Spotlight: Brazilian lithium developments

Brazil seeks to become an important lithium player without copying the state-focused approaches of other countries in the region.

The government is updating mining regulations to spur diversification away from iron ore. Producing minerals like lithium is especially attractive as demand will rise amid the global energy transition and the associated electromobility boost.

"The lithium potential throughout Brazil and Latin America needs to be explored as soon as possible, otherwise countries will miss this window of opportunity that will open with the global energy transition," Luis Mauricio Ferraiuoli Azevedo, head of mining exploration association ABPM, told BNamericas

"Having regulations that facilitate private sector activity is fundamental, because global experience shows that sectors in which governments operate strongly and impose many regulations often fail to capture their full potential," added Azevedo. 

While countries such as Mexico, Chile, Bolivia and Argentina signaled greater government intervention in the sector, Brazil wants to facilitate private participation through improved regulations that favor small and medium miners.

Most Brazilian lithium projects are in Minas Gerais state, which offers favorable mining and transport infrastructure, hydroelectric power, water and easy access to foreign markets via Vitoria port in neighboring Espírito Santo state. A traditional mining jurisdiction, Minas Gerais’ permitting procedures are also considered highly efficient.

BNamericas takes a look at recently announced public and private lithium developments in Brazil.

LATIN RESOURCES

Australia's Latin Resources secured additional exploration rights to expand its Salinas project, in Minas Gerais’ Bananal valley. Investment amounts were not disclosed.

The rights will cover another 1.2km of the Colina deposit’s southern strike extension.

“We are very pleased to be able to secure this additional ground to the south of our Colina prospect, where drilling shows that our high-grade pegmatites are open and continue to the south in this direction,” exploration manager Tony Greenaway said in a statement.

“Our resource definition drilling is progressing well and is on schedule to meet our fast-tracked timeline. We have additional drilling rigs on site now and have expanded our geological team on site to keep pace with the increase in activity,” he added.

SIGMA LITHIUM

Canada’s Sigma Lithium hit the 25% construction completion milestone of the first phase of its Grota do Cirilo project, also in Minas Gerais. Grota do Cirilo is a high-grade lithium spodumene deposit.

“The continuous advance of final construction drawings towards 65% completion also allows us to plan for the total amount of bulk construction material to be utilized, potentially extending our management of our supply chains,” co-CEO Calvin Gardner said in a statement.

The company issued more than 30 purchase orders for critical equipment as of July.

Sigma’s local subsidiary Sigma Mineração expects the US$123mn phase 1 of Grota do Cirilo to be completed during the first quarter of 2023, involving production capacity of 230,000t/y.

COMPANHIA BRASILEIRA DE LITIO

In early July, Brazilian private equity firm Ore Investment acquired a 33.3% stake in Companhia Brasileira de Lítio (CBL), a producer of lithium concentrate and compounds, offering 208mn reais (US$39.5mn) in an auction by Minas Gerais' investment arm Codemge.

The acquisition must be completed in August, an executive involved in the process, who requested anonymity, told BNamericas.

CBL is the only company in Brazil that produces lithium carbonate and hydroxide and is a pioneer in underground mining of spodumene, a major source of lithium hydroxide. It was founded in 1986 and has certified spodumene reserves that exceed 1.3Mt.

REGULATIONS

The federal government published a decree to suspend preliminary authorization for lithium imports and exports. Previously, such operations required the green light from government bodies such as the nuclear energy commission.

The measure is expected to help attract lithium investments, which could reach 15bn reais through 2030, according to government projections.

"This measure is part of the government's efforts to reduce bureaucracy in the mining sector and improve the business environment," geology, mining and mineral transformation secretary Pedro Paulo Dias Mesquita recently told BNamericas.

"Specifically, with regard to lithium, this will help to attract more investment to the sector. In addition to the well-known activities of lithium companies such as Sigma Lithium, AMG Mineração and CBL, several other companies are in the initial phase of activity in the segment that will probably generate more investments throughout the lithium production chain," Mesquita said.