Cadence Minerals needs US$380mn to revive Brazil iron ore project

UK mining firm Cadence Minerals estimates that it needs US$378mn to restart operations of its iron ore project in Brazil’s Amapá state.

Among others, operations will require US$137mn, the port facility US$114mn and port operations US$28.5mn, according to an investors' presentation.

The company expects to receive all licenses during 2025.

Annual production capacity is estimated at 5.5Mt during a 15-year mine life. The ore at the site has 67.5% iron content, considered the highest quality in the world and attractive for steelmakers that aim to reduce their greenhouse gas emissions.

Cadence owns 34.1% of the project, while Indo Sino controls the rest. The ownership of Amapá is via a JV called Pedra Branca Alliance (PBA), which owns DEV Mineração.

The project comprises an open-pit mine, a processing and beneficiation plant, a rail line and an export port terminal.

Operations were halted in 2014 after a geotechnical failure at the port facility, which limited exports. Before cessation, the project generated an underlying profit of US$54mn in 2012 and US$120mn in 2011.

DEV continued operations and rehabilitated the port until 2014. However, due to restricted iron ore exports and cash flow constraints, DEV filed for judicial protection in Brazil in 2015, and operations ceased.

In 2019, Cadence and Indo Sino, alongside DEV, submitted a judicial restructuring plan for approval by unsecured creditors to redevelop the Amapá project. This strategy includes plans to resume operations after plant revitalization and modifications aimed at improving product quality and increasing recovery, along with recovery of the port, rail line and support areas.