Sigma Lithium adds production line to nearly double output next year in Brazil

Sigma Lithium (NASDAQ: SGML; TSXV: SGML) says it’s building a second production line at its Grota do Cirilo project in Brazil to nearly double lithium output next year. 

The new line at Sigma’s green technology plant will increase annual lithium production at the project in Minas Gerais state to 520,000 tonnes next year from the current output of 270,000 tonnes, the company said on Monday.

The stage two capital spending to build the new line is expected to be US$100 million, which the Development Bank of Brazil agreed in February to fund. Sigma expects to commission the new line by year-end, with first production expected in the first quarter of 2025.

Sigma, the world’s sixth-largest global integrated producer of lithium concentrate, obtained an environmental licence from the state government at the end of January to install and operate the new line. Construction is starting this month. 

Grota do Cirilo

Grota do Cirilo produced more than 105,000 tonnes of lithium concentrate in its first calendar year of operations. For first quarter 2024 alone, it produced 52,800 tonnes.

Last year, Sigma reported revenue of US$135.1 million even as the price of lithium plunged by about two-thirds. The miner ended the year with US$48.5 million in cash and cash equivalents compared with US$28 million at the end of September.

“Sigma Lithium is in a position to generate cashflow while delivering large quantities of low cost chemical grade lithium concentrate at a critical supply juncture for the lithium market and the battery industry,” Sigma CEO Ana Cabral said on Monday in a release.

“The high quality of our lithium products offers great commercial advantages due to their high purity, low levels of iron and alkalines, and coarse particle size.” 

Shares in Sigma Lithium gained 11% to $19.55 apiece on Monday afternoon in Toronto, valuing the company at $2.2 billion. They’ve traded in a range of $14.03 to $57.57 during the past 52 weeks.