ASX-listed Centaurus Metals has hit an unexpected hurdle in the development of its flagship Jaguar nickel sulphide project in Brazil, after being told that transmission upgrades are required to meet the mine’s long-term energy needs.

The company said on Thursday that local power distributor Equatorial Pará Distribuidora de Energia had advised that transmission capacity at the Ministry of Mines and Energy- (MME-) approved connection point was insufficient to supply the 47 MW already cleared by regulators.

Centaurus entered a trading halt earlier this week while seeking clarity on the issue.

At a meeting in Belém on Tuesday, Equatorial informed the company that the MME’s planning arm, Empresa de Pesquisa Energética, is carrying out a detailed study to expand transmission infrastructure in the Carajás province. The study, which covers Jaguar and several other large-scale projects in the region, is due for completion in December.

Centaurus explained that projects driving demand growth include Ero’s Tucumã copper project, Vale’s planned second kiln at Onça Puma and Pantera Copper’s development.

“Following the advice from Equatorial earlier this week that upgraded power transmission was required to meet Jaguar’s long-term power requirements, our team in Brazil moved quickly to clarify the situation and I am pleased to say that we had a very positive and constructive meeting with Equatorial on Tuesday, Brazil time,” said MD Darren Gordon.

“It is very pleasing to see that the Brazilian government is directly considering the Jaguar project, and other significant mining projects owned by major mining houses in the region, as part of the future expansion of the transmission capacity. Based on current estimates, this capacity should still be delivered in line with Jaguar’s current project development timeline.”

Centaurus said it would continue to work with energy agencies to keep the upgrade on schedule while also exploring short-term supply alternatives should the process be delayed.

“Jaguar is a world-class nickel asset, with 1.2-million tonnes of contained nickel, underpinned by outstanding economics, and is poised to become a major new long-life mining asset that will create significant value for all stakeholders, particularly the local communities and the region where it is located,” Gordon added.