On Wednesday, Harvest Minerals (LSE:HMI) said Brazilian Energy company CEMIG had connected its natural fertiliser project to the electricity grid. Approval from CEMIG was received on 18th February following final testing at the project.

The low-cost mine, called Arapua is located in the heart of the Brazilian agriculture belt and has an indicated and inferred resource of 13.07Mt at 3.1pc potassium oxide and 2.49pc phosphorus pentoxide. At forecast levels of output for the company’s KPFértil product, the resource already provides 29 years of production based on drilling a mere 6.7pc of known mineralization to date. 

Last year in preparation for connection to the grid, Harvest installed a 600KW power substation and two transformers. Up until now the plant and other onsite facilities were powered by Diesel generators.  Replacing these generators with power from the national grid will reduce costs at the project. The project is already considered low cost with an 80% margin and a market for the product on its doorstep, reducing transportation costs. As an example, the local coffee industry alone represents a potential market for KPFértil of over 3Mtpa within 300km of the project.

Harvest advises that the current installed capacity for electricity supply exceeds the maximum current demand by 15% and can easily be upgraded to 2,500kW, allowing for future demand.

Harvest's Executive Chairman, Brian McMaster, said, "The plant upgrade and expansion we installed last year is working well and by switching from diesel to grid power we will be able to continue to control costs and maintain our position as one of the lowest cost producers in the world."

Author: Stuart Langelaan

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