Brazil could join the club of major global lithium producers

Burnt by the sun and prone to drought, the Jequitinhonha valley, in the southeast of Minas Gerais, is one of the poorest places in the country.

But the region, nicknamed the “valley of misery”, is on the verge of a boom: it is home to around 85% of the lithium reserves of Brazil, the world’s fifth-largest producer of the metal, an essential ingredient in electric vehicle batteries.

Authorities in the region are eager to explore the potential of the silvery-white metal.

Last month, they hosted a fanfare-filled event at the Nasdaq headquarters in New York, where they launched an initiative to attract investment to what they call the “Lithium Valley.”

Not everyone is thrilled with the idea, however.

Some residents in the region of around one million people complain about the environmental impact of lithium mining, others complain that local communities are not being included.

“This is the Jequitinhonha Valley… They want to call it ‘Lithium Valley’. But we are not going to put Minas Gerais interests ahead of the identity of our people”, says Aline Gomes Vilas, 45 years old, local activist in the city of Aracuai.

‘Green lithium’

Ana Cabral-Gardner, chief executive of the Canadian mining company Sigma Lithium, is keen to respond to these criticisms.

His company, which began mining in the valley in April, is among the first to explore its lithium reserves.

Its goal is to produce more than 600,000 vehicle batteries from this metal in its first year, increasing up to three times that amount.

Sigma calls itself a “green lithium” miner and emphasizes its social and environmental credentials.

Lithium mining is notoriously water-intensive, a problem given that the metal is typically found in water-poor regions.

Cabral-Gardner, who is Brazilian, says her company reuses 90% of its water supply, protects the local stream and does not use chemicals in the mining process.

“Our entire operation is built around finding a balance between sustainability and mining,” she told AFP.

“I was called the ‘hippie CEO’.”

Just another gold rush?

In Aracuai, which is close to the Sigma mine, Gomes Vilas says it is already having a negative impact, including damage to people’s homes due to explosions used in the mining process.

“This was a peaceful rural area. Now there is a constant noise. There are already houses with cracks in the walls because of the explosions,” she says.

“The whole house shakes every time there is an explosion,” adds Luiz Gonzaga, a 71-year-old rural worker who lives close to the mine.

“They’re digging far away from me for now, and the dust is already bothering us. Imagine what it will be like when they start digging closer.”

Brazil, a country with a history of voracious resource booms and busts, needs to ensure communities like this one benefit from lithium mining, advocates say.

“The Jequitinhonha Valley went through a gold rush, a diamond rush, and that never brought development,” says Ilan Zugman, director for Latin America at the environmental group 350.org.

“We obviously believe the transition to clean energy needs to happen, but it must be fair and inclusive for local communities.”

Until now, lithium extracted in Brazil is almost entirely exported – which is not a good sign, warns Elaine Santos, a researcher at the University of São Paulo.

“Look at Europe and the United States: they have a strategy to develop the entire value chain for electric cars, from mining to vehicle production,” he says.

“Brazil’s policy is still very limited… Brazil runs the risk of deepening its dependence as a country that only exports raw materials, with little added value.”

Brazil revamped its lithium industry last year when the government of former far-right president Jair Bolsonaro issued a decree that made it more attractive to foreign investors, notably by lifting export restrictions.

His left-wing successor, Luiz Inácio Lula da Silva, has not broken with this policy until now. In fact, his administration sent an envoy to the recent “Lithium Valley” event in New York.

Brazil’s position differs from that of Chile, for example, where President Gabriel Boric recently announced plans to nationalize the lithium industry – the second largest in the world, after Australia.

With information from AFP and France 24.