Dual-listed Horizonte Minerals has entered into long-term power purchase agreements (PPAs), thereby securing renewable power at a low cost for its Araguaia nickel project, in Brazil.
The PPAs have been awarded to a subsidiary of a global AAA rated energy company and Brazilian energy firm Casa dos Ventos Comercializadora de Energia.
The PPAs comprise three underlying contracts with all suppliers using renewable power, delivering a fixed price of $28.4/MWh during the first five years and $29.6/MWh for the next five years, excluding transmission costs and other charges.
This favourable pricing represents an estimated cost of about $1 400/t nickel, when transmission costs and charges are included compared to about $2 000/t nickel used as the basis for the feasibility study.
"Given that the electrical power will represent roughly a third of Araguaia's operational cost, we are very pleased to enter into these fixed-price power contracts which are 30% lower than that used in the feasibility study, ensuring that our operational costs will be in the lowest quartile globally,” said CEO Jeremy Martin.
The PPAs will supply 100% of the expected power demand during the ramp-up period and the first five years of operations, in addition to more than 60% of the expected power demand for the following five years.
Araguaia is under construction with first metal scheduled for early 2024, when fully ramped up with Line 1 and Line 2 it will produce 29 000 t/y of nickel.