Brazil Potash Corp. has signed a non-binding Memorandum of Understanding with Gera Center Ltda. covering a proposed 28-year Build, Own, Operate, Transfer contract for power infrastructure at the Autazes Project in Brazil. The arrangement remains subject to definitive agreements, which may not be agreed or signed, and the proposed transaction may not be completed.
Under the proposed structure, Gera Center would provide power for construction before converting the facility into an emergency backup system when mining operations begin. Brazil Potash says the arrangement would move approximately US$33 million in power-generation capital from the project’s upfront construction budget to operating costs spread over 28 years, while producing estimated US$10 million in net savings over the contract life compared with the Pre-Feasibility Study.
#Power supply for construction and operations
Gera Center would supply, install, operate and maintain 63 containerized modular diesel generator sets with a peak capacity of 20 megawatts. The system would start at 10MW and increase to 20MW during the first year.
Because conventional grid electricity is not available at the site during construction, the plant would provide the main power source for civil works and shaft sinking. Initial power delivery would be available within 120 days of contract signing, while the system is expected to be fully installed and supplying primary construction power within the 120-day mobilisation window following contract execution.
When mine operations commence, the same system would move into a 23-year emergency backup role. It is intended to support continuity of production if the primary 500 kV transmission line connecting the project to the Brazilian national grid is disrupted. During this backup phase, Gera Center would be contractually required to maintain at least 98% operational availability and respond to a critical incident within a maximum of two hours.
#Ownership and supplier selection
Ownership of the power infrastructure would transfer to Brazil Potash at the end of the 28-year contract term. The company said Gera Center ranked first on technical and commercial criteria across the proposed contract period.
The selection process involved 12 firms with experience in the Amazon Region. Eight submitted formal proposals and four proceeded to the final evaluation stage. Brazil Potash said the proposals were further assessed through in-person and virtual discussions involving technical teams.
#Conditions and project risks
The parties plan to work toward definitive documentation in the coming months. Brazil Potash said there is no assurance that the documents will be agreed or signed, that the proposed transactions will be completed, or that the final terms and conditions will match those outlined in the MOU.
The company also identified the need to obtain permits and regulatory approvals for the Autazes Project. Other risks cited include Amazon-region logistics, weather and access constraints, fluctuations in diesel fuel costs, the ability to secure project financing on acceptable terms or at all, and risks associated with the mining and mineral exploration and development industry.
The proposed arrangement also carries further terms and conditions not set out in full here.
#Key Takeaways
- Brazil Potash has signed a non-binding MOU with Gera Center for a proposed 28-year BOOT power contract.
- The proposed 20MW modular diesel plant would provide construction power before becoming a 23-year emergency backup system.
- The arrangement would include approximately US$33 million in power-generation capital shifted to operating costs and estimated US$10 million in net savings versus the Pre-Feasibility Study.
- Power delivery would be available within 120 days of contract signing, subject to contract execution and definitive agreements.
- The transaction remains conditional, with permits, financing, diesel costs and operational conditions among the identified risks.
Original source: Read original article