By Sandeep Wasnik
Brazil is currently the center of attention when it comes to lithium, as the South American nation is becoming a significant player in the global lithium industry. Brazil boasts the fifth-largest lithium reserves in the world, which are primarily found in the Jequitinhonha Valley in the southeastern state of Minas Gerais, often known as the “Lithium Valley,” also nicknamed “Misery Valley.” This region holds an estimated 85 percent of Brazil’s known lithium deposits.
According to Brazil’s ministry of mines and energy, “high purity lithium from Minas Gerais makes it easier to use in the production of more powerful batteries.” The ministry also mentions an extraction approach for hard rock that uses less water than brines.
Since 1991, CBL “Companhia Brasileira de Lítio” has been the oldest and largest producer of lithium in Brazil. They mainly supply spodumene concentrate to the domestic market. Also, since April 2023, lithium concentrate has been exported by Sigma Lithium, a Canadian firm with a mine in the Lithium Valley. Also, several additional foreign companies have started to set up operations in northeastern Minas Gerais. This area includes the ten municipalities that make up the Lithium Valley. Based on research carried out by the Geological Survey of Brazil, the ministry estimates that these municipalities contain the biggest lithium reserve in Brazil, which consists of about 45 deposits.
Sigma Lithium, the first new mining company in the area to start production in April, is at the center of that campaign. Sigma Lithium pledges to employ locally, use renewable energy and 90 percent recycled water to create a “green lithium”, and voluntarily contribute more to environmental and local government projects than the national average.
Brazilian Lithium Exports and Investments:
The first shipment was carried from the port of Vitória in Espírito Santo to the Chinese company Yahua. It consisted of 15,000 tons of high purity lithium “greenlithium” and 15,000 tons of ultra fine tailings manufactured by the Sigma Lithium. This “greenlithium” produced without the need for a tailings dam, and since no chemicals are needed in the purifying process, the water utilized is recyclable. It is an environmentally benign process because the tailings are also dry piled and used for waste-mineral recovery.
In 2023 (January to November), Brazil exported lithium carbonate valued at US$3.319 million, and in 2022, exports were recorded at US$5.93 million, as shown in the infographic.
Governor Romeu Zema of Minas Gerais and federal authorities from Brazil visited Nasdaq in New York in May 2023 to launch the “Lithium Valley” concept and seek foreign investment for the region’s lithium mining firms. Officials have claimed that the long-neglected region would become a valley of opportunity due to lithium mining, in order to prove the need for the investment.
At Grota do Cirilo, Sigma Lithium forecasts 13 years of production, bringing in over US$5 billion for the company and more than US$200 million in revenue for the local municipalities. Based on statistics from the 2022 Brazilian census, the corporation estimates that it will pay little less than tenth of the combined GDP of Araçuaí and its adjacent town Itinga this year, or about US$10.7 million.
The state government of Minas Gerais and Lula’s Ministry of Mines came together to promote “Lithium Valley” to foreign investors. In addition, Minas Gerais is looking for foreign investment in the production of lithium and is pursuing a privatization policy. Governor Romeu Zema sold the state’s 33 percent stake in CBL, a lithium mining firm that has been active in the state for many years. Additionally, a bill to establish a regional “Lithium Hub” and provide the executive branch the authority to enact a unique tax system for nearby lithium mining companies is currently making its way through the state assembly.
Lithium Projects in Brazil:
Minas Gerais is known in the world of mining for its large reserves and production of iron ore. Players in lithium mining in various stages of development, the following companies operate in the state: Lithium Ionic, Deep Rock, Latin Resources, Atlas Lithium Corporation, Sigma, and Companhia Brasileira de Lítio (CBL). Below table shows the active lithium mining companies and projects.
India is moving toward renewable energy sources like solar and wind power and has set ambitious targets for lowering carbon emissions. A vital component of India’s green energy targets, lithium-ion batteries store and distribute energy from various sources. India wants to lead the global race in EV sales, with a target of 30% electric vehicles sold by 2030. Because lithium is essential to EV batteries, ensuring a steady supply is essential to meeting this objective.
India can look for Brazilian lithium as part of its strategy to secure its lithium supply. In fact, Brazil has emerged as a promising partner for India in this regard, and both countries are actively exploring potential collaborations. Also, Brazil is actively looking for foreign partners in the lithium sector. This may result in advantageous agreements and joint ventures as they become more open to Indian companies and government efforts. Indian companies can partner with Brazilian entities to explore new lithium deposits and develop existing ones in the Lithium Valley. Secure and reliable long-term supply agreements for Brazil’s lithium imports can ensure India’s access to this crucial resource.
The author is an Advisor of ASIA – Latin American and Caribbean countries and is also the Director of international trade and foreign investment at Grupo 108.
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