At least four suppliers in the Brazilian spodumene market voiced interest in federal policies to boost demand for electric vehicles (EVs) to create a consolidated end-to-end battery supply chain in Brazil, the companies said at a conference in Minas Gerais.
In an initiative led by Companhia Brasileira de Litio (CBL), executives for AMG Lithium, Lithium Ionic and PLS all pleaded for the Brazilian federal government to implement policies to boost EV demand — which would support the Brazilian spodumene market — CBL's chief executive Vinicius Alvarenga said.
CBL owns the only lithium carbonate refinery in Brazil and it believes the country has the potential to have an end-to-end battery supply chain. Currently, Chinese refineries receive 99pc of all lithium chemicals produced in Brazil.
"The only thing stopping Brazilian companies to make battery cells is the lack of demand from the regional market," Alvarenga said. "We need to pressure the government to incentivize the installation of lithium-based energy storage systems and to give more benefits to EV buyers."
Alvarenga mentioned WEG — a multidisciplinary technology company — and Moura, the largest battery manufacturer in Latin America, as firms well suited for the job.
"Brazil can be one of the world's top players in the energy transition landscape," said Leandro Gobbo, vice-president for Brazilian operations at PLS. "We have world class ore, the expertise and the technology to do so — we only lack government incentives."
At the bottom of the cost curve, Brazil has one of the cheapest hard-rock lithium operations in the world, rivaling China and beating Australia and many African producers.
Although China holds its place as the home to the cheapest hard-rock lithium projects in the world, Brazilian miners are also operating at a profit despite the low price environment, mainly because of cheap labor. Around half of the world's hard-rock lithium miners are currently operating at a loss.
All three commercially producing spodumene companies in Brazil — Sigma Lithium, CBL and AMG — are sticking to their investment guidance and expansion plans despite falling prices.
"There is an opportunity here at this low-price environment," said Blake Hylands, chief executive of Lithium Ionic, who owns one of the largest undeveloped spodumene sites in Brazil. "We need to move projects forward at this time so Brazil can progress in the global stage."
The average labor costs in Brazil are significantly lower than in places like Australia, which is also dealing with a workforce shortage in mining, according to Gobbo, and where employee wages have pushed most spodumene operations to operate at a loss as prices bottom.
"Brazil will never beat China in capital costs and internal demand," Alvarenga said. "But despite taking a hit at those two, Brazil is the best place in the world to produce spodumene."
Brazil has a combination of benefits that are not seen elsewhere, such as low royalties, a specialized workforce, solid internal and external logistics, market transparency, legal stability, high ESG and human rights standards, and the cheapest electrical energy in the world, Alvarenga said, which is mostly renewable.
"If we look at other countries with cheap [spodumene] production, we don't see that," said Ligia Pinto, vice-president of external affairs at Sigma Lithium, Brazil's top lithium concentrate producer. "Our low costs do not harm human rights."
The so-called Lithium Valley — a lithium rich region in southeastern Brazil — has a production capacity of 320,000 metric tonnes (t)/yr of lithium concentrate between CBL and Sigma Lithium, the country's top producer. AMG Lithium, which operates further south, bumps up Brazil's total current capacity to 410,000t/yr.
"This is a country that we can trust," Hylands said. "We are taking longer than China, but that's okay, because everyone takes longer than China."
