London-based Horizonte Minerals has signed an earthworks development contract with Brazilian company Copa for its wholly-owned Araguaia ferronickel project in Brazil.

Copa will be responsible for constructing the process plant and supporting infrastructure components of the bulk earthworks for the plant.

The Brazilian company will level the main plant area, and build a series of plateaus to support key process equipment packages and buildings. Copa will also install initial drainage facilities and the main ramp and crusher platform.

Horizonte will begin construction in the dry season this quarter, chief executive Jeremy Martin said.

"This is another important milestone in our 24-month project construction timeline, with next steps being the award of the civil works, 230 kV powerline and electromechanical construction contracts," Martin said.

The Araguaia feasibility project includes an open pit mine with a central rotary kiln furnace metallurgical processing facility, with peak production at 900,000 tonnes per year to produce 52,000 tonnes of ferronickel. The mine will produce 14,500 tonnes of nickel per year.

Horizonte estimates a 28-year mine life, with a capital cost of US$443 million and an internal rate of return of over 20%.

Horizonte also plans to increase production with a Stage 2 expansion, with production expected to increase to 29,000 tonnes per annum of nickel.