Brazil Potash signs 28-year power MoU for Autazes, shifting $33M to operating costs

Brazil Potash has signed a non-binding memorandum of understanding with power firm Gera Center for a 28-year build-own-operate-transfer contract to supply electricity to its Autazes potash project in the Brazilian Amazon, restructuring how the development funds its construction power.

The deal moves about $33M in upfront power-generation capital out of the construction budget and into operating costs spread across the contract term, and delivers roughly $10M in net savings versus the project’s pre-feasibility study, the company said on May 19.

Gera Center, a Manaus-based generator, will deploy a 20-MW modular diesel plant as the primary energy source during construction and as an emergency backup through the mine’s initial 23-year operating life. The system is expected to be installed and delivering power within a 120-day mobilization window after the contract is executed, in line with the project’s shaft-sinking schedule.

Autazes is designed to supply domestic potash to Brazil, one of the world’s largest agricultural exporters, which imports the overwhelming majority of its potash. The build-own-operate-transfer structure lets the developer shift capital exposure to its energy partner during the most cash-intensive phase of construction.

The MoU is non-binding. Brazil Potash (NYSE-American: GRO) said it expects to formalize definitive contracts in the coming months.

Source: Mining Weekly