Article #3 – Brazil state of charge

Atualizado: 7 de nov.

“Lithium likely to become a de-facto precious metal [1]


Sérgio Granato de Araújo*



In recent years, estimates of Lithium reserves in Brazil have gone from 0.4% to 8%, placing it in the world's top 5. Since then, the country has received massive investments for the production of Li-concentrate, which include, in later stages, the construction of chemical plants to produce Li-compounds



LITHIUM (Li), THE MOST strategic and essential metal for the energy transformation, has been the target of billionaire investments in projects all around the world, including Brazil.


Li-ion batteries (LiB) are critical not only for the 6 billion+ smartphones in use today, but for electric vehicles (EVs) and renewable energy sources firming and integration. In 2020, LiB by far dominated the EV battery market and captured 93% of the battery market for stationary energy storage [2].


With an upward trend in the coming years, e-mobility and clean energy, coined by McKinsey as the “Engineering Tomorrow” innovation tech group, attracted, in 2021 alone, USD 236 billion and USD 257 billion in investments, respectively [3].


Brazil, the leading country in terms of sustainability, with about 45% of the energy mix (world: 14%) and 78% of the electricity mix (world: 27%) coming from renewables, recently found that it has also been granted with large Lithium deposits [4].


USGS


According to USGS (U.S. Geological Survey), Brazil ranked 16th, seventh, and fifth in i) identified Li-resources, i.e., concentration of material of economic interest in the earth's crust, ii) Li-reserves, i.e., mineral resource that can be economically mined, and iii) Li-production, totaling, in 2021, 470,000, 95,000, and 1,500 (2021e) tons of contained Lithium (100% Li), respectively [5].


CPRM numbers


In turn, CPRM, the local state-run geological service, after the completion of the first phase of “Lithium Potential Assessment in Brazil” project, which i) identified new potential areas for Lithium and ii) expanded the knowledge of already known mineralized areas, suggested that Brazilian reserves of contained Lithium may be much higher: 8% of global Li-reserves, instead of 0,4% as reported by USGS (Jan 2022), positioning the country among the world's top 5 Li-reserves [6].


Unlike the Lithium Triangle countries (Chile, Bolivia, and Argentina), which extract Lithium from continental brines, Brazil mines Lithium from pegmatite rock (source of spodumene, the most important Lithium mineral) deposits or even using Lithium concentrate tailings (e.g., from tantalum production) as raw materials.


According to CPRM, Lithium is extracted in small and medium-sized mines from pegmatite deposits in Vale do Jequitinhonha region (1st phase of the CPRM project), located in Northeast of Minas Gerais (MG) state (within “Eastern Brazilian Pegmatite Province”), main producing area and holder of the Li-reserves in Brazil. 100% of Brazil’s official Li-reserves are located in this region [6].


Reserves outside Jequitinhonha Valley


Occurrences of Lithium in pegmatite bodies can also be found in i) Rio Grande do Norte and Paraíba states (“Borborema Pegmatite Province” – 2nd phase of the project, nearing completion), ii) Ceará state (“Solonópole sub-Province” – 3rd phase of the project, started), iii) Eastern, Southern (São João del Rei region), and Southeastern of MG state, iv) Northwest of Rio de Janeiro state, v), South of Bahia (BA) state (Itambé region), and vi) South of Tocantins state, to occur in future phases of the CPRM project [6].


In addition to the favorable geology, Lithium mining in MG can be attributed to i) its strong mining tradition, ii) adequate infrastructure for mining activities, iii) access to seaports (BA and Espírito Santo (ES) states), and iv) proximity to major (future) battery markets.


The big three


While countries of the Lithium Triangle signaled greater government intervention in the sector, Brazil is moving towards easing the participation of the private sector through improved regulations that favor small and medium miners [7].


Three major mining companies have activities related to Li exploration in Brazil: i) CBL (Brazilian Lithium Company), with 100% national capital, ii) AMG (Advanced Metallurgical Group) Mining (EURONEXT: AMG), and iii) Sigma Lithium (TSX-V: SGML; NASDAQ: SGML), all with mining operations located in Vale do Jequitinhonha region.


CBL, the only one


CBL, a pioneer in underground mining of spodumene (at Cachoeira mine, located between Araçuaí and Itinga counties), produces technical- / battery-grade Lithium carbonate (Li2CO3 purity of 98,5% / 99.5%) and Lithium hydroxide monohydrate (LiOH.H20) in Divisa Alegre/MG chemical plant since 2019. CBL is the only one in Brazil, and one of the few companies in the world, with integrated lithium production [8].


Global companies


AMG, with its Volta Grande mine (formerly Mibra mine), produces today 90,000 tons/year of Li-concentrate (5 to 6%) [9], and Sigma, with its Grota do Cirilo project (w/ various deposits, including Xuxa mine), plans to start Li-concentrate production in later 2022 [10]. The former sends Li-concentrate for processing in Germany to serve the growing European battery market [9][11], while the latter inked an offtake agreement with LG Energy Solution for the supply of environmentally sustainable Li-concentrate (6%) until 2027 [10].


AMG's circular economy


AMG production of spodumene concentrate, which represents a starting material for further processing to Lithium downstream products (e.g., Lithium hydroxide), uses tantalum processing tailings as feedstock. In a second stage, AMG intends to increase production to around 130,000 tons/year [9]. AMG is designing a new Lithium chemical plant in MG to transform the concentrate into Lithium carbonate, starting production in 2026 [12].


Sigma's ESG footprint


Sigma claims to adopt environmentally friendly methods in Grota do Cirilo Li mines by i) using 100% clean energy from hydropower plant next to mine, ii) eliminating hazardous chemical reagents, iii) using water recirculation circuits (reuse reaches 90%, 10% evaporates), and iv) adopting dry stacking tailings method, avoiding wet tailings dams (which caused Brumadinho tragedy) [13]. Considered the largest hard-rock Lithium project in the Americas, Grota do Cirilo will place Brazil on the green Li production route for following ESG concepts, having allocated almost 20% of CAPEX to environmental and social actions [14].


Sigma’s larger-scale commercial operation is planned with capacity for 270,000 tons of Li-concentrate (5 to 6%) (36,700 tons of LCE) yearly in phase I, rising to 531,000 tons (72,200 tons of LCE) in phase II [13].


Junior mining


Other Lithium projects are being proposed and/or developed in Brazil, as the i) Salinas project, by Australian Latin Resources, ii) Solonópole project, by Australian Oceana Lithium, and iii) Itinga project, by Canadian Lithium Ionic.


Removing barriers


Recently, Ministry of Mines and Energy (MME) eased Lithium foreign trade, which classified Lithium as being of nuclear interest, moving Li investments in Eastern Europe and Asian countries towards Brazil. As result, the continental country expects more than USD 2.81 billion in investments in Lithium production by 2030 [15].


Energy storage: a perfect partner for solar PV (access here)



26, September, 2022


* Professor at School of Electrical, Mechanical and Computer Engineering (EMC) of Federal University of Goiás (UFG)


References

[1] https://www.nasdaq.com/articles/lithium-likely-to-become-a-de-facto-precious-metal:-5-picks

[2] https://www.iea.org/reports/energy-storage

[3] https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-top-trends-in-tech

[4] https://www.epe.gov.br/sites-pt/publicacoes-dados-abertos/publicacoes/PublicacoesArquivos/publicacao-675/topico-631/BEN_S%C3%ADntese_2022_PT.pdf

[5] https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-lithium.pdf

[6] https://rigeo.cprm.gov.br/xmlui/handle/doc/17451

[7] https://www.bnamericas.com/en/features/spotlight-brazilian-lithium-developments

[8] https://cblitio.com.br/company/?lang=en

[9] https://amglithium.com/solutions/resources

[10] https://ir.sigmalithiumresources.com/static-files/f403af5f-87eb-47d9-8359-dfe3ff4bf949

[11] https://amglithium.com/home

[12] https://www.brasilmineral.com.br/noticias/amg-investe-r-12-bilhao-em-planta-quimica

[13] https://www.sigmalithiumresources.com/project/

[14] https://www.em.com.br/app/noticia/economia/2022/02/23/internas_economia,1347033/sigma-comeca-a-produzir-litio-este-ano-em-minas.shtml

[15] https://www.reuters.com/markets/commodities/brazil-eases-rule-lithium-exports-amid-rising-demand-2022-07-07/

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