05/10/2024 – 5:31
Energy turnaround and global demand for electric cars could boost mineral extraction and battery production in the country. The race for lithium may be starting in Brazil. The metal is used to manufacture batteries, for example for electric vehicles – which are among the best-known exponents of the global transition to clean energy generation.
A battery can cost up to 30% of the price of a vehicle. With an eye on the profit that can be achieved with the production of these devices, Brazil may be wanting to invest more in lithium extraction.
The country has the fifth largest reserves in the world and boasts the potential to become responsible for around 25% of global ore production in the coming years. Nowadays, the country produces around 2% of the global total, according to the consultancy A&M Infra, cited in a text released by the federal government.
The contradiction between fewer emissions and environmental impacts
According to the same text, the Ministry of Mines and Energy (MME) expects to inject R$15 billion into production by 2030.
The problem is that extracting minerals and producing batteries causes environmental and social impacts far beyond the reduction of greenhouse gases from the automobile industry. The warning comes from Bruno Milanez, professor at the Federal University of Juiz de Fora and specialist in conflicts related to mining activities.
In the researcher’s analysis, it is necessary to be careful with the concepts that mining companies use to indicate that projects are sustainable. “From a social point of view, the implementation and operation of mineral projects has significant impacts. Mining occurs in isolated areas, where the population is more vulnerable and has less political power. The arrival of workers from abroad causes an increase in violence, alcohol and drug abuse, sexual exploitation and other social issues. Furthermore, rent and food prices increase, without a corresponding increase in local income”, he states.
An example: according to the latest report published by the National Committee in Defense of Territories Against Mining, Brazil recorded 932 mining conflicts in 2022, surpassing the 840 recorded in the previous year. More than 688 thousand people were negatively impacted, in 792 Brazilian locations.
The Parliamentary Front for Sustainable Mining, created in the National Congress, welcomes mineral exploration aimed at the electric car industry. “We have approximately 8% of the world’s known lithium reserves, as well as other important minerals for the manufacture of vehicles and batteries”, says federal deputy Zé Silva (Solidariedade-MG), president of the group.
Race for lithium in Minas Gerais
From 2021 to 2023, there was an almost 18-fold increase in requests to the federal government for mineral exploration in Minas Gerais, where more than 80% of the Brazilian lithium stock is located — requests jumped from 45 to 851 in the period. The data comes from a study by the Federal University of Vales do Jequitinhonha and Mucuri published by the environmental journalism portal Dialogue Earth.
The reserves are concentrated in the Jequitinhonha Valley region.
According to Bruno Milanez, lithium mining is not new to the region. The mineral has already supplied the domestic market, with use in industrial components and even in the weapons industry.
In Milanez’s analysis, the lithium exploration situation in the Jequitinhonha Valley requires attention. “We see a rush for lithium, a situation similar to the ‘wild west’, where everyone rushes to the region in search of opportunities”, he describes. “It is curious to see how the federal government defends these projects, as historically there is a strong link with the mineral sector. Governments of different political orientations see mining as a form of development”, comments Milanez.
When contacted by DW, the MME responded with a note about the government’s interest in expanding lithium exploration. “Brazil has world-class reserves for all these minerals and has an abundance of clean energy to extract and process them. Aware of this, the MME works with the objective of expanding geological knowledge and mineral research to identify and efficiently extract strategic minerals and develop the Brazilian industry for transforming strategic minerals in the battery chain and other products essential to enabling the transition to a fuel economy. low carbon”, says the text.
However, experts argue that the emission of polluting gases should not be the only indicator of the environmental effects caused by the activities of mining companies in the country. “It is important to consider that the direct and indirect impacts of mining are not restricted to CO2 emissions. Like Brazil’s recent history, over the past decade, we have had [rompimentos de barragens em] Mariana, Brumadinho and Maceió. In other words, three of the biggest disasters in history”, says Maurício Angelo, founder of the Mining Observatory.
Tax waivers, benefits and long-term plans
In general terms, mining is responsible for 4% of Brazilian GDP, according to a report by the Brazilian Mining Institute (Ibram). Around 42% of national mining revenue in the first half of 2024 came from Minas Gerais. Pará was the second state with the highest share of revenue, with 34%. In total, in Brazil, there are 2,700 municipalities that have mining activities. More than 218 thousand jobs are generated directly by the sector.
Ibram’s half-yearly balance sheet shows revenue of R$129.5 billion in 2024, an increase of 8% compared to the same period of the previous year.
Likewise, mining plays a key role in the Brazilian trade balance. In the first months of this year, mining represented 41% of the Brazilian balance, considering exports against imports.
Although they describe the sector as one of “Brazil’s salvations”, since the country has a good performance with commodities, economists such as Silvia Mattos, also coordinator of FGV/Ibre, warn about the finiteness of resources and how financial planning is carried out. long term.
“Mining has royalties so you can extract. Return directly from taxation, with an impact on the public sector benefiting from this extraction, because it is a finite resource. But you would have to use these resources well for the future. Norway saves part of the money from extracting non-renewables for retirement, we already spent it all. We are extracting something that won’t be there forever. Who will pay the bill?” he asks.
“The curse of natural resources is when more certain money comes, you believe you will have it forever, which is not true. This economic dependence is not necessarily bad, Australia is a great example, as it is a country completely dependent on the exploitation of resources, but it invests a lot in innovation for the country’s economic development”, continues Mattos.
The mining sector’s investment forecast in projects is US$64.5 billion over the next four years (2024-2028). However, of this total, only 17% will be applied to environmental projects. This creates a contrast when considering that the share reserved for iron ore projects will reach 26.8% of the sum.
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