Mirabela inks deal to resume nickel operations at Brazil's Santa Rita
Perth-based Mirabela Nickel closed a deal with the government of Brazil's Bahia state on Monday to release 40mn reais (about US$11mn) in state VAT ICMS tax credits from the state's coffers.
ICMS is a value-added tax on the transfer of goods and services between states in Brazil. Payment of the ICMS tax generates tax credits that may be used to offset ICMS tax obligations generated on domestic sales.
With the deal, Mirabela will be able to resume operations at its Santa Rita open pit mine in the state, local news service Bahia Notícias reported.
The miner decided to place its Santa Rita open pit mine in Brazil on care and maintenance on February 19, mostly as a result of further reductions in nickel prices, difficulties in obtaining additional funding and unsustainable levels of cash outflows from its Brazilian subsidiary Mirabela Mineração do Brasil (MMB).
MMB implemented a lower production model (LPM) in October 2015. At the time, Mirabela announced a 33% cut in nickel production from Santa Rita to 12,000t/y from 18,000t/y.
Mirabela is primarily involved in the development and exploration of mineral properties in Brazil. Santa Rita was its only operating mine.
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