnvera) and Denmark (EKF).
Horizonte Minerals has three main partners for the equity portion of the investment: the Luxembourg fund La Mancha Resource Capital, the American asset Orion Resource Partners, and the Anglo-Swiss miner Glencore.
Sustainable Projects and Secured Logistics
The investments in the Araguaia Nickel Project were planned to have low carbon emissions. The company has entered into a long-term power purchase agreement, securing 100% of the energy needed for the first five years of operation and 70% for the following years.
To ensure logistics, Horizonte Minerals has secured long-term port agreements, guaranteeing access for the import of raw materials and the export of the final product at the Port of Vila do Conde, Pará.
With the approval from the Pará Secretary of the Environment, the company will begin extraction to build stock, with the commissioning stage scheduled to last six months. This phase will ensure sufficient stocks to feed the plant in the following months.
The Araguaia Nickel Project currently employs about 3,000 workers and, during operation, expects to generate 500 jobs for 30 years. Investment in nickel in Brazil is on the rise, and Brazil’s participation in the segment is still modest, but with projects like those of Horizonte Minerals, the country could increasingly stand out in the global nickel market.
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