The company will receive a pre-payment of $30 million for up to 55,000 tonnes of lithium concentrates over six years, with rights to a supplementary 25,000 tonnes, the note read. This contract is extendable for an additional five years and the first tranche of $3 million has already been paid.
As per the agreement, Mitsui will support Sigma in the construction with a $7 million advance deposit, according to the mining company. This is subject to the Japanese company’s approval. The deal also includes technical, logistics and marketing collaboration between the two.
The installation permit needed to begin construction should be issued in June, with works at the plant to begin at the end of July, chief executive officer Calvyn Gardner told Fastmarkets. Commission of the plant is to take place nine months later, Gardner added.
Sigma will explore an ore deposit with more than 50 million tonnes of resources in Vale do Jequitinhonha, a region in Brazil’s southern state of Minas Gerais. Sigma is currently running a feasibility study to advance with the project.
The company expects to start commercial production at 220,000 tonnes per year of battery-grade spodumene, with plans to increase output to 440,000 tpy after a further study.
The lithium oxide content is to reach 6-7%, with an aim to achieve the price premiums representative of those grades, the executive said.
Fastmarkets last assessed spodumene with a minimum 5-6% lithium oxide content
at $600-750 per tonne cif China on March 27. Prices have been stable since December 26, 2018.
“We have a world-class deposit and believe premiums over the benchmark prices could be around $15-20 per tonne for each additional 0.1% grade of the product,” Gardner said.
Sigma is emerging as an alternative to Australian lithium miners , the CEO added. This would provide a “critically important diversification strategy” for the clients, Gardner said.
“We will be able to supply potential converters coming to the United States and Europe,” rather than them being mostly based in Australia and China, Gardner commented.