Brazil's mining sector draws attention amid energy transition

Mar 14, 2023

International mining players are increasingly interested in Brazilian mining assets, seeking to supply critical minerals for the energy transition.

"The interest in mining assets related to the energy transition has gained strength in Brazil and this is part of a global trend. We also see this happening in several other countries," Potássio do BrasilCEO Adriano Espeschit told BNamericas.

"In addition to minerals related to the energy transition, we also tend to see a wave of investment in Brazil in minerals related to the fertilizer chain, since this is related to global food security and Brazil is one of the few countries in the world with potential in this segment," added Espeschit. He highlighted that his company, a unit of Brazil Potash, is awaiting progress in the licensing process for potassium exploration in Amazonas state, which will require US$2.5bn.

Assets in Brazil, at different stages, have generated businesses of different scales.

Mining titan Vale is spinning off its base metals unit, comprising copper and nickel assets, and negotiates with potential investors to become minority shareholders in the unit. Interested parties have contracted legal services and are carrying out due diligence, according to a source involved in the process, who requested anonymity.

Meanwhile, Canadian junior Solis Minerals acquired 22 lithium exploration licenses covering 248km2 in Rio Grande do Norte and Paraiba states and involving the Borborema project.

Solis bought the licenses from Brazilian businessman Leandro Gobbo for US$20,000, plus 500,000 ordinary shares.

"Brazil is fast becoming a tier 1 destination for hard rock lithium explorers and producers alike. The value to be generated is significant in the short term through building an extensive portfolio of prospective lithium ground in the country to complement our copper exploration assets in Peru," Solis CEO Jason Cubitt said in a statement.

"Brazil is still very much in its infancy with lithium exploration and offers a junior explorer such as Solis an exceptional opportunity to discover a material asset," he added.

RARE EARTHS

Meanwhile, US based firm Energy Fuels completed the acquisition of 17 mineral concessions in Bahia state for US$21.9mn. The areas are expected to host EV-critical minerals.

"The Bahia project is a well-known heavy mineral sand deposit that has the potential to supply 3,000t-10,000t of natural monazite concentrate per year for decades to Energy Fuels' White Mesa Mill in Utah for processing into high-purity rare earth element oxides and other materials," the company said in a statement.

"The Bahia project is also expected to produce large quantities of high-quality titanium (Yemenite and rutile) and zirconium (zircon) minerals that are also in high demand," it added.

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