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RisksVariable water levels lead to drought periods Stricter regulatory changes for mining activities Increased public scrutiny of the mining sector leads to reputational risksDescriptionClimate change can cause fluctuations in precipitation, which may reduce water availability, strain resources, and disrupt operations.Increased legal actions for environmental damages or regulatory non-compliance could result in fines, penalties, and reputational damage, impacting operations and financial stability. Stricter environmental regulations and carbon pricing may also significantly raise operational costs.As climate change remains a growing concern, stakeholders—including investors, and local communities—are placing greater scrutiny on environmental and social performance. Failing to meet or exceed expectations could result in lost business opportunities and challenges in securing financing. LikelihoodLikely Likely PossibleImpact SeverityHigh High/Moderate High/ModerateTime PeriodImpact TypePhysical, Acute Policy & Legal, Chronic & AcuteReputation, ChronicRelevant Climate Pathways (SSP Scenarios)SSP2-4.5: SSP3-7.0:SSP5-8.5:SSP1-1.9: SSP2-4.5: SSP3-7.0: SSP1-1.9: 2020-2039, 2040-2059, 2060-2079, 2080-2100SSP2-4.5: 2020-2039, 2040-2059, 2060-2079, 2080-2100SSP3-7.0: 2020-2039, 2040-2059, 2060-2079, 2080-2100Management ResponseLTH is committed to optimizing water use by recycling water in mining processes and securing alternative sources, reducing dependence on external supplies, improving resilience to drought, and ensuring operational continuity. The company plans to recycle approximately 90% of the water withdrawn during production and will implement dry-stacked tailings to further minimize consumption. In 2024, the Salinas site began reusing water from A/C units to reduce reliance on local sources.We will continuously collaborate with our legal experts to effectively navigate potential litigations and proactively monitor regulatory changes. Engaging with policymakers will help us stay ahead of new requirements. Our on-site team will conduct thorough due diligence, continuously assessing evolving regulatory and legal frameworks in Brazil to ensure full compliance. Simultaneously, our Canadian corporate team will remain diligent in monitoring changes in Canada’s regulatory landscape.We are committed to implementing robust ESG practices, ensuring transparent communication and active stakeholder engagement to build trust and maintain our social license to operate. As the project progresses, we will continue to advance these initiatives. By hiring the community consultant group Integratio, we aim to maintain ongoing dialogue with local stakeholders, addressing concerns and providing essential support.SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 5-8.5SSP 5-8.5
New technologies are developed and the demand for lithium decreasesRapid advancements in battery technology or alternative energy storage solutions could impact the demand for lithium. The development of alternative materials or advancements in recycling technologies, may also influence lithium demand and, in turn, affect revenue streams.PossibleHigh / ModerateMarket and Technology, ChronicSSP1-1.9: SSP2-4.5: SSP3-7.0: :We are committed to continually evaluating the market landscape and enhancing our market intelligence capabilities to better anticipate demand shifts and price volatility. Our capital markets team will closely monitor and forecast changes in demand, adjusting strategies as necessary to stay ahead of market trends.OpportunitiesContinued and or increased market demand for lithiumContinual renewable energy development in BrazilCommunity Co-AdaptationThe rising demand for lithium, driven by the expanding electric vehicle (EV) and energy storage markets, presents a significant growth opportunity. With the global EV market set for rapid expansion and energy storage needs surging, the demand for lithium-ion batteries continues to accelerate.Increased investment in Brazil’s Lithium Valley will drive larger renewable energy projects. With strong solar, wind, and hydropower potential, Minas Gerais can provide low-cost energy, reducing our Scope 2 emissions.Co-adaptation with local communities experiencing similar climate challenges presents a unique opportunity. By adopting collaborative approaches to managing climate risks we can enhance community resilience, foster mutual support, and create shared benefits.Likely Likely LikelyHigh Moderate Moderate - HighMarket, Chronic Market & Technology, Chronic Reputation, ChronicSSP1-1.9: SSP2-4.5: SSP3-7.0: SSP1-1.9: SSP2-4.5: SSP3-7.0: We will continue to rapidly advance this project to meet the rising demand. Additionally, we will continue to explore and assess properties in the region to enhance our capacity to keep pace with market needs.We will continue to prioritize the use of renewable energy sources whenever possible, including our partnership with CEMIG, a hydroelectric energy provider. By advancing our project, we will invest in local economies, supporting and funding the development of these renewable energy initiatives.We are committed to implementing robust ESG practices, transparent communication and active stakeholder engagement to build trust and maintain our social license to operate. Our private social investment policy will enable us to fund community projects that align with our values. We have already contributed to numerous projects in neighbouring communities and will continue to seek new opportunities as the project progresses.SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 5-8.5SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 1-1.9SSP 2-4.5SSP 3-7.0SSP 5-8.5
Manager, Environment and Sustainable GovernanceKatrina Diezkdiez@lithiumionic.comBlake Hylands, CEObhylands@lithiumionic.comLithium Ionic Corp. 400-36 Lombard St., Toronto, Ontario, Canada, M5C 2X3THANK YOU