Mining · Brazil
Key Facts
—The hunt. A nickel developer is searching for a cornerstone backer for a large new mine.
—The price. The project in northeast Brazil carries a price tag of one point four billion dollars.
—The metal. It would supply nickel and cobalt, the building blocks of car batteries.
—The advisers. Rothschild is leading the global raise, with Bradesco courting local funds.
—The backers. Government lenders in the US, Canada and Brazil are all in the frame.
—The stakes. It is part of the West’s drive to source battery metals away from China.
Brazilian Nickel is looking for a big anchor investor to get its planned mine off the ground, in a deal that doubles as a test of how the West intends to fund its scramble for battery metals.
What Brazilian Nickel is trying to build
The company wants to develop a large mine in the northeastern state of Piauí. The project is valued at about one point four billion dollars.
It would produce nickel and cobalt, two metals at the heart of the batteries that power electric cars. Output is targeted at around 100,000 tonnes of nickel hydroxide product a year.
First commercial production was expected in the second quarter of 2022. The aim is to supply Western battery makers looking for new sources of supply.
The company is backed by a specialist critical-minerals investment group. It already runs a pilot operation at the site, so the project is not starting from scratch.
The mine uses a low-cost leaching method to draw nickel from the ore. The company says the metal it produces is the high-grade type that battery makers want.
It has already lined up a buyer for part of the future output. Earlier this year it agreed a supply deal aimed at the United States market.
The search for a first big yes
The hard part is the money. The chief financial officer says the project needs one large anchor investor to commit before smaller backers will follow.
To run the process, the firm has hired heavyweight advisers. Rothschild is handling the global search for debt and equity, while a large Brazilian bank courts domestic funds.
That domestic effort alone aims to raise about one hundred million dollars. The bigger prize is a foundation investor with the size to anchor everything else.
Once such a backer is in, the plan is to attract smaller cheques from funds in São Paulo, London and New York. Without that first yes, the rest is hard to assemble.
Governments enter the picture
What makes the deal unusual is who the likely anchors are. The company is courting state-backed lenders rather than relying on private money alone.
Brazil’s national development bank is one obvious candidate. So is a United States government finance arm, which has already signalled tentative interest in the project.
Canada’s export-credit agency and European institutions are also in the mix. A royalty firm could chip in too, in exchange for a slice of future output.
The pattern reflects how strategic these metals have become. Governments now treat battery-metal supply as a security issue, not just a commercial one.
Public lenders are willing to take early risk that private investors often avoid. Their backing acts as a stamp of approval that can draw in commercial money.
Why it matters for investors
The timing is no accident. Much of the world’s nickel comes from Indonesia, and that supply has been squeezed by quota cuts and rising costs.
That has lifted prices and sharpened the search for alternatives. A Brazilian mine offers Western buyers a source outside the dominant Asian supply chain.
For investors, the deal is a window into how these projects now get funded. Public lenders increasingly take the first risk so private capital will follow.
It is also a marker for Brazil’s mining ambitions. The country wants to move up the battery-supply chain, but as currently designed the project does not turn the intermediate into battery-grade sulfates at home, so the material will be sold to refiners and industry abroad—a pattern our reporting has shown Brasília has been trying to prevent.
Background: Brazil’s agribusiness sector.
Frequently Asked Questions
What is Brazilian Nickel raising money for?
It is seeking an anchor investor to help fund a planned nickel and cobalt mine in the Brazilian state of Piauí, valued at about one point four billion dollars. The project targets around twenty-eight thousand tonnes of nickel a year, with first production planned for the start of the next decade.
Who might provide the money?
The company has hired Rothschild for the global raise and a large Brazilian bank to court local funds for about one hundred million dollars. It is also courting state-backed lenders in Brazil, the United States, Canada and Europe, plus a royalty firm, with an anchor investor seen as the key to unlocking the rest.
Why does this mine matter beyond Brazil?
Nickel and cobalt are essential for electric-car batteries, and most nickel today comes from Indonesia, where supply has been squeezed. A Brazilian source gives Western buyers an alternative to the dominant Asian supply chain, which is why government lenders are taking such an active interest.
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