Lithium of R$ 25,000 a ton begins to be produced in MG – 05/11/2023 – Market

One of the poorest regions in Brazil has started to produce one of the most valued and strategic metals in the world.

Less than a month ago, on April 17, the mining company Sigma Lithium started exploring for lithium in the Jequitinhonha Valley, in Minas Gerais, in a project with investments that already total R$ 3 billion, with R$ 1 billion to be contributed to the throughout 2023.

The company’s projection points out that the region will receive US$ 500 million (R$ 2.5 billion) in royalties over 13 years with the activity. There are other mining companies with prospects in nearby municipalities such as Salinas, in the northern region of the state.

Lithium, a metal also called “white gold”, is used in the production of electric car batteries, which makes it strategic at a time when the automotive industry is seeking to abandon fossil fuels.

The Jequitinhonha Valley brings together 55 municipalities, which are concentrated along a river of the same name. It is one of the regions with the lowest HDI (Human Development Index) in the state.

The Sigma mine, called Grota do Cirilo, is located between the municipalities of Itinga and Araçuaí and has an initial production capacity of 277 thousand tons per year. The second phase of the project, currently underway and scheduled for completion in 2024, increases this capacity to 440,000 tons per year.

The report tried for two days to contact the mayors of Araçuaí and Itinga, without success.

The lithium collected in the region is then processed in the company’s unit close to the mine, and is worth approximately US$ 5,000 (R$ 25,000) a ton on the world market today. In its raw state, the metal is quoted at US$ 70 (R$ 350) a ton.

Production will be shipped abroad through the port of Vitória (ES). There was the possibility of this occurring through the port of Ilhéus (BA). Lithium storage, however, requires dry and locked warehouses, which was found in better conditions in Vitória.

The company’s CEO, Ana Cabral-Gardner, did not rule out the possibility of using the Bahia-Minas Railway, which is expected to be resumed, and passes close to the region. The road arrives at Ponta de Areia, in Caravelas (BA). The port structure to be implemented in the municipality, however, would have to undergo evaluation.

Company hires professionals who had left the region due to lack of opportunities

The expectation is that 1,000 direct and 6,000 indirect jobs will be generated in the region with the installation of the plant.

The search for employees went through a program created by the mining company called “Volta ao Lar”, through which the company contacted and offered jobs to professionals who were born and have relatives in the region, but who, due to lack of opportunities, left the area .

“We hired a chemical engineer who was in London, a geologist who was in Canada and a mine truck driver who was in Rio Grande do Sul”, says Gardner.

According to the CEO, 70% of the mining company’s thousand employees entered this program. “As the employees already have a relationship, relatives in the region, this does not generate inflation, for example, in rents. It is much better than bringing a thousand outsiders”, argues the executive.

Lithium in the land of cachaça

About 100 kilometers from the Sigma plant, in the municipality of Salinas, a city famous for its cachaça, in the northern region of the state, lithium is also the next wealth to be explored.

According to Mayor Kinca Dias (PDT), the Australian company Latin Resources Limited foresees investments of R$ 600 million for extracting the metal in the municipality.

The mine from which the input will be removed is already undergoing soundings. “It will be very good for the generation of jobs and economic development in the region”, says Dias.

The mayor, however, stresses that the ideal is to extract and process lithium, as is happening in Itinga and Araçuaí.

“Of course, we dream not with exploration, but with the transformation of raw materials. That’s what we want. The world is watching lithium. Some countries no longer manufacture combustion cars”, he says.

A decree by former President Jair Bolsonaro (PL), published in the Official Gazette on July 6, 2022, helped boost investments for lithium exploration in the Jequitinhonha Valley.

Reserves were already known, but there were impediments to exporting the metal. With the decree, the foreign trade of minerals and lithium ores and their derivatives was facilitated.

‘Green lithium’ is the redemption of the Irapé hydroelectric plant

In the early 2000s, the construction of a hydroelectric plant in the Jequitinhonha Valley by Cemig (Companhia Energética de Minas Gerais) promised the “redemption” of the region, with the attraction of investments that would help in the economic growth of the municipalities.

The hydroelectric plant, named Irapé, came off the drawing board during Itamar Franco’s term as governor of the state (1999/2002).

The energy for the production of lithium in the Jequitinhonha Valley will come from this hydroelectric plant. The plant was inaugurated in 2006, but did not live up to its promise. The hope is that this will now happen. “There have never been large investments in the region. Now, yes,” says the mayor of Salinas.

The consultant working in the energy sector, Aloísio Vasconcelos, who was director of generation and also of commercialization and distribution at Cemig in the Itamar Franco government, says that the construction of the hydroelectric plant pioneered the region. “Irapé was a very important and significant project”, he says.

The use of hydroelectric energy in its production line is one of the justifications used by the company to claim that it produces “green lithium”, that is, that the extraction of the metal has a low impact on the environment.

The mining company also argues that all the waste resulting from the lithium beneficiation process will be sold to manufacture lower quality products.

The possibility of buying clean energy, such as wind produced in the northeast, due to the interconnected national system, and the proximity of Irapé, are cited by Sigma’s CEO as important for Sigma’s mode of operation.

“We are a green company. Were it not for Brazilian renewable energy, we would have had to build a plant to generate our own renewable energy”, says Gardner.

On Tuesday (9), the governor of Minas Gerais, Romeu Zema (Novo), launched on Nasdaq, in New York, the project Lithium Valley Brazil (Lithium Valley) to try to attract new investors to the Jequitinhonha Valley and the northern region of state.

“We want the Jequitinhonha Valley to become a technology valley for the production of batteries and other value-added products”, said Zema, in New York.