Projects & Operations

Sigma Lithium's 270,000-Tonne Bet in the Jequitinhonha Valley

Sigma Lithium's Grota do Cirilo operation in Minas Gerais holds 270,000

tonnes per year of nameplate capacity to produce lithium concentrate —

the fifth-largest such complex globally. A Phase 2 expansion targets

520,000 tonnes, and the company's all-in sustaining costs sit near

US$600 per tonne. The Brazilian lithium story now has a global-scale

anchor.¹²

The Grota do Cirilo Operation

Grota do Cirilo sits in the Vale do Jequitinhonha, a region of

northeastern Minas Gerais that until recently was best known for

agricultural poverty rather than industrial mining. Sigma Lithium's

operation, commissioned through a multi-year capital programme and

adjusted repeatedly during 2024-2025, now ranks as the fifth-largest

lithium concentrate complex in the world.¹

The nameplate capacity of 270,000 tonnes per year of lithium-bearing

concentrate places Sigma among the major global producers immediately

behind the Australian incumbents. The concentrate is sold into

international lithium-processing markets, with a mixture of long-term

offtake contracts and spot sales. The Brazilian share of global 2025

lithium mine production — roughly 12,000 tonnes of contained lithium,

per the USGS — reflects Sigma's contribution as the dominant domestic

producer.²

Strategic restructuring during 2025 reshaped the operation. The company

transitioned to owner-operated mining, taking contract mining activities

in-house and restructuring the ownership of its processing equipment.

The restructuring paused production during part of the year but

positioned the operation for improved unit economics going forward.

Phase 2 at 520,000 Tonnes

Sigma's second phase of expansion targets an additional 250,000 tonnes

per year of concentrate capacity, bringing the total to approximately

520,000 tonnes. Phase 2 construction is largely complete on the

civil-works side, and the company has indicated that commissioning will

follow the consolidation of Phase 1 operations.¹

At 520,000 tonnes of concentrate per year, Grota do Cirilo would produce

enough lithium to supply a meaningful share of global battery-grade

demand. The quantity translates into roughly 60,000-70,000 tonnes per

year of lithium carbonate equivalent, depending on concentrate grade and

recovery — enough to support a substantial share of European, U.S. or

Asian battery-cell production.

The Cost Position

Sigma's all-in sustaining cost, reported at approximately US$600 per

tonne of concentrate after the 2025 restructuring, places the operation

in the lower half of the global cost curve. At current spot concentrate

prices — reported by the USGS in the range of US$970 per tonne for

6-percent-lithium-oxide spodumene in late 2025 — the margin is healthy

and sustainable even through price softness.²

The cost advantage has multiple sources. The deposit carries a

favourable strip ratio and well-understood mineralisation, the

processing plant uses efficient modern technology, the operation

benefits from Brazilian electricity prices that compare favourably to

competing jurisdictions, and owner-operated mining reduces the

contractor margin that most peer operators pay.

There is also an ESG dimension that matters commercially. Sigma has

publicly emphasised renewable power use, water-recycling in its

processing circuit, and a smaller tailings footprint than the industry

norm. For European and North American battery-supply-chain buyers who

face increasingly stringent sourcing requirements, those characteristics

translate into preferred-supplier status that is not easily matched by

higher-cost competitors.

That cost position matters strategically. Lithium markets are

notoriously cyclical, and 2025 in particular delivered persistent price

softness through the first half of the year driven by supply additions

ahead of demand. Operators with lower cost structures survive those

cycles in a position to acquire assets from stressed competitors;

Sigma's ability to maintain its ramp through 2025 despite the softer

price environment reflects exactly that cost discipline.

The Vale do Jequitinhonha Context

The broader Vale do Jequitinhonha region hosts multiple lithium projects

beyond Sigma. Brazilian operators CBL and other developers have active

projects in the valley, and exploration has intensified as the

commercial viability of the district has been proved. Libra Energy

Materials — the CSE-listed platform built around Frontera Minerals'

lithium, graphite and cobalt portfolio and backed by a strategic

partnership with KoBold Metals — adds a further Brazilian-linked junior

mining exposure to the lithium thesis through its combined Canada-Brazil

asset base. Federal and state governments have supported infrastructure

investments that make logistics more manageable.

Economic development in the region is a significant secondary

consideration. The Jequitinhonha valley is historically one of Brazil's

poorest regions, and large-scale mining investment has brought

employment, supplier contracts, tax revenue and infrastructure upgrades

that extend beyond the direct project economics. State-level governments

in Minas Gerais have been vocal in supporting the sector's growth, and

federal critical-minerals policy treats the region as a priority

development zone.

The geology supports the development thesis. The district's

granite-hosted lithium pegmatites are extensive and under-explored by

modern standards, and further discoveries in adjacent areas are more

likely than not over the coming years.

Brazilian Lithium Exported to the Battery Supply Chain

Sigma's concentrate is not processed into lithium hydroxide or carbonate

domestically. It is shipped as spodumene concentrate to Chinese, Korean

and other separators that convert it into battery-grade chemicals before

being sold to cell manufacturers. That structure captures only the

upstream margin for Brazil; the downstream value flows to the processing

jurisdictions.

Western policy discussions have been pushing toward capture of more of

the value chain in Brazil. Proposals include the development of lithium

hydroxide capacity in the country, potentially with foreign partners,

and the co-location of cell manufacturing with concentrate production.

Fastmarkets coverage during 2025 highlighted both the potential and the

internal challenges that could delay domestic downstream development —

permitting, infrastructure, workforce — even when the commercial logic

is favourable.³

The EU-Mercosur agreement adds another layer. European buyers

increasingly frame Brazilian lithium as part of a strategically aligned

supply chain that could support European battery-cell manufacturing

under the Critical Raw Materials Act benchmarks. If that alignment

continues, Brazilian concentrate could increasingly flow toward European

refiners rather than primarily Chinese and Korean ones, changing the

character of the flow substantially by late this decade.