SÃO PAULO Despite Votorantim Metais Ltda.s plan to close its smelting facilities in Brazil by the end of November, it will comply with obligations under its sales agreement with Mirabela Nickel Ltd. until the end of 2014.
Perth, Australia-based Mirabelas main asset is the Santa Rita Mine in Brazil, one of the worlds largest open-pit operations for nickel sulfide. About 50 percent of the companys production is earmarked to feed São Paulo-based Votorantim Metais Fortaleza de Minas operation.
"Discussions were held with Votorantim and Votorantim has confirmed to (Mirabela) in writing that ... it intends to comply with its obligations under the sales agreement until the end of 2014," the mining company said. "Mirabela notes that Votorantim still intends to close its smelting facilities from November 2013 and may only procure a minimal amount of nickel concentrate from the company in 2014. As such, Mirabela is continuing to explore opportunities for new strategic, financing and offtake alternatives and is in ongoing discussions with its financiers."
Mirabela has two significant debt structures. Its $50-million facility with Brazilian bank Bradesco is secured by the companys contract with Votorantim.
A version of this article was first published by AMM sister publication Metal Bulletin.