European investment fund Appian Capital Advisory restructured its operations in Brazil to support new growth opportunities and is seeing the need to invest US$600m in its Santa Rita nickel operation in Bahia state. As part of internal changes, Ignacio Bustamante, head of the Base Metals division, was tasked with managing Atlantic Nickel, owner of the Santa Rita project. Bustamante will oversee the operation’s transition from open-pit to underground mining. In this interview, he talks about the operation, investment needs and the nickel market.
BNamericas: How are Atlantic Nickel’s operations advancing?
Bustamante: Atlantic Nickel’s Santa Rita is an operating open-pit nickel sulfide mine in the northeastern Brazilian state of Bahia. Restarted by Appian in 2019, the asset benefits from established infrastructure, reliable access to water and electricity, an experienced local team, and strong support from both the community and local government. It is a safe, sustainable, low-cost operation with the potential to deliver nickel supply for multiple decades. Further value will be unlocked through the development of a large, higher-grade underground resource, which extends the current open-pit life of mine to over 20 years.
BNamericas: How much do you plan to invest?
Bustamante: Significant investments have supported the revised operating strategy, leading to the successful restart and turnaround of Santa Rita. Appian is currently progressing the mine’s underground development, including having delivered its pre-feasibility study in 2024. The PFS has further reinforced Appian’s confidence in the underground extension, which projects a mine life of more than 20 years, a higher production rate of approximately 30,000t/y nickel equivalent, and a low capital intensity and cost structure. The definitive feasibility study on the underground extension is targeted to be completed in 2025. With a world-class processing plant and infrastructure in place, built with over US$1bn of historical investment, capital requirements for surface infrastructure are minimal. The underground development and supporting infrastructure require an investment of around US$600m, to be completed between 2025 and 2030.
BNamericas: What are the company’s needs for contracting machinery, equipment and services?
Bustamante: Our open pit is a mature operation and therefore has constant requirements for services. As Atlantic Nickel transitions to underground mining, the company is prioritizing the addition of in-house underground expertise, before expanding hiring services for underground operations. Given the current development timeline, we will also move forward with early equipment orders in anticipation of starting underground development in 2026.
BNamericas: When could this asset be divested?
Bustamante: Appian continues to market the asset and will consider any offers that align with the internal view on the value of Atlantic Nickel. However, the current market environment is not favorable for the sale of the asset. We believe Atlantic Nickel remains one of the best nickel sulfide projects in the world and are convinced about the underground expansion and the long-term market prospects. Hence, we remain committed to acting counter-cyclically and advancing the project to underground production. Concurrently, Appian continues to pursue Sibanye-Stillwater in the English High Court to recover damages following their termination of the legally binding transaction of Atlantic Nickel and Mineração Vale Verde. In October 2024, the High Court of England and Wales vindicated Appian’s claim, ruling that Sibanye-Stillwater is liable for damages caused by unlawfully terminating their US$1.2bn transaction with Appian.
BNamericas: What is your estimate for nickel price performance this year?
Bustamante: Despite current market weakness, nickel demand growth remains robust and will eventually absorb the current surpluses, returning to deficits in the long term. In the short term, we expect the market to remain at low levels but supported by the marginal cost of conversion of NPI [nickel pig iron] into class 1 units. However, instead of relying on price, we focus on operating a lean, efficient business capable of generating strong cash flows throughout the commodity cycle. Our open-pit operation has consistently maintained a low-cost position since its restart, and the underground development is expected to reduce costs even further. We delivered a strong operational and financial performance in 2024, even in a low-price environment.
BNamericas: Do you think Brazil has more nickel potential and, if so, which states would be best positioned?
Bustamante: Brazil has great potential for further nickel development, particularly in the Itabuna-Salvador-Curaçá belt, where Santa Rita is located. Several major mining companies are active in the region, and exploration results continue to demonstrate promising growth potential. Atlantic Nickel is a prime example of this opportunity, as one of the few long-life nickel sulfide operations globally. Nickel sulfide, while often overlooked, remains a critical feedstock for global smelting capacity and enjoys several advantages over laterites, including a more established processing pathway for producing class 1 refined nickel and significantly lower carbon intensity.
BNamericas: What is your perception of the mining business environment in Brazil? What are the main risks and the main opportunities?
Bustamante: When carrying out our investment due diligence, we look for favorable legal and regulatory frameworks, coupled with political stability in the jurisdiction. As a very mature mining jurisdiction, Brazil ranks very well across all these dimensions, with respected institutions, a great talent pool and a thriving mining sector ecosystem that has attracted investors globally. The Brazilian regulatory framework is also best in class. However, like other established mining jurisdictions, the main risks for investors are the current permitting timelines, which can extend project cycles and hinder their commercial potential. With respect to opportunities, Brazil has tremendous geological potential with only approximately 30% of Brazil’s territory known in detail. Brazil is a crucial market for Appian, where we are actively involved with several exciting projects.
Printed with permission from BNamericas. This article was first published on 26 March 2025.
