Key takeaways:

• Brazilian lithium expansion: Major players like Sigma Lithium, CBL and AMG are scaling up operations to boost competitiveness, with projects aimed at doubling production capacities and reducing costs through automation and efficiency
• Challenges in verticalization: Industry leaders emphasize the need for domestic demand, tax reforms, and supportive public policies to advance Brazil’s lithium supply chain and attract further investment
• Global competitiveness: Brazil is emerging as a hub for low-cost, ESG-compliant lithium production, leveraging its favorable geology, skilled labor, and strategic initiatives like the “Lithium Valley Brazil” to attract foreign investment

CBL’s expansion: Doubling capacity to boost competitiveness

Vinicius Alvarenga, chief executive officer of Companhia Brasileira de Lítio (CBL) – the oldest lithium producer in Brazil, operating since 1991 – told Fastmarkets in an interview that the company is expanding their chemical plant and mining capacity.

The project will double mining production from 50,000 tonnes per year of spodumene concentrate to 100,000 tpy, and will expand CBL’s chemical production, for both battery and technical grade, from 2,000 tpy to 6,000 tpy of lithium carbonate equivalent (LCE). The initial forecast is that the plant might be ready in 24 months, once the new project receives its licensing.

The main goal, according to Alvarenga, is to reduce costs and gain competitiveness.

“Today we have high fixed costs and low production capacity. We will increase capacity and will maintain our costs. Our biggest cost today is labor and, with this expansion, we will not increase our labor force. There will be very little investment in new people, because everything is automated. We need to grow now and then take advantage of the positive lithium price scenario that for sure will come someday,” he said.

Alvarenga explained that this is a brownfield project: “We will use the entire structure from the current plant. This is the least capital-intensive refinery project in the market, compared to other refinery projects worldwide currently.”

During a panel at Lithium Business Brazil, Fabiano Costa, president and CEO at AMG, highlighted that the company wants to take the supply chain a step further in Brazil.

“We want to produce technical chemicals here. Our current plan is to have a chemical converter plant in Brazil, instead of sending the spodumene concentrate to China first and then Germany, as we currently do. We would send chemicals directly to Germany,” he said.

In September 2024, AMG commissioned the production of battery-grade lithium hydroxide at its site in Germany, the first lithium hydroxide refinery in mainland Europe.

AMG Brazil has a 100% stake in the ownership of the Mibra Mine in the district of Minas Gerais, which produces spodumene. The spodumene will be taken to a facility in Brazil to produce technical-grade lithium hydroxide, which will then be sent to the company’s refinery in Germany for purification into battery-grade lithium hydroxide.

AMG plans to ultimately reach 100,000 tpy of battery-grade lithium hydroxide by 2030 — enough to supply 2.5 million electric vehicles (EVs) – which would give the company a 14% market share of the total projected European market size.

Sigma is also working on a project to expand its capacity. In August 2024, the company received a binding commitment from the National Brazilian Bank for Economic and Social Development (BNDES) for a development loan of 487 million Reais ($89 million) to fully fund the construction of its second plant.

The goal is to more than double the company’s spodumene concentrate production capacity from the current 270,000 tpy to a total of 520,000 tpy. Commissioning is expected to begin in the fourth quarter of 2025.

According to Ligia Pinto, Sigma’s vice president of institutional and government relations and communications, the company wants to expand and is looking for financing.

“We have to cut costs, and we are managing to resist and produce amid falling prices. The goal is reinvestment, not profit, so that the ‘Lithium Valley’ [in the Vale do Jequitinhonha, in the state of Minas Gerais, where lithium is produced] can consolidate itself as the market becomes more sophisticated here,” Pinto said during the panel with the other CEOs.

Verticalization of the lithium industry

One of the topics discussed by the panel was the challenges that Brazil still needs to overcome to verticalize and advance in the lithium chain.

“We have to stop the obsession with verticalization: both mining and conversion are strong. At some point, it may be advantageous to do conversion too, but we shouldn’t demonize mining,” Alvarenga said.

Alvarenga said it’s necessary to have domestic demand for the supply chain to advance.

“We are not currently planning greenfield refinery projects in Brazil until there is a domestic market. We need the government to encourage lithium demand in Brazil — consumption by EVs, batteries, etc,” he said.

Costa also said that the cost of capital in Brazil is very difficult.

“Public policies could help with financing for those who want to move forward. There are some aspects that need to be triggered for more investment, such as increasing domestic demand,” he said.

Leandro Gobbo, vice president of PLS Brazil, highlighted that capital expenditure (CAPEX) is important, but operational expenditure (OPEX) costs are even more important. In Brazil, the tax burden is also a point of concern, according to Gobbo.

PLS entered a deal in August 2024 to acquire Latin Resources, the owner of an important spodumene project in Brazil.

“It’s unbelievable that we still don’t have a tax reform. Brazil is a tax mess. Labor costs are high. Decisions must be made based on state policy to promote a complete supply chain. Brazil needs effective public policies that have a direct impact on operating costs. We need to seize the opportunity of low prices now; we already have the ore and the technology. We are interested in vertical integration, but vertical integration isn’t the solution to all our problems. We need state policy,” Gobbo said.

Competitiveness

Brazil is expected to become a reference in low-cost hard-rock lithium production and an investment hub for foreign companies.

“Brazil is the most favorable country for spodumene production in the world: lower royalties than Australia, well-qualified labor, ESG, good domestic logistics, excellent geology. Brazil is not ‘junior’ in mining,” Alvarenga said.

Blake Hylands, CEO of Lithium Ionic, added that foreign companies want to invest heavily in Brazil: “There are some concerns, such as the government not providing adequate support for future projects, but Brazil is definitely a country of trust and expertise.”

Green premium

In addition to good geology and other factors mentioned above that make Brazil competitive, Gobbo also mentioned social responsibility.

“We produce a green product in Brazil that is not remunerated for it. There is no monetary advantage today in producing a green product; we should have a financial bonus for producing green,” he said.

For Pinto, Brazil offers a lithium production that positions itself as green, with legal security to operate, human rights and unions.

“We are far beyond the rhetoric,” she said.

Fastmarkets’ research team expects Brazilian LCE production to be about 57,000 tonnes in 2025, growing at a compound annual growth rate (CAGR) of 6% to reach about 102,000 tonnes of LCE in 2035.

There are 25 projects in different stages of development. The most advanced next-in-line mine in Brazil is Atlas Lithium’s Minas Gerais project.

“Brazil is well endowed with lithium resources and under-explored relative to many other regions. The ‘Lithium Valley Brazil’ initiative aims to improve regulatory frameworks and streamline the permitting process, and Sigma Lithium has demonstrated that projects can be quickly developed in the country,” the Fastmarkets’ research team highlighted.

Current Fastmarkets lithium pricing

Fastmarkets’ daily assessment for the spodumene min 6% Li2O, spot price, cif China was $660-690 per tonne on Friday July 11, unchanged from the previous day’s assessment.

Fastmarkets assessed the lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea at $7.70-8.30 per kg on Friday, also unchanged day on day.

And Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was assessed unchanged day on day, at $7.90-8.60 per kg on Friday.