Brazil's Bandeira Lithium Mine Seeks Construction Permit Within the Year, Initial Investment of US$191 Million

en.Wedoany.com Reported - On October 9, Canadian mining company Lithium Ionic updated the development schedule for the Bandeira lithium mine in Minas Gerais, Brazil, aiming to obtain the permits required for project construction by the end of 2026 and to begin production between the end of 2027 and early 2028. The project's initial capital expenditure is estimated at US$191 million, with designed average annual production of 177,000 tonnes of spodumene concentrate and a mine life of 18.5 years. Currently, the relevant permits are still in the approval stage, and construction financing has not yet been finalized.

Lithium Ionic submitted the environmental permit application for the Bandeira project in November 2023. In a recent interview, company CEO Blake Hylands said that the relevant federal-level procedures are nearing completion, and the project is expected to enter the state-level committee review stage in about two months. The company is also advancing the next phase of engineering design, reviewing the feasibility study data completed in September 2025, and has begun ordering some long-lead equipment.

The feasibility study released in September 2025 estimated the project's after-tax net present value at US$1.45 billion using an 8% discount rate, with an after-tax internal rate of return of 61%, based on a spodumene concentrate price assumption of approximately US$1,392 per tonne for 2026 to 2028. In this interview, Hylands suggested that the project's net present value could approach US$2 billion based on a spot price range of US$2,000 to US$2,500 per tonne. The company's price sensitivity analysis published in January 2026 showed that under a price assumption of US$2,515 per tonne, the after-tax net present value would be approximately US$1.8 billion, with an internal rate of return of 102%.

Lithium Ionic plans to cover approximately 60% to 65% of construction funding through debt financing, with the remainder to be funded by equity financing. The company has signed 5-year spodumene concentrate offtake agreements with Yahua Group and Grand Chen, and the contracts include a minimum price clause of US$1,000 per tonne. The agreements also provide for a US$20 million prepayment, payable after the project makes a final investment decision and begins construction. The company estimates the project's all-in sustaining cost at approximately US$650 per tonne.

On August 25, Lithium Ionic completed the sale of the Salinas lithium mine assets to PLS for total cash consideration of US$37.5 million, of which US$30 million was paid at closing and the remaining US$7.5 million is deferred in accordance with the agreement. The company also retains a 2% royalty interest on future spodumene sales from the asset. According to this interview, the company held close to C$30 million in cash after paying transaction-related costs.