Canadian mining firm Lithium Ionic Corp has announced that its wholly-owned Brazilian subsidiary, MGLIT Empreendimentos Ltda, has forged an agreement with Cemig Distribuição S.A.
Bandeira Project Location, Existing Substation and Transmission Lines, and New Electrical Infrastructure Layout Connecting Bandeira to Existing Power Grid. Image Credit: Lithium Ionic Corp.
The aim of this partnership is to facilitate the construction and electrification of vital power infrastructure connecting Cemig’s existing power grid with the forthcoming Bandeira lithium operation, situated approximately 3 km away.
This agreement reinforces the company's commitment to expedite Bandeira's production and establish its position as a near-future lithium producer in the region. Additionally, it secures cost-effective and environmentally friendly hydroelectric power to meet the project's long-term energy requirements.
Cemig, being the largest electricity distributor in Brazil, serves around 96% of the State of Minas Gerais through its extensive network.
Lithium Ionic has initiated an independent Feasibility Study (FS) for Bandeira, compliant with NI 43-101 standards, with an anticipated completion date in early 2024.
This study follows a recently concluded Preliminary Economic Assessment, which supported the viability of a spodumene concentrate mining project with a long operational life and cost-effectiveness. The project boasts a post-tax Net Present Value of 8% of US$1.6 billion and an impressive Internal Rate of Return (“IRR”) of 121%.
Securing a connection to the region’s sustainable hydroelectric power infrastructure marks a significant de-risking milestone on our path to becoming Brazil’s next prominent lithium producer and reaffirms our commitment to delivering value to our shareholders by rapidly advancing this project.
Blake Hylands, P.Geo, CEO, Lithium Ionic Corp.
Hylands added, “With a reliable source of sustainable and renewable electricity, the Bandeira project is poised to benefit from cost-efficient power and a reduced carbon footprint, aligning with our corporate and ESG objectives. We look forward to collaborating with Cemig on this important project.”
Details related to the Cemig Agreement include:
- The electrical transmission infrastructure will comprise 3 km of new transmission lines and a new substation located in close proximity to the future Bandeira mine.
- MGLIT will directly oversee the construction of the electrical connection systems, including negotiations with contractors and suppliers, as well as the procurement of materials and services from Cemig's pre-approved list.
- MGLIT and Cemig will collaboratively manage the environmental permitting and land management aspects of the project.
- The total project cost is estimated to be around BRL$17 million (approximately CAD$4.65 million). Upon project completion, the Company may be eligible for reimbursement of up to BRL$2.98 million (approximately CAD$816,000), subject to specific requirements.
- The construction of the new electrical infrastructure is slated for completion by the fourth quarter of 2025, with electrification expected during the same period, contingent on specific criteria.
- After construction and a technical inspection by Cemig, the transmission lines and substation will be transferred to Cemig. MGLIT will be responsible for the operation and maintenance of the electrical infrastructure downstream of the new substation.
Source: https://www.lithiumionic.com/