Brazil’s Path to become a Global Lithium Giant

Learn how Brazil’s new age of mining positions Spark Energy Minerals to unearth the next potential mega lithium discovery.

Significant developments in the global lithium market mark 2024 as an exciting year. Even though global lithium supply is expanding, market tightness persists, keeping lithium prices healthy as climbing demand from the electric vehicle (EV) sector could increase by over 40 times by 2040 according to the International Energy Agency. With lithium prices expected to hit record highs over the next two decades, Brazil is doing everything in its power to grab a big slice of the world lithium market, propelling junior lithium explorers like Spark Energy Minerals Inc. (EMIN.CN) in its search for the next big find.

• BYD Co. is mulling the purchase of lithium mining assets in Brazil as it seeks to lock in raw-material supplies to expand its electric car production outside Asia.
• The Chinese company’s new EV factory in Brazil will include a unit to process lithium and iron phosphate for the international market and BYD hopes it will be able to finish work in less than two years, according to Stella Li, BYD’s global vice-president.
• “We prefer to buy any available and affordable resource, but it needs to be competitive. At the same time, BYD also prefers to own some mining operations in Brazil,” Li said at an interview in Sao Paulo.

Brazil is a Tier 1 mining jurisdiction and the fifth largest global producer of lithium, but the country has recently stepped on the gas to enhance its mining sector. One major development is the proposed Mine Plan 2050. This initiative reflects Brazil’s recognition of mining as an economic strength, with the government expressing confidence in reporting its first surplus in eight years.

Additionally, the International Trade Administration highlights Brazil as a mining powerhouse, offering significant opportunities for U.S. companies in mining equipment, services, and technology, especially those focusing on sustainable practices and safety.

Yup, Brazil is more than mining friendly and is favored to deliver critical electrification metals to market far faster than any other country. Exploration dollars also go three times farther in Brazil due to the Reais exchange rate, but that’s not all.

The government of Minas Gerais launched an initiative focused on developing lithium production infrastructure in the Northeast and North regions of the state. Vitor Saback, undersecretary of geology, mining, and mineral transformation at Brazil’s Mines and Energy Ministry, said in an interview from Bloomberg’s New York headquarters, “We plan to develop the whole lithium supply chain, including batteries.”

And all that finished product will easily find its way to world markets from the country’s double-sided deep seaports which service major shipping routes to Europe, Asia, and Africa.

Against this backdrop, Spark Energy Minerals (EMIN.CN) strategically put together one of the largest land holdings in Brazil’s “Lithium Valley” known for its vast lithium reserves. Spark’s sizeable portfolio was built from a series of privately owned assets acquired years ago with every project covering a minimum of 80 square kilometers.

In a premium location near Brazil’s biggest lithium deposit, Spark’s land holdings are also in the same region that hosts the Companhia Brasileira de Lítio’s (CBL) Cachoeira mine, which has been producing lithium since 1993.

Lithium-ion batteries play a pivotal role in powering a wide range of technologies, from electric vehicles to systems that store renewable energy, thanks to their superior ability to store energy. Nevertheless, the quest for environmentally friendlier and sustainable alternatives is intensifying. Research is being conducted on various potential replacements, including sodium-ion (derived from common salt), seawater, iron, silicon, magnesium, and hemp. These alternatives present distinct benefits and limitations regarding environmental impact, energy density, and weight, suggesting that fully substituting lithium without trade-offs remains a challenge.

So, for the foreseeable future, lithium is a must-have. Unfortunately, China currently produces approximately 14% of the world’s lithium supply and with worsening geopolitical and trade tensions, that chain may soon become insecure. If they break from the global lithium loop, Australia and Chile will be hard-pressed to make up the difference. Developing new reserves is of immediate importance and Brazil is a relatively untapped ‘gold’ mine.

1. Rapidly Growing Lithium Demand: The global EV market is anticipated to grow at a CAGR of 17.8% to reach 1.58 trillion by 2030, driven by advancements in battery technology, increasing environmental awareness, supportive government policies, and expanding charging infrastructure. The global push towards reducing carbon emissions and the automotive industry’s commitment to electrification are key factors propelling this growth.
2. A Robust Portfolio of Lithium Assets: Spark has a diverse portfolio of highly prospective lithium projects in Brazil. Newfoundland has a long history of diverse world-class mineral deposits, and the Newfoundland Lithium Belt has similar geological characteristics to the lithium-rich corridors in Ireland and the Carolinas.
3. Veteran Leadership: Spark’s expert management, board, and technical team boasts well over a century of combined industry experience in financial management, investor relations, corporate development and governance, markets, and exploration and development in both the mining and energy sectors.
4. Regional Experience: Geologist, Leonardo Souza, is a native of Brazil with a long successful history of developing mineral exploration projects across a spectrum of sizes and mineral types as well as fostering partnerships and negotiating deals for domestic and international markets. Phillipe Martins, Spark Legal Counsel has a rich professional background in Brazil and has developed an influential network across various Brazilian municipal, state, and federal levels with a focus on the production chain and mineral sector.
5. Mining For The 21^st Century: Spark Energy Minerals takes its ESG seriously and is wholly committed to mining in a modern, safe, and sustainable manner that benefits both shareholders and stakeholders for years to come.

Wait, There’s More?

Adding to this brain trust, Spark Energy Minerals trading on the CSE-EMIN and the OTCQB-MTEHF announced on February 12, 2024, that it had engaged Exploration Outcomes Ltd., a Brazilian exploration advisory firm to design, coordinate, and support its generative exploration activities in the company’s extensive and prospective Brazilian tenements package.

Exploration Outcomes is founded and led by Jon Hill, a 35-year industry veteran globally recognized as an economic geologist who as Anglo American’s former Country Manager, developed a network of deep privileged relationships in Brazil.

As such, Hill, currently working with successful gold producer, Jaguar Mining, is bringing together the world-class technical team to rapidly evaluate the potential of the search space across Spark’s tenement portfolio where any one of many projects could be a discovery / take-out target.

Now is the time to get in on Spark’s story, as the old saying goes, “Buy when others are Fearful and Sell when others are Greedy!” Spark is trading on the CSE-EMIN and OTCQB-MTEHF has a market capitalization of just $3.5mm CAD after a recent restructuring with 3 highly prospective Lithium properties in the heart of mining friendly Brazil. The company could be on the precipice of a major stock revaluation with its exploration program and upcoming investor awareness program.  

This perfect storm of location, prospectivity, and leadership lays a solid foundation for growth potential in a burgeoning lithium market, making Spark Energy Minerals (EMIN.C)a unique investment opportunity for those looking to capitalize on the renewable energy transition.

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