Brazilian banks invest in critical minerals as a pathway for energy transition

The growth of Brazil's industry is closely tied to financing and the push for decarbonization involves the exploration of critical minerals, industry participants said at an international conference organized by Brazil's national development bank BNDES on March 10-11 in Rio de Janeiro.

"We are doubling in size due to BNDES support during a critical period when sector prices are at historic lows, yet we are still delivering profits," said Ana Cabral, CEO of Sigma, at the event.

With three operational plants and eight more planned, Brazil's lithium carbonate equivalent output reached 50,035 mt in 2024 and is expected to more than double by 2028, according to S&P Global Market Intelligence.

Brazil possesses some of the world's largest reserves of critical minerals, but these resources still need to be explored with the encouragement of funding calls for mineral transformation research, said José Luis Gordon, director of productive development at BNDES.

Among the funding calls launched by the bank in collaboration with state-owned financier Finep is a Real 5 billion ($857 million) fund aimed at promoting business plans that focus on the transformation of strategic minerals. Project registration applications will be accepted until April 30.

"Brazil has a significant competitive advantage in terms of costs, but it is essential to replicate what other regions are already implementing," said Paulo Castellari, director of Appian Capital/Graphcoa. "Whether in graphite or other metals, we will need to explore different types of financing."

The federal government's industrialization plan presents an opportunity to understand its reserves and prepare for a future where Brazil is not only an exporter of minerals but also an exporter of value-added products, said Celso Pansera, president of Finep.

A significant portion of investments in Brazil's lithium and rare earths sectors also comes from companies listed on the ASX and TSX, such as Sigma.

As of 2024, 32 Brazilian mining companies were listed on the TSX, raising $540 million in equity capital during the year.

Platts, part of S&P Global Commodity Insights, assessed daily Lithium Triangle (LiT) price at $9,200/mt on March 11, stable from the previous day and down 8% since the launch of the assessment on Sept. 2, 2024.