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The new nickel mining project aims to produce ferronickel, which will be turned to the global stainless steel and matte nickel market, for the production of batteries for electric cars
Horizonte Minerals, a company based in London, obtained authorization for a project amazing in the north of Pará: extract ores in the municipality of Conceição do Araguaia, in the Araguaia Níquel Project. The undertaking, which foresees an investment of US$ 537 million (R$ 2,6 billion), represents the largest greenfield investment in nickel in Brazil. The project aims to produce 14,5 tons of nickel per year, with the forecast for the first metal to be produced in March 2024, according to the MSN website.
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 opted to meet current market demand. Company will allocate investments in the production of ferronickel on Line 1, aimed at the global stainless steel market, which represents 72% of the global demand for nickel, against 12% for batteries.
Line 2 is undergoing a feasibility study, with completion expected in the second half of the year. In it, the company is studying the possibility of investing in the production of matte nickel, used in the manufacture of batteries, with part of the product from the furnace. 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 make the investment for Line 1 feasible, Horizonte Minerals closed a financing package of US$ 713 million (R$ 3,4 billion), combining senior long-term debt and equity. The company obtained financing from five banks, led by BNP Paribas, in addition to the support of international development agencies in Finland (Finnvera) and Denmark (EKF).
Horizonte Minerals has three main partners for the equity investment: the Luxembourgish fund La Mancha Resource Capital, the American asset Orion Resource Partners and the Anglo-Swiss mining company Glencore.
Sustainable projects and guaranteed logistics
Investments in the Araguaia Níquel Project projects were planned to be low carbon. The company entered into a long-term electricity purchase agreement, guaranteeing 100% of the energy required for the first five years of operation and 70% for subsequent years.
To ensure logistics, Horizonte Minerals closed long-term port agreements, guaranteeing access to the import of raw materials and the export of the final product at the Port of Vila do Conde, in Pará.
With the approval from the Environment Secretariat of Pará, the company will start extracting to form stock, with the commissioning stage scheduled to last six months. This phase will guarantee enough stocks to feed the plant in the following months.
The Araguaia Níquel Project currently employs around 3 workers and, during operation, expects to generate 500 jobs over 30 years. Investment in nickel in Brazil is on the rise, and Brazilian participation in the segment is still timid, but with projects such as Horizonte Minerals, the country can increasingly stand out in the global nickel market.
