Sigma Lithium: EV Trend “Inevitable,” Speed Has Brought Lithium Demand Forward
Rising lithium prices have attracted investor attention, and while the market has cooled somewhat in recent months, experts agree that the crucial battery metal’s story still has a long way to go.
Speaking at the Prospectors & Developers Association of Canada (PDAC) convention, Ana Cabral-Gardner, co-chairperson and co-CEO at Sigma Lithium (TSXV:SGML,NASDAQ:SGML), explained that higher electric vehicle (EV) demand from the western world surprised the market in 2020 and led to a major run in prices.
“That took the whole industry by surprise, and then as per the current price levels it was clear that the industry wasn’t expecting it and it wasn’t ready for it,” she explained to the Investing News Network.
She noted that prior to 2020, EV demand came mostly from Mainland China, and was largely driven by subsidies. But in the second half of 2020, one in every five vehicles sold in Western Europe was an EV.
This “shock to the system” has been further exacerbated by greater EV uptake in North America.
“There were forecasts that EVs would prevail in the long run, but the speed at which consumers have embraced it has surprised the industry,” said Cabral-Gardner.
An updated feasibility study released in April shows that Sigma Lithium’s Grota do Cirilo project in Brazil has the capacity to produce 230,000 tonnes per annum (tpa) of 6 percent battery-grade sustainable lithium for eight years under a Phase 1 base-case scenario that the company says would be a “financially robust” standalone operation.
There is also the option to increase Phase 1 production to 265,000 tpa of battery-grade sustainable lithium, as well as a Phase 2 scenario that lays out the potential for additional production of 220,000 tpa; this would increase the company’s output to 450,000 tpa of 6 percent battery-grade sustainable lithium.
“We’re not only ready to bring it into production for late this year, but then as we continued to work we were able to plan to double that level of production for the year thereafter,” said Cabral-Gardner about the study.
Since the PDAC interview took place, Sigma Lithium has announced an increase of about 50 percent to Grota do Cirilo’s total mineral resource, bringing it to 85.7 million tonnes.
“We’re very optimistic about the sector because the EV demand trend — it’s a tsunami, it’s inevitable,” she said.
Watch the interview above for more from Cabral-Gardner on Sigma Lithium and the lithium sector. You can also click here for our recap of PDAC, and here for our full PDAC playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.