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Minas Gerais presented an initiative to attract international investors for lithium exploration in the Jequitinhonha Valley region.
The campaign, called Lithium Valley, is joint with the federal government and aims to position the region as a production center for one of the critical ores of the energy transition. Lithium is an essential component of batteries and expected market demand is expected to triple by the end of the decade with the electrification of transport.
O state government bets on the initiative to not only transform one of the poorest regions of the country, but also to contribute to global decarbonization and much more. With the intention of generating notoriety, the campaign was presented at the headquarters of Nasdaq, in Times Square, in New York.
The region has 45 lithium deposits in the northeast of the state, which could increase national production by more than 20 times, according to estimates by the government of Minas Gerais.
The measure, in addition to generating a transformation in the region, also promises to bring legal certainty and objectify criteria of strict rules for the preservation of the environment.
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Chile, which is the country with the largest proven reserves of lithium and one of the lowest costs for obtaining the mineral, has just presented a new national policy for the exploitation of lithium. The country will require state participation in future exploration projects, which has generated uncertainty among investors. The shares of the two companies that produce lithium in the country plummeted more than 20% the day after President Gabriel Boric's pronouncement.
Minas Gerais wants to offer an attractive alternative for investors and allow the Lithium Valley to be competitive in lithium exploration.
Brazil welcomes companies from all over the world with open arms. We are convinced that the development of the mining sector does not dispense with the private sector”, said Vitor Saback, national secretary of mining of the Ministry of Mines and Energy.
Legal certainty is a key point in the government's offer to attract investors. For just over a year, the government of Minas Gerais has been working on the Vale do Litio campaign and now expects that environmental licenses will be streamlined with the presentation of the campaign.
The government's objective is to enhance the Jequitinhonha Valley, demystifying mining, which is considered a more sensitive point when it comes to the sector in Brazil, especially in Minas Gerais. “What doesn't solve anyone's life is the ore being eternally buried”, said the governor of Minas Gerais, Romeu Zema.
The Lithium Valley campaign did not present many details, but will involve streamlining environmental licenses and also studies for possible investments in infrastructure.
Objective criteria will also be prioritized to offer more security to investors. The campaign still provides an example of success in the Lithium Valley. The company Sigma Lithium has just inaugurated its commercial lithium production in the region, after more than a decade studying the region's potential and R$ 1,2 billion in investments.
The company should dispatch the first shipment of 15 thousand tons from the Port of Ilhéus later this month. “We will produce enough lithium for 617 electric cars [annually],” said CEO Ana Cabral-Gardner. With the expansions planned for the coming years, the estimate is that this total will be multiplied by three.
Sigma Lithium claims to be the world's first producer of green lithium, using all the electricity in the plant from renewable sources.
All the water used is also 100% recycled in the lithium purification step, which does not involve chemical agents. The tailings are dry stacked and then exported for the recovery of residual minerals, which have commercial value. Several other companies are conducting geological studies and want to follow the same path as Sigma.
Although the Chilean salt flats have a higher concentration of lithium and lower costs for producing the mineral compared to the Lithium Valley, the bet is that sustainability credentials make the difference.
Environmental activists claim that the activity could interfere with the availability of water in a region that is already desert, which is one of the reasons that led Chile to review its ore exploration policy. Brazil, in turn, wants to contribute to the world decarbonization and intends to do so with integrity, transparency and predictability, says the national mining secretary of the Ministry of Mines and Energy.
