Atlantic Nickel – Preparing for the Energy Transition

As the move to more sustainable forms of energy sweeps every industry, nickel is going to become a key resource, and Atlantic Nickel is well placed to meet that need.

Atlantic Nickel owns and operates one of the largest open-pit nickel sulphide mines in the world and the only one in operation in Brazil. The Santa Rita nickel mine, which Atlantic Nickel restarted in 2019, benefits from world-class facilities from more than US$1 billion previously invested in its existing processing plant and associated infrastructure.

“Atlantic Nickel is on the sweet spot in terms of offering the right kind of deposit, using simple, fit-for-purpose technology to produce a product that generates the lowest carbon footprint but is also easier to be applied, in an industry that’s going to be very attractive in terms of growth,” says Paulo Castellari, CEO of Atlantic Nickel.

Atlantic Nickel acquired the Santa Rita mine from an Australian listed company that went bankrupt. Following the buyout, Atlantic Nickel revised its operating plants completely and carried out a detailed analysis of the deposit to better understand the asset.

“It started operations safely just over a year ago and we’re now getting to our target production rate,” Castellari tells us.

The mine is producing nickel, copper, and cobalt, with a life of mine of 34 years. Today, it’s clear to see why the asset is an appealing prospect, but that was not always the case.

“This asset was not well understood but our technical team saw the potential and saw the coming changes in the industry,” Castellari recalls. “We revised the operating model to overcome any challenges faced in the past and maximise the opportunity, operating it as an open-pit mine for eight years. Then we’ll develop an underground mine where we will reach ores with better grades, to increase production from approximately 20,000 to 30-35,000 tonnes. We’ll be producing nickel sulphide for at least 34 years.”

Based in the State of Bahia, in the northeast of Brazil, the Santa Rita mine has all the appropriate licenses and is operating to the highest standards in terms of safety and ESG practices. From a location and infrastructure perspective, it is also perfectly placed. Santa Rita is only 140 kilometres from the Port of Ilhéus where Atlantic Nickel exports its product. The mine is also supported by good logistics and is in a location that is attractive to recruits and only a couple of hours drive away on very good roads.

But as well as being well placed, Atlantic Nickel has an invaluable group of people on its side.

“We have a good team that understands mining, and because we’ve invested a great deal, we have been able to clock a C1 cash cost of just under three dollars a pound, and a US$ 3.92 /lb all-in cost in sustaining CAPEX,” Castellari says.

A Unique Opportunity

Atlantic Nickel will need every ounce of that expertise to get the most out what Castellari believes to be a once-in-a-career chance to make the most of a deposit under ideal conditions and at the perfect time for the market.

“We have been able to identify a unique opportunity to exploit a very rare sulphide deposit. We’re working safely, responsibly and deploying world-class, fit-for-purpose standards with a team that understands the geography and the industry in the long run,” says Castellari. “We expect 18-20% compound annual growth rates in the battery industry and we’re well-positioned because we have the right product, produced in the right way.”

Seizing this opportunity is a huge operation, with a number of challenges.

“We understand open-pit operations very well. We started operations before the plan and we’ve done seven shipments already in 2020, generating income to our shareholders in a healthy way,” Castellari explains. “But we need to fine-tune the system. We’re going through the normal processes to optimise our assets. We understand underground mines, we’ve worked there and known what’s important, but it is the start of this process.”

Atlantic Nickel has already carried out a preliminary economic assessment for the underground expansion and the numbers look extremely favourable. Now the company is starting its next stage, refining their plans, carrying out pre-feasibility studies, and looking at its options.

“This is where we need to be very cautious and keep applying our methodologies,” Castellari says.

A Positive Impact

As well as yielding positive results for the business, Atlantic Nickel constantly bears in mind how its work will influence wider society.

“Nickel has positively impacted the region’s GDP. There are other mining ventures in the state and they understand the importance of the industry very well,” Castellari points out. “We’ve been doing this for many years now and this is something very close to our hearts.”

Atlantic Nickel’s work to aid local communities has its foundation in the long experience Atlantic Nickel’s leadership have in the mining sector.

“We’ve each worked in large, respected mining firms in the past,” Castellari says. “I myself have spent 25 years in large mining companies at various different stages of the mining value chain. We have developed a number of strategies that are really world-class.”

These include rolling out social integration schemes that look at all the facets in a society, environmental, economic, and social, and see where they meet, allowing Atlantic Nickel to take part in that society.

“We’re not a company that comes in, generates value and leaves. We work together to make sure things work well for the community,” insists Castellari. “We’ve invested just over $2.6 million. We’ve been targeting schools in a strategy linked to the wider advisory strategy on education.  We’ve also been involved in rainforest conservation. Almost 80% of our mine’s employees are local and we have a local supply chain programme.”

This is why Atlantic Nickel sources its uniforms from local suppliers, among many initiatives where the company is sourcing locally, encouraging and empowering local businesses.

Moving Forward

For Atlantic Nickel, this has been a year of ramping up. They have overcome the effects of the COVID-19 pandemic and are now looking to optimise their open-pit operation.

“We’re now optimising the rest of the value chain, optimising mining activities and plant productivity. For the next 12 months, that’s where our focus is,” Castellari says. “In parallel with that, we’re investing in understanding the deposits better. We’re going to detail the first level study that we’ve done for the underground mine to ensure we have the right numbers. But from a more strategic point of view Atlantic is ready to become a well sought-after long-term supplier. We have a strong but flexible sales portfolio, four years of committed production, and a good spread in terms of geography and customers.”

As well as moving forward with the mine itself, Atlantic Nickel is also in close contact with the end-users of their output, particularly in the rapidly growing area of battery manufacturing.

“We produce a concentrate that contains nickel, copper and cobalt mainly – all these materials will be used in the oncoming energy transition,” Castellari explains. “We all know the pressure all sectors in the industry are feeling around the energy transformation. We’re the best placed to feed the battery market straight away. Our ore goes through one process as opposed to other nickel products that have to go through a number of different means to eventually become nickel sulphate. We want to be placed as a key supplier in the battery metals market.”

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