Electric vehicle sales driving mining firms' strategies in Brazil

The rapid expansion of electric vehicle sales globally is driving the strategies mining firms, from juniors to giants.

The trend has generated growth of lithium, copper and nickel projects, among others.

“The electric vehicle industry is expanding, but is also in constant transformation in the search for the best technology for battery production. So, we will see the transformation of transformation. That said, I consider lithium to be the most difficult input to replace for battery production compared to other materials," José Carlos Martins, CEO of mining company Cedro Mineração and founder of metals consultancy Neelix, told BNamericas.

This week, Brazilian mining giant Vale announced a US$6.5bn capex plan for 2024, with US$2.5-3bn allocated to energy transition metals such as copper and nickel.

Vale, one of the world’s largest iron ore producers, estimated that electric vehicle sales will expand 24% annually through 2030 reaching 46mn units globally that year. This year, sales are projected to reach 14mn units. 

South America's largest city São Paulo, for instance, said it will invest US$1bn in coming years to replace its diesel buses with electric vehicles.

Faced with the expansion, lithium-focused companies are moving forward with their projects in Brazil.

ATLAS LITHIUM

US-based exploration company Atlas Lithium arranged financing of US$50mn to advance the first phase of its Neves project in Brazil’s Minas Gerais state. 

The company estimates capex for the first phase of the project at US$49.5mn to produce spodumene concentrate.

The funds were secured from lithium chemical companies Chengxin Lithium Group and Yahua Industrial Group, which supply lithium hydroxide to Tesla, BYD and LG, among others, Atlas said in a statement.

Goldman Sachs was the financial advisor to Atlas Lithium in the transactions.

"The ability to become a lithium producer with minimal dilution to shareholders is a significant accomplishment. Securing strong customers with premier end-users is also pivotal to Atlas Lithium’s ambition to become a significant supplier of high-quality lithium," said CEO and chairman Marc Fossa.

The funding involves US$10mn in Atlas shares and US$40mn as a prepayment for 80% of phase 1 concentrate production at Neves.

First phase production is estimated at 150,000t/y of battery grade spodumene concentrate starting in the first quarter of 2024, with the two chemical companies receiving 60,000t/y each.

Atlas said it is evaluating a second phase to increase capacity to 300,000t/y by mid-2025. 

LITHIUM IONIC

Canadian junior Lithium Ionic, meanwhile, announced it hired a Brazilian executive to advance its U$230mn Bandeira lithium project, also in Minas Gerais state.

The company hired Paulo Guimarães Misk as chief operating officer. Misk is a Brazilian-based mining engineer with over 38 years of in-country experience in the operational management of several multinational mining companies across a diverse range of commodities, including lithium. 

"Paulo has demonstrated outstanding leadership in building and transforming operations at his previous roles at Largo, Anglo American and AMG, and we are delighted to welcome him to our leadership team as we enter the next phase of development for Bandeira," said Blake Hylands, CEO of Lithium Ionic, in a statement.