Glencore-backed Horizonte Minerals is warning that it needs a whole new financing package to restart a nickel project in northern Brazil after a review revealed the mine will cost 87% more than thought.
In the latest sign of the challenges facing mining projects around the world, the London-listed firm said it’s engaging with existing and potential new investors on a “full financing solution” as well as holding talks to restructure company debt facilities.
The Araguaia project in Brazil’s Amazon region will cost $1-billion, up from a previous $537-million budget, of which $479-million has already been spent, Horizonte said in a statement Monday. The cost review follows a decision last year to restrict the project to critical works. The start of production, which was slated for this year, is now penciled in for early 2026, with ramp-up lengthened to 18 from 12 months.
Nickel mines and projects are struggling after a flood of cheap exports from Indonesia sent prices of the metal used in stainless steel and batteries tumbling about 45% since the start of 2023. Budget blowouts and long delays appear to be getting worse in the mining industry generally amid heightened social and environmental scrutiny, more red tape, harder-to-reach deposits, inflation and pricier capital.
“Completion of construction activities at Araguaia will be subject to successful completion of a full financing solution in 2024,” said Horizonte, which is also backed by investment firms La Mancha and Orion. “There can be no certainty at this stage that the full financing solution will be achieved and further updates will be provided in due course.”
Meanwhile, Graham Crew will replace Maryse Bélanger as interim chief operating officer, the company said in the same statement.