Sigma Lithium Corporation, a leading global lithium producer, has announced the signing of a deferred US$22.4 million letter of credit for export financing with Banco do Brasil at very low interest rates. This transaction marks a significant milestone for Sigma, highlighting its growing maturity as a lithium producer and its ability to access trade finance mechanisms typically reserved for Brazil’s largest industrial exporters.
The letter of credit will enable Sigma to offer 90-day export vendor financing to its clients at very low interest rates. This move strengthens the company’s commercial flexibility and market access, as it allows Sigma to phase out existing trade finance lines and transition from receiving advance payments to providing vendor financing. The transaction also positions Sigma to further improve its competitive position by strengthening its commercial flexibility and institutionalizing a premium for its lithium concentrate.
The transaction was calculated based on Sigma’s July 5th production and shipment of 22,000 tonnes of lithium hydroxide, priced at 8.75% of the London Metal Exchange (LME) quote. It represents an inaugural solution for the company developed in tandem with Banco do Brasil to deepen Sigma’s commercial partnerships during the seasonal lithium purchase cycles.
Ana Cabral, Co-Chair and CEO of Sigma Lithium, commented on the transaction, stating that it reflects the company’s significant achievement in reaching maturity to access trade financing instruments available to Brazil’s largest exporters. She expressed gratitude for the partnership with Banco do Brasil, the country’s largest bank, which has extended highly competitive interest rates to Sigma Lithium through its balance sheet in Asia.
Cabral also emphasized the importance of Sigma’s consistent shipping schedule, product quality, low costs, and ability to market to downstream battery and auto manufacturers in securing these additional credit opportunities. She believes the transaction enhances the company’s flexibility in marketing its Quintuple Zero Green Lithium, ultimately helping to institutionalize a price premium that reflects its superior chemical qualities.
Sigma Lithium is committed to powering the next generation of electric vehicles with carbon-neutral, socially and environmentally sustainable lithium concentrate. The company operates at the forefront of environmental and social sustainability in the EV battery materials supply chain at its Grota do Cirilo Operation in Brazil. Sigma’s state-of-the-art Greentech lithium plant produces Quintuple Zero Green Lithium, which is characterized by its zero carbon footprint, zero dirty power usage, zero potable water consumption, zero toxic chemicals, and zero tailings dams.
The company’s Phase 1 project, which entered commercial production in the second quarter of 2023, has an annual capacity of 270,000 tonnes of concentrate. Sigma has also issued a Final Investment Decision to nearly double its capacity to 520,000 tonnes of concentrate through the addition of a Phase 2 expansion of its Greentech Plant.
