Latin’s Salinas has a big role to play in the Lithium Valley Brazil initiative
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The state of Minas Gerais has the largest lithium resources in Brazil and is looking to leverage this with the launch of the Lithium Valley Brazil initiative to generate jobs and income for its population.
This initiative seeks to transform the Jequitinhonha Valley into a technology hub for battery production and other value added products by formulating public policies to attract companies and investments, qualify the workforce, promote technology, and provide the necessary infrastructure for the region’s growth.
As one of the companies with existing resources in this region, Latin Resources (ASX:LRS) is understandably keen to play a key role in this effort and is looking to follow in the footsteps of lithium producer Sigma Lithium Resources.
There’s good reason for the company to do so.
TSX and Nasdaq-listed Sigma Lithium has progressed its Grota do Cirilo project rapidly, taking just 14 months since the start of construction to shipping battery-grade lithium concentrate in May 2023 after growing resource from 13.5Mt at 1.56% lithium in 2018 to 106.8Mt at 1.43% lithium in 2022.
And just to make it that much more attractive, Sigma’s Greentech plant features 100% dry-stacked tailings, 100% clean energy, 100% recycled water and zero hazardous chemicals.
Taken together, it gives its Grota do Cirilo project impeccable environmental credentials.
Nor is Sigma sitting on its laurels with co-chairperson and chief executive officer Ana Cabral-Gardner saying at the sidelines of Minas Gerais Lithium Valley launch at NASDAQ that the company was finding demand not only for its high purity battery grade material, it was also finding demand for its tailings
“It’s now easier to accelerate because now it’s all about line trains … the bulk of the work, which is the risk phase is well behind us,” she noted.
“We’re going straight to a triple (of production) and then we’ll pause at about a 100,000t LCE and again take a gauge of the market, take the pulse of demand growth and the electric vehicles growth and we’ll probably put a four line train to be active in 2025.”
This will take Sigma up towards becoming the eighth largest lithium carbonate producer in the world by 2025.
Latin Resources managing director Chris Gale noted that the company was inspired by Sigma to start exploring in Brazil, adding that watching the Canadian company’s growth was. “incredible”.
“There is no other mine on the planet, less certainly a lithium mine that has been that quick,” he said.
“Latin Resources wants to emulate that, a lot of research reports out there are calling us Sigma 2.0, which I love, which is great.”
The company currently has eight rigs and 160 personnel – 60 recruited from the local town of Salinas, which again mirrors Sigma’s policies about employing local people – on site.
It is progressing 65,000m of drilling – with 35,000m completed to date – aimed at increasing the size and Indicated JORC resource at the Colina deposit, which currently stands at 13.2Mt at 1.2% Li2O.
At least part of this drilling will feed into a resource upgrade due out in June with Gale noting that if the company can emulate Sigma’s growth, this could be a significant increase.
“We’ll back that up at the end of the year with a further upgrade. We will have our PEA completed in the third quarter of this year, DFS in the first half of next year,” he added.
“We want our development approval approved by the end of next year, we had some great meetings today with the governor on the environmental side and we want to start construction in 2025 with production in 2026.”
This will give the company a pathway to production similar to that taken by Sigma with Gale noting that the two companies could be collectively producing “enormous” amounts of spodumene concentrate by 2026.
“By my estimation, we are going to be number three in the world of lithium production in a little over five years,” Gale concluded.
This article was developed in collaboration with Latin Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.