Paulo Toledo CEO LGA MINERAÇÃO E SIDERURGIA
Can you introduce us to LGA Mineração e Siderurgia?
LGA Mineração e Siderurgia is part of a holding portfolio called PST Holding. Our base is in Belo Horizonte and Congonhas, and our plant is in Congonhas. We have two iron ore operations in Minas Gerais, with a capacity of 2 million t/y and another with 1 million t/y. Through PST Holding, we are developing and operating a magnesite mine in Bahia state, where we supply carbonite of magnesite to the agriculture and fertilizer sectors. We are also developing two mines in Pará state, with startup expected by the end of 2024. Our core business is mining, but we also invest in companies within the mining ecosystem, establishing pioneering commercial partnerships. Can you elaborate on your plant's location and its logistics?
We have established a strategic partnership with Gerdau and Vale, utilizing run-of-mine material from their mines. Our facility is located within 2 km of the Gerdau steel plant, the most significant facility regionally. We produce iron ore concentrate with an iron content of 64% and another with an iron content of 58%. Currently, LGA is investing in milling operations to transition our production into pellet feed, which is projected to begin in March 2025, allowing us to enhance the quality of our output. Can you discuss the process and challenges of increasing production capacity?
We are currently in the implementation phase of our project to increase capacity to 4.5 million t/y, and we have successfully obtained the necessary license for this expansion. However, the licensing process in Brazil poses significant challenges due to its bureaucratic nature, which can deter international investors. For instance, one of our operations took four years to secure a license for a relatively straightforward dry operation. Compared to countries like Australia, which produced at similar levels to Brazil a decade ago, they now produce three times more due to their more efficient licensing processes.
Daniel Tellechea Interim CEO LARGO
Can you provide an overview of the current status of Largo and tell us about vanadium?
Vanadium is a critical metal primarily known for its use in the steel industry with growing use in clean energy storage. Globally, vanadium production is dominated by China, Russia, South Afric, and Brazil.
Largo’s vanadium operation is in Maracás in the state of Bahia. Largo currently operates with two main strategies: a short-term strategy focusing on navigating low commodity prices through efficiency and restructuring, and a long-term strategy aimed at increasing vanadium and ilmenite production. Longer-term, we expect to increase our production of ilmenite at the Maracás Menchen mine, with the goal diversifying revenue. We expect to maintain vanadium (V2O5) production between 12,000 to 14,000 t/y. Our long-term goal is to upgrade our mineral resources to mineral reserves, and increase our mineral resources to support sustainable, cost-competitive vanadium production for the future. Can you expand on future battery technology demand for vanadium and Largo’s ventures in this area?
The Western world focuses on lithium news, but in China, there has been significant growth in vanadium redox batteries (VRFBs) over the past three years. According to Guidehouse Insights, vanadium redox flow battery installations are expected to experience a 22x increase by 2031. We established our own VRFB division in late 2020, investing heavily in understanding the business and integrating our own technology into the grid. We deployed Europe’s largest VRFB with an Enel Green Power in Spain. More recently, we announced our plans to forming a 50-50 joint venture with a major battery developer, Stryten Energy LLC in the United States to further our energy storage initiatives. It is important to note that VRFBs are safe from explosions and fires and can store grid energy efficiently. Vanadium can be recycled and reused for 15-20 years, making it a compelling choice for large scale and long duration energy storage applications.