Horizonte says Araguaia nickel mine in Brazil is on track for early 2024 production

Horizonte Minerals (TSX: HZM; AIM: HZM) said on Monday it was on track to begin production at its Araguaia nickel mine in northern Brazil in the first quarter of 2024.

The company, which began building the operation last May, said the inital phase of the project was 50% completed as of Mar. 30 this year.

Pre-stripping activities have begun on the main Pequizeiro pit with ore stockpiling to begin in the third quarter this year, it said.

Horizonte noted that about 90% of capital spending has been awarded, amounting to around US$485 million. In October, the company flagged a 12.6% capex increase at Araguaia to US$537 million.

Araguaia, which Horizonte bought from Glencore in 2015, will initially generate 14,500 tonnes of nickel a year, mostly destined to supply the stainless steel market. 

Output is expected to jump up to 29,000 tonnes of the battery metal a year after a second production line comes online in 2027. 

Construction includes an open pit and a processing plant, which will produce ferronickel over an estimated 28-year period.

“With the award of the Line 2 feasibility study contracts, we are one step closer to delivering on this low capex project that will double nickel production,” chief executive Jeremy Martin said in a statement.

Araguaia is considered a key project to diversify Brazil’s mining sector, which is centred on iron ore.

Brazil has estimated reserves of 16 million tonnes of nickel and is currently the world’s eighth largest producer, with output of 108,000 tonnes in 2022, up 8% from 2021, according to GlobalData.