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Developing the next major nickel project in Brazil

STAINLESS STEEL

Approximately two thirds of global nickel production is used to produce stainless steel. Ferronickel is preferred by stainless steel mills due to its iron content. Nickel-containing materials play a major role in our everyday lives, including food preparation equipment, mobile phones, medical equipment, transport, buildings, power generation. Nickel-containing materials are selected because - compared with other materials - they offer better corrosion resistance, better toughness, better strength at high and low temperatures, and a range of special magnetic and electronic properties.


Stainless Steel is a reliable, steady growth market that has continued to grow ~4% year on year. Global stainless output is forecast to rise by a CAGR of 2.5% over the 2020-2040 period. China’s steel demand is expected to increase by 8% in 2020, aided by government infrastructure stimulus and a strong property market. China's strong recovery since late February, which continues at a steady pace, suggests positive GDP growth in 2020 despite a -6.8% contraction in the first quarter. This strong recovery in China will mitigate the reduction in global steel demand, due to the Covid pandemic.


Horizonte’s 100% owned Araguaia ferronickel project has been designed to feed into the Stainless Steel industry. The project has a completed Feasibility Study and is fully permitted. The Stage 1 Base Case for the Araguaia project’s Feasibility Study was US$14,000; however, based on the consensus long-term nickel price of $16,400, the project NPV is $691 million generating free cash flow of over US$2.9 billion, giving an IRR of 27%.

Investors can plug-in their own nickel price into our NPV calculator on the Araguaia project page.

Sources:
Nickel Institute
Araguaia Feasibility Study