Mining company Sigma Lithium has agreed to supply lithium to commodity trader Glencore to help meet surging demand for the element, which is used in electric vehicle (EV) batteries.

As part of the deal, Glencore will receive more than 20,000 tonnes (t) of the battery-grade, carbon-neutral, zero hazardous chemicals and zero tailings sustainable lithium, known as Triple Zero Green Lithium, from Sigma Lithium’s Vitoria port in Brazil this week.

The lithium is due to be sourced from Sigma’s Greentech lithium plant at its Grota do Cirilo project in Brazil.

The Greentech plant makes use of 100% renewable energy, 100% recycled water and 100% dry-stacked tailings.

Sigma said it will make a 50% payment in advance of shipment at a provisional premium price of 9% of the average price of lithium hydroxide at the London Metal Exchange.

"Sigma Lithium and Glencore are building an EV supply chain that is focused on providing lithium materials that are responsibly sourced in an environmentally and socially sustainable manner," said Sigma Lithium CEO and co-chairperson Ana Cabral.

"Given the critical role of EVs in reducing the carbon footprint of the transportation sector, Glencore and Sigma Lithium's joint efforts are fully aligned with our clients' approach to responsible sourcing and supply chains built in line with the ethos of the consumer of the EV.

"Our Triple Zero Green Lithium set a high standard of sustainability to fully support the electric vehicle industry in reducing its environmental footprint.”

Furthermore, Sigma is assessing strategic options, including a potential sale of the business, reported Reuters.