Name of the Project
Araguaia ferronickel project.

Location
Pará state, Brazil.

Project Owner/s
Horizonte Minerals.

Project Description
A feasibility study has confirmed Araguaia as a Tier 1 project with a large, high-grade scalable resource, long mine life and low-cost source of ferronickel for the stainless steel industry.

The project has two principal mining centres – Araguaia nickel south (ANS) and Araguaia nickel north (ANN). ANS hosts the Pequizeiro, Baiao, Pequizeiro West, Jacutinga, Vila Oito East, Vila Oito West and Vila Oito deposits, while ANN hosts the Vale do Sonhos deposit.

The feasibility study comprises an openpit nickel laterite mining operation that delivers ore from several pits to a central rotary kiln electric furnace (RKEF) metallurgical processing facility.

The metallurgical process comprises a single line (Line 1) RKEF to extract ferronickel from the ore. After an initial ramp-up period, the plant will reach full capacity of about 900 000 t/y of dry ore feed to produce 52 000 t of ferronickel, which, in turn, will contain 14 500 t/y of nickel over a 28-year life-of-mine. The ferronickel product will be transported by road to the Port of Vila do Conde, in the north of the state, for sale to overseas customers.

Included in the study is the option for future construction of a second process line (Line 2), which would double Araguaia’s production capacity from 14 500 t/y of nickel up to 29 000 t/y of nickel.

The Stage 2 expansion gives a 26-year mine life.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The Stage 2 expansion generates an estimated net present value of $741-million and an internal rate of return of 23.8%.

Capital Expenditure
Horizonte increased the capital expenditure (capex) for Araguaia to $537-million in October 2022.

Planned Start/End Date
The project remains on track to deliver its first nickel in the third quarter of 2024.

Latest Developments
Horizonte Minerals has reported that costs at its Araguaia nickel project will increase by at least 35% and that first production will be delayed.

The company previously expected the mine to begin operating in early 2024, but that expectation has now shifted to the third quarter of next year.

The cost and schedule changes follow detailed engineering and construction work, along with a comprehensive cost review, that resulted in changes to the design and execution scope.

Horizonte has indicated that the final detailed engineering work added additional scope items linked to the major equipment packages. It has made several enhanced design changes from the original engineering study and identified the requirement for additional civil works and quantities.

Further, changes had been requested from selected suppliers, which have failed to deliver to the project timeframe, adding further cost pressures.

Horizonte has engaged Reta Engenharia to undertake an independent review of the remaining capex and schedule, incorporating the change in scope, material and quantity variations, increased project duration to first metal and associated costs, as well as  additional working-capital requirements. The company has also undertaken a detailed review of the ramp-up and operational costs. An update will be published by the middle of the  fourth quarter.

Horizonte CEO Jeremy Martin has emphasised that, despite the anticipated higher capital requirement, Araguaia remains a Tier 1 asset that will deliver strong margins over its 28-year mine life once production starts in 2024.

“Moreover, the imminent completion of the feasibility study on Line 2 will demonstrate Araguaia's capacity to support an annual production of 29 000 t/y,” he has said.

Key Contracts, Suppliers and Consultants
Ausenco Engineering Canada (process plant design); FLSmidth, Metso Outotec, Uvån Hagfors Teknologi Inteco Melting and Casting Technologies (equipment supply and technical support); and Hatch (furnace contract).

Contact Details for Project Information
Horizonte Minerals, tel +44 203 356 2901.
Tavistock, on behalf of Horizonte Minerals, tel +44 207 920 3150 or email horizonte@tavistock.co.uk.