Transition Minerals
Brazil positions itself to become a critical minerals provider
Brazil’s mining future lies in precious critical minerals crucial for electrified supply chains. Geopolitical fissures between the West and China are creating opportunities for Brazil to provide alternative, diversified supply chains for these critical materials. In 2024, key developments in the Brazilian lithium scene included Pilbara Minerals’ proposed acquisition of Latin Resources and its Salinas project for over US$360 million, as well as Sigma Lithium receiving a R$487 million commitment from BNDES for a 16-year loan to double production. These developments signal international and domestic appetite for Brazilian lithium.
Lithium Ionic, a TSX-V listed lithium exploration and development company, is one of Brazil’s principal lithium players and is developing its flagship Bandeira project, situated between CBL and Sigma Lithium’s properties. A feasibility study conducted for the Bandeira projected an NPV of US$1.3 billion post-tax, based on a 14-year project life at an annual production of 178,000 t/y. Paulo Misk, COO of Lithium Ionic, said: “Our region boasts high-grade spodumene and minimal amounts of other lithium minerals, ensuring excellent recovery rates of 68.9%. The large crystals mean we do not need extensive grinding, allowing for a simple, low-cost process using ore sorting and Dense Media Separation (DMS).”
The solid economic fundamentals of Brazil underpin lithium projects in the country as a mining jurisdiction. Misk added: “Besides great geology, Brazil offers a low capital intensity; US$785/t of LCE compared to global averages of over US$1,000/t for project development.”
Sigma Lithium, which operates the world’s fourth-largest lithium industrial complex in Brazil’s Lithium Valley, is another industry reference that has transformed the region, driving social and economic growth and development. The company became the first Brazilian exporter of ‘green lithium’ at the end of 2023, exporting its ‘Quintuple Zero Green Lithium’, which the company claims uses zero carbon, zero coal power, zero tailings dams, zero utilization of potable water and zero use of hazardous chemicals for production. Ana Cabral, co-chairperson and CEO of Sigma Lithium, said: “We established a state-of-the-art lithium industrial plant in one of Brazil's poorest regions, transforming the area's economic landscape, which now grows at a rate of 20% per year.”
“We produce nearly 45,000 t/y of spodumene concentrate and around 2,000 t/y of lithium chemicals, approaching total capacity. Looking ahead, we are conducting a feasibility study to double our mining capacity and triple our lithium chemicals production.”
Vinicius Alvarenga, CEO, Companhia Brasileira de Lítio (CBL)
The success of Sigma Lithium’s operations stands in contrast to the development of the lithium industry globally and the scale of the task to provide lithium supplies necessary for electrification of supply chains. Projections of future lithium demand far outstrip current and planned production figures. Cabral added: "Since 2018, despite billions of dollars having been invested in lithium globally, Sigma Lithium is the only company that has achieved commercial production at this scale and low cost, ensuring our adaptation and competitiveness amidst volatile market fluctuations.”
Sigma Lithium’s success and industrialization efforts have faced a common challenge: the availability of labor. Cabral explained how the company overcame this issue: “We initiated a 'homecoming program' to recruit talent from the region, including people who had emigrated, successfully employing 85% of our 1,200 employees from the local area.”
Marc Fogassa is CEO and chairman of Atlas Lithium, a NASDAQ listed lithium developer, whose Minas Gerais lithium project is set to enter production in Q4 of 2024. In addition, the company is pursuing REE and graphite projects in the country. Cognizant of the difficulties facing the lithium market due to high volatility and low prices, Atlas Lithium’s strategy has been to excel in cost discipline and secure offtake agreements early. Fogassa said: “Atlas Lithium has established significant partnerships with major companies. Chengxin Lithium Group, associated with BYD and Yahua Industrial Group, a Tesla supplier, invested US$10 million in December 2023, and committed another US$40 million upon certain customary milestones. In March 2024, Mitsui, a major Japanese conglomerate, invested US$30 million.”
For Fogassa, green lithium is what will separate Brazilian lithium producers from the pack. Fogassa commented: “The plant is designed to use minimal water, setting a new standard for water efficiency in lithium processing. We are also in the process of working with the state electric utility to obtain a dedicated power line which will transmit renewable hydroelectric power as we aim to run a carbon-neutral operation in the future.”
Vinicius Alvarenga, CEO of Companhia Brasileira de Lìtio (CBL), which produces nearly 45,000 t/y of spodumene concentrate and around 2,000 t/y of lithium chemicals, discussed some of the industry’s principal challenges. Low prices have impacted CBL, which is exploring the potential of expanding its operations. This year, it became the first lithium company worldwide to receive the BV 360 certification from Bureau Veritas, a comprehensive ESG award.
Alvarenga was critical of the current stance of the Brazilian government regarding EV adoption: “While commendable for its environmental benefits, Brazil's unique focus on ethanol as a sustainable fuel has inadvertently isolated the country from global shifts towards electric mobility, lacking comparable incentives or infrastructure support for EVs.”
“Our processing plant will utilize Dense Media Separation (DMS) for extraction, a technology traditionally used in the preparation of spodumene concentrate, which will be our commercial product. The plant is designed to use minimal water, setting a new standard for water efficiency in lithium processing.”
Marc Fogassa, CEO and Chairman, Atlas Lithium
Nickel: The green alternative
In addition to lithium and REE, Brazil’s nickel scene is also growing, with Brazil’s geography, geopolitics, and green energy credentials providing it the ability to carve out a niche in global nickel markets, presently dominated by Indonesian producers. Centaurus Metals, an ASX-listed Australian developer, has recently delivered a positive feasibility study for its flagship Jaguar nickel project located in Pará state. The results include an estimated mine life of 18 years at an average annual production of 18,700 t and forecasted pre-production capital expenditure of US$371 million, and the company is actively value engineering to improve these results. Bruno Scarpelli, Centaurus Metals’ country manager, said: “Brazil offers several important cost advantages as a mining jurisdiction – it has ultra-low-cost energy, a low corporate tax rate and an attractive Government royalty regime.”
Indonesian and Chinese dominance of critical mineral production, including nickel, is well established, but Brazil-focused miners want to differentiate their products, stressing Brazil’s green energy matrix and stringent environmental regulatory framework, in contrast to their Asian competitors. Scarpelli said: “While Indonesia's laterite nickel deposits are substantial, they are energy intensive and primarily coal-powered, resulting in high carbon footprints… Brazilian power is almost entirely generated from renewables, so in addition to being low cost, Jaguar’s power supply will also have extremely low carbon emissions.”
Another prominent developer of nickel in the country is Brazilian Nickel, focused on its flagship Piauí nickel project in northeast Brazil, which is at an advanced stage. According to Mark Travers, CEO of Brazilian Nickel, the Piauí nickel project is intended to be the first to apply the heap leaching process on a commercial scale for nickel. Discussing the Piauí project's ESG credentials, Travers mentioned: “Our clean energy profile features a low CO2 intensity in our nickel production, especially in our mixed hydroxide precipitate (MHP), one of the lowest CO2- emitting products in the market.”
Underlining the vital role of private equity investments in the sector and the importance that Western governments are assigning critical mineral projects, Brazilian Nickel’s financiers include TechMet, a company focused on financing projects that contribute to the energy transition and the U.S. Development Finance Corporation. Travers commented: “While traditional nickel sources have been heavily concentrated in Indonesia and China, we see an opportunity to fill that gap by providing a sustainable alternative from Brazil.”
In Bahia state, a Brazilian company, Bahia Nickel, is developing its Mangueiros project, a magmatic nickel, copper and cobalt sulfide deposit, offering a uniquely boat-shaped geometry with mineralization at shallow depths. The project, which is still in the early stages of development, was acquired from the Companhia Baiana de Pesquisa Mineral (CBPM), Bahia state’s own mining company. Discussing the potential timeline of the project and how global trends in the nickel market could affect it, Elton Pereira, CEO of Bahia Nickel, said: “The nickel market is challenging right now, with challenging prices due to global supply fluctuations from Indonesia, but our project’s timeline to start production aligns well with predictions for market recovery, which experts suggest will happen around 2028 to 2030.”
Article header image courtesy of Sigma Lithium