CNGR, Glencore to take Centaurus Brazil nickel concs output for 5 years

Australia-listed Centaurus Metals, which is developing the Jaguar nickel mine project in northern Brazil, said Oct. 28 it has secured offtake arrangements with a subsidiary of Chinese battery materials processor CNGR Advanced Material Co. Ltd and natural resources company Glencore AG for its entire nickel concentrates production for the first five years of Jaguar's operation.

Each new contract is for the supply of a minimum of 20,000 dry metric tons/year of high-grade (30%) nickel concentrates, Centaurus said in a statement. The contracts are worth around $900 million in total (at current nickel prices) over the five-year period set to begin from Jaguar's production start-up in the first quarter of 2029.

The new contracts are in addition to a 20,000 mt/yr supply already recently contracted from Jaguar by Glencore.

Any additional volume produced and made available for sale by Centaurus over and above the minimum 40,000/mt/year of concentrate under these two new offtake agreements, and the 20,000 mt/year already contracted to Glencore, will also be purchased by the parties, with parcels alternating between CNGR and Glencore, Centaurus said.

This total additional volume is estimated to be 60,000 mt of nickel concentrate over the life of the five-year contracts.

Glencore and CNGR have a right to terminate their offtake agreements if first nickel concentrate is not shipped to them by the end of 2029.

Jaguar's nickel contained output is estimated to be around 22,500 mt/year over the first five years of operations.

As part of the accord, Glencore and CNGR will also each put up $20 million in project equity to strengthen funding for the Jaguar project, which is heading towards a final investment decision, Centaurus said in a statement.

Pricing under the contracts is referenced to the London Metal Exchange Cash Settlement nickel price, with variable nickel payability linked to the nickel price. Payabilities have also been agreed for copper and cobalt by-products contained in the concentrate, Centaurus said.

Centaurus' managing director, Darren Gordon, described Jaguar, located in Brazil's minerals-rich Carajas province, as "one of the world's most significant new sources of high-quality, low-cost nickel sulfide concentrate for global markets."

CNGR Advanced Material Co. Ltd is described as a global leader in advanced battery materials and nickel processing and one of the world's largest pCAM (precursor Cathode Active Material) producers, holding the largest global market share for both ternary precursors and cobalt tetroxide. It has a strong presence in China and Indonesia.

The Centaurus link-up with CNGR "provides fantastic alignment with Centaurus' business model in Brazil," Gordon said.