A lithium mining boom in Brazil’s Jequitinhonha Valley is drawing growing international interest amid a global race for critical minerals, sparking economic opportunities and social tensions in the region. The valley, located in the state of Minas Gerais, holds about 85 percent of Brazil’s lithium reserves—ranking the country seventh worldwide—and has been officially rebranded as "Lithium Valley" by local authorities eager to attract investment.

Brazil’s mineral wealth extends beyond lithium, also including the world’s second-largest rare earth metal reserves after China and a near-monopoly on niobium, a component essential for steel alloys. These resources have positioned Brazil as a strategic supplier to markets seeking to reduce dependence on China for battery and technology metals critical to electric vehicles, consumer electronics, and green energy sectors.

The Jequitinhonha Valley project Grota do Cirilo, operated by Canada’s Sigma Lithium, has been active for about three years, primarily exporting lithium to China. Additional companies are expected to enter the region, with the U.S.-based Atlas Lithium anticipating commencement of operations next year, while Canadian entity MG Litio progresses through licensing procedures. A subsidiary of Chinese electric vehicle manufacturer BYD also holds mining rights in the area.

Local residents express mixed reactions to the mining activities. Some, such as Pedro Lagos, who runs a family guesthouse in nearby Aracuai, report economic benefits from increased tourism and international visitors drawn by the mineral boom. Others raise concerns over environmental and health impacts. Ana Claudia Gomes de Souza, an activist from the village of Piaui Poco Dantas near Grota do Cirilo, cites respiratory illnesses among residents, pollution of water sources, and disruptions to subsistence farming and artisanal mining as consequences of the industrial activity.

Sigma Lithium maintains that it complies with all legal regulations and is actively working to mitigate environmental effects, disputing allegations of air pollution. However, access restrictions imposed by the company until recently limited local villagers’ ability to reach their homes, exacerbating tensions.

Indigenous groups including the Pankararu and Pataxco have voiced alarm over the rebranding of a region historically named in indigenous terms to "Lithium Valley," viewing it as symbolic of cultural erasure and marginalization. The political context adds further complexity: in the upcoming presidential runoff scheduled for Sunday, candidates Luiz Inácio Lula da Silva and Flavio Bolsonaro represent divergent approaches to resource management. Lula emphasizes national sovereignty and expanding domestic mineral processing capacity to maximize local benefits, cautioning against Brazil becoming a "backyard" for foreign interests. Bolsonaro advocates accelerating mining permits and positioning Brazil as a key supplier for the United States in its efforts to reduce reliance on China.

The Jequitinhonha Valley largely supported Lula in the first election round, with 71 percent of the vote, contrasting with Bolsonaro’s national lead. Activists worry that a Bolsonaro victory could intensify extraction efforts with diminished environmental oversight. As the world powers compete for access to Brazil’s "white gold," the fate of local communities and ecosystems hangs in the balance.