Horizonte stock plunges on Araguaia costs blowout

2nd October 2023

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online


Font size: - +

The share price of Horizonte Minerals fell 51% on Monday, as the London-listed mining company announced that the costs at its Araguaia nickel project, in Brazil, 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 now expects to achieve that milestone by 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.

In October last year, Horizonte increased the capital expenditure (capex) for Araguaia to $537-million. 

The firm explained that the final detailed engineering work had added additional scope items linked to the major equipment packages, made several enhanced design changes from the original engineering study and identified the requirement for additional civil works and quantities.

Further, changes had been required with selected suppliers, which 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, and 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 current quarter.

Horizonte stressed that it continued to have strong support from its major partners. The company is working with various financial institutions, together with the cornerstone shareholders for a financing solution to complete construction. 

"[We] are confident that the project is now significantly de-risked given the near-finalisation of detailed engineering and procurement, together with the detailed review of the costs to project completion, ensuring successful delivery,” commented CEO Jeremy Martin.

He stressed that, despite the anticipated higher capital requirement, Araguaia remained a Tier 1 asset that would deliver strong margins over its 28-year mine life once production commenced next year.

“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.”

Edited by Creamer Media Reporter



Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...


Since 1919, Victaulic’s innovative solutions and design services continue to increase construction productivity and reduce risk, ensuring projects...


Latest Multimedia

sponsored by

Photo of Martin Creamer
On The Air (19/07/2024)
19th July 2024 By: Martin Creamer
Platinum, diamonds, hydrogen make headlines
Platinum, diamonds, hydrogen make headlines
19th July 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.207 0.241s - 127pq - 2rq
1: United States
Subscribe Now
2: United States