Centaurus Metals has locked in a binding five-year offtake agreement with global giant Glencore for a third of its Jaguar Nickel Project’s output, marking a pivotal step towards commercial production in Brazil.
- Binding five-year offtake agreement with Glencore for 20,000 tonnes per annum of nickel concentrate
- Contract covers approximately 30% of Jaguar’s forecast nickel concentrate production
- Agreement valued at over US$450 million at current nickel prices
- Key milestones include final investment decision by September 2026 and production start by January 2029
- Pricing linked to London Metal Exchange nickel prices with variable payability
A Major Commercial Milestone
Centaurus Metals has taken a significant stride forward in the development of its Jaguar Nickel Project in Brazil by signing a binding offtake agreement with Glencore AG, one of the world’s largest natural resource companies. This deal secures the supply of 20,000 dry metric tonnes per annum of high-grade nickel concentrate to Glencore, representing roughly one-third of Jaguar’s anticipated annual production capacity.
Strategic Partnership with a Global Leader
Glencore’s involvement is a strong endorsement of the Jaguar project’s quality and potential. The nickel concentrate will be shipped to Canada for processing at Glencore’s Sudbury smelting operations, highlighting the global nature of the supply chain. The five-year contract, commencing in early 2029, is valued at more than US$450 million based on current nickel prices, underscoring the commercial significance of this agreement for Centaurus.
Milestones and Market-Linked Pricing
The agreement is contingent on several critical milestones, including a final investment decision by Centaurus’ board by September 2026, at least 50% completion of the tailings dam construction by the end of 2027, and first concentrate production by January 2029. Pricing will be tied to the London Metal Exchange’s nickel cash settlement price, with a variable payability mechanism that adjusts with market fluctuations. This structure provides both parties with a degree of flexibility and market alignment.
Implications for Project Funding and Development
Securing a long-term offtake partner like Glencore is a critical step in de-risking the Jaguar project’s financing. Centaurus retains flexibility over the remaining two-thirds of production, which can be leveraged to support funding through debt or equity. Managing Director Darren Gordon emphasised that this agreement not only validates the project’s quality but also strengthens Centaurus’ position as it advances towards a final investment decision and eventual production.
Looking Ahead
As the Jaguar Nickel Project moves closer to production, this offtake agreement with Glencore sets a solid foundation for commercial success. The next few years will be critical as Centaurus works to meet the agreed milestones and navigates market conditions. The partnership signals confidence in the growing demand for nickel, particularly for low-carbon applications, positioning Jaguar as a future key supplier in the global nickel market.
Bottom Line?
Glencore’s backing brings credibility and momentum, but milestone execution and market dynamics will shape Jaguar’s path forward.
Questions in the middle?
- Will Centaurus meet the final investment decision deadline by September 2026?
- How will fluctuating nickel prices impact the economics of the offtake agreement?
- What strategies will Centaurus employ for the remaining two-thirds of Jaguar’s production?