Horizonte Minerals Plc (AIM: HZM) has entered into long-term power purchase agreements which have secured renewable power at a low cost for its 100%-owned Araguaia Nickel Project in Brazil, where construction is underway, and production remains on track to commence in Q1 2024.
Jeremy Martin, CEO of Horizonte Minerals, commented: “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.
Horizonte has awarded the power purchase agreements to a subsidiary of a global AAA rated energy company and Casa dos Ventos Comercializadora de Energia S.A. The agreements comprise three underlying contracts with all suppliers utilizing renewable power, delivering a fixed price of US$28.4/MWh during years 0-5 and US$29.6/MWh for years 6-10, excluding transmission costs and other charges.
This favourable pricing represents an estimated cost of approx. US$1,400/t Ni when transmission costs and charges are included compared to approx. US$2,000/t Ni used as the basis for the feasibility study, representing a cost reduction of around 30%.
The power purchase agreements will supply 100% of the expected power demand during the ramp-up period and the first five years of operations, in addition to over 60% of the expected power demand for the following five years.
“Furthermore, in line with our target of becoming one of the lowest CO2 nickel producers globally, these PPA contracts demonstrate our ability to achieve this objective. By leveraging the abundant hydropower available in Brazil, we can not only differentiate ourselves against global peers from a cost perspective, but also from an environmental standpoint. Given the PPA supplier’s strong operating credentials, we see these contracts as a major de-risking milestone for the Araguaia project.” Jeremy continued.
To find out more, please visit www.horizonteminerals.com
