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May 2014

ENVIRONMENTAL IMPACT

STUDY - EIS

ARAGUAIA PROJECT

Volume I:

Introduction, Project Characterization,

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1.

GENERAL INFORMATION

Information about the Project and the Project’s company is shown at the Chart 1-1.

Chart 1-1 – General information about the Project

Project Name Project Araguaia

Company Name responsible Araguaia Níquel Mineração Ltda.

Mailing address

Avenida Afonso Pena, n. 3.111, room 303, Funcionários, CEP 30.130-909, in the city of Belo Horizonte – MG

Phone and Webpage Phone (5531) 2514-0847/48 | Web:

www.horizonteminerals.com CNPJ (National Registry of Legal Entities) 97.515.035/0001-03

State Registration / Registration with the

Commercial Registry 15.390.005-9/ 15900355754 Project's responsible person - CPF

(Certificate for Brazilian Individuals)

Antônio José de Almeida – CPF: 507.364.697-53

Contact of the person responsible for the Project

Avenida Afonso Pena, n. 3.111, room 303, Funcionários, Zip code 30.130-909, in the city of Belo Horizonte – MG. Phone/Fax. (5531) 2514-0847/48

E-mail - [email protected]

Information about the company responsible for the Environmental Impact Study Chart 1-2

Chart 1-2 – General information about the Project

Company responsible for the EIS Walm Engenharia e Tecnologia Ambiental Ltda.

Mailing address

Rua Apinagés, n. 1100, sixth floor, Perdizes, Zip code 05017-000, in the city of São Paulo – SP.

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Phone and Webpage Phone (5511) 3873-7006 | Web:

www.walmambiental.com.br CNPJ (National Registry of Legal Entities) 67.632.216/0001-40

Municipal Registration 2079916-0

Person responsible for the EIS - CPF Jacinto Costanzo Junior– CPF: 776.909.588-34

Contact of the person responsible for the EIS

Rua Apinagés, n. 1100, >sixth floor, Perdizes, Zip code 05017-000, in the city of São Paulo – SP.

Phone (5511) 3873-7006 Fax (5511) 3873-7020

E-mail – [email protected]

The professionals responsible for the elaboration of EIS/RIMA and all the technicians and consultants that involved on in are identified in the Chart 1-3.

The copies of the technical liability notes (ART) made by the professionals in the technical team are presented in the Annex I.

Chart 1-3 – Multi-disciplinary technical team responsible for the EIA

NAME PROFISSIONAL QUALIFICATION

PROFESSIONAL RECORD

AREA - general performance (EIA - Rima)

Jacinto Costanzo Junior Geologist

CREA (Regional Council of Engineering and Agronomy Registration): 65844/D

§ Technical manager and

§ General Coordinator of EIA

Walter Sérgio de Faria Geologist

CREA (Regional Council of Engineering and Agronomy Registration): 119498/D § Legal aspects § Impact evaluation § Environmental programmes

Bruno Pontes Costanzo Production

Engineer CREA: 5062440285

§ Project manager

§ Project characterisation

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NAME PROFISSIONAL QUALIFICATION

PROFESSIONAL RECORD

AREA - general performance (EIA - Rima)

Caetano Pontes

Costanzo Geologist CREA: 5062983540

§ Physical Environment - PE: Impact and programme evaluation

Karina Barbosa de Aguiar Geographer CREA: 5063370419

§ Physical Environment - PE: Climate and meteorological aspects, air quality, geological aspects, geomorphological aspects, pedological aspects, surface water resources, surface water quality, groundwater resources

Maíra Daronco Teruya Environmental

Engineer CREA: 5063133800

§ Physical Environment - PE: Climate and meteorological aspects, air quality, geological aspects, geomorphological aspects, pedological aspects, surface water resources, surface water quality, groundwater resources

Laura Rocha de C. Lopes Architect CREA: 5061906349

§ Socio-economic / environment coordination

Rita Monteiro Falcão Geographer CREA: 5063856693

§ Socio-economic environment: Economic profile (ADI and ADA); Quality of life indicators (ADI and ADA); urban structure; urban infrastructure and social facilities; demographic dynamics

Sueli Harumi Kakinami Biologist

CRBio (Regional Council of Biology): 14.450/01/D

§ Biotic environment coordination

Ellen Cristina Serrão

Acioli Biologist CRBio: 90583/06-D

§ Biotic environment: diagnosis, integrated analysis, evaluation of impact and programmes

Raquel Colombo Oliveira Biologist CRBio: 79597/01-D

§ Biotic environment: diagnosis, integrated analysis, evaluation of impact and programmes

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NAME PROFISSIONAL QUALIFICATION

PROFESSIONAL RECORD

AREA - general performance (EIA - Rima)

Eder Roberto Silvestre Geographer CREA: 5063505098 § Cartography / geo-processing

Julierme Z. Lima Barboza Geographer CREA: 5063220828 § Cartography / geo-processing coordination

It is highlighted that the technical team above mentioned can be contacted through the following information:

ü Address: Rua Apinagés, n. 1100, sixth floor, Perdizes, Zip code 05017-000, in the city of São Paulo - SP.

ü Phone (5511) 3873-7006 ü Fax: (5511) 3873-7020

ü E-mail: [email protected]

Annex CE-01 shows the technical liability notes (ART) by the team presented in Chart 1-3.

2.

PROJECT DESCRIPTION

The items subsequently presented will develop the Project description, aiming to show its activities, processes and tasks in the installation, operation, and closure phases.

2.2 General Information

The mining Project “Araguaia" involves exploring lateritic nickel deposits in the municipality of Conceição do Araguaia in Pará State, Brazil. Considering the physical characteristics of the deposits and their proximity to the surface, it is anticipated that the ore exploitation will happen through truck and shovel open pit mining.

The exploited ore will be reduced to ferro-nickel alloy through a pyro-metallurgical process known as Rotary Kiln Electric Furnace– RKEF.

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The processing technique to be used in the metallurgical processes at Araguaia is based on proven technology deployed in the ferro-nickel metallurgical industry. The process uses a rotatory kiln for calcination and partial reduction. The RKEF has been used in the industry for over 60 years as the main processing technology. Currently, 18 RKEFs are in operation in many countries around the world, including China. The most recent plants to use RKEF are Barro Alto (Anglo American) and Onça Puma (Vale) both in Brazil, as well as a POSCO plant in South Korea.

The Resources estimates for Araguaia Project comprise 07 lateritic deposits. Measured Mineral Reserve estimated at a cut-off grade of 0.95% Ni in a dry basis is 72Mt at a grade of 1.33% Ni and 25Mt of Indicated Mineral Reserve at a grade of 1.21% Ni will be mined along 25 years with a feeding rate of 900kt.

2.2.1 Project Location

Araguaia’s central point is located at coordinates 07° 37’S and 49° 24’E (675000E/9120000N), observed in the Project Location Map (CE-ANP-01). The Project is 40 km to the north of the municipality Conceição do Araguaia, at the southeast of Pará State in the vicinity of the border of Tocantins State (25 km west of the Araguaia River). The PA 449 road, which connects the municipalities Conceição do Araguaia and Floresta do Araguaia, crosses the Project area.

To access the Project by air, the most used route is to land at Palmas airport and travel from Palmas to Conceição do Araguaia by road. Conceição do Araguaia has an airport for local flights, but currently no airline companies operate there.

2.2.1.1

Basic information on geology, deposit type and lateritic profile

Araguaia is situated within the Araguaia Belt. It is an extensive zone aligned north-south along the Amazonia Craton to the west, and the São Francisco Craton to the east, between the towns Gurupi/TO, through Conceição do Araguaia/PA, and Marabá/PA. The belt is about 1.000 km long and 150 km wide and its evolution is believed to be contemporary to the Brazilian thermal events in the Neo-proterozoic.

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Continental Phanerozoic sediments of Parnaíba Palaeozoic Basin are overlapped to the east portion of the belt. The medium portion to the west of the belt is under the east portion of the Amazonia Craton. The northern part of the belt disappears under the sediments of the Amazonia Basin, while sediments of the southern part of the Parnaíba Basin overlap the belt.

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CONCLUSIONS AND RECOMMENDATIONS

The Environmental Impact Study (EIS) considers that the Araguaia Project will benefit from the current global trend of robust nickel demand. The Project is situated in an area with an existing mining industry, where there is suitable basic infrastructure, existing logistics and transport infrastructure, a readily available supply of labour and areas already modified by human actions (mostly farmland).

It is important to highlight that in meeting its objectives, Araguaia will add impetus to the socio-economic development of the area, creating new jobs, integrating local services into its operations, and generating revenues for the Municipality of Conceição do Araguaia by paying taxes and duties.

The Project's key objectives are:

• To produce ferronickel alloy in an area with an established mining industry, where there is basic infrastructure, logistics infrastructure and a workforce available

• To anticipate future demand for nickel to ensure its relevance as a supplier to global commodity markets

• To develop mining and metallurgy activities in the southeast of Para State, while maintaining the highest standards of financial, environmental, and social management

The environmental programmes and sub-programmes will be crucial to avoid and minimise the potentially negative impacts of Araguaia, as well as to optimise the positive impacts. The proper design and active management of those programmes will enable an effective balancing of the financial, environmental, and social areas linked to the proposed project.

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References

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