Brazilian lithium to meet demand time line

There is no such thing as a quick chat with Latin Resources (ASX: LRS) Managing Director Chris Gale when discussing the company’s Salinas lithium project in Brazil’s Minas Gerais state.

Within the Salinas lithium project is a global mineral resource estimate of 70.3 million tonnes at 1.3 per cent lithium oxide, reported above a cut-off of 0.5 per cent lithium oxide.

Western Australia is currently the largest lithium-producing destination in the world, producing spodumene considered by those in the know at cost-effective rates.

Latin Resources Managing Director Chris Gale, however, is eager to relay the message that Brazil is more than competitive to Western Australia when it comes to lithium mine development.

A preliminary economic assessment (PEA) for Salinas proposed a 3.6-million-tonne-per-annum standalone mining and processing operation, delivering an after-tax net present value of eight per cent of $3.6 billion (US$2.5 billion), and a combined after-tax internal rate of return of 132 per cent.

The PEA demonstrated a low-capital, two-phased operation delivering high-quality 5.5 per cent lithium oxide concentrate, and three per cent lithium oxide fine spodumene concentrate at a low all-in sustaining cost of US$536 – separating the project from higher-cost producers.

‘This is a Tier 1 global asset, and will be the next lithium spodumene mine in production,’ Gale told Future Mining.

Latin Resources maintained a brisk pace, having lodged a 2800-page environmental permit in December 2023, which it anticipates to be approved within the next six months.

Subsequent submission of a development and construction licence is expected to be approved by Q3 this year.

After publishing the PEA, Latin Resources’ phone pinged incessantly as it received numerous inbound offtake inquiries for the Salinas project.

As part of the offtake process, Latin Resources sought funding proposals from potential offtake partners in exchange for offtake, with funding to be used to progress the development of Salinas.

‘The market’s current sentiment for lithium has been devastating, but I can tell you from our side – in the real world – the appetite for our spodumene is absolutely through the roof,’ Gales says.

‘The interest came from Tier 1 companies, including chemical converters, battery manufacturers and trading houses.

‘These are corporations that know that by 2026–27, when we are due to start production, there will be more demand than supply.’

One would be hard-pressed to find a development company in finer fettle than Latin Resources.

The company currently has approximately $52 million in the bank, which means it is fully funded through to a financial investment decision, due at the end of 2024.

The company has a definite strategy in place: commence construction in Q1 2025 for a 12-month construction period, followed by three months of commissioning, after which it will be in production by mid 2026. At this time, the Salinas lithium project will be a Tier 1 global asset producing 250,000 tonnes in year one, moving to 525,000 tonnes per annum and generating $6.8 billion of free cash flow. 

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