Atlantic Nickel, Appian strike Santa Rita offtake accord with Trafigura

London — Miner Atlantic Nickel and Appian Capital Advisory LLP, a mining investor, have set up a three-year offtake contract with global trader Trafigura for a portion of the output from the restarted Santa Rita nickel sulphide project in Brazil, which will resume shipments this month, Atlantic Nickel announced Monday.

Atlantic Nickel has also finalized a $40.8 million financing agreement with Trafigura, which will provide funding required for the restart of the project, the company said.

Atlantic Nickel -- the owner and operator of Santa Rita -- together with its parent company Appian, took over operations last year at the project after a three-year break in activity at the site.

Since the recommencement of blasting activities at the mine site in Bahia state, northeast Brazil, in July 2019, Atlantic Nickel has achieved several operational milestones in the mining and processing areas on or ahead of schedule, it said in a statement. Refurbishment of the plant is complete, and the company has produced over 11,000 dry mt of nickel sulphide to date.

Production from the mine is expected to reach nominal annualized capacity in the first half of 2020, and the targeted planned production for 2020 is between 13,000 mt and 15,000 mt of nickel in concentrate, a spokesman said.

From 2021, with operations fully ramped-up, production is expected to be between 18,000 mt/yearand 20,000 mt/year of nickel equivalent, he said.

Santa Rita is an open-pit nickel-copper-cobalt sulphide operation, classed as one of the largest open pit nickel sulphide mines in the world, an asset operating with a second quartile cost position. Atlantic Nickel has identified a 25 plus year life of mine operation for it based on the existing open pit ore reserves and its underground potential, the spokesman said.

Santa Rita's previous operator Mirabela Nickel was headquartered in Perth. It entered receivership in 2016 after its sole nickel asset, Santa Rita, was put on care and maintenance in 2015. Appian acquired the company in July 2018 and is the 100% owner, the spokesman said.

-- Diana Kinch, diana.kinch@spglobal.com

-- Edited by Shashwat Pradhan, shashwatpradhan@spglobal.com