INTERVIEW: Sigma Lithium CEO outlines expansion plans for Brazil Grota do Cirilo plant

Sigma Lithium will double its capacity to 520,000 mt of lithium concentrate in 2025 through a phased expansion of its Grota do Cirilo project in Brazil, CEO Ana Cabral said in a recent interview.

In 2024, the Toronto-listed company recorded total production and sales volume of 240,000 mt in Brazil, positioning it to surpass its 2025 production target of 270,000 mt.

This strategic approach enables Sigma to maintain momentum in a challenging market, Cabral told Platts, part of S&P Global Commodity Insights.

"The first line began producing material in 2023, and now we're doubling capacity by commissioning the second line," she said. "By the end of 2026, we'll be commissioning the third line. The broader strategy was designed around a phased approach to reach approximately 800,000 tons of spodumene concentrate production. This modular expansion plan has positioned us to navigate industry cycles effectively."

Cabral emphasized this approach not only minimizes costs but also accelerates the timeline for bringing additional production capacity online.

"We're planning to commission the dense media separation plant this year in the fourth quarter," she explained. "The construction is designed to leverage existing infrastructure, making it a relatively straightforward project compared to the initial phase one construction."

Expanding downstream

For 2027, Sigma's vision for growth incorporates downstream production of lithium sulfate.

"We can achieve this using clean technologies and reusing the tailings generated during the reduction [of lithium oxide mass]," she said, "It makes sense for our clients because we then become the lynchpin of a chemical-to-chemical supply chain."

Cabral said the challenges around producing downstream lithium salts but believes lithium sulfate will enable Sigma to secure a broader market base.

"For lithium carbonate or lithium hydroxide, it will be difficult to be cost competitive with the current incumbent, China," she said. "We'll be able to earn the same margins by producing a relatively simpler product (i.e. lithium sulfate) while capturing a wider market in 2027. I'm not closing the door... but I always ask can it stand the test of a downturn in prices?"

Balancing sustainability and cost

Sao Paulo-based Sigma Lithium produces its own "quintuple zero green lithium" grade, focusing on delivering net-zero carbon lithium without the use of carbon-intensive energy, potable water, toxic chemicals and tailings dams. The remainder of embedded carbon is offset using carbon credits.

Cabral affirmed the market is still reticent when it comes to paying a premium for green lithium.

"Let me be clear, nobody pays for the green premium, period," she said. "The premium comes from the quality. The traceability and the fact it's green ensure I have a captive audience as we know automakers will need to adhere to standards such as the European battery regulations and battery passport."

Cabral explained that Sigma is able to maintain low costs due to Brazil's low labor rates and the use of dense media separation technology.

"DMS is cheaper than traditional flotation methods, which are more complex and energy intensive," she said. "We've demonstrated that we can uphold the top mining company standards in terms of traceability while being structurally low-cost."

Tapping Brazil's potential

Addressing the workforce was one of the biggest local bottlenecks for Sigma Lithium, particularly moving labor to the Jequitinhonha Valley in Minas Gerais state, Cabral said.

"The company has generated over 20,000 direct jobs and retrained 1,500 people through its 'Homecoming' program, which prioritizes hiring from the Jequitinhonha Valley where the plant is situated," she said. "We're building a training center next to the community association to ensure local workers are equipped with the skills needed for specialized roles in the industry."

Cabral also emphasized the region's potential for growth and sustainability.

"We have the structural low cost that Africa has for power and labor but we don't have the logistical challenges as Latin America is industrialized in terms of transport and grid infrastructure," she said. "Latin America can also ensure traceability given that the history of the region is intertwined with unionization, labor laws and human rights."

Optimistic outlook amid market uncertainty

Global lithium prices are under pressure amid high inventories and weaker-than-expected demand from the EV sector. Despite these market conditions, Sigma Lithium is still poised to surpass its production from last year.

"If demand doesn't grow, it's musical chairs," Cabral said. "Somebody's going to be displaced, i.e. high-cost producers. We are at the very low end of the cost curve. So, there's no reason for us to pause production."

Cabral remains optimistic about demand stating the industry has not stopped growing. She predicted inventories will be depleted by 2027 at the current rate of demand.

"If we're after 100% electrification, the industry still needs a lot of material," she said. "If China grows at the same rate in 2025 as it did in 2024, we will need to find a substantial amount of material."

Cabral added that battery energy storage systems experienced strong demand at the end of 2024 and had been a good offset for the lower-than-anticipated battery demand from the EV industry.

Despite looming US tariffs and the escalation of trade wars, Cabral remains confident in Brazil's position.

"We are a neutral country and friends with everybody," she said. "I don't see trade restrictions affecting us."

With increasing shipments to trading houses in Japan and the UAE, "lithium diplomacy is very effective when you're working with trading houses in neutral territories as they work with the entire supply chain," she said.

Cabral concluded by emphasizing Sigma's strategy of maintaining relationships across the market: "We sell to everybody."

Platts assessed lithium spodumene concentrate with 6% lithium oxide content (SC6) Feb. 18 at $855/mt FOB Australia, down 12% since the start of 2024.