Horizonte Minerals (TSX: HZM) has announced that its Araguaia nickel mine in northern Brazil is on schedule to commence production in Q1 2024. The mining company started constructing the operation in May of the previous year and, as of March 30, reported that Araguaia Line 1 is 50% complete.

Chief Executive of Horizonte, Jeremy Martin, commented in a statement: “With the award of the Line 2 Feasibility Study contracts, we are one step closer to delivering on this low capex project that will double nickel production.”

The main Pequizeiro pit has already seen the initiation of pre-stripping activities, with ore stockpiling expected to begin in Q3 of this year. Horizonte has allocated about 90% of the capital expenditure, approximately $485 million, for the project.

Purchased from Glencore in 2015, the Araguaia mine is projected to initially produce 14,500 tonnes of nickel per annum, primarily catering to the stainless steel market. The production rate is anticipated to increase to 29,000 tonnes annually once the second production line becomes operational in 2027.

The Araguaia mine is crucial for diversifying Brazil’s mining sector, which is predominantly focused on iron ore. With estimated reserves of 16 million tonnes of nickel, Brazil ranks as the world’s eighth-largest producer. According to GlobalData, the country’s output increased by 8% to 108,000 tonnes in 2022 compared to the previous year.

Iron, the world’s most widely used metal, plays a crucial role in a variety of industries, particularly in manufacturing and construction. It is the primary raw material for steel production, which is indispensable for infrastructure development, transportation, and the production of various consumer goods. The iron market’s health is closely tied to the global economy and has a direct impact on numerous sectors.

China, the world’s largest consumer of iron ore, significantly influences the iron market. With its rapid economic growth and urbanization, the country has experienced a surge in demand for steel to support its expanding infrastructure projects, such as high-speed rail networks, bridges, and skyscrapers. This has led to a substantial increase in China’s consumption of iron ore and consequently, its impact on global iron prices and demand from miners.