On November 21, Horizonte Minerals (HZM) announced that it has entered into a long-term power purchase agreement, thereby securing renewable energy at a low cost for its 100% owned nickel project Araguaia, Brazil, where construction is underway and production remains on track to begin in the first quarter of 2024.
The binding power purchase agreement covers the first 10 years of Araguaia production, ensuring that the project will be in the bottom quartile of global nickel producers, the company said.
Horizonte noted that the fixed pricing in the agreement was US $28.4 /MWh for 0-5 years and US $29.6 /MWh for 6-10 years, adding that this represented a price about 30% lower than that used in the feasibility study, excluding transmission charges.
Importantly, the company points out that Brazil's electricity is generated through renewable energy, in line with Horizonte's aim to be one of the world's lowest producers of nickel with carbon dioxide emissions.
According to a press release, the power purchase agreement will supply 100 percent of the expected electricity demand during the start-up period and the first five years of operation, and more than 60 percent of the expected electricity demand for the following five years.
Jeremy Martin, Chief Executive Officer, commented, "Given that electricity will account for approximately one-third of Araguaia's operating costs, we are pleased to enter into these fixed-price electricity contracts, which are 30% lower than those used in the feasibility study, ensuring that our operating costs will be in the lowest quartile globally."
Horizonte Minerals is developing two 100% owned first-tier projects in Brazil, Araguaia Nickel project and Vermelho Nickel-Cobalt Project, in the state of Para.
Araguaia is under construction, with the first metal production scheduled for early 2024, and it will produce 29,000 tonnes of nickel a year when Lines 1 and 2 are fully operational. Vermelho, which is in the feasibility study stage, will produce 25,000 tonnes of nickel and 1,250 tonnes of cobalt for the electric vehicle battery market.
