Highlights:
• Binding power purchase agreements executed covering the first 10 years of Araguaia production, ensuring the project will operate in the lowest quartile of global nickel producers;
• Fixed pricing of US$28.4/MWh and US$29.6/MWh, for years 0-5 and 6-10 respectively[1], represents a price exclusive of transmission charges ~30% lower than that used in the feasibility study; and
• The power in Brazil is generated through renewable sources, in line with Horizonte's target of being one of the lowest CO2 nickel producers globally.
Horizonte Minerals Plc is pleased to announce that it has entered into long-term power purchase agreements ("PPAs"), thereby securing renewable power at a low cost for its 100%-owned Araguaia Nickel Project ("Araguaia" or "the Project") in Brazil, where construction is underway and production remains on track to commence in Q1-2024.
The PPAs have been awarded to a subsidiary of a global AAA rated energy company and Casa dos Ventos Comercializadora de Energia S.A. ("CDV"). The PPAs comprise 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 6-10, excluding transmission costs and other charges. All contracts are priced in US dollars, mitigating any foreign exchange risk, with no inflation adjustments included. 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 PPAs 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.
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.
"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 are able to 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."
ABOUT CASA DOS VENTOS
Casa dos Ventos Comercializadora de Energia S.A. ("CDV") is a Brazilian energy company that develops, builds and operates renewable energy projects. The company is one of the leading providers of energy solutions to support consumers in their energy transition and holds the largest portfolio of wind and solar projects under development in the country, with approximately 20 GW.
CDV is a signatory to the UN Global Compact and works in line with the 17 Sustainable Development Goals (SDGs) and best ESG practices, preserving local biomes, developing social projects in the communities where it is present and contributing to a low carbon economy.
