Sigma Lithium in Brazil to nearly double lithium production by 2025

Scarlet Ibarra / April 1, 2024 | 16:54
Sigma Lithium Corp SGML.V production at the Grota do Cirilo mine in Itinga, in Minas Gerais state, Brazil April 18, 2023. REUTERS
Sigma Lithium, a leading lithium producer in Brazil, plans to significantly expand its production capacity. This expansion aims to nearly double its lithium output by 2025, responding to the rising global demand for lithium, particularly in electric vehicles and energy storage.

Sigma Lithium,  with this ambitious expansion plan underscores the company's commitment to meeting the growing demand for lithium, particularly in the electric vehicle and energy storage sectors. With this strategic move, Sigma Lithium aims to solidify its position as a key player in the global lithium market while contributing to the transition towards cleaner energy solutions.

The company, listed on NASDAQ and TSXV as SGML, has unveiled an ambitious plan for its Greentech plant in Brazil. The implementation of a second production line reaffirms its commitment to sustainable development and growth strategy, cementing Sigma's leadership in the global lithium market.

The new line at Grota do Cirilo, Minas Gerais, will increase Sigma's lithium production capacity to 520,000 metric tons per year by 2025, up from the current 270,000 metric tons. This increase reflects its forward-looking vision and response to global lithium demand, essential in electric vehicle batteries and renewable energy storage.

The projected investment for this expansion phase is $100 million, with expectations for the plant to become operational by late this year and commence production in the first quarter of 2025. This development has been facilitated by obtaining an environmental license from the state government in late January, as well as a letter of intent for additional financing from the Brazilian Development Bank (BNDES) received in February, underscoring solid institutional support for the project.

Currently, Sigma ranks as the sixth-largest integrated lithium concentrate producer globally. In its first calendar year of operations, its mine produced over 105,000 metric tons of lithium concentrate, with a production of 52,800 metric tons in just the first quarter of 2024.

The year 2023 witnessed Sigma reporting annual revenues of $135.1 million, closing the fourth quarter with $48.5 million in cash and cash equivalents, marking significant growth from the $28 million recorded at the end of the September quarter. This financial growth reflects the company's production and marketing strategy, as it has seen customer demand surpass the quantities produced in Phase 1, benefiting from the "premiumization" of its lithium.

Ana Cabral, Sigma's CEO, underscored the company's top-tier lithium products, citing their exceptional purity, minimal iron and alkali content, and coarse particle size. These attributes not only meet battery manufacturers' technical needs but also yield significant commercial benefits.

The news of expansion propelled Sigma's shares by 7.6%, reaching $13.94 each at noon in New York, valuing the company at $1.4 billion. This market response mirrors investors' faith in Sigma Lithium's ability to leverage the expanding lithium market, buoyed by a sustainable growth strategy and environmentally friendly operations.

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