Horizonte Minerals plc has secured long-term renewable power at a low cost for its 100%-owned Araguaia nickel project in Pará state, Brazil.
SUPPLIERS
The company awarded the power purchase agreements to “a subsidiary of a global AAA rated energy company” and Casa dos Ventos Comercializadora de Energia S.A. (CDV).
CDV holds the largest portfolio of wind and solar projects under development in the country, with approximately 20 GW.
CONTRACTS
The deal comprises three underlying contracts with all suppliers utilising renewable power, delivering a fixed price of US$28.4 /MWh during years 0-5 and US$29.6 /MWh for years six to 10, excluding transmission costs and other charges.
“All contracts are priced in US dollars, mitigating any foreign exchange risk, with no inflation adjustments included,” added Horizonte in a statement.
“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 agreements will supply 100% power for the first five years of operations and more than 60% of the expected power demand for the following five years.
HYDROPOWER
“In line with our target of becoming one of the lowest CO2 nickel producers globally, these PPA [power purchase agreements] contracts demonstrate our ability to achieve this objective,” said chief executive Jeremy Martin.
“By leveraging the abundant hydropower available in Brazil, we are able to not only differentiate ourselves against global peers from a cost perspective, but also from an environmental standpoint.”
Horizonte owns two large scale Tier-1 projects in Pará state; the Araguaia nickel and Vermelho nickel-cobalt projects.
The company’s top three shareholders are La Mancha Investments S.à r.l., Glencore plc and Orion Resource Partners LLP.