Piauí project on track for 2029 production amidst global nickel market challenges

Privately held UK company Brazilian Nickel is looking to raise US$1.4bn to develop its project in Brazil.

The firm expects to start construction of the Piauí nickel project late 2026 and production during the second half of 2029.

Brazilian Nickel CEO Mark Travers spoke with BNamericas about the status of the project and the prospects for nickel in the coming years.

BNamericas: What is the current status of the Piauí nickel project? 

Travers: We are well-positioned to begin construction as soon as financing is secured. 

All key environmental licenses for the full-scale project are in place, and we have advanced from basic engineering into detailed engineering to ensure construction readiness. 

The deposit has been extensively drilled, with over 82,000m of drilling completed, providing a robust understanding of the resource. 

BNamericas: Are there any additional licenses pending?

Travers: We have obtained all the necessary licenses required at this stage of the project including installation licenses. There will be additional operating licenses required that can only be obtained once construction is underway.

BNamericas: When do you expect to start production and what will be the annual capacity?

Travers: This will depend on when we obtain the financing, but the current plan is to start construction in the latter part of 2026 with the first product coming online in the second half of 2029. 

We estimate average annual production of 27,000t of nickel over the first 10 years.

BNamericas: What are the current needs in terms of machinery, equipment and services for the project?

Travers: Our team is currently assessing the needs and is already in discussions with potential suppliers to support the project leading up to construction and operation. We'll share more details as soon as the requirements are finalized.

BNamericas: What are the financing needs for the project, and what will be the sources of funding? 

Travers: Overall, we need about US$1.4bn mainly for capex, working capital, interest costs and fees. 

We have received a letter of intent from the US Development Finance Corporation for a US$550mn loan and are working with various other development banks. 

We are also talking to potential equity investors as well as sovereign wealth funds and continue to benefit from the strong support of our principal investor, TechMet Ltd.

BNamericas: What is your forecast for nickel prices this year, and how does this compare to the estimated production cost for your nickel project in Brazil?

Travers: Given that we don't expect to begin production until the latter part of 2029, we are less focused on the nickel prices of today. However, speaking very generally, I expect them to remain under downside pressure by low-cost oversupply primarily coming out of Indonesia and a slower than forecast rollout of EVs globally, which will provide a drag that we do not see correcting for a few years until demand will again outpace supply.

BNamericas: In addition to the Piauí project, are you evaluating investments in other initiatives in Brazil or elsewhere in Latin America?

Travers: First and foremost, the Piaui project is the absolute priority for our team today, but we are also constantly evaluating opportunities to apply our technology and our knowhow in other parts of Brazil and even in other countries. 

We're also looking at the development potential in areas adjacent to the Piauí project.

Our longer-term goal is to develop and/or collaborate on multiple projects like Piauí on sites where our technology and approach are a good fit. 

BNamericas: Currently, what are the main advantages for the development of nickel projects in Brazil? And what are the main challenges? 

Travers: Brazil offers a unique combination of competitive and skilled labor, affordable energy costs, and a strong commitment to environmental and social sustainability. 

Brazil has rich, high-quality deposits of nickel and other minerals that are critical for the energy transition and the government is actively assessing these resources and looking at how it can encourage their development.

The Brazilian development bank BNDES has shown a commitment to help move projects forward and has announced the creation of a critical minerals fund of over 1bn reais [US$175mn]. 

Brazil is a stable democracy, which is so crucial given the long time it takes to develop a mine. On top of all that, Brazil also benefits from an established legal and regulatory framework for managing mining activities, an important advantage given the long lead times especially around permitting when trying to develop a mine. 

Like many resource-rich countries, Brazil faces infrastructure challenges, and permitting processes can be complex. However, these are well-understood aspects of operating in the country. In the case of Piauí, we have already secured all key permits, positioning us well for the next phase of development. 

BNamericas: Is there any question I haven't asked that you would like to highlight? 

Travers: I think the big question is: Why develop a new nickel mining project in times of perceived oversupply and depressed prices? The answer is, this is the best time to be developing a new nickel mining project because today, the lack of capital expenditure across the sector will ensure demand will once again outpace supply and prices will begin to recover, just as our project moves into production. 

We believe we have the best project out there, in terms of our readiness to proceed with construction, in terms of using extraction technology that is both environmentally friendly and low capital cost and in terms of being a viable alternative to global supply chains that are currently dominated by China and Indonesia. 

Companies, funds and governments in the US and in Europe clearly see the value of strengthening supply resilience for critical minerals, and we strongly believe they will continue to do so.