After a 22-year career in the financial market that took her from São Paulo to New York, London and Johannesburg, Ana Cabral was ready to regain control of her schedule, spend time with her children and become an investor.
Twelve years later, her travels are more intense than ever and she has become one of the most prominent executives in the mining sector, after taking charge of a company she supported through her private equity firm A10 Investimentos.
Even as Sigma Lithium faces a collapse in the price of the metal used in electric car batteries, it promises to stay the course and even triple production with a message to rivals and naysayers: it finally understands how to deal with the industry.
“The joke in the sector is that I am the temporary CEO who has been in the position the longest because it is very difficult,” said Cabral in an interview in São Paulo. “My colleagues from that time are gone. They’ve retired, they’re moving somewhere else, they’re doing other things.”
Although Sigma is finally producing and shipping lithium to major markets such as China, Cabral is struggling with the lack of premiums for her product, which she sees as “illegal” competition from companies that do not respect human rights and safety protocols. similar security, and the need to secure long-term capital.
Lofty statements
The fast-talking executive, who is in her 50s, is prone to making grandiose statements, including her claim to produce “quintuple-zero green lithium,” with no waste and the “most water-efficient operation in the world.” .
Sigma’s mining activities have altered the landscape of Vale do Jequitinhonha, an impoverished region in the state of Minas Gerais, but it insists the community is supportive and better off due to the jobs, investments and social programs that have helped offset the dust. and the noise of controlled explosions.
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Sigma was not the first lithium producer in Brazil, but it helped boost the sector in the country. And Cabral is the biggest defender of the mining flag, working to obtain the support of regulatory bodies, government authorities and legislators.
On LinkedIn, she frequently posts comments about the industry, praising both government officials and rival companies. Her feed is filled with clips and photos from her dizzying schedule of events and panel discussions around the world.
Although praised by Brazil’s mining sector, whose image has been tarnished by two fatal dam disasters, Cabral has her critics.
“There is nothing special about the plant,” said Klemens Laschefski, a geographer and professor at the Federal University of Minas Gerais, who visited Sigma’s operations in Araçuaí and was part of a documentary. Sigma appears to be “a speculative product that they intend to sell at a higher price. That’s why they’re doing ESG marketing, everything the modern investor wants to hear.”
In response, a Sigma spokesperson said that A10 Investimentos, the private equity firm that Cabral helped found, has owned Sigma for more than a decade, hardly making it a “speculative” investment.
As Brazil prepares to host the United Nations Climate Change Conference next year, Cabral’s mission complements President Luiz Inácio Lula da Silva’s attempts to position the country at the forefront of the energy transition and climate solutions, while in which it refuses to choose sides among global superpowers.
A sign of government support came a few months ago in the form of a 16-year loan, worth R$487 million (US$84 million), from the National Development Bank’s climate fund, BNDES, to finance the expansion of Sigma. Support is essential, insists Cabral, to make the company competitive.
Winding path
Cabral’s path from capital markets banker at institutions such as Merrill Lynch, Goldman Sachs Group and Credit Suisse to CEO of Lithium was not linear.
Born in Rio de Janeiro, she worked at billionaire Jorge Paulo Lemann’s former investment bank, Banco Garantia, in the early 1990s, before moving to rival Pactual. He then spent more than a decade in New York and London before returning home.
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“You start thinking about where you’re going next,” she said. “It’s kind of a pyramid, right? Then it became clear to me that I was not going to be the CEO of Goldman Sachs.”
She founded private equity firm A10 Investimentos in São Paulo with her longtime friend and finance veteran Marcelo Paiva in 2013. After initially focusing on M&A consultancy, they identified lithium as a promising investment.
Her ex-husband and former co-CEO, Calvyn Gardner, had a mining background, while she brought financial expertise. Just as they were looking for other investors and capital for the project, a tailings dam operated by iron ore giant Vale SA failed, triggering a deadly environmental disaster that drastically affected the appetite to support mining activities at the time.
Undaunted, Cabral remembers asking her mother to look after her children for a few weeks in 2016, while she went to Australia and China to study the sector. She ended up staying nine weeks and came back more convinced than ever.
The best thing
“I told the investment committee, ‘This is really going to be the best thing we do or must I be blind,’” she said. “Because in Asia it’s like they’re living in a future that hasn’t arrived here yet.”
After listing Sigma in Canada in 2018 and later on the Nasdaq, the company’s shares were overvalued during the pandemic. The stock rose more than 5,000%, reaching a peak market capitalization of $4.5 billion in May 2023. At that level, her stake would have made her a billionaire.
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After years of geological and feasibility studies, the Grota do Cirilo mine was preparing to finally start production. At that time, Sigma hired Bank of America to conduct a strategic review, and the company said it had received expressions of interest from companies in the energy, automotive and battery sectors.
As expectations of a sale grew, shares rose.
At the same time, Cabral’s marriage to Gardner had broken down and what began as a private divorce proceeding became increasingly public. Gardner stepped down as co-CEO in January 2023, and Cabral says the separation was difficult on a personal level but had no impact on the business.
As the price of lithium began to plummet in 2023, Sigma shares also fell and there was no deal for the company. Shares of lithium companies continued to languish as oversupply outstripped demand from battery makers amid slowing electric vehicle sales. Analysts expect the metal market to remain in surplus for years to come.
Cost escalation
This month, Sigma recorded its fourth consecutive quarterly loss, as revenue fell below analysts’ estimates, even with increased production. The company’s shares are down about 54% this year.
Joel Jackson, an analyst at BMO Capital Markets, said completing the next two phases of the mine could take longer than expected, with possible increased costs. He also sees no real benefit in terms of price for the company’s efforts to promote its sustainable credentials and the traceability aspects of the product.
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“Sigma is very proud of the quality of its product and the different sustainability metrics that it cites that its product offers,” said Jackson, who has a buy rating on the stock. “But we still don’t see any premium in the market right now for these metrics.”
In its 2023 report, the US Geological Survey ranked Brazil fifth in the world for lithium production, with an 86% increase over the previous year, largely due to Sigma. The country is in seventh place in reserves.
In March, Cabral received an award in Brazil for her prominence among women in the business world. The award was presented by billionaire Rubens Ometto, owner of Cosan, an ethanol and logistics giant, and a former client of Cabral from his time in the financial sector. Part of her speech cited references from the movie Barbie to highlight the challenges she and other women in business face.
“We need to be beautiful, but not too beautiful. We can be bosses, but we can’t be too tough,” she said at the awards ceremony. “Despite being successful, we are constantly underestimated by people who don’t know us. It is literally impossible to meet the expectations placed on us as women.”
Cabral said that by 2027, when the mine expansion is expected to be completed, she could see herself remaining as an investor, but not necessarily leading the company. When asked if running Sigma has been easier than her busy life as an investment banker, Cabral scoffed.
“Definitely not,” she said. “Do I plan to spend the next 10 years like this? Well, I don’t think I’ll make it. I think I’m going to collapse somehow. But does this mean I have to sell the company? Absolutely not.”
