Lithium projects expected to face Trump-induced uncertainties

Projects associated with so-called critical minerals, such as lithium, are likely to remain appealing in the long term but are expected to face headwinds in the short and medium term.

“We don’t expect to see an upward price curve or incentives for lithium and other critical mineral projects in the short and medium term, as we must consider the effects of the decision made by the United States government, under Donald Trump, to discourage decarbonization efforts, which explains much of the demand for these minerals in the recent past,” the CEO of an international mining company operating in the critical minerals segment told BNamericas, asking not to be named.

“In addition, we still need time to better understand the effects of the tariffs that the US administration has been imposing on several countries. It’s a very uncertain scenario right now, but in the long term I believe there’s no going back from the path to global decarbonization,” added the executive.

Amid an uncertain market, Brazilian lithium producer Companhia Brasileira de Lítio (CBL) is postponing an investment to expand output.

Last year, the firm said it was evaluating a plan to invest about US$70mn to increase production. The project envisaged doubling production of lithium concentrate from the current 45,000t/y.

“Unfortunately, the [lithium] industry is going through a very difficult time. The vast majority of global producers are operating at a loss, and current prices do not justify any investment. The investments being made are based on the belief that a better future is ahead, close to equilibrium, which is twice the current price. The price is exactly half of what is necessary for new investments. The situation is very serious,” said Vinicius Alvarenga, the CEO of CBL, in an interview with local newspaper Diário do Comércio.

Despite the challenges, some lithium initiatives in Brazil are advancing.

Australia’s Pilbara Minerals said Tuesday it has finalized the acquisition of Latin Resources Limited, which had the Salinas lithium project in Minas Gerais state. Last August, the firm announced a US$370mn all-share transaction to acquire Latin Resources.

“We are thrilled to have completed our first major acquisition outside of Australia and to be bringing a lithium project with such great potential into our portfolio,” CEO Dale Henderson said in a statement.

With the acquisition complete, Belo Lithium, a local subsidiary of Latin Resources, will now be known as PLS and the Salinas project will regain its former name, Colina.

“The Colina project has the potential to become a top 10 hard rock lithium operation by production globally (excluding Africa) with development flexibility to supply new markets. Consistent with previous PLS production expansions, the company will continue following its growth strategy, analyzing lithium market conditions to ensure a strategic and sustainable investment decision,” the firm said.

Meanwhile, US-based Atlas Lithium said on Monday it is shipping its modular dense media separation (DMS) lithium processing plant from South Africa to Brazil. It will be used at its Neves lithium project in Minas Gerais state.

“The news announced today is transformational for Atlas Lithium as our fully paid processing plant significantly reduces project risk,” Eduardo Queiroz, Atlas Lithium’s project management officer and VP of engineering, said in a statement.

“Our momentum is clear: from securing our operational permit in October 2024, to completing fabrication of our optimized DMS plant in South Africa, and now executing its careful shipment to Brazil, Atlas Lithium has firmly delivered several critical milestones,” he added.

The plant is due to arrive at Brazil’s Santos port on March 2.